| Why you need a killer executive summary in your business plan |
By Brian Hill and Dee Power
Looking for capital for your business or investors for your company?
Then you need a killer executive summary in your business plan.
The purpose of the executive summary is to entice the reader
to review, or request to review, the entire business plan.
The executive summary is not a mini version of the entire
business plan. Keep it brief. It should be viewed as a
marketing tool, a very important marketing tool. While the
executive summary is presented first, it is written after the
entire plan has been completed. It should not contain any
information that cannot be found elsewhere in the business
plan. Don't write the executive summary first, with the idea
you can always expand it later into a full blown business
plan, that just doesn't work. The executive summary could be
sent with a personalized cover letter, to potential investors.
What should your executive summary include?
A brief two to three page overview of the company with one or
two paragraphs under each of the following headings:
Capital Required: Amount, uses and type of the capital requested.
Business Activity: The company's products or services.
Business Profile: A very brief description of when the company
was established, by whom, number of employees, any recent changes.
Market Opportunity: Define the company's market base, the
customers, where they are located. Number of customers or dollar
size of market.
Marketing Strategy: The company's marketing: advertising,
promotions, methods of distribution, and sales force.
Competitive Factors: The competitors, their strengths and
weaknesses.
Facilities: Buildings, locations, equipment, machinery.
Staffing: Number of employees and divisions.
Management Team: Brief description of senior management.
Ownership: Who are the owners and their percentage and
relationship.
Financial Summary: Brief summary of the financial performance
of the company for the last three to five years and what is
projected for the next three to five years.
Critical Mistakes You Don't Want To Make
****************************
Forgetting to include your contact information, name and
phone number
Not including the amount of your capital request
Not clearly articulating what business the company is in
Losing the reader in technical jargon
Too short, one page is not adequate
Too long, no more than 3 pages
Forgetting to discuss the accomplishments of the management
team
Not clearly stating who the customers (market) are
Not including the marketing strategies
No financial projections
Tips For A Better Executive Summary
*******************
You need a stand-alone exciting executive summary. Most
investors only want to see a 2 to 3 page executive summary
as their introduction to your company. If you can't capture
their interest in those 2 to 3 pages, your business plan
doesn't stand a chance of being reviewed.
DON'T go over the 3 page limit, your executive summary starts
becoming a mini business plan rather than a summary.
DO include every section in your executive summary that's in
your business plan, just limit it to a paragraph for each
section.
DON'T lie or exaggerate, in your summary or in your business
plan. Conveying a sense of excitement is okay, hype is not.
DO keep in mind the objective of the executive summary is to
entice the investor to request the business plan. The summary
doesn't have to answer every question or address every issue.
DON'T make careless mistakes, math errors, or a sloppy
presentation. This is your first, and perhaps the only chance
that you get to make a good impression.
DO have someone who is unfamiliar with your company read your
executive summary. And make sure they can understand why the
company is an outstanding potential investment just from that
executive summary.
DON'T send a copy of the executive summary. Print out an
original on your letterhead as the first page. That way if for
some reason the executive summary gets separated from the cover
letter, your company's contact information is still available.
DO send the executive summary with a one page cover letter that
is personalized with the name of the investor.
**********************************************
Dee Power is co-author with Brian Hill of
"Attracting Capital From Angels"
http://www.AttractingCapitalFromAngels.com
More info? email mailto:attractingcapital@capital-connection.com
and "Inside Secrets To Venture Capital"
http://www.InsideSecretsToVentureCapital.com
More info? email mailto:insidesecrets@capital-connection.com
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