If you plan to launch your own small business, then you need to create a business plan. We’ve put together a detailed framework to help you communicate the purpose and goals of your business, and your strategies for reaching the milestones you identify.
Arguably one of the most critical sections of a business plan is the executive summary—and it’s also one of the most difficult to write. The executive summary is the first clause that someone will read, and getting investors to read the full content of your business plan hinges on a concise, decisive and compelling summary.
But here’s the catch: 55% of people spend less than 15 seconds actively reading content, based on data published in Time Magazine. This means the limited window of time you have to convince someone that your business plan is worth their focus depends on a strong executive summary. For that reason, it’s important to know the objective of this section, what it needs to contain, and how to draft a summary that makes an impact.
The purpose of an executive summary
The executive summary component of your business plan exists to give readers an overview of the entire document, allowing them to understand what they can expect to learn. “Investors will read the executive summary to decide if they will even bother reading the rest of the business plan. It’s rare for an investor or lender to read an entire business plan, at least in the initial stages of analysis and consideration for funding,” says Eric Markowitz, Inc.com Staff Writer.
For all intents and purposes, this is your long-winded elevator pitch.
Relevant information to include in your executive summary
Despite being the first page of your business plan, it’s wise to write this section last. This tactic allows you to formulate a clear picture of what specific material from the overall document you would need to be introduced in the executive summary.
Since the goal of a business plan is to persuade the reader to invest in your business, the executive summary needs to demonstrate why this investment would be a smart financial decision. The kicker is: you need to do all of this in just one page.
To get started, The Balance Small Business suggests including the following details:
- Business Opportunity: What demand or need is there for your business and how will you meet this demand?
- Target Market: What demographic do you intend to reach as your customer base?
- Business Model: What products or services will your business offer and what makes them desirable to consumers?
- Marketing/Sales Strategy: What will your methods be to create brand recognition for these products or services?
- Competition: What businesses will you compete with for market share, and what do you offer that your competitors do not?
- Financial Analysis: What is your plan to manage finances and what is your projected revenue in the first three years?
- Owners/Staff: Who are the owners and lead staff members and what important skills or credentials do they bring?
- Implementation Plan: What is your framework and timeline to move from a concept to launching an actual business?
To think about it differently, you might consider grouping the above details into a few specific categories:
- Mission Statement: What are the core values and central purpose of your business?
- Company Information: What products or services do you offer, how long have you been in operation, who are the owners and lead staff members, and how many business locations do you manage?
- Business Highlights: What has your evolution consisted of, and how has the market share, revenue and customer base increased?
- Financial Summary: What are the current and projected state of your finances and do you need an investor to help you expand?
- Future Goals: What objectives or projects will this financial investment be used for?
Practising executive summary writing
Putting all the pieces together can be challenging. Here’s an example to guide you as you embark on writing your executive summary. Keep in mind that, as you write your own executive summary, you consider the industry and market that you are entering, the customers you’ll be interacting with, and the things your business will need to succeed (financial backing, upfront costs, additional workforce, etc)
Company: vegan protein blitz: animal-free protein powder
Vegan Protein Blitz: Animal-Free Protein Powder offers 25 grams of protein per serving without any use of animal protein—similar to, and in many cases, more than, the average amount of protein in similar products. We intend to appeal to those within the fitness community who are looking for a great-tasting protein powder without compromising on the amount of protein per serving. With some vegan protein powder products on the market currently, we expect mild competition and are confident we will be able to build a strong market position.
The Company and Management
Vegan Protein Blitz: Animal-Free Protein Powder was founded in 2018 by Sarah Bailey, a certified personal trainer and former food scientist, who couldn’t find a vegan protein powder that tasted good and provided the amount she needed to fuel her fitness routine. Her kitchen is based in San Diego, California, where she employs two full-time employees and three part-time employees.
Along with Sarah Bailey, Vegan Protein Blitz: Animal-Free Protein Powder has a board of advisors. The advisors are:
- Laura Henry, partner at Food Inc.
- Kristin Smith, CEO of Just Nuts Vegan Health Bars
We offer animal-free protein powder that is also made with all natural sugar sources and no preservatives. Our customers are health-conscious and serious about fueling their bodies with animal-free whole foods. We plan to grow quickly, with an initial goal of building a full-time marketing team of fitness advocates and professionals who understand the industry and our customers’ needs.
Our Competitive Advantages
While there are other vegan protein powders on the national market, there are none that are made with all-natural sugar and with a comparable amount of protein as that of an animal-based powder. With the expertise of our founder Sarah Bailey, we also stand out as a company that truly understands the audience. Please see our market research (Section 3) for more information on why consumers are demanding this expertise.
Our sales projections for the first year are $600,000 with a 10% growth rate over the next two years. By year three, we project 55% gross margins and will have ten full-time employees. The salary for each employee will be $60,000USD.
Startup Financing Requirements
We are seeking to raise $250,000 in startup funds to finance the first year. The owner has invested $40,000 to meet working capital requirements, and will use a loan of $80,000 to supplement the rest.
Write your executive summary
Earning investor interest in your business is critical to getting access to the things your business will need to succeed, and a solid executive summary can help you do that. Starting with writing your full business plan can help you get clarity on the strongest key points of your business proposal, which you can use to build out your executive summary.
Most importantly, keep this section of your business plan straightforward and concise, making it easy for the reader to understand what you’re doing and why it matters.
The information and tips shared on this blog are meant to be used as learning and personal development tools as you launch, run and grow your business. While a good place to start, these articles should not take the place of personalized advice from professionals. As our lawyers would say: “All content on Wave’s blog is intended for informational purposes only. It should not be considered legal or financial advice.” Additionally, Wave is the legal copyright holder of all materials on the blog, and others cannot re-use or publish it without our written consent.