LAST WRITTEN, MOST IMPORTANT SECTION
Without exception the Executive Summary is the most important section of any business plan. It is the very first part of your business plan that anyone will ever read. First impressions count when it comes to your business plan. The Executive Summary is also perhaps the most detailed "sales oriented" business presentation you will make in everyday business interactions. Its importance is particularly true for non-profit organizations seeking funds, and for small businesses in search of investors or in need of expansion funds.
When speaking with investors, it will be the Executive Summary that they will initially ask to see. If, and only if, your Executive Summary makes a lasting impression on them will they then request a conference call with you and a copy of the full business plan for further financial discussions.
Instances that include startup businesses and non-profit funding will require a detailed, accurate, and persuasively written business plan to succeed with foundations, bankers, or investors. You will want to wait until the end of your business plan's construction before writing the Executive Summary. It is not really possible to write a summary or overview of something that is not already defined or constructed.
Other language faux pas to watch for in your writing the executive summary content include:
- Excessive use of ' I' : I should be used only in a couple of places in the summary if at all.
- Any sort of reference to the reader, this includes "you" or proper names.
- Keep your sentences alternately structured so that your reader does not tire from 2 pages of Proust styled writing. Keep an Executive Summary exactly that; a summary.
Another way to look at the Executive Summary is as "the hard sell" of your business plan. It should be succinct and precise, interesting and engaging, factual and personable, business-like, and yet very likeable. Think of the Executive Summary as the business plan's own "personality" if you will. A personality is a guiding core that determines how and what to expect in your interactions with the individual or company. In a similar way, a businessman reading the Executive Summary should be able to make reasonable calculations as to what to expect when he interacts with you, the primary representative of this personality or company.
When you sit face to face interviewing a person, you get a good feel for their personality. You also have the luxury of alternating a soft-sell pitch and a hard-sell pitch if you are the party being interviewed and if such a tactic is needed. In the context of a business plan, you, the owner, are the one being interviewed. The problem you are immediately faced with is that often you will not have the opportunity to alternate your soft and hard sell pitches because you will not necessarily be face to face with your banker or investor on the first contact or presentation of your business plan.
Since paper cannot talk and is not as innately interesting as people usually are when sitting across from you, your dilemma becomes how to sell the bank or investor representative on your company without the luxury of getting to soften him up. On paper, the most effective way to sell your company is to write very professionally while presenting only the most powerful facts from your plan sections.
The most powerful facts in your business plan are those which deal with numbers, statistics, research, financials, and, ultimately, profits and profit margins. In other words, financial facts and results are the most powerful elements in your business plan. If you do not know how to exploit them in a selling manner, then find a staff member, professional writer or advertiser, or a talented marketer to write your Executive Summary for you.
When constructing the Executive Summary, it may be helpful to first write a mini-outline very similar to a book report that we all produced in school. If it is 3 pages typewritten, then it is long enough to warrant an outline. This will help you to focus structure and flow within the context of the Executive Summary.
The first things you will write immediately at the top of your Executive Summary are the full contents of your Company Profile section. This is the one area where it is acceptable to have a small repetition of facts. The facts of your company's Mission and Vision, along with its Legal Structure are things which must appear in the top of the Executive Summary. They are also facts which are nearly impossible to rewrite in a creative manner and for the sake of consistency of content, you do not want to rewrite these portions. They are simply too factual and short to rewrite without losing your business credibility.
When you open your Executive Summary with the Company Profile facts, keep it short and to the point and then quickly move to the next segment of fact gathering. Keep in mind as you write the Executive Summary, aside from the initial Company Profile, your primary source for gathering information will be in the other 5 summaries of the business plan.
Do not be afraid to end your Executive Summary bluntly after you have methodically and smoothly dumped the information from the other summaries into it. It doesn't need to "flow" into the nuts and bolts of the business plan's detailed content.
WHO PREPARES THEM
It is especially important to upstart companies (a company that has only recently been started) and non-profit organizations to have your financial plans and financial statements professionally prepared by your CPA or accountant. These are documents that will be scrutinized by bankers and other investors, and they must stand up to their examination mathematically. This is no place for cutting your costs to save on your final expense for the plan and it is no place for stretching things to fit your objectives. This is a place to be brutally truthful and accurate to your investors; they will respect you for it, even if they would have done things differently if standing in your shoes. Integrity of financial statements is an attribute that will be admired and respected even if the financial backer must decline your funding.
Having an independent CPA prepare your documents lends credibility to your financial statements since the CPA does not have a personal and vested interest in dressing up your figures for the banker.
WHERE THEY GO IN YOUR PLAN
Your company's financial statements and plans always go toward the rear of the business plan. The reason has a lot to do with use strategy. The financial pages of your business plan are not necessarily examined closely by non-financial business people with whom you are in contact. But the pages need to be in there to satisfy banker and investor number crunchers when presented to them. To non-financial business people, meaning non-bankers, the statements give your plan a finished and 'together' presentation and it gives them a certain comfort in dealing with you. But clearly, a business plan is usually created to satisfy the concerns of bankers and investors, so never disregard their importance to your plan.
WHY PROJECTIONS COUNT
Your company's financial projections, particularly those related to a company's return-on-investment, are essential to your overall business plan because they reflect your company's management, business philosophy, style, efficiency, and ultimately your business productivity and bottom line. Bankers, foundations, and investors all look for the ROI [return on investment] statistics in any business plan. Your business plan represents your company, and the financials and projections are of utmost importance when financiers consider funding. Simply put, "They want to make sure that their profit margin is not undermined and that their expectations are real, not imagined."
IMPORTANCE OF FINANCIALS IN UPSTARTS
The greatest point of importance to financial upstarts is that your financials indicate your commitment to your company and its overall efforts as well as your determination in your objectives to move forward. The financials tell bankers and others that you have given significant thought and work to answer questions about your company's viability and growth projections.
WHAT EXACTLY ARE "THE FINANCIALS"?
A business's Financial Plan should be included with the financials. A complete Financial Plan for your business will include all of the financials below as well as projections for your company's breakeven figures, a financial assessment of industry risks, and the industry's normal production and profit ratios. You will want to include your company's P&L report with the Financial Plan as it is the most accurate document reflecting the company's bottom line and profit margins; both of which are of great importance to bankers and investors.
The company's Financial Statements can be summarized as: 1) Income Statement; 2) Cash Flow Projections, and 3) the Balance Sheet. All of these statements, or reports as they are sometimes called by staff accountants, make up what is collectively referred to as the financials. Most commonly, they are prepared monthly or quarterly for you to review and check. When preparing your business plan, you may want to take the final figures from these reports and summarize them on one page in an annual format with a line for each month in the report. This helps the reader to see your company's year at a glance and on one page.
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Executive Summary of the Business Plan
How to Write an Executive Summary That Gets Your Business Plan Read
Susan Ward wrote about small businesses for The Balance for 18 years. She has run an IT consulting firm and designed and presented courses on how to promote small businesses.
CP Cheah / Getty Images
An executive summary of a business plan is an overview. Its purpose is to summarize the key points of a document for its readers, saving them time and preparing them for the upcoming content.
Think of the executive summary as an advance organizer for the reader. Above all else, it must be clear and concise. But it also has to entice the reader to read the rest of the business plan .
This is why the executive summary is often called the most important part of the business plan. If it doesn’t capture the reader's attention, the plan will be set aside unread—a disaster if you've written your business plan as part of an attempt to get money to start your new business . (Getting startup money is not the only reason to write a business plan; there are other just-as-important reasons .)
Because it is an overview of the entire plan, it is common to write the executive summary last (and writing it last can make it much easier).
What Information Goes in an Executive Summary?
The information you need to include varies somewhat depending on whether your business is a startup or an established business.
For a startup business typically one of the main goals of the business plan is to convince banks, angel investors , or venture capitalists to invest in your business by providing startup capital in the form of debt or equity financing .
In order to do so you will have to provide a solid case for your business idea which makes your executive summary all the more important. A typical executive summary for a startup company includes the following sections:
- The business opportunity. Describe the need or the opportunity.
- Taking advantage of the opportunity. Explain how will your business will serve the market.
- The target market . Describe the customer base you will be targeting.
- Business model . Describe your products or services and and what will make them appealing to the target market.
- Marketing and sales strategy . Briefly outline your plans for marketing your products and services.
- The competition. Describe your competition and your strategy for getting market share. What is your competitive advantage, e.g. what will you offer to customers that your competitors cannot?
- Financial analysis. Summarize the financial plan including projections for at least the next three years.
- Owners/Staff. Describe the owners and the key staff members and the expertise they bring to the venture.
- Implementation plan. Outline the schedule for taking your business from the planning stage to opening your doors.
For established businesses the executive summary typically includes information about achievements, growth plans , etc. A typical executive summary outline for an established business includes:
- Mission Statement . Articulates the purpose of your business. In a few sentences describe what your company does and your core values and business philosophy.
- Company Information. Give a brief history of your company —d escribe your products or services, when and where it was formed, who the owners and key employees are, statistics such as the number of employees, business locations, etc.
- Business Highlights. Describe the evolution of the businesshow it has grown, including year-over-year revenue increases, profitability, increases in market share, number of customers, etc.
- Financial Summary. If the purpose of updating the business plan is to seek additional financing for expansion, then give a brief financial summary.
- Future goals. Describe your goals for the business . If you are seeking financing explain how additional funding will be used to expand the business or otherwise increase profits.
How Do I Write an Executive Summary of a Business Plan?
Start by following the list above and writing one to two sentences about each topic (depending on whether your business is a startup or an established business). No more!
The Easy Way of Writing One
Having trouble getting started? The easiest way of writing the executive summary is to review your business plan and take a summary sentence or two from each of the business plan sections you’ve already written.
If you compare the list above to the sections outlined in the Business Plan Outline , you’ll see that this could work very well.
Then finish your business plan’s executive summary with a clinching closing sentence or two that answers the reader’s question, “Why is this a winning business?”
For example, an executive summary for a pet-sitting business might conclude: “The loving on-site professional care that Pet Grandma will provide is sure to appeal to both cat and dog owners throughout the West Vancouver area.”
(You may find it useful to read the entire Pet Grandma executive summary example before you write your own.)
Tips for Writing the Business Plan’s Executive Summary
- Focus on providing a summary. The business plan itself will provide the details and whether bank managers or investors, the readers of your plan don’t want to have their time wasted.
- Keep your language strong and positive. Don’t weaken your executive summary with weak language. Instead of writing, “Dogstar Industries might be in an excellent position to win government contracts,” write “Dogstar Industries will be in an excellent position.”
- Keep it short–no more than two pages long . Resist the temptation to pad your business plan’s executive summary with details (or pleas). The job of the executive summary is to present the facts and entice your reader to read the rest of the business plan, not tell him everything.
- Polish your executive summary. Read it aloud. Does it flow or does it sound choppy? Is it clear and succinct? Once it sounds good to you, have someone else who knows nothing about your business read it and make suggestions for improvement.
- Tailor it to your audience. If the purpose of your business plan is to entice investors , for instance, your executive summary should focus on the opportunity your business provides investors and why the opportunity is special. If the purpose of your business plan is to get a small business loan , focus on highlighting what traditional lenders want to see, such as management's experience in the industry and the fact that you have both collateral and strategies in place to minimize the lender's risk.
- Put yourself in your readers’ place. And read your executive summary again. Does it generate interest or excitement in the reader? If not, why? Also try giving it to a friend or relative to read, who is not engaged in the business. If you've done a good job on the executive summary, an impartial third party should be able to understand it.
Remember, the executive summary will be the first thing your readers read. If it's poorly written, it will also be the last thing they read, as they set the rest of your business plan aside unread.
Office of the Comptroller of the Currency. " Business Plan Guidelines ," Page 2.
Corporate Finance Institute. " Executive Summary ."
United Nations Conference on Trade and Development. " How to Prepare Your Business Plan ," Page 167.
Iowa State University. " Types and Sources of Financing for Start-up Businesses ."
U.S. Small Business Administration. " Write Your Business Plan ."
Clute Institute. " Using Business Plans for Teaching Entrepreneurship ," Page 733.
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Why your business plan's executive summary is so important (+ how to write one)
If you plan to launch your own small business , then you'll need to write an executive summary as part of your full business plan. In this article, we'll answer all your pressing questions, including: What the heck is an executive summary, anyway? What’s the purpose of an executive summary? And how do I actually create a well-written executive summary?
Executive summaries are arguably one of the most critical sections of a business plan —and they're also one of the trickiest to write. The executive summary is the first part of your complete business plan that someone will read, so it needs to be compelling in order to convince someone to read the whole thing.
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 your business plan is worth their attention depends on a strong executive summary. No pressure or anything.
For that reason, it’s important to know how to draft a concise executive summary that makes an impact and communicates the goals of your small business. But have no fear, just read on to learn how!
What is an executive summary?
An executive summary is essentially an outline of your business plan. If your full business plan is a roadmap, your executive summary is your roadmap's roadmap. It gives your readers a heads up about what you'll talk about in the rest of your business plan. For all intents and purposes, your business's executive summary is your elevator pitch.
The purpose of an executive summary
If there's one section of your business plan everyone is going to read, it's the executive summary. Your business plan's executive summary exists to give readers an overview of the entire document. It should outline what they can expect to learn and motivate them to keep reading on.
“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.
Keep your goals and purpose in mind when writing your executive summary.
If your business is a startup, the purpose of your business plan (and executive summary) will likely be to get banks or investors to provide you with financing. So, when writing your executive summary, highlight the financial requirements of your business and why your business is worthy of funding.
If you're a more established business owner, then your executive summary will talk more about your achievements, evolution, and goals for the future.
How to write an executive summary for a business plan
Your business's executive summary should be as short as possible, ideally only one or two pages long.
Remember that you're vouching for yourself and your business in your executive summary, so make sure your language is confident and positive!
Bad example : We might not be the best or the most established protein powder brand, but we probably have the most passion and love out of all our competitors.
Good example: 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.
It's best practice to avoid talking about more fluffy, subjective points and cliches (like passion, hard work, etc.) so you can focus more on the practical information and facts your readers want to know about (like why they should actually invest or partner with your business). You also want to seem confident in yourself and your business, so avoid words like "might," "maybe," or "could" and opt for more definitive words, like "will"!
Remember that your executive summary should fill in the blanks for your readers. Keep your target audience in mind and try to answer their questions, rather than create new ones, or they may get confused and stop reading. Give them a reason not to go back to checking their current value of Bitcoin.
"Put yourself in the business plan reader's shoes and think about what you would like to know in the report," Marius Thauland, business strategist at Leiekontor, told Business News Daily . "Get their attention by making it simple and brief yet still professional. It should also attract them to read the entire document to understand even the minute details."
There's no specific way to order the different sections of your executive summary, but you'll want to put the most important information or your strongest points first . The first sentence and paragraph of your executive summary is especially important, since these are what will reel your readers in.
We'll give you an idea of how to do this below.
What to include in the executive summary of your business plan
Despite being the first page of your business plan, it’s a good idea to write your executive summary section last. This trick allows you to get a clear picture of what specific material from the full business plan you need to introduce in the executive summary. So if you haven't written the rest of your business plan yet, stop, maybe check out our articles on writing a business plan (wink wink nudge nudge), and come back here once you're done.
Since the goal of a business plan is to persuade the reader to invest in your business, your 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 1-2 pages.
To get started, The Balance Small Business suggests including the following eight sections. Choose the topics most relevant to your business and write one or two sentences about each of them. And remember to order them from most important to least important!
1. Business opportunity
What demand or need is there for your business and how will you meet this demand? Talk about a problem or a gap in the market, and why your business alone has all the answers.
2. Target market
What demographic do you intend to reach as your customer base? Who's going to be buying your product?
3. Business model
Use this part to give more juicy details about your business idea. What products or services will your business offer, and what makes them desirable?
4. Marketing/Sales strategy
What will your methods be to create brand recognition for these products or services? You might want to consider marketing techniques like social media, paid media, or email marketing.
Give your readers the low-down of your industry. What businesses will you compete with for market share, and what does your business offer that your competitors do not? How big and competitive is your industry? How will you stand out against other small businesses? Are there any industry trends you should bring up?
6. Financial analysis
Investors and banks will be especially interested in this part. What is your plan to manage your business finances, and what is your projected revenue for the first three years of your business? You should go into detail about how you will distribute your funding and spell out what your investors will get out of it.
In this section, you can give a brief overview of your business's history. Who are the owners and lead staff members of your business and what important skills or credentials do they bring?
8. Implementation plan
What is your framework and timeline to move from a concept to launching an actual business?
Effective executive summary examples
Sitting down to start writing an executive summary and putting all the pieces together can be challenging .
To think about it differently, you might consider grouping the above details into a few specific categories:
What are the core values and central purpose of your business?
What products or services do you offer, how long has your business been in operation, who are the owners and lead staff members, and how many business locations do you manage?
What is the current and projected state of your finances and do you need an investor to help you expand?
What objectives or projects will this financial investment be used for?
Keep in mind that, as you write your own executive summary, you should 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). Here’s an example of a good executive summary template to guide you as you embark on writing your own executive summary.
Executive summary/business plan example: Vegan Protein Blitz
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 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 $60,000 USD.
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.
More executive summary templates
Need more business plan examples, or ready to create your own executive summary with a template? Here are a few we found around the web:
- US Small Business Association
Final tips for writing an 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. Writing your full business plan first 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.
Brush up on your writing skills
You're an entrepreneur, and you probably didn't start your business to write business plans . Free online editing tools and resources like Hemingway and Grammarly can help you punch up and polish your writing. Just copy and paste your executive summary into the software, and it will let you know where your writing needs to be more clear.
Get to the point
Remember what we said about keeping it short? We mean it. Even if there's a really clever sentence that you're super proud of, it's gotta go if it doesn't contribute to your summary. You don't want to give too much detail (that's what the rest of your business plan is for!) or repeat yourself.
Always proofread your work a couple of times before calling it a day! Reading your executive summary out loud can help you identify awkward phrasing and catch any typos you might have missed. Another idea is to copy and paste it into a text-to-speech program to hear what it sounds like out loud. It also helps to print out your executive summary and edit the physical document, which helps you see it from a fresh perspective.
If you have a kind friend, family member, or fellow business owner, you should ask them to take a look at your executive summary/business plan and give their constructive criticism. If they understand your goals and plan and seem excited about your idea, that's a good sign! If they give your business plan back to you with a bunch of red marks and a confused look on their faces, that's probably a sign for you to make sure your executive summary flows more logically.
Once your business is off the ground, Wave will be ready and waiting for you. Send free invoices, get paid, track expenses, pay your team, and balance your books with our beginner-friendly financial management software.
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.
Preparing A Business Plan: The Step By Step Guide You Need To Know!
1. the step-by-step guide you need to know:business planning basics, 2. the step-by-step guide you need to know:what are the different types of business plans, 3. the step-by-step guide you need to know:how do you create a business plan, 4. the step-by-step guide you need to know:how do you make sure your plan is accurate, 5. the step-by-step guide you need to know:what are the risks associated with creating a business plan, 6. the step-by-step guide you need to know:how do you get started in business planning, 7. the step-by-step guide you need to know:what are some common mistakes made during business planning, preparing a business plan: the step-by-step guide you need to know.
As a small business owner , you know that a well-executed business plan is essential to success. But what goes into a business plan ? How do you get started?
Here's a step-by-step guide to help you create a business plan that will get you on the right track.
1. Define your business
The first step in creating a business plan is to define your business. What are you selling? Who is your target market? What are your goals and objectives?
Answering these questions will help you create a clear and concise business plan.
2. Research your industry
Once you know what your business is, you need to research your industry. What are the trends? What is the competition doing?
Understanding your industry will help you create a plan that will make your business successful.
3. Set your goals
Now that you know what your business is and what the industry looks like, you need to set some goals. What do you want to achieve in the next year? In the next five years?
Your goals should be specific, measurable, achievable, relevant, and time-bound.
4. Create your marketing plan
Now that you know what your business is and what your goals are, you need to create a marketing plan. How are you going to reach your target market ? What are your marketing strategies?
Your marketing plan should be detailed and include specific actions that you will take to reach your target market.
5. write your executive summary
The executive summary is a brief overview of your business plan. It should include your business name, location, products or services, target market, marketing strategies, and financial projections.
6. Create your financial projections
The financial projections section of your business plan is one of the most important parts. This is where you will outline your revenue and expenses for the next year.
You will need to include detailed information about your income, expenses, assets, and liabilities. Your financial projections should be realistic and based on your research.
7. Put it all together
Now that you have all of the pieces of your business plan, it's time to put it all together. Start by writing a cover page that includes your business name, address, and contact information.
Then, write an executive summary that outlines your business plan. Next, include a table of contents so that readers can easily find the information they're looking for. Finally, write each section of your business plan in detail.
8. Review and revise
Once you have written your business plan, it's important to review and revise it regularly. Make sure that your plan is up-to-date and accurate. As your business grows and changes, so should your business plan.
The Step By Step Guide You Need To Know!:Business Planning Basics - Preparing A Business Plan: The Step By Step Guide You Need To Know!
There are different types of business plans , which can be broadly divided into two categories: operational and financial. Operational plans focus on the day-to-day running of the business, and include activities such as marketing, sales, customer service, and product development. Financial plans, on the other hand, focus on the financial aspects of the business, and include activities such as raising investment, managing cash flow , and forecasting profitability.
The most common type of business plan is the traditional business plan , which is used to raise investment from banks or venture capitalists. This kind of business plan is very comprehensive, and includes detailed information on all aspects of the business, including the financials.
Another popular type of business plan is the lean business plan, which is a more concise version of the traditional business plan. This kind of business plan is often used by businesses that are seeking to raise smaller amounts of investment, or that are looking to get their business off the ground quickly.
Finally, there is the one- page business plan , which as the name suggests, is a single page document that outlines the key elements of the business. This kind of business plan is often used by businesses that are already up and running, and that are looking to refine their strategy.
No matter what type of business plan you choose to use, there are certain elements that should always be included. These elements are:
-An executive summary: This is a brief overview of the key points of the business plan.
-A business description: This is a detailed description of the business, its products or services, its target market, and its competitive advantages.
-A market analysis: This section looks at the size and growth of the target market, and analyses the competition.
-A marketing strategy: This section outlines the main marketing initiatives that will be used to reach the target market.
-A sales strategy: This section outlines how the products or services will be sold, and how the sales team will be organised and structured.
-A financial plan: This is a detailed breakdown of the expected costs and revenues for the business. It should include a profit and loss statement , a balance sheet, and a cash flow forecast .
Assuming you have a business idea, the first step is to develop a business plan . But what exactly is a business plan? How do you create one? What should it include?
A business plan is a formal document that outlines the goals and objectives of your business. It includes your company's history, products and services, marketing and sales strategies , financial projections, and more.
Creating a business plan can seem like a daunting task, but it doesn't have to be. Follow these steps to create a successful business plan :
1. Do your research
Before you start writing your business plan , you need to do your homework. This means researching your industry, your competition, and your target market. This will help you understand the landscape you're operating in and give you the information you need to create a winning strategy.
2. Define your business
The first step in creating your business plan is to define your business. What is your business? What does it do? What are its goals and objectives? Answering these questions will give you a clear direction for your business plan.
3. Write your executive summary
The executive summary is the most important part of your business plan. It's a brief overview of your company and its plans for the future. Think of it as an elevator pitch for your business . You should include your company's mission statement, products and services, target market, and competitive advantage in your executive summary.
4. Create a marketing plan
Your marketing plan should detail how you plan to reach your target market and promote your products or services. It should include your marketing budget, strategies, and objectives.
5. Develop a financial plan
Your financial plan should include your company's financial projections for the next three to five years. This will include your income statement, balance sheet, and cash flow statement .
6. write your business plan
Now that you've done your research and defined your business, it's time to start writing your business plan. Begin with your executive summary and then move on to each section of your plan. Include as much detail as possible so that anyone reading your plan will have a clear understanding of your business.
7. Get feedback on your business plan
Once you've written your business plan, it's important to get feedback from others. Ask family and friends for their input. You can also hire a professional business consultant to review your plan and offer suggestions.
8. Revise and update your plan regularly
Your business plan is not a static document; it should be revised and updated regularly as your business grows and changes. Be sure to review your plan at least once a year to ensure that it is still relevant and accurate.
The Step By Step Guide You Need To Know!:How do you create a business plan - Preparing A Business Plan: The Step By Step Guide You Need To Know!
If you're like most entrepreneurs, you've probably heard that a business plan is essential to the success of your business. But what exactly is a business plan? And how do you make sure your plan is accurate?
A business plan is a formal document that outlines the goals and objectives of your business. It also includes a detailed description of your products or services, your target market, your marketing strategy, your financial projections, and your management team.
The first step in creating a business plan is to conduct a thorough research of your industry and market. This will help you determine the potential for your business and identify any risks or challenges you may face. It's also important to understand your target market and what needs and wants they have. This information will be critical in developing a marketing strategy that will reach your target market.
Once you have a good understanding of your industry and market, you can start to develop your business goals and objectives. These should be specific, measurable, achievable, relevant, and time-bound. That is, they should be goals that you can realistically achieve within a certain timeframe.
After you've established your goals and objectives, you can start working on your marketing strategy. This should include a detailed plan for how you'll reach your target market and promote your products or services. Your marketing strategy should also include a budget and timeline for implementation.
The next step in developing your business plan is to create financial projections . This involves estimating your revenue and expenses for the next three to five years. It's important to be realistic when developing your financial projections. Be sure to include any one-time costs associated with starting up your business , such as legal fees or market research.
The final step in creating a business plan is to assemble your management team. This should include individuals with the skills and experience necessary to help you achieve your business goals . Be sure to include an executive summary of your business plan as well as resumes for each member of your management team.
Once you've completed all of the steps above, you'll have a comprehensive business plan that you can use to guide the decision-making process for your business. Remember, a well-crafted business plan is an essential tool for any successful entrepreneur.
The risks associated with creating a business plan are numerous and can vary greatly depending on the type of business, the industry, the size of the company, and the stage of development. The most common risks include:
1. The risk of unrealistic assumptions: Most businesses are started with some degree of optimism and hope. This is especially true for first-time entrepreneurs who may not have a realistic understanding of the market, the competition, or the potential for success. As a result, their business plans may be based on overly optimistic assumptions about the future.
2. The risk of over-reliance on one person: Businesses often have a single point of failure, which is typically the founder or CEO. If this person leaves the company, it can be difficult to continue without them.
3. The risk of inadequate planning: A well-thought-out business plan is essential for any business, but especially for small businesses. Without a plan, it can be difficult to track progress, set goals, and make informed decisions about where to allocate resources.
4. The risk of insufficient funding: Many businesses require significant upfront investment, and without adequate funding, it can be difficult to get the business off the ground.
5. The risk of unrealistic growth expectations: Most businesses take time to grow and achieve profitability. For businesses that are expecting rapid growth, it is important to have realistic expectations and to plan for potential bumps in the road.
6. The risk of not protecting your intellectual property : If you have developed unique products, processes, or services, it is important to protect your intellectual property through patents, copyrights, or trademarks. Otherwise, you may lose the competitive advantage that your ideas provide.
7. The risk of poor management: One of the most important aspects of any business is effective management. Poorly managed businesses are more likely to fail than those that are well-run.
8. The risk of an unstable market: Markets are constantly changing, and businesses must be able to adapt to new conditions in order to survive. If a business is reliant on a single market or sector, it may be more vulnerable to changes in that market.
9. The risk of legal problems: All businesses face the risk of legal problems, whether it is from employees, customers, suppliers, or other third parties. It is important to have adequate insurance and legal protection in place in order to minimize the risk of financial loss from litigation.
10. The risk of failure: Of course, the biggest risk associated with starting a business is the risk of failure. Even with a well-thought-out business plan and a strong team in place, there is no guarantee of success. However, by understanding and managing the risks associated with starting a business , you can increase your chances of success .
The Step By Step Guide You Need To Know!:What are the risks associated with creating a business plan - Preparing A Business Plan: The Step By Step Guide You Need To Know!
If you're like most people, the thought of preparing a business plan can be daunting. After all, there's so much to think about and cover in a business plan! What should you include? How do you get started?
Here's a step-by-step guide to help you get started on your business plan:
1. Do your research.
Before you start writing your business plan, you need to do your research. This includes understanding your industry, your target market, your competition, and your own business strengths and weaknesses. This research will help you understand what needs to be included in your business plan .
2. Write your executive summary.
Your executive summary is a brief overview of your business plan. It should include your business idea, your objectives, your target market, and your competitive advantages. This is the first section of your business plan, so make sure it's clear and concise.
3. Write your company description.
In this section, you'll describe your company in more detail. This includes your company history (if applicable), your products or services, your target market, and your overall business strategy. This is your opportunity to really sell your business idea to potential investors or lenders.
4. write your market analysis .
In this section, you'll need to prove that there's a market for your product or service . This includes market research, target market analysis , and a competitive analysis. This is an important section of your business plan, as it will help you understand your place in the market and how to best reach your target market.
5. Write your management and organizational structure.
In this section, you'll need to describe your management team and organizational structure. This includes information on each team member's experience and qualifications, as well as the overall structure of your company. This is an important section for potential investors or lenders, as it will show them that you have a strong team in place to help grow your business.
6. Write your service or product line.
In this section, you'll need to describe your products or services in detail. This includes information on what your product is, how it's used, and what benefits it provides to customers. This is an important section for potential investors or lenders, as it will help them understand what it is you're selling and why it's a good investment.
7. Write your marketing and sales strategy.
In this section, you'll need to describe how you plan on marketing and selling your products or services . This includes information on your target market , your marketing mix, and your sales strategy. This is an important section for potential investors or lenders, as it will help them understand how you plan on generating revenue for your business.
8. Write your financial projections.
In this section, you'll need to provide financial projections for your business . This includes information on your start-up costs, operating expenses, revenue projections, and profitability projections. This is an important section for potential investors or lenders, as it will help them understand the financial viability of your business.
9. Write your appendix.
Your appendix is a catch-all for any additional information that doesn't fit elsewhere in your business plan. This can include things like resumes, permits and licenses, contracts, financial statements, and more. This is an important section for potential investors or lenders, as it can provide them with more detailed information about your business if they're interested.
The Step By Step Guide You Need To Know!:How do you get started in business planning - Preparing A Business Plan: The Step By Step Guide You Need To Know!
1. Not Defining or Measuring Your Objectives
The first step in any business planning process is to define your objectives. Without a clear understanding of what you hope to achieve, it will be difficult to create an effective plan. Once you have defined your objectives, you need to establish measurable goals and targets. This will give you a way to track your progress and determine whether or not you are on track to achieving your objectives.
2. Relying on Gut Feeling Rather Than Data
When it comes to making decisions about your business, it is important to rely on data rather than gut feeling. Too often, businesses make decisions based on what they think is right without any supporting data. This can lead to costly mistakes. Before making any decisions, be sure to do your research and gather data that will support your position.
3. Failing to understand Your Target market
Another common mistake made during business planning is failing to understand your target market. It is important to know who your target market is and what their needs are. Without this information, it will be difficult to create a marketing plan that will reach them. Be sure to spend some time researching your target market before you begin creating your marketing materials.
4. Not Prioritizing Your Activities
When you are creating your business plan, it is important to prioritize your activities. There are always a lot of things that need to be done when starting a business , but not all of them are equally important. You need to prioritize your activities so that you can focus your time and energy on the things that are most likely to lead to success.
5. Failing to Make Regular Updates
One of the most common mistakes made when creating a business plan is failing to make regular updates. Your business plan should not be a static document; it should be dynamic and ever-changing. As your business changes and grows, so should your business plan. Be sure to set aside some time each month to review and update your plan.
6. Not Getting Input from Others
When you are developing your business plan, it is important to get input from others. Talk to your friends, family, and colleagues about your plans. Get their feedback and input on what you are doing. This will help you refine your plans and make sure that you are on the right track.
7. Trying to Do Too Much at Once
Another mistake that is often made during business planning is trying to do too much at once. When you are first starting out, it is important to focus on one thing at a time. Trying to tackle too many things at once will only lead to confusion and frustration. Start with one goal and work towards it until it is accomplished before moving on to the next goal.
8. Not Seeking Professional Help
When it comes to business planning, many people try to go it alone. While it is possible to create a successful business plan on your own, it is often best to seek professional help. There are many resources available that can help you through the process of creating a business plan. A professional can provide valuable insight and guidance that you may not be able to get on your own.
9. Not Having a Contingency Plan
One final mistake that is often made during business planning is not having a contingency plan. Things will inevitably go wrong at some point during the life of your business. It is important to have a Plan B in place in case something does go wrong. By having a contingency plan, you can minimize the impact of problems and keep your business running smoothly .
The Step By Step Guide You Need To Know!:What are some common mistakes made during business planning - Preparing A Business Plan: The Step By Step Guide You Need To Know!
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Building a Strong Business Plan for Your Startup
Starting a new business can be a daunting task, but with a solid business plan in place, you can increase your chances of success and avoid common pitfalls. A well-thought-out business plan acts as a roadmap for your startup, helping you stay focused and on track as you navigate the ups and downs of entrepreneurship. It's a crucial document that outlines your company's goals, strategies, and the steps you'll take to achieve them. But how do you create a business plan that stands out from the crowd and attracts investors, customers, and employees? In this article, we'll dive into the key elements of a strong business plan and provide tips for making your vision a reality. So, whether you're just getting started or looking to refine your existing plan, let's get ready to build a business that's built to last!
The executive summary is the first and most important section of your business plan. It gives a brief overview of the entire plan and is typically read by potential investors , lenders, and stakeholders. Think of it as a condensed version of your business plan - a snapshot of what your company is all about and what it hopes to achieve.
The executive summary should be no more than two pages long and should clearly and concisely answer the following questions: What does your company do? Who are your target customers? What are your goals and objectives? How will you achieve them? What sets your business apart from the competition?
The purpose of the executive summary is to grab the reader's attention and make them want to read the rest of your business plan. It should be engaging, compelling, and make a strong case for why your business is worth investing in. Remember, you only have one chance to make a good first impression, so make it count!
The company description section of your business plan provides a more in-depth look at your business, including its history, goals, and objectives. It gives readers a clear understanding of what your business does, what products or services it offers, and what sets it apart from the competition.
In this section, you should include the following information:
Your company's history: How did you come up with the idea for your business? What inspired you to start it?
Your business's mission and vision: What is the purpose of your business? What do you hope to achieve in the short and long term?
Your target market : Who are you trying to reach with your products or services? What are their needs and how does your business meet those needs?
Your product or service offering: What do you offer that's unique or different from your competitors? What are the key features and benefits of your products or services?
Your company structure: What type of business entity are you? Do you have any partners or employees?
Your location: Where is your business located? Will you have a physical storefront, or will you operate primarily online?
By providing this information, you give readers a better understanding of what your business is all about and what you hope to achieve. This section should be well-researched, clear, and concise. The more information you can provide about your business, the better equipped readers will be to make informed decisions.
The market analysis is a critical component of your business plan as it provides insight into the industry, market, and competition. It helps you understand the demand for your product or service and how your business fits into the larger market. This section allows you to demonstrate your knowledge of the market and your understanding of what it takes to succeed in your industry.
Industry overview: What is the current state of the industry? What trends are emerging? What are the growth prospects for the industry?
Target market analysis: Who are your target customers? What are their demographics, buying habits, and pain points? How does your business meet their needs?
Competitor analysis: Who are your competitors and what do they offer? What sets your business apart from them? What are their strengths and weaknesses?
Market analysis: How big is the market for your product or service? What is the current demand and what is the forecasted demand in the future ?
Sales and marketing strategies: How will you reach your target customers and promote your product or service? What marketing strategies will you use? What are your sales goals and objectives?
By conducting a thorough market analysis, you can identify opportunities and challenges in your industry and develop strategies to take advantage of those opportunities and overcome those challenges. This section should be well-researched and provide data and statistics to support your conclusions.
The product/service description is where you get to shine the spotlight on what you're offering to the market. This section provides an in-depth look at your product or service, including its features, benefits, and unique selling points. The goal is to clearly communicate what your product or service is, how it solves a problem, and why customers should choose your business over the competition.
Product or service overview: What is your product or service? What does it do? What problem does it solve?
Product or service features: What are the key features of your product or service? What sets it apart from similar products or services on the market?
Product or service benefits: What are the benefits of using your product or service? How will it make the customer's life easier or better?
Unique selling points: What sets your product or service apart from the competition? What makes it unique and compelling to customers?
Development stage: Is your product or service already available or is it still in development? If it's in development, what's the timeline for launching it?
Intellectual property : Are there any patents, trademarks, or copyrights associated with your product or service?
By providing this information, you give readers a clear understanding of what your business offers and why it's worth investing in. This section should be well-researched and clearly communicate the value of your product or service to potential customers.
Marketing and Sales Strategies
The marketing and sales strategies section of your business plan outlines how you plan to reach your target customers, promote your product or service, and generate revenue. This section should be well thought-out and align with your overall business goals.
Target market: Who are your target customers and how will you reach them?
Marketing strategies: What marketing tactics will you use to promote your product or service? This could include advertising, public relations, events, content marketing, and more.
Sales strategies: How will you sell your product or service? Will you sell directly to consumers, through a distributor, or through a combination of channels?
Sales and marketing budget: How much will you invest in marketing and sales efforts? What is the expected return on investment for these efforts?
Sales goals and projections: What are your sales goals for the next year, the next 5 years, and the next 10 years? What data and assumptions support these projections?
By outlining your marketing and sales strategies, you give readers a clear understanding of how you plan to reach your target customers, promote your product or service, and generate revenue. This section should be well-researched and clearly communicate your plan for growth and success.
The financial projections are a crucial component of your business plan, as they outline your expected financial performance over the next several years. This section provides an overview of your revenue, expenses, and profits, and helps you determine if your business idea is feasible and sustainable.
Income statement: An income statement shows your expected revenue, expenses, and profits over a specific period of time, usually one year.
Balance sheet: A balance sheet shows your expected assets, liabilities, and equity at a specific point in time.
Cash flow statement: A cash flow statement shows the expected inflows and outflows of cash over a specific period of time, usually one year.
Break-even analysis: A break-even analysis shows the point at which your business will start to make a profit, based on your expected revenue and expenses.
Assumptions and risks: What assumptions are you making about the future of your business? What are the risks and uncertainties that could impact your financial projections?
By providing this information, you give readers an understanding of your expected financial performance and the underlying factors that will impact your success. This section should be well-researched and provide realistic, achievable projections based on sound financial principles.
Management and Operations Plan
The management and operations plan outlines how you plan to run your business day-to-day, including who will be responsible for key functions, how tasks will be organized, and what systems and processes will be in place. This section is important for demonstrating to investors, lenders, and other stakeholders that you have a clear plan for running your business and that you're capable of executing it.
Organizational structure: What is the organizational structure of your business? Who will be responsible for what tasks and functions?
Management team: Who are the key members of your management team and what experience and qualifications do they bring to the table?
Staffing plan: How many employees will you need and what will be their roles and responsibilities?
Operations plan: How will you run your business day-to-day? What processes and systems will you have in place to ensure efficiency and quality?
Legal structure and liabilities: What is the legal structure of your business? What are the potential liabilities and risks associated with your business, and how will you manage them?
Insurance: What types of insurance will you need for your business and why?
By outlining your management and operations plan, you give readers a clear understanding of how your business will be run and who will be responsible for key functions. This section should be well-researched and clearly communicate your plan for executing your business idea.
The funding request is a section of your business plan that outlines the amount of funding you're seeking and what you plan to use the funds for. If you're seeking funding from investors, lenders, or other sources, this section is critical in demonstrating how much capital you need and how you plan to use it to grow your business.
Amount of funding: How much funding are you seeking and why do you need this amount?
Use of funds: What specific projects or initiatives will you use the funds for? How will the funds help you achieve your business goals?
Repayment plan: If you're seeking a loan, what is your plan for repaying the loan? When will you start making repayments and how much will you repay each month?
Equity offering: If you're seeking equity investment, what percentage of your company are you offering and at what valuation? What are the rights and responsibilities of the investors?
By outlining your funding request, you give readers a clear understanding of how much capital you need and how you plan to use it. This section should be well-researched and demonstrate that you have a solid plan for using the funds to grow your business and generate a return for investors.
Conclusion and Next Steps
The conclusion and next steps section of your business plan wraps up your document and outlines what you plan to do next. This section is important for demonstrating to investors, lenders, and other stakeholders that you have a clear understanding of your business and a plan for moving forward.
Recap: Briefly summarize the key points covered in your business plan.
Future plans: What are your plans for the future of your business? What are your long-term goals and how will you achieve them?
Next steps: What specific steps will you take next to move your business forward? This could include seeking funding, launching your product or service, or expanding into new markets.
Request for funding/investment: If you're seeking funding or investment, reiterate your request and explain why you believe your business is a good opportunity for investors.
By wrapping up your business plan with a clear conclusion and next steps section, you give readers a sense of your confidence and determination to succeed. This section should be well-written and demonstrate that you have a clear understanding of your business and a plan for moving forward.
Appendices and Supporting Documents
The appendices and supporting documents section of your business plan is where you can include additional information that supports your main plan. This section can include a variety of items such as market research reports, product specifications, resumes of key team members, letters of reference, and financial statements.
The purpose of this section is to provide more detailed information to support the claims and projections made in your business plan. This information can be critical in demonstrating the viability of your business and convincing investors or lenders that your plan is solid.
Some of the key items you might include in your appendices and supporting documents section include:
Market research: Reports or data that support your market analysis and demonstrate the size and growth potential of your target market.
Product specifications: Detailed information about your product or service, including technical specifications, product features, and benefits.
Resumes: Resumes of key team members, including your management team and key employees.
Financial statements: Detailed financial statements, including balance sheets, income statements, and cash flow projections.
Reference letters: Letters of reference from industry experts, suppliers, or customers that support the claims made in your business plan.
By including appendices and supporting documents in your business plan, you give readers a more complete picture of your business and demonstrate that you've done your due diligence in researching and planning your business. This section should be well-organized and clearly presented to make it easy for readers to understand and reference.
Tips for Making Your Business Plan Stand Out
Your business plan is your chance to showcase your business and convince investors, lenders, and other stakeholders that your idea is worth investing in. To make your business plan stand out, you need to do more than just provide a basic overview of your business. Here are some tips for making your business plan stand out:
Keep it concise: Your business plan should be concise, easy to read, and to the point. Avoid using industry jargon and technical terms, and stick to clear, straightforward language.
Tell a story: Your business plan should tell the story of your business, from its inception to its future plans. Use a narrative approach that captivates readers and helps them understand why your business is unique and worth investing in.
Be realistic: Your business plan should be grounded in reality. Make sure your financial projections are achievable and that your marketing and sales strategies are realistic. Avoid making overly optimistic assumptions or unrealistic claims.
Show passion: Investors want to invest in businesses that are driven by passion. Make sure your business plan showcases your passion and enthusiasm for your business and its products or services.
Use visuals: A picture is worth a thousand words. Use charts, graphs, and other visuals to help illustrate your points and make your business plan more engaging.
Get feedback: Ask trusted friends, family members, or business advisors to review your business plan and provide feedback. Use their suggestions to refine and improve your plan.
Proofread: Before submitting your business plan, make sure to proofread it thoroughly. Check for typos, grammatical errors, and other mistakes that could make you look unprofessional.
By following these tips, you can make your business plan stand out and increase your chances of securing funding and support for your business.
Common Mistakes to Avoid When Creating a Business Plan
Creating a business plan is a critical step in starting a new business. It's important to take the time to do it right, as a well-crafted business plan can help increase your chances of securing funding and support. However, many entrepreneurs make common mistakes when creating their business plans that can hurt their chances of success. Here are some of the most common mistakes to avoid:
Failing to research the market: Before you start writing your business plan, it's important to research your market and understand your target customers and competitors. Failing to do so can result in a business plan that is unrealistic and lacks a solid understanding of the market.
Not including a financial plan: A business plan without financial projections is like a ship without a compass. Financial projections are an essential part of any business plan and help demonstrate the viability of your business.
Being too optimistic: While it's important to be enthusiastic and optimistic about your business, it's also important to be realistic. Avoid making overly optimistic assumptions or unrealistic claims, as these can hurt your credibility.
Failing to detail your strategies: Your business plan should include a detailed marketing and sales plan, as well as a management and operations plan. Without these key components, your business plan will be incomplete and less likely to convince investors and lenders to support your business.
Neglecting the design: A well-designed business plan is more likely to be read and taken seriously by investors and lenders. Avoid using generic templates or a plain, unappealing format, and instead invest in a professional design that showcases your brand.
Ignoring the competition: Your business plan should include a thorough analysis of your competition, including their strengths and weaknesses, as well as how your business will differentiate itself from the competition. Failing to do so can make it difficult to convince investors and lenders that your business is a good investment.
By avoiding these common mistakes, you can create a strong business plan that increases your chances of securing funding and support for your business.
A business plan is a critical document for any startup, as it lays out the foundation for your company and helps you secure funding and support from investors and lenders. Building a strong business plan involves several key components, including an executive summary, company description, market analysis, product/service description, marketing and sales strategies, financial projections, management and operations plan, funding request, conclusion and next steps, and appendices and supporting documents. To make your business plan stand out, it's important to include a detailed financial plan, be realistic in your assumptions, and invest in a professional design that showcases your brand.
Additionally, it's important to avoid common mistakes such as failing to research the market, neglecting to detail your strategies, and ignoring the competition. By following these guidelines, you can create a strong business plan that increases your chances of success.
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How to write an executive summary for your business plan
An executive summary is a synopsis of all the key sections of your business plan, and it’s one of the most important parts of your plan. .
It should enable the reader to see at a glance your organisation’s core capabilities, strengths, past achievements, and strategic focus and direction, as well as provide an explanation of how these factors set your business apart.
An executive summary should explain succinctly why you wrote the report, emphasise your conclusions and recommendations, and include the essential information used to support those conclusions.
It's important readers like investors and lenders can grasp this information quickly and are encouraged to read on.
In other words, your executive summary should be able to be read as a separate, standalone document, communicating the whole story independently of the full business plan.
What to include in an executive summary
Think of your executive summary as an introduction to your business. Include:
- your mission statement
- company information and management team
- growth highlights
- financial information
- The market and your customer
- market opportunity
- marketing and sales
- competition and your competitive advantage
- business operations
- financial projections and plans
- summary of future plans.
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Best practices for writing an executive summary
- Make it compelling. Investors and lenders read this section first, and you want them to continue reading. For example, if you're selling a business idea to investors, include highlights that will encourage potential investors to read on. This might be related to growth rates, your competitive edge, or an exciting new technology.
- Focus on providing a summary. The business plan itself will provide the details. Keep it short and concise, but ensure you explain clearly why you have arrived at your conclusions. The suggested length is one to three pages.
- Don't introduce any information that isn't covered in the business plan.
- Organise it according to the sequence of information presented in the full plan.
- Write it after you have completed the plan and decided on your recommendations.
- Use keywords from the main plan to ensure continuity.
- Insert the executive summary as the first section, after or before the table of contents, even though it will be the last component you have written.
- Create the summary by rephrasing information – don't just cut and paste.
- Include all key fundamentals of the proposed business from the body of the plan, including the financial implications.
- Identify the purpose of the plan and include at least the major recommendations or requests.
- Be clearly articulated, positive, reasoned, concise and to-the-point.
When using an executive summary and business plan to apply for a loan or funding, state clearly and definitively:
- how much you want
- how you're going to use it
- how the money will make your business more profitable
- how you'll repay the loan.
And finally, remember it's important to finish with a compelling closing sentence or two that answers the reader's key question: "Why is this a winning business?"
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How to Write a Punchy Executive Summary of the Business Plan
- by IdeaBuddy
- May 30, 2023
- 4 minute read
Table of Contents Hide
What is an executive summary, how long should an executive summary be, what information to include in the executive summary, write in plain language, tailor the messaging to your audience, keep it enticing and factual, executive summary recap.
A great business plan is the glue that holds together your business idea, market strategy, and customer intel. At the same time, it is a bite-size illustration of your business potential, suitable for investors to check the pulse of your venture easily.
But, most first-time founders have difficulty getting their business plans read by busy investors. So, in this post, we look at components of an attention-grabbing executive summary to get your business plan read to the end.
To understand what makes an executive summary effective, let’s look at the scope of this part of the business plan first.
Think of the executive summary as your elevator pitch. The summary presents bankers and investors with important information about your venture: product or service, market potential, the team behind the company, financial forecasts and plans for growth.
The better you illustrate the core aspects of your product, the higher the chances are that they will keep on reading. If you had to cut down all other parts of your business plan, the executive summary would still have to present your business venture on its own. That’s why it’s best to write this part of the business plan last, as it can serve as a recap of your business idea.
Given the importance of the summary, you and your team will want to invest significant time in crafting it and having it reviewed by experts in the industry, similar-size startups or experienced founders.
A rule of thumb is to keep your executive summary as short as possible. Most often, the executive summary is around two pages long, but it can go up to four pages in length.
Bear in mind that brevity is crucial here. You will want to cover all aspects in some detail within the summary, highlighting vital information only. Later in the plan, you can work on expanding each segment, but for now, it’s good to have a rundown of the main business plan parts.
However, first-time founders might find it difficult to prioritize some parts over others. A good way to get past this block is to try and summarize your entire business plan on one page . This might feel grueling at first, but it is an excellent exercise to really get down to the essentials.
The goal of the executive summary is to illustrate your goals and vision. It should give all the readers a clear answer to the question of who you are as a company and what you set out to accomplish.
As the outline of your business idea, the executive summary should include the following information:
- Mission statement , i.e. what your business aims to achieve and what it does
- A short description of your product or service
- Information on the market , including market saturation and growth potential
- Your business objectives
- Evidence for viability and feasibility of your idea
- Competitors and your competitive advantage
- Funding needs
Tips for writing the executive summary
The executive summary is likely the first interaction between your company and an investor. So, when writing the executive summary, focus on the impression it leaves on the reader.
This is similar to when meeting someone for the first time. A skilled communicator will focus on the person across the table, not on themselves. More specifically, on how that person feels about themselves in your company. This applies to the executive summary as well.
Think of it this way. The investor or banker skimming through your business plan is inundated with requests. They have limited time and so your job is to remove any potential inconvenience for them, as they attempt to read your business plan.
So, how does this translate to the actual writing of the summary?
First of all, you will want to tailor all your messages within the summary to the reader. This means avoiding any industry-specific lingo, corporate speak, or abbreviations that don’t add value to the message.
More importantly, such wording can confuse your reader. While investors and bankers are well versed in finance, they might not understand the intricacies of molecular biology or self-driving cars, or even the specific issues in remote language learning.
They then have to ask for clarifications, which causes additional work for them, and so you risk that they will reject or overlook your idea.
Building on the previous point, your executive summary needs to speak in a language that investors understand. That means you will need to adjust your copy for several target personas.
If you’re pitching to an investor, focus on enticing them to explore new market opportunities and revenue streams.
When preparing to take a loan from a bank, support your request by demonstrating the feasibility of your idea, the experience of founders, and current market positioning. In that case, you may want to include the amount of funding you need and how you plan to use it.
When writing the summary, you will want to strike a balance between it being compelling and factual. This means that you want to present the facts about your business venture but also illustrate the potential for the idea’s expansion.
The summary is not a place for overly elaborate storytelling, but rather for the key stats and plans to achieve the goal, highlighting the benefits for your reader.
Remember, the executive summary of the business plan is the first interaction between your business and the reader. And so, it can determine the course of your business success, both short- and long-term.
If you do it right, you can boost your business expansion. And the way to do it is to focus on essential information, building the case for your business to receive support, whether it’s funding or partnership opportunities.
Looking to grow your business idea to a sustainable venture? Give Idea Buddy a go and create solid foundations for your business today.
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What should a business plan include?
1. the executive summary, 2. a description of the business, 3. the market(s) the business will operate in, 4. a swot analysis.
5. Management team and personnel
6. The products or services offered
8. A financial plan
The contents of a business plan
This is placed as number one on our list of components of a business plan , but it can easily be the final stage. That's because sometimes it's easiest to write your summary after you've covered all the other details.
A great summary is one of the key features of a business plan. It serves as an overview of your entire business and the elements surrounding it.
Be sure to outline succinctly the 5 "W"s (Who, What, Why, When, Where) as well as the mission statement . Think about why you started the business along with where you would like it to be in the future, how will you get there? Your mission statement is the start of creating a culture that people in your organisation will live and work by.
This section should contain details of things such as your goals and the customers you will service. What are the products and services you will offer to your customers? You'll need to provide an overview of them and how they will address customers' needs and wants?
You've come up with this great business idea , but how will it do in the market? Or, more importantly, what is the market for it? How well do you know the market? What does a typical buyer look like, what is their income level? Does the business have the hallmarks of disruptive innovation ?
This is the time to research and determine who your target market is and ask specific questions that relate to your product or service. Put you idea to the test. What have others done before you and what can you do differently and better? Analyse what information you've uncovered and outline it's potential impact in your plan.
Create a detailed list of your strengths, weaknesses, opportunities and threats. This needs to be done with an open and honest approach, keep emotions out of it, focus on being objective when analysing your business and those of your competitors.
Any strengths you uncover will represent internal, positive factors in your business that are within your control. Weaknesses are also internal, but are negative factors that need to be improved.
Both opportunities and threats are external factors. While opportunities will potentially positively impact on your business, threats represent negative factors beyond your control. For example, are there high barriers to entering the market? Does a competitor have the market cornered due to brand loyal customers? These could harm your enterprise, so you need to strategise for it in your plan.
5. The management team and personnel
Who will run the business, who are the directors in the business? What are the skills of the management team and how do their different responsibilities make maximum use of their abilities. What is the chain of command in terms of decision making?
Also use this section to identify how the management team, and taking on employees will help maximise strengths, while addressing identified weaknesses to help improve the business.
Finally, which of the UK's business structures will you choose to operate through?
- Limited company
- Limited liability partnership
In this section you need to detail what will be produced and how it will be sold. You should explain how your product or service will meet a particular need in the marketplace, and how you'll get customers returning to make repeat purchases. Repeat custom is after all the lifeblood of many a good business.
Who will you rely on, in terms of suppliers, to help you assemble your products? What intellectual property, patents or copyright do you own, or might you be at risk of potentially infringing?
What is the branding to your business? What are the key messages you want to communicate with your target market and how will you go about reaching them? How will you achieve market share and at what cost in terms of your budget?
8. Let's talk money: A financial plan
Ideas are great, but how will you make them a reality and sustain a viable business. Creating a financial plan will give you the opportunity to address your financial concerns and talk money, think about start-up costs, financial projections , funding and investor pitches.
You'll need to list how much your start-up will cost, everything from stationary to leases should be outlined and balanced against your financial projections.
Don't fear change, your business plan isn't written in stone
It’s important to remember that your business plan isn’t written in stone. This is a document that you and your staff can improve and update as the business grows and changes. Your plan should be reviewed regularly.
Consider implementing a monthly review to track progress or make adjustments to your strategy. Accountability and motivation are key in making sure your goals are met, think about the people involved and what can you do to keep them inspired.
This post was created on 26/06/2018 and updated on 18/02/2022.
Please be aware that information provided by this blog is subject to regular legal and regulatory change. We recommend that you do not take any information held within our website or guides (eBooks) as a definitive guide to the law on the relevant matter being discussed. We suggest your course of action should be to seek legal or professional advice where necessary rather than relying on the content supplied by the author(s) of this blog.
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