The executive summary of a business plan is the gateway to your great idea. It is the first chapter of this document, which is why it is the first thing investors, partners, banks, etc. will read. In it you will write the reasons why the reader should take your project into account.
“The main objective of an executive summary is to get the reader interested in your business idea, without the need for them to read the plan in its entirety”
If you manage to be clear and persuasive enough, you will be very close to finding great investment opportunities and support for your new company. Kevan Williams, author of the book “Brilliant Business Plan” states that the executive summary should have a maximum of 2 pages and should answer the following questions:
1. Is there an attractive market for your business idea?
The first thing an investor would want to know is if there is someone in the world who wants to pay for your products or services and how big is that market. If there are interested people and they are enough, you will have started on the right foot. Use phrases like:
- The economy has been growing at a rate of 5% per year.
- The transport ministry estimates that used vehicle sales need to grow 20% by 2018 to meet demand.
- The download of applications related to personal finance has increased by 35% within the last 2 years.
Remember that these phrases must always show that there is an opportunity in the market, they must highlight growth and the sources of information must be reliable. Look for studies carried out by government entities or market analyzes carried out by large companies.
Also read: When and why it is good to have a business plan.
2. Does your company have the products or services necessary to win in this market?
If you demonstrate that there is an opportunity in the market, now you must demonstrate that you have the products to take advantage of that market. In this section you must answer the following questions:
- What is your product or service?
- Who are your competitors?
- How are you going to differentiate yourself from your competitors?
Highlight the data found in your market research. The use of numbers is always a sign that you have investigated and have a way to argue the potential of your idea. You need to do some legwork and prove that your product really works.
3. Does your company have the right people to make this happen?
You have already shown that a market exists, it is attractive and that you have a product to satisfy it. However, this is not enough to ensure that you have everything to create a business. The final step is to convince the reader that you and your team are the right people to carry out this project. You must answer the following questions.
- Who will be in charge of running the business? Name the key people.
- What is your experience?
- Why are these individuals good for your business?
- How committed are you to this project?
Also read: How to make my business plan in 3 simple steps.
4. How much money will your company make?
It is very possible that the person who reads your business plan is willing to invest money in your idea, so they will be very interested to know when they will have their money back. For this reason you should have prepared a financial summary that contains the following:
- Expected revenue in the first year, based on the size of the market and the portion you plan to cover.
- Sales volume of the first three years.
- Gross and net earnings for the first three years.
- Payment plan for debts acquired.
- Results of the financial sensitivity analysis.
- Return of investment.
5. What will you do to grow your company?
If the reader reaches this point it is because he is convinced that there is a very good opportunity. For this reason, he will be very interested in what your long-term plans are, so it is better that you think now, what you will do when your company is a success.
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If you are really interested in creating your own business and want to find more information on this subject, buy our book “How to create a company while you work. Discover how to manage your time, manage your money and motivate yourself while creating a company and working for another” , where you will find all the information you need to found your own company, without having to leave your job.
