Executive Summary

executive-summaryHow to Write an Executive Summary


An Executive Summary, in short, is your best summary or synopsis of your business idea, condensed into a few pages, if possible, and supported by other documents.
 
How important is a great executive summary?
 
The executive summary is to a business plan, what a headline is to an advertisement.  If your headline in an advertisement does not compel the properly targeted prospect or consumer to read further or take the next step, then it has not done it's job, your advertisement dollar is wasted, and your product will not get sold.  
 
Some people will be turned away by a headline in a well written advertisement, and that is ok, as long as it is not turning away the ideal consumer.  
 
Likewise, your executive summary should be clear, concise and compelling enough to persuade the right investor to clear time on his or her schedule in order to meet with you, whether in person or via conference call.  The reason for the executive summary is to position the very best of your business plan, and your qualified team credentials and proposition in front of the investor in such a way that is only takes a few minutes for the busy investor or fund manager to make the decision that your plan is worth taking the next step.  
Remember, an investor worth pitching to is going to greatly value and guard his or her time, and a great executive summary will recognize this and do its job of validating their time by quickly proving the quality of your team and your project in the most concise manner.
 
How to craft your executive summary to get results. . .
 
First, remember that the result you are first seeking is an open door and a commitment from an investor to take deeper look, whether his or her personal style is to read through more of the actual business plan, or to have a conference with you and your team.  Your goal, or the goal of the executive summary, is to secure the next meeting.
 
Second, the executive summary is a representation of your professional presentation, promotional and organizational skills, aside from the actual credibility of the business model (or acquisition) and your executive team.  In other words, the way in which your executive summary is packaged, organized and presented tells the investor and his/her team how professional and prepared you are to receive funding and move forward with a successful venture, whether it is a start-up or an acquisition of a revenue producing property or stabilized business.
 
Third, the executive summary should include 2 main ingredients, that are well supported by several documents, depending on the industry and the scope of the actual business.  While there is no set of specific documents that are common to executive summaries across all industries, every great executive summary should certainly contain at least the following concepts, concisely laid out in an organized and/or bullet point fashion to make it very easy for the reader to summarize that your plan is strong and credible.  
 
The executive summary must very quickly and clearly show that your business concept has (1) the qualified team to get the job done, and (2) that your business concept itself is strong and feasible (the project just makes sense).  
 
The rest of a great executive summary will include supporting documentation to prove those 2 ingredients are true, such as:
 
- The executive summary should show how experienced and qualified your management team is to be successful with the plan
- The make-sense numbers, including future proforma and any historical P&L if it has a history
- Any supporting third party news or statistics that bolsters the need for your business in the specific market
- Renderings, architectural or engineer plans, schematics, and supporting project documents
- A clear use of funds, with proposed dates, or a "draw schedule" as it is referred to in some industries
- A clear exit strategy, or proof that the investor is going to receive his or her ROI
- PFS - Personal Financial Statement of any principal, usually having 20% or more ownership in the project
- Documentation showing there are no encumbrances or other insurmountable obstacles preventing the success of your business plan
- All other supporting documentation that adds to the strength of your plan, and overcomes all objections
 
Fourth, the executive summary should have a summary or synopsis of it's own, distilling the entire pitch to 1 introductory page up front, if possible (i.e. a summary of your summary).  This page should easily and clearly convey in the first paragraph, exactly what the business does.  It should reveal either an "aha" kind of insight into a current un-serviced or under-serviced need in the market, or clearly paint the picture as to why your business is essential in its current and future market.  If there is actually a problem, or a growing problem in the current market that your business is poised to serve, that should be concisely pointed out as well.  If you are acquiring an established business or piece of investment real estate, then your summary still needs to show that your team can handle the business or property successfully, and that the business or property itself is sustainable and proposes a solid ROI for the investor.
 
The summary should quickly establish the credibility of your management team, and the credibility of your business or idea.  If it can do this in a compelling way that tells the investor that he or she should read more, then it has done its job.
 
One other way to check if your summary is on target is if it can concisely hit these 4 marks:
 
1- The Business and Team's qualifications or legitimacy
2- The problem or need in the market
3- Your business as the solution for this need
4- Why "now" is the best time for the Business
 
Remember, you will know that a great Executive Summary has done its job when you secure a meeting with a qualified, competent investor who is serious about going through the due diligence process to verify that your team and your plan is worth his or her decision to take personal, financial risk.  Your summary, in essence, is a sales and marketing tool and it's job is to get a meeting with a credible, capable investor.
 
The national and international partners of 5th Avenue Acquisitions & Venture Capitalists are in the business of helping you secure the private financing that is necessary to help your business plans succeed.  To learn more about our services, or to get started on your path to funding, you can fill out our project funding form here.
 
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