What should be included in an Executive Summary?
Starting your dream business, you require a business plan. When you talk about a business plan, the most important aspect of the business plan is the executive summary. After all, it is an executive summary that lures the investors and convinces them to invest in your idea. An executive summary is written after the completion of your business plan, as it is a summary.
Get in the Investors’ Shoes
Investors get numerous emails of business plans and everyone wants them to invest in their idea.
Practically, an investor gets 2 minutes to scan through any business plan. Hence, it is the executive summary that they read and if they like the idea, then they study the complete business plan.
So, an executive summary is your jackpot, which decides the investors’ investment. Therefore, it has to be the best and should cover all the important aspects of your business. Are you worried about how to write a well-crafted executive summary? Don’t worry, we will guide you through.
Firstly, what is an executive summary? It is the most crucial part of your business plan. It is a synopsis or summary of the key points of your business plan. It is the first and foremost part of your business plan which the investors read. Your executive summary should be interesting as well as precise. Even more, it should cover all the important parts of your business plan. How to make a perfect executive summary that wins the investors’ heart. Here are the key elements.
- Your business idea and the funding requirements should comply with the investment,
- The market size should be huge,
- The team should have the desired skill set,
- The sector shouldn’t be over-allocated,
The introduction must concisely cover all the above points.
The remaining part should follow a standard procedure. Firstly, your business idea will be described, team, market, products, the financial aspect, and lastly the funding requirement.
Introduce your idea in a few sentences. Cover the legal aspect, location, product/service, shareholders and management, the activities, and realistic milestones. The prime objective is to build the interest of the investor. Describe them that you have the right team, resources, and generate the traction of your product. If there are some loopholes in the team, then you need to address them and show them here itself how you will remove these loopholes.
Investors will get answers to his set of questions like:
What he will be investing in?
Who will lead the project?
Why you will run the company?
Who are the shareholders?
Describe your product/service in detail here. You need to generate the need and then describe how your product will be beneficial and how it will solve all the problems. Your product/service should address a customers’ need or a market opportunity.
Moving on, you need to give an overview of the market of the product/service. Your market study must include the following:
- Customers: Who are the customers? What’s the market size? What is the estimated value of the market size?
- Need: Why will the users/customers buy your product/service?
- Marketing: What is your marketing strategy? How will you enter the market?
- Competitors: Who are your competitors? What differentiates you from the competitors?
The Financial Outlook
Herein, you need to describe the financial aspect of your business. Showcase your historical costs and projected financials, and mention your prime assumptions underlying your forecast. Which figures should be mentioned?
Show your profitability with positive EBITDA
Show your cash generation with a positive operating cash flow
Show your growth in revenue, EBITDA, and operating cash flow are growing on a regular basis
You can also include a few KPI (Key Performance Indicators)
Conclude the executive summary, mentioning the requirement of funds and how will it be utilized. If required, mention the % equity on offer, the length of the loan etcetera.
If you are planning to raise equity and have received bidding offers from some investors, then don’t forget to mention it here as it will attract the investors’ interest and end up investing in your idea.
Done! We hope that you get a better understanding of the executive summary from the above blog. Still, if you are facing problems in creating your executive summary and a comprehensive business plan then visit Infocrest now.