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Writing Business Plan Executive Summary – format, example and guidance

I write business plans for some startup and SME clients. I review business plans for Enterprise Agencies. I also provide training on business plans. A question I am often asked is, ‘what content goes into a business plan’, with the follow up being, ‘how much information should be included in an Executive Summary‘. Most people are wondering about what should be included and more importantly what should just be filtered out. This blog article will address this particular issue of writing a ‘compelling Executive Summary’.

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Business summaries are not actually summaries

I read a super post entitled, ‘The Structure of a Perfect Pitch‘ by Dave Bailey, which points out that startups are regularly asked to provide short summaries in profiles, applications, websites, emails, social media, partners, press, pitches and of course in business plans. His key point is that a Business Summary is not really a summary at all…

When the whole team is working night and day on complex problems, how are you supposed to sum up everything your company does?
The truth is you can’t. And you shouldn’t.
The goal isn’t to compress everything your company does, or list every benefit you offer your customers. A great summary is sales copy that effectively positions your company to your audience.

Dave Bailey, Entrepreneur, Early Stage Investor and Coach

Write Your Summary First

Business plans take time to write. I like to prepare a PowerPoint presentation with key bullets on each of the headings in the business plan – one (or two) slide(s) for Problem, Solution, Marketing Opportunity, Customer, Marketing, Operations and Finance.

I then suggest writing your initial Executive Summary. There are probably 5 or 6 key pieces of information that you want to get across to the reader. You know what those are before you start. So go ahead and write your summary or story of your business – what you want the reader to know, think and feel.

Tell the story of your business -
Tell the story of your Business

You might not have the financials done at that stage so use placeholders for the important figures like turnover, net profit %, margins and other KPIs like markets, customers and product – all of which can be added later. When you have finished your business plan you can go back to finalise the Executive Summary. This approach will make sure that the Executive Summary has a nice flow and is not a series of disjointed trains of thought as if written by different people at different times.

BTW, I highly recommend that you don’t ‘copy + paste’ from other documents. Those were written for other purposes. Start from a blank screen and write to address the essence of each issue. This will ensure that the message is concise but comprehensive. You can always check other documents later for consistency particularly if you have phrased something in a particular way that works really well.

Format for 1 Minute Introduction

There is a superb commercialisation workbook called, ‘So What, Who Cares, Why You’ by Wendy Kennedy. I like to use the title as a prompt for a concise 1-minute introduction that participants can use at training sessions. So 20 seconds on so what, 20 seconds on who cares, and 20 seconds on why you. (contents in brackets is optional if can be weaved into the message).

  • So What
    What is the problem you are solving and what does solution involve from the customer perspective (try to mention pricing)
  • Who cares
    Who is the customer (how big a market does this represent ie quantify)
  • Why You
    Skills, qualifications of the promoter (relevance to opportunity = story) + key team.

The objective is not to explain everything about your business but ensure some understanding and hopefully elicit some excitement from the recipient. The goal is to start a conversation – these begin with questions (avoiding the polite nod).

Responding “Yes” but really doesn’t understand what you are saying.

So What, Who Cares, Why You are core elements of an Executive Summary as they are the key questions that an interested person will want and need to know about your business. I will outline my format for an Executive Summary shortly but first I want to highlight some key points on business plans from Art of the Start by Guy Kawasaki, a book that I read shortly after it was first published in 2004 [a classic that I have read on 3 separate occasions. BTW, the updated and revised (2015) Art of the Start 2.0 was not as groundbreaking for me].

The Art of Writing a Business Plan

The Art of Writing a Business Plan is the title of Chapter 4 of Art of the Start – the original book. The author declares that the business plan is the modern-day equivalent of the Holy Grail.

It is supposed to satisfy everyone (investors, directors, founders, and managers) and induce magical effects on those who partake of it – specifically, the irresistible urge to write a check. Also, like the Holy Grail, the business plan remains largely unattainable and mythological. Most experts won’t agree, but a busines plan is of limite usefulness for a startup because entrepreneurs base so much of their plans on assumptions, ‘visions’ and unknows. ….. However, many investors, recruits, potetial board members and internal decison makers do expect a business plan and won’t proceed without one. Plus, writing a business plan does have the benefit of forcing a team to work together to formalise intentions. So write a plan, and write it well, but don’t convince yourself it’s the Holy Grail. Organisations are successful because of good implementation, not good business plans.

Chapter 4, Art of the Start – The Time Tested, Battle Hardened Guide for Anyone Starting Anything

Guy’s advice is to ‘Pitch then Plan’ on basis that a good business plan is a detailed version of a pitch – as opposed to a pitch being a distilled version of a business plan. The slides essential for a good pitch for investors were outlined:

  1. Title Slide
  2. Problem
  3. Solution
  4. Business Model
  5. Underlying Magic
  6. Marketing and sales
  7. Competition
  8. Management team
  9. Financial projections and key metrics
  10. Current status, accomplishments to date, timeline, and use of funds.

He adds that the majority of the business plan writing effort should be devoted to getting the executive summary right.

A good Executive Summary is a concise and clear description of the problem you solve, how you solve it, your busines model, and the underlying magic of your product or service. It is the most important part of your business plan because it will determine whether people will read the rest of the document. If the Executive Summary fails to spark interest, then the game is lost before it even begins.

Chapter 4, Art of the Start – The Time Tested, Battle Hardened Guide for Anyone Starting Anything

My ‘template’ for the Executive Summary

Before presenting my template there are 3 key points to consider:

  1. I generally like to keep the Executive Summary to two pages. I think it is important to start with a short paragraph of 3 lines which details the value proposition referencing the problem being solved, the customer and how the solution is better than the competition. The reader will want to know as much as possible about the business immediately to put their mind at ease so this (long) sentence is critical in setting up the story of the business with all pertinent details to be added in summary format in these first two pages.
  2. I will then detail the business using headings in bold containing one short paragraph per topic. I am also inclined to include a graphic in the Executive Summary which summaries the product and/or business model. It is nice to add colour to the document (personally find them more pleasant to read).
  3. The finances are critical and must be given sufficient prominence. Turnover, overheads, margin, pricing and key metrics such as the number of customers, average value of customers, growth levels and customer acquisition costs. If for instance, the business is seeking to raise money, I would declare that in your very first paragraph. It would then be discussed properly in the Executive Summary (and in even greater detail in the main text of the plan – would be treated as a theme running through the document).

Information to present and in what order?

I like to frame my Executive Summary with six components.

  1. Open a business plan with a summary of the value proposition. The first paragraph of circa 3 lines will summarise the customer, job to be done/ finished story benefit and solution. [It might then clarify the reason for writing and reading the plan particularly if raising finance].
  2. Problem & Solution
    This is the ‘So What’ of your business. Outline the ‘burning problem’ being solved for customers outlining what the solution involves. It is great to reference pricing at this juncture. As per ‘The Startup Pitch‘ it is important to start by outlining a real problem as it orients the reader to want to find out the solution.
  3. Customer & Market
    There are two dimensions to ‘Who Cares’. Firstly, building on the previous section, you can describe your consumer and outline the use case for specific customer segments. You might also need to explain who the decision maker is and if there is a different end-user. For B2B, I like to cite reference customers – beta or ideally paying customers who could be described as strategic reference customers in the verticals that you are targetting.
  4. Promoter & Team
    This is the ‘Why You’ of the Business proposition. Has the team the experience and skills to deliver on the plan. This can be discussed within context of what has been achieved to date. Advisors are also important as are key outsourced resources.
  5. Business Model & Finances
    I will normally include a summary table in this section with 3 year forecasts for Sales, Margins, Number of Products or Markets, and Employees. A more detailed version can be presented in the main document in the finance section. It is important the the business model (in this context this means how the business makes money) is detailed. I would also take opportunity to reiterate the reason for writing the plan at this juncture.
  6. Your secret sauce
    Each of the above will be written in the order presented and be of about the same length (5-6 lines). I would then suggest that you review the text to see if it does full justice to ‘your competitive advantage’ or ‘secret sauce’. If there is more detail that you need to add, you firstly decide where to place it in terms of the flow of the message – so that section will be a bit longer than the others. You might have Intellectual Property or an technological advantage over the competition (So What), a particularly strong Route to Market or access to Customers (Who Cares), or a great Team to include Partners (Why You). So yes, my view is that your secret sauce will probably emerge when you drill down into So What, Who Cares, Why You – it will be identified by talking to your customers – your raving fan customers will tell you what they really value in your solution.

Example Executive Summary – TLC Dog Grooming

TLC Business Plan cover page by Donncha Hughes Business Advisor

I wrote an example business plan for TLC Dog Grooming, a ficticious business, using my business plan template (follows Business Cube the Guide to Writing a Business Plan by InterTrade Ireland). The full plan is included as a resource in my online training programme, ‘Writing your Business Plan’ along with the business plan template. This download presents the Executive Summary

The Executive Summary will form the basis of a 2-page Investor Teaser which may be distributed in advance of a full business plan perhaps with a slide deck.

Business planning is indispensable

I would certainly agree with Guy Kawasaki when he says that “for most entrepreneurs, the business plan is one of the least important factors in raising money. If an investor is leaning towards a positive decision, then the business plan only reinforces this inkling. It probably wasn’t responsible for the positive position itself. If the investor is leaning towards a negative decision, then it’s unlikely that the plan will change his mind. He lists 4 realistic reasons to write a business plan.

  • In the latter due-diligence stage of courting an investor, the investor will ask for one. It’s part of the game – a business plan has to be ‘in the file’
  • Writing a plan forces a founding team to work together. With any luck, this will help generate a strong, cohesive team. You might even figure out who you don’t want to work with.
  • Writing a business plan makes the team consider issues that it had overlooked or glossed over in its euphoria – for example, developing a customer service policy.
  • Finally, the writing of a plan uncovers holes in the founding team. If you look around the room and realise that no one can implement key elements of the plan, you know that someone is missing.

His conclusion is that the document itself is not nearly as important as the process that leads to writing the document. I will also leave the final word to Mr Kawasaki.

You and I both know that you don’t know when your product or service will ship, who will buy it, how much they will pay, and if they’ll ever reorder it, but you can’t state this in a business plan. So write as if you know exactly what the future holds, and react opportunistically when you encounter reality.

Chapter 4, Art of the Start – The Time Tested, Battle Hardened Guide for Anyone Starting Anything

As always I hope that you enjoyed reading this post – comments and social shares welcome.

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