How To Write A Business Plan: Part 1 – Executive Summary
The business plan boot camp will consist of nine parts in total, each tackling a portion of the plan and the basics of how to handle its successful creation as prospective businesses look to secure funding and backing. Put together, these skills will help create a business plan that will wow potential investors.
Part 1. The Executive Summary
If you’re a budding entrepreneur hoping to start your own business one of the first items on your to do list should be putting together a business plan. There aren’t many businesses that can get legitimate funding from established creditors and banking institutions without a plan for how the money loaned is going to be used.
Creditors want to see that you’ve thought out all of details of your business idea, This means having knowledge of everything from the ins and outs of market demand and how you’ll use the money they loan you to smaller details like how you’ll go about solving real problems for real people You’re a good risk if they can feel confident that you have been meticulous in your research and smart with your strategy. To get there, you need a business plan.
A business plan typically has nine main parts, of which the executive summary is the first and perhaps the most important. It is the first section of your business plan that an investor will see. It needs to clear, well written and thorough.
When it comes down to it, the purpose of the executive summary is to tell your potential investors what your company is about, your goals for the company, and why you think your business has what it takes to make it in a saturated, overly competitive market. Your executive summary is your first opportunity to grab the attention of your potential investors and to set yourself up as a straightforward, goal-oriented, savvy businessperson. Think of your executive summary as your first impression. It will be the most viewed part of your business plan. It should be concise, clocking in at a page at most.
You want your executive summary to highlight the strongest parts of your business plan. As a result, the executive summary is actually the last section of your business plan you write, even though it appears first in your plan.
Whether you have an established business or are starting a new one, make sure to include the following in your executive summary:
Mission Statement: This statement explains succinctly what your business is about. It should be one paragraph max and generally should be able to summarize the essence of your business in only a few sentences.
Company Information Statement: Write a statement that tells the history of your company — when it was established, where it is located, the names of the people who founded it, their roles today, the number of employees you currently have, etc. This should be no more than 1-3 paragraphs.
Growth Highlight Statement: Write a statement that demonstrates the growth of your company over time. Make sure to include examples, such as financial successes and applicable financial data. You can include graphs and charts in this section.
Products and Services Statement: Write about the specific services and products your company produces.
Financial Information Section: Describe your current investors and backers as well as the bank supporting you. This is especially important to include if you are hoping to acquire more financing from additional investors.
Future Plans Summary: Write about your goals for the business. Where would you like to take it in the future? Be detailed and specific, but also concise.
If you don’t have all the data that an established business will have available, you can still show your creditors a thoughtful businessperson and idea. You may not have as much information as an established business, but you do have an angle that market research can help flesh out.
Executive Summary Bullets:
- A Mission Statement: Tell the investor what your business idea is about.
- A Background Information Statement: Write a statement focuses on your past work experience that relates to your startup and the decisions you made that led you to pursue your startup.
- A Products and Services Statement: Write about the specific services and products you hope to produce at your company, if applicable.
- A Market Analysis Statement: Do market analysis research that proves there is a need for your business. What are the gaps that are currently not being filled? What specifically will your company do that will help fill those gaps. Charts and graphs are acceptable in this section.
- A Financial Information Section: Do you have any initial investors or backing from a bank? If so describe them in this section.
- A Future Plans Summary: Cap off your executive summary by telling your investors where you hope to take your startup in the future.
Executive Summary Pointers:
- Write concisely and precisely. Every word counts. Even sections that need a longer length to get your point across can still be concise.
- Run spell-check and get a friend who is a good copyeditor to read through your sections before submitting them.
- Back up your statements with proof (anecdotes, statistics, analysis, research)
- Be crystal clear about your unique strengths and what is remarkable about your company. What are you selling that is solving a real problem for real people?
- Don’t be afraid to narrow. You don’t want to be a Jack- or Jill-of-all-Trades. You want to have a business idea that is specific enough that it meets a specific need without alienating new potential customers. That can be a tough balance to find — but that’s where your market research can really help support your company description and your overall business plan.
It’s important that you don’t try to start with your Executive Summary. You really need to go through the steps of diving deep into the other eight sections before you can come up for a breath and summarize. Think of your Executive Summary as the aerial view of your business plan while the other eight sections are your deep dive.
Stay tuned for Part 2 of How to Write a Business Plan, focusing on putting together a successful company description that builds off of the executive summary.
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