How to Write a Business Plan: Executive Summary
If you’ve got an idea that you know in your entrepreneurial soul is market gold, you’re likely in the process of writing a business plan. A business plan is necessary for any idea that needs funding to get off the ground – after all, ideas aren’t worth too much on their own without money to back them up! If you want your business plan to stand out from the rest, remember these words: it’s all about the research.
An executive summary is exactly what it says on the tin: a compact version of your big idea. You need to answer these main questions in an executive summary:
- What kind of company is it?
- What is your genre? Are you an internet-based company or will you have a store? Are you planning to focus locally, nationally, or internationally?
- What does the company sell, and why is it different from other companies?
- You need to have a unique niche – doubtless there are others who are selling something similar to what you are, but why would the customer choose your business?
- Who is managing the company?
- Include yourself and any other business partners. Be sure to elaborate on the strengths of your team – often, the people behind the idea are more important than the idea itself.
- How much money is needed? What will it be used for?
- Will you need all the money at once, or in increments? Can you give an overview of your spending plans?
It’s a good idea to write the executive summary first, and then build your business plan around that. The main thing to keep in mind when writing an executive summary is that you need to be both concise and compelling – which means that your executive summary needs to be rich with statistics and sentences that sell the uniqueness of your plan.
As for the layout of business plans, the best method is to establish a problem that the business will solve. This is a great three-step way to look at it:
- What is the problem? If you’re looking to go into business, that means you have discovered a niche or an opportunity to make money that others have not yet. In essence, there is a problem out there that is looking to be solved. Planning this part of the executive summary can be trickier than it first appears. Why is your business the right solution to this problem? Why haven’t your competitors addressed this problem?
- What is the solution? The short answer is that your business is the solution. But in order to convince executives to open their wallets, you’ll need to show how your business is the unique and profitable solution.
- Substantiate your claims. As this is an executive summary, this doesn’t mean lay out every scrap of research you’ve been doing for the past six months. The executive summary is a great way to make a statement with the body of the knowledge that you’ve accumulated during your research phase, and allow the curious reader to refer to your accumulated research elsewhere in the plan.
In order to write a compelling business plan, be prepared to come to the forefront with facts. Showing an executive that you have the right business for the job takes as much research as it does entrepreneurial ingenuity – and many business plans are heavy on dreams and light on fact. But if you look at your business plan as a chance to show the executives how real your chances of success are, you’ll differentiate yourself from the pack and make it more likely that your plan will be the one that gains the trust of the moneylenders.