Peak SBC, LLC  




by: Cary Christian

I told you last week about the three keys to writing an effective business plan. I decided it would be worthwhile to spend a little more time on the subject this week in order to cover the all-important Executive Summary.

Business plans are always long documents, particularly if they are well conceived and well written. Some users of a business plan, such as venture capitalists, receive hundreds or maybe even thousands of business plans per week. There is simply no way they are going to read every one of them.

Assuming you are submitting your business plan because you actually WANT someone to read it, the Executive Summary is your key to getting it read. This is where you build enough interest to get the reader to want to read the rest of it. For this reason, it is BY FAR the most important section of your business plan. Write a poor Executive Summary and the rest of the plan is immaterial. It could be blank, for that matter, because it will NOT get read.


Don't try to simply summarize every section included in the body of the business plan. It will come off as stilted and awkward. Summarize the most important points contained in the document, i.e., those sections that carry the most importance. Here's what you should include.


Describe your business. The reader needs to first understand what it is you do in order for the remainder of the information to make any sense. Give them a brief, well written two or three paragraph summary of your business.


Show the reader that you understand the market you operate in. Describe it for them. Tell them about your competition. Tell them what makes your business unique or about the strategic strengths you have within your market. Tell them where you stand in your market. Are you the market leader? Second but trying harder? A new entry into the market?

If you are a new entry into the market, this section becomes even more important. If the reader doesn't believe after reading this section that you have a good grasp of the market, he or she will not bother reading further.

Try to keep this section to three or four paragraphs, but if you must use more because of complexities in your market or your position within it, take the extra space needed here and save it elsewhere.

You can split this section into several subsections if it aids the flow of the summary. For example, you might present a section discussing your competition in the market and dedicate another to your unique position or strengths.


After describing your business and the market you operate in, it's time to tell the reader what you're going to do with their money. You need to convince them, in a very small amount of space, that their money is going to boost you over the top and make it possible for you to meet or exceed the projected financial information you will be presenting next.


Summarize your projected income statement, statement of cash flow and balance sheet. Present each statement summarized to the level of major categories. For example, instead of listing all the individual expenses that make up Operating Expenses, simply list all of the expenses as one line item called "Operating Expenses." It should be easy enough to condense each statement to ten lines or less.

Your goal is to give the reader an overview of the projected financial results. They'll get into the details later.

If necessary, present summaries of other supporting schedules. If you believe such supplemental information is important to an adequate understanding of the summarized statements, provide it.


Give the reader a summary of what you're looking for. If you want to raise $1 million in operating capital, say so. Tell them the terms you are prepared to offer, whether it be interest, an equity stake in the business, or a combination of both.


Provide the reader with full contact information for each individual that should be contacted if the reader has questions. Make it easy for them. Provide every address, phone number, fax number, cell phone number, or email address that might be useful to them for the individuals identified as contacts.

Try to keep the entire Executive Summary to five pages. Most readers would prefer three, but it will be very difficult, if not impossible, to provide the information required in less than five because of the inclusion of the financial statement tables. If you write this section well you won't have any trouble keeping their attention through five pages.

And above all, you MUST WRITE IT WELL! Write, rewrite, and rewrite some more. Make the Executive Summary as perfect as it can get. It needs to read fast, flow nicely, provide maximum information with few words (be concise!) and, of course, your punctuation, grammar and spelling should be impeccable.

Copyright (c) 2002


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