Selling an idea to a potential investor needs a strong business plan, and to have a lasting impact that business plan needs an even stronger executive summary. It’s the first thing an investor or lender sees, and if it isn’t good, it’s probably also the last thing they’ll see of your business plan.
Your business plan or investment proposal needs an executive summary to include just the key points of your plan and not bore anyone with the minutiae of it. Writing an executive summary will also help you determine what the high-value USPs of your product or service are and communicate that more effectively.
An executive summary is most likely the only section someone might read in your business plan, particularly in the early stages of evaluation. It is therefore the most important hook you must keep for an investor interested in learning more about your business and considering funding it.
Here are a few key points to remember when writing an executive summary for your business proposal.
First and foremost
The first paragraph of your executive summary is almost as important as the executive summary is to the entire business plan.
Brevity is vital
Your executive summary is meant to be exactly what it’s called – a summary. Don’t make the reader work too hard by having to read pages after pages summarizing points from your plan. Keep it brief, and ideally, no more than two pages long.
Lastly…
Writing the executive summary of your business proposal after the entire plan has been done is ideal. This will ensure that you’ve summarized the most essential sections of the plan accurately.
What should the Executive Summary include?
Given that the executive summary includes key points from your business plan, you should ensure mentioning the points below to make it easier for an investor to understand your business and its potential. Don’t make them dig deeper. What an investor will like is to see how and where you’re going to be spending his money and the potential to generate returns.
The Problem Your Business Solves
A good product or service solves an actual customer need. Investors know when there’s a demand for something. It’s your job to tell them how your supply will help the end-user and bring them money.
The Target Market
There isn’t a problem unless you know who you are solving it for. This part of the executive summary should mention your target audience, their demographics, interests, and pain points.
Your Business’s Competition
Not including competition in the market for your business is a rookie mistake and any investor will construe that for lack of experience. Mentioning your existing competition in terms of both, brand, and product, is important for the investor to understand the industry landscape for your business.
Your Core Team
You must have heard the saying “If you want to go fast, go alone; but if you want to go far, go together”. Briefly introducing your core team, their experience and their role in your company are important in letting the investor know that you intend to go far, and in building trust with the investor that if he were to invest, there’s a good team to support and grow his investments.
A Financial Overview
If you’re asking for money, you have to talk about money. If it is a new business, you should share projections for the next 3-5 years. However, if you’re seeking additional funding for an existing business, give a summary of your existing financials along with an estimated projection for the next 3 years.
Your Funding Needs
Lastly, and most importantly, you have to mention why you’re asking an investor to put his money and trust in your business and how exactly you’re going to be using that investment to scale your business.
Clearly, the executive summary is crucial. Now make it so interesting that someone would actually want to read your entire report and support you in scaling your business.