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Two
Types of Business Plan Executive Summaries
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by:
Dave Lavinsky
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Companies seeking capital often ask how long
the Executive Summary of their business plan should be. The answer
depends upon the use of the summary, mainly determining if 1) it
precedes the full business plan, or 2) it will be used as a stand-alone
document.
When the Executive Summary precedes the business plan, its length
should be short, typically only one to two pages and certainly no
longer than three pages. This is because the Executive Summary is not
meant to tell the whole story of the business opportunity. Rather, the
summary must simply stimulate and motivate the investor to learn more
about the company in the body of the plan.
The second type of Executive Summary is a stand-alone document. That
is, it is given, by itself, to investors for their initial review. If
interested, the investor will then request the full business plan. A
stand-alone Executive Summary is often used to limit the flow of
information. That is, if an investor is not interested in the general
opportunity that your summary presents, you don’t want to reveal to
them intimate details of your plan.
Regardless of which type of Executive Summary you are developing, the
summary must included the following critical elements:
1. A concise explanation of the business
2. A description of the market size and market need for the business
3. A discussion of how the company is uniquely qualified to fulfill
this need
In addition, a stand-alone Executive Summary should include summaries
of each essential elements of the business plan. This includes
paragraphs addressing each of the following:
- Customer Analysis: What specific customer segments the company is
targeting and their demographic profiles
- Competition: Who the company’s direct competitors are and the
company’s key competitive advantages
- Marketing Plan: How the company will effectively penetrate its target
market
- Financial Plan: A summary of the financial projections of the company
- Management Team: Biographies of key management team and Board members
The Executive Summary is the most critical element of the business
plan. If it does not grab the investor’s attention, the investor will
neither read nor request the full business plan. As such, spend time
developing the best possible summary, create two versions (e.g.,
stand-alone and full plan predecessor) as appropriate, and work to get
it in the hands of the right investors.
About the author:
GT Business
Plans has developed over 200 business plans for clients that
have collectively raised over $750 million in financing, launched
numerous new product and service lines and gained competitive advantage
and market share. GT Business Plans is the sister site of GT Venture Capital
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