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Executive summaries highlight the best parts of your company. However, a poorly written document can cause potential investors to pause and go with another team. Fortunately, you can write an executive summary with a bit of insight and practice.
In this post, we outlined everything entrepreneurs would want to know about executive summaries.
What is an Executive Summary?
Executive summaries are overviews of a business plan or investment proposal, and they describe essential market information, such as business purpose , target market , and financial projections . You should put the most important details of the document or business proposal in your executive summary.
Here is a web page that also defines executive summaries.
What’s Included in an Executive Summary?
The executive summary’s purpose is to essentially serve as a written manifestation of your best elevator pitch and make a favorable first impression. Consider it a sales effort rather than an attempt to fully describe your start-up and address key highlights rather than get bogged down in the details.
Below, we’ve outlined the seven components generally included in an executive summary:
Component 1. Business Purpose
The purpose of your executive summary is that of how you will solve the prospect’s problem. Address your ideas in the first sentence, and indicate your unique value proposition (UVP) along with what market your company most benefits. Avoid slang, company history, and technical terms that underpin your solution.
Component 2. Market Overview
Investors seek a sizable and growing market. Spend a few sentences outlining the segmentation, size, growth, and market dynamics. You will want to highlight the strength’s in this section and leave the opportunities for further scrutiny during meetings or presentations.
Component 3. Competitive Advantage
Competitive advantage is the efficiency and efficacy that sets your business apart from competitors. Your competitive advantage comes from how you optimally serve customers, collaborators, and the company in a symbiotic way. Lean on this strength and work with a strategic marketing consultant to help you craft the most compelling offer.
Component 4. Business Model
Develop a plan for your sales and marketing efforts. You should also determine other critical elements, such as your customers, licenses, units, and profit margin. This component should give a high-level but logical overview of how you operate.
Component 5. Key Team Members
Investors are more interested in people than the ideas. Explain each team member’s purpose, background, and contributions by mentioning their titles and obligations during past roles. Consider including external advisors who possess the experience to sweeten the prospect of selecting your company for the next level.
Component 6. Financial Projections
You must present your three-to-five-year summary revenue and expense projections. Investors need to know how much funding they are seeking now and how much they will receive. The request is generally the minimum amount of cash required to complete significant milestones throughout the project.
Component 7. Document Highlights
You can also offer a short bulleted list that references specific pages or sections in the executive summary. As such, the investor will have an opportunity to recall some of the areas that you think are most important to address, such as pro forma templates , terms sheets , and proposed investment contracts .
You can write your executive summary how you see fit, and many writers prefer writing their introduction last to approach it from a more comprehensive viewpoint. The most vital thing to remember is to put your best face forward and develop a communications plan that will resonate with targeted prospects and investors.
How to Write an Executive Summary
You should write your executive summaries so that they are unique to your company and complement the main document. However, there are some insightful steps that start-up may want to follow when writing their very first executive summary.
Below, we’ve explained a five-step process when writing an executive summary:
Step 1. Write a Business Plan
Your executive summary covers essential topics in your business plan. Therefore, it is advised that you write the entire business plan first. Your executive summary will be far more impressive when it makes an impact versus reading like a generic form letter.
Visit this this website for more information about business plans.
Step 2. Create an Introduction
Compelling introductions vary to the members of your target audience. Perhaps your introduction includes a surprising industry fact or brief story, and you should make it relevant to your business and engage your audience while clearly defining your business plan’s purpose and what the reader can anticipate.
Step 3. Write the Executive Summary Components
Read through the proposal or business plan and highlight key points for inclusion in your executive summary. Cover each critical point in a concise yet comprehensive manner that eliminates the reader’s need to read the remainder of the business plan. Ideally, the summary will entice them to continue reading, but they should also have a firm grasp of the rest of the document.
Step 4. Edit Your Executive Summary
Arrange your executive summary to work naturally with your document’s contents, starting with essential components. A bulleted list is beneficial for highlighting your primary points. Verify the document’s accuracy and clarity twice.
It is also worthwhile to eliminate buzzwords, obvious information, jargon, and false claims. Give your executive summary a second read to determine if it can function as a stand-alone document if necessary.
Step 5. Get Legal Help When Necessary
Not every entrepreneur possesses strong writing skills, which means that it may be advantageous to have a professional marketer or licensed attorney review your executive summary to ensure it reads smoothly and address the points you wish to communicate. Also, avoid comparing yourself to other businesses entirely and focus specifically on how you will soothe their problems.
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Examples of When to Use Executive Summaries
Executive summaries are easy to understand when applied to common situations. However, knowing what to emphasize and highlight is a challenge. The most vital element to remember is that your prospect is your target audience, which means your executive summary should resonate with their people.
Here are some start-up examples of when to use executive summaries and how they can elevate your business:
Example 1. Raising Seed Capital with SAFE Note
Martin Inc. needs to raise seed money for its start-up quickly. Instead of going through a convertible note , Martin’s team approaches investors with a win-win solution in their business plan. The executive summary highlights how the SAFE note could benefit both parties based on convincing future projections and offers thorough documentation to back up all claims.
Example 2. Business Plan Executive Summary
Let’s say that Initrode wants start-up capital to sell its software online at scale. They approach investors with a business plan. However, this document is complex and lengthy. Initrode decides to write a highly compelling, high-converting executive summary that outlines the problems their service will solve and how they plan to return the investment so that investors don’t have to sift through the document to find important information.
Business Lawyers Write Executive Summaries
You should speak with business lawyers if you need help writing an executive summary or business plan. When facilitating your next deal, they can point out legal issues in your documents and draft the supporting agreements. Get in contact with a legal professional from your state today.
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