Executive Summary as a Guiding Light
There's no one right way to go about writing a plan. One of the most effective approaches I've discovered is to begin by writing an executive summary.
Certainly the most significant part of any business plan is its executive summary. So vital is a good executive summary to a business plan that I'm tempted to wax eloquent about its literary merit.
What is an executive summary? Probably the best way to begin defining it is to explain what it isn't.
The executive summary is not an abstract of the business plan.
The executive summary is not an introduction to the business plan.
The executive summary is not a preface.
The executive summary is not a random collection of highlights.
Rather, the executive summary is the business plan in miniature. The executive summary should stand alone, almost as a kind of business plan within the business plan. It should be logical, clear, interesting -- and exciting. A reader should be able to read through it in four or five minutes and understand what makes your business tick. After reading your executive summary, a reader should be prompted to say, "So that's what those people are up to."
The executive summary should be no more than two pages long. The farther it goes past that point, the less it qualifies as an effective executive summary.
If capturing an entire business in two pages or less sounds like a tall order, it is. In fact, it is probably the most difficult part of the plan to write.
That's because it's usually more difficult to write concisely than it is to write at length. I believe that problem stems from our schools, where students are typically encouraged to write reports that are as long as possible.
The executive summary should serve several purposes, both for you and for readers of the business plan. For you, it should accomplish the following:
- Crystallize your thoughts.
Since the executive summary is the business plan in miniature, it contains the plan's highlights, its key points. To write an executive summary, focus on the issues that are most important to your business's success -- past and future -- and set aside those matters that are tangential.
- Set priorities.
The executive summary, like the business plan, should be organized according to the items' order of importance. Writing it forces you to pick and choose from among the many points you want to make in the business plan and decide on their order of importance.
- Provide the foundation of the full plan.
Once you've written a version of the executive summary, you've made the process of writing the plan much easier. Suddenly, you've provided yourself with a takeoff point for each section of the plan. The four or five sentences that summarize the means of making the product or providing the service give you the basis for that section of the plan. As we all know, it's much easier to begin writing with something on the page than it is to begin with a blank page.
For readers of your business plan, the executive summary is usually the first stop in the reading process. (This assumes that the executive summary is at the very beginning of the plan and that the reader goes from front to back. You can control the former, but not the latter. Some investors, for instance, turn first to the founders' ré sumé s and others to the marketing section.) In any case, from the readers' perspective, your executive summary should have the following attributes:
- Capture others' attention and imagination.
This is particularly important if you want your plan to help you get a bank loan or attract investment funds. But any reader should be intrigued with your executive summary. It intrigues readers most by conveying your commitment to -- and excitement about -- the business.
- Make readers want to read more.
Because bankers, investors, and financial types have more business plans to read than they have time for, they have to decide easily and quickly which ones to analyze carefully. The executive summary helps them make that decision. Thus, if you hope to obtain financing from the plan, the executive summary has to keep the banker or investor interested. Otherwise, that person will not go further in the plan.
- Convey the flavor of the rest of the plan.
Readers should have a good feeling about your business and what the rest of the plan will cover. The executive summary must succeed in capturing the enthusiasm and energy that resonate through the plan as a whole.
This material was excerpted from Chapter 4 of How to Really Create a Successful Business Plan by David E. Gumpert.
Copyright © 1996 Goldhirsh Group, Inc.