An executive summary isn’t just the beginning of your business plan – it’s your opening act, your first chance to impress potential investors, banks, clients and other stakeholders.
An effective executive summary gives decision-makers critical information about your business instantly.
Creating an executive summary is more than just a writing exercise. It requires careful crafting and strategic thinking, as well as an ability to balance the needs to be both succinct and comprehensive.
What is an executive summary?
The executive summary is a brief introduction and summary of your business plan. It introduces your business, the problem you solve, and what you’re asking from your readers. Anyone should be able to understand your business by simply reading this section of your plan.
While structurally it is the first chapter of your plan—you should write it last. Once you know the details of your business inside and out, you will be better prepared to write this section.
Why write an executive summary?
The business plan executive summary provides quick access to critical information from your more detailed business plan.
It is essential for informing anyone outside of your business. Many people—including investors and bankers—will only read your summary. Others will use it to decide if they should read the rest. For you, it is a snapshot of your business to reference when planning or revising your strategy.
Now if you’re writing a business plan solely for internal use you may not need an executive summary. However, some internal plans may necessitate writing an executive summary for assignment—such as for an annual operations plan or a strategic plan.
It takes some effort to do a good summary, so if you don’t have a business use in mind, don’t do it.
How long should it be?
Business plan executive summaries should be as short as possible. Your audience has limited time and attention and they want to quickly get the details of your business plan.
Try to keep your executive summary under two pages if possible, although it can be longer if absolutely necessary. If you have a one-page business plan, you can even use that as your executive summary.
Two pages isn’t a ton of space to capture the full scope of your vision for the business. That means every sentence of your executive summary counts.
You will want to immediately capture the reader’s attention with a compelling introduction. Without getting too lengthy, present who you are as an organization, the problem you are seeking to solve, your skills, and why you are the best entity to solve the problem you’ve outlined.
It’s crucial to establish the need or problem your business is solving in a clear manner, in order to convince your audience that it must be addressed. Following that, recommend the solution and show its value. Be clear and firm in your recommendation, making sure to justify your cause and highlighting key reasons why your organization is the perfect fit for the solution you’re proposing. Finally, a strong conclusion is needed to reiterate the main points and wrap up the executive summary.
What to include in your executive summary
1. Business overview
A one-sentence description that explains what you do, why you do it, and how you do it.
Summarize the problem you’re solving in the market and reference any data that solidifies that there is a need.
Describe your product or service and how it addresses the problem you identified.
4. Target market
Who is your ideal customer? Describe who they are, how they’ll benefit, and why they’re an attainable customer base.
Who are your competitors? List out any primary competition as well as alternatives that your customers may consider. Include key details about their current offerings, promotions, and business strategy.
6. Your team
In your executive summary, outline your organizational structure and current team. List out brief explanations of who you and your team are, your qualifications, and what your function will be within the business. It may be valuable to also highlight any gaps in your team and how you intend to fill them. If you have potential partners or candidates in mind, briefly mention them and expand on their qualifications within your full business plan.
7. Financial summary
Highlight key aspects of your financial plan that address sales, expenses, and profitability. Try to keep these in chart or graph form to ensure the information is easy to consume and resonates visually.
8. Funding requirements
This section is only necessary if you’re seeking out funding or pitching to investors. Be sure to throw out your financing number and reasoning upfront, rather than hiding it later on in your plan. It helps investors understand your position, what you’re asking for, and how you’ll use it.
9. Milestones and traction
Add initial sales, pre-sales, newsletter sign-ups, or anything else that showcases customer interest. Outline what steps you’ve already taken to launch your business, the milestones you’ve hit, and your goals and milestones for the next month, six months, year, etc.
Executive summary vs introduction
A common mistake some people make when starting an executive summary outline is thinking it performs the same function as the introduction to their business plan. In fact, the two serve different purposes and contain different types of information, even though they are both essential.
As we’ve discussed, the executive summary is a high-level overview of the entire business plan. The introduction, by contrast, dives deeper into your business, providing information about the nature of your business, the history of your company, your mission statement, products or services, and the specific problem that your business solves.
The introduction is more detailed, and usually comes right after the executive summary.
On the other hand, the introduction gives investors or lenders – anyone reading your business plan – a sense of why they should continue reading. Think of it more as the space to tell stakeholders why you are speaking to them. An executive summary can also serve this purpose, but the introduction is meant to speak more directly to your target audience, while an executive summary could give a larger audience a general overview of your business.
Tips for writing an effective executive summary
Here are a few best practices to make writing your executive summary easier, and ultimately more effective.
1. Think of an executive summary as your pitch
The executive summary is like an elevator pitch. You’re selling someone on reading your full plan while quickly summarizing the key points. Readers will expect it to cover certain areas of your business—such as the product, market, and financial highlights, at the very least.
While you need to include what’s necessary, you should also highlight areas that you believe will spark the reader’s interest. Remember, you’re telling the brief but convincing story of your business with this summary. Just be sure that you’re able to back it up with the right details with the rest of your business plan.
2. Write it last
Even though the executive summary is at the beginning of a finished business plan, many experienced entrepreneurs choose to write it after everything else. In theory, this makes it easier to write since all of the information is already written out and just needs to be condensed into a shorter format.
Now, if you’ve started with a one-page plan, this process is even easier. Just use your one-page plan as a starting point and add additional details to any sections that need it. You may even find that no changes are necessary.
3. Keep it short
Ideally, the executive summary is short—usually just a page or two, five at the outside—and highlights the points you’ve made elsewhere in your business plan. Whatever length you land on, just focus on being brief and concise. Keep it as short as you can without missing the essentials.
4. Keep it simple
Form follows function, so don’t overcomplicate or over-explain things. The best executive summaries are a mixture of short text, broken up with bullets and subheadings, and illustrations, such as a bar chart showing financial highlights.
Run through a legibility test after writing your summary. Is it easy to skim through? Are the right pieces of information jumping out? If the answer to either of those questions is no, then work back through and try breaking up information or adjusting the formatting.
5. Create an executive summary outline based on importance and strengths
Organize your executive summary outline so that the most important information appears first. While there are specific components to include, there is no set order of appearance. So, use the order to show emphasis.
Lead with what you want to get the most attention, and add the rest by order of importance. For example, you may start with the problem because that can add drama and urgency that tees up the solution you provide.
Additional resources to write a great executive summary
Need more information and guidance to craft a convincing executive summary? Check out these in-depth resources and templates.
The executive summary of a business plan is a brief introduction and summary of your business strategy, operations, and goals.
An executive summary is typically written to convince someone to read your more detailed plan. For investors, it may be the only thing they look at when deciding if they’d like to hear your pitch. Loan officers may review it to determine if your business seems financially sound. And partners, mentors, or anyone else may use it to determine if they want to be involved with your business.
While there is no required order for an executive summary, it’s often recommended that you lead with the problem you’re solving or the purpose of your business. This will help frame your intent for the reader, and ideally make them more interested in learning more.
A good executive summary is brief, convincing, and easy to read. Focus on keeping things short and concise, only including necessary information. Be sure to lead and highlight anything that is especially interesting or important about your business. And after writing, spend some time reviewing and reformatting to make your summary as attractive to read as possible.
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Tim Berry is the founder and chairman of Palo Alto Software , a co-founder of Borland International, and a recognized expert in business planning.
He has an MBA from Stanford and degrees with honors from the University of Oregon and the University of Notre Dame. Today, Tim dedicates most of his time to blogging, teaching and evangelizing for business planning.