Types of Executive Summaries and 5 things to Know Before Writing One!

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When making the business plan, we put a lot of effort in most of the later parts, such as giving the financial metrics, marketing details, outlining the competition, emphasizing the strengths, etc. while sometimes forgetting to give importance to the executive summary. Executive summaries shorten a “longer report or proposal or a group of related reports in such a way that readers can rapidly become acquainted with a large body of material without having to read it all. It usually contains a brief statement of the problem or proposal covered in the major document(s), background information, concise analysis, and main conclusions. It is intended as an aid to decision-making by managers and has been described as the most important part of a business plan.” [2]

Ideally, the executive summary is a snapshot of your business plan. So briefly the executive summary should include the problem, the solution, the business model, the underlying magic of your product or service as described by Guy Kawasaki in his book, ‘Art of the Start’.

Guy Kawasaki, noted marketing specialist, author, and venture capitalist gives an interesting example to denote the importance of executive summary. We have borrowed that idea and added an exaggerated account just to show just how important a well-written executive summary is!

Scenario
Walking up to meet the potential investors, (sweating and cursing in the case that you are slightly late!) you enter to meet your (possible) future investors with a 10-page business plan. But anxiety unveils when you find that the last 7 slides of your business plan are nowhere to be found! Let’s just say, pages lost in transit but now what to do? Are the first 3 slides of your document enough to give a glimpse of what your business plan could have been? (This scenario is outdated in the era when digital documents are accessible within seconds, but hey, let’s just play along for once, okay!)

[3]

Needless to say that if an investor is turned away by reading the executive summary, then all that hard work in putting the business plan together is fairly wasted! So, let’s learn further on the types of executive summaries and the crucial points to remember when constructing one.

Types of Executive Summaries

There are two types of executive summaries. One is more like a preview (similar to the trailer of a movie) and the other a standalone document (more like the longer trailer but with the spoiler alert!). The shorter executive summary gives all the problems with the promise for a solution that will entice the investor to read more. The stand-alone one will include the problems with the solutions so as to give the reader comprehensive information.

An online article [4] outlines the following to be included regardless of the type of executive summary:

  • A concise explanation of the business
  • A description of the market size and market need for the business
  • A discussion of how the company is uniquely qualified to fulfill this need [4]

A detailed executive summary [5] will also include a paragraph on the following:

  • Customers: Who will the Company be targeting?
  • Competition: Who are the competitors and what advantages do you have over them?
  • Marketing Plan: How the Company will enter the market and gain position
  • Financial Plan: Financial projections, and a summary of the investment proposition
  • Management: Brief bios of key management.

Crucial Points to Remember while Constructing an Executive Summary

1. A Fantastic Introduction

Hooked till the last line. That should be one’s motto when writing an executive summary. If an investor is not enticed by the executive summary and isn’t “salivating” for more information, then it’s a lost cause!

2. Who is Your Audience

One size fits all is definitely the case here. Know your audience and tailor the executive summary to suit the particular investor’s needs.

3. Identifiable Goal

It is vital for the investor to see the specific type of benefits that they may reap. Vagueness such as there would be “increased profits” or “decline in costs” might not give a good picture. Note down the exact goals that can be achieved.

4. No False Information

Stay away from putting in false numbers!

5. Keen Eye to Detail

Attention to detail is key and one must pay utmost care in ensuring that there are no material errors in any of the information provided.

These are the types of executive summaries and the crucial points to remember when constructing one. What do you keep in mind when constructing the executive summary for your business plan. Let us know your thoughts via the comments section and bookmark Alumni Insider for more articles like this.

References:
1. Featured Image – Headway
2. Executive Summary
3.
Image – Nik Macmillan
4. Business plans: Two Types of Executive Summaries
5. Two Types of Executive Summaries

 

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2 Comments

    • Alumni Insider on

      Yes we do Vibha! Executive summaries are really helpful for startup entrepreneurs who are looking for preparing their pitch decks. And, you can connect with investors quickly via http://www.alumnialliances.com. This is the place to find alumni. So, join now!

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