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:
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
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.
Growthink develops strategic business plans, conducts market research,
and builds financial models for growing ventures. To date, Growthink
has developed over 200 business plans for clients who have raised over
$750 million in venture capital.
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