Executive Summary
Ideally, the executive summary should fit in one page, and at most in two pages (usage font between 10 and 12). Above all, it must contain synthetic phrases and keywords! Even before the business plan, the executive summary is the first project presentation document. Its drafting is complex and responds to specific objectives and rules.
Never forget one thing: You will often be asked for your business plan and it must be done with rigor and professionalism. We will never read your business plan but we will always read your executive summary whether you are a start-up or an already profitable company and whatever your sector.
Principle and objective of the executive summary
The executive summary is a summary of the project. The business plan is essential, but it only comes into play when the investor has already expressed an interest in the business project. The objective of the executive summary is to arouse the interest of the reader in a minimum of time.
You should think of it as your company’s resume! It must make the investor want to know more, and ask you for your business plan or offer you an interview. The executive summary is therefore a real marketing and sales tool.
Also, although this is the first document that will be sent to investors, it is a document that is written last, when the writing of the business plan is finalized, and only when all the arguments are perfectly mastered.
How to write an executive summary?
The drafting of this document requires a certain formalism, and certain essential information must appear in it.
Here are the main rules:
• It is like when you are writing for a CV.
This document must be very short and concise. Do not forget that your interlocutors receive many files and only have a few minutes to carry out an initial sorting. Ideally, the executive summary should fit in one page, and at most in two pages (usage font between 10 and 12). Above all, it must contain synthetic phrases and keywords!
• This summary must be powerful, educational and didactic (instructive).
Although it is very short, its writing is complex because each word must be relevant. Do not hesitate to read it several times and have it read by others (ideally an uninformed audience), to ensure that it is clear. Make sure that there are no redundancies, and that you have covered all aspects of the project. It must reflect the essence of your project as well as its chances of success. It must contain the strong points of the project and allow you to get an overall idea of it.
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- It must answer essential questions:
- What is my project?
- Who am I?
- To whom to sell?
- How to sell?
- How much does it cost investors?
- How much does it bring them?
- And in how long?
- It must answer essential questions:
• It must be written in such a way as to tell a story.
What is the purpose of the company? What is its ambition (which markets does it want to conquer)? And how will it achieve its objectives (commercial and marketing strategy)?
• Like any commercial prospecting document, the first sentence is decisive.
The investor should immediately understand what products or services the company offers, otherwise they may not bother to read on. This first sentence should inform the value proposition of the company,
To express the value proposition, construct a sentence according to the following model: my company (name) develops (a clear offer) to help (an identified target) to solve (a problem)
with (a unique advantage)
Or answer the following three questions:
- What need(s) / lack(s) are you addressing? The place that hurts…
- How is your value proposition unique?
- The remedy that feels good For what return on investment? The customer benefit?
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There is no standard plan, but the executive summary follows the structure of the business plan. It must include several parts, which answer the questions mentioned above:
• Description of the activity and the offer (products/services),
• Company: date of creation, legal form, shareholding, human resources (number of employees, committees, etc.), history and steps taken, barriers to entry,
• Market and vision: current targets and positioning… and the share of dreams,
• Team: the talents behind the project (Management, sales, R&D and production),
• Strategy: the operational application of the vision: technical development, commercial development, industrial protection strategy, partnerships, etc.,
• Financial outlook: summarized in a table (in terms of turnover and profitability, and possibly investments and staff). The projection must be established over at least three years,
• Recourse to investors: overall need and amount of capital sought, previous or expected valuation for this round, planned exit prospects.
Concretely, in the executive summary, take up the main points of the business plan by summarizing them in a few sentences. You should then proofread the whole thing to ensure the conciseness, consistency, and appeal of the story told.
Just as you have to highlight what may interest and reassure the investor, you have to be careful to avoid anything that may worry him, because you can only justify it during an exchange.
For example:
• A project that looks more like research than a business project,
• The scattering and proliferation of tracks,
• The presence of an industrialist in the capital (which can complicate the exit of the financier),
• A project too far from its market: highlight your customer contacts, even if they are not completed, because they show your market vision.
It must be adapted to the typology of the interlocutor. Like a CV, it is written according to the typology of the targeted investor.
• You can have two or three different executive summaries depending on the target, especially if these targets have strong differences in terms of expectations and constraints, and correspond to a different business strategy. This is the case, for example, if you contact manufacturers on the one hand and institutional venture capital investors on the other (to raise a large amount corresponding to all of your financing needs) or business angels (for a first reduced fundraising, with a view to a later second)…,
• However, be aware that the investment community is small. They talk to each other, so you must be clear about this strategy and not send messages that may seem contradictory, which could suggest that you do not know what you want or where you are going.
A few additional rules you should keep in mind:
- Quantify your remarks as much as possible.
- Position the company in relation to the existing and the competitors.
- Avoid details (for example: no reference to sources of information): these elements will be specified in the business plan.
Examples of EXECUTIVE SUMMARY
The introduction to your executive summary must cover all of these points.
Example 1.
Founded in 2020, ABC Inc offers ‘A/B testing’ software via its website www.abc.com and in 2022 achieved a turnover of €1 million. The objective of this business plan is to obtain financing of € 7 million to enable the company to increase its market share in the ‘A/B testing’ market estimated at € 2.3 billion in 2022. company is managed by 3 experienced entrepreneurs and currently employs 5 other employees.
Example 2.
You can download for free this MS Word: Executive Summary example MS Word
EXECUTIVE SUMMARY
Market opportunity
75% of French people no longer want to eat meat and 65% of them would be ready paying double for a product that “would feel like meat” without being meaty meat.
Project: operation and value
Our company wants to design a vegetable steak, which does not contain any meat, and which provides the sensation of the meat when eaten.
The product will be sold in supermarkets at a price of €25 including tax per kilogram. Our distributors take a commission of between 20% and 30% of our turnover via their distribution channels. We will also sell directly in 1 store in Paris and in our online store, at the same selling price.
Team
We are two co-founders. Co-founder 1 is an engineer, graduate of Polytechnique and specialized in the food industry. He worked for 10 years at Charal, within the R&D team. He will mainly deal with product development and operations. Co-founder 2 is from from HEC (Master in Digital Marketing). He worked 5 years at Facebook. He will take care of marketing, sales and investor relations.
We are in the process of recruiting a team of sales and marketing managers.
Market and competition
We have 2 direct competitors: Company B and Company C. Our competitive advantages
compared to the 2 companies are the following:
– Our selling prices are 10% lower, for a much better product
– We already have a network of distributors in place
– We are supported by a large company in the food industry
– Our production is entirely “Made in France”
SWOT analysis of the competitive environment
| Strengths | Weaknesses |
| Professional network in the insurance sector set up | SEO (organic) |
| Traction and revenue | Still little visibility and notoriety |
| Opportunities | Threats |
| Partnerships with companies that reach the same audience | Opportunity to be overtaken by a (new) faster competitor in the sector |
| Development of a new range of services | No funding |
Development plan
The company was created in January 2024.
Currently:
– We have already signed 6 partnerships with distributors.
– We sold over 1,000 products in less than 6 weeks.
– We have a management team already in place.
– Our social networks have more than 20,000 members.
– We won 3 competitions for innovative startups.
Here is our 3-year development plan:
| 2024 | 2025 | 2026 |
| Business plan | Development of the client portfolio | Launch of services with different positioning |
| Finance research | Launch of a new product line | New wave of recruitments |
| Launch of the activity | Customer loyalty policy | Increase customer satisfaction |
| Creation of the website | Partnership with companies that reach the same audience | Launch of new services for the Asia and Pacific markets |
| Website content production | Launch of marketing campaigns | Launch of marketing campaigns 2 |
Financial Needs
We need € 500,000. 50% will be used for the development of our product, 20% will be used to recruit a team, 15% will be used for marketing and communication and the remaining 5% will be used to finance the working capital requirement.
We forecast a turnover of € 150k for the coming year, € 250k and € 600k for the following years. We expect a net margin of around 21% after 3 years.
2 venture capital funds already trust us (€ 300k each), as well as a European fund (€ 150k) and the Rokket B incubator (€ 260k).
Executive summary for investors
For the investor, the executive summary must meet several objectives:
Allow them to quickly know if your project is within its investment target, particularly in terms of:
- Investment amounts and round table size.
- Sector or type of activity: for some, exclusion of certain sectors such as crafts, wholesale and retail trade, franchising…, or for others, targeting of certain very specific sectors…
- Stage of business development: initiation, creation, development, etc.,
- Geographical location for some (in particular the regional SCRs).
Inform him about your business project and its prospects for financial profitability. These elements stem from several aspects that he must perceive:
- The value proposition.
- Growth potential.
- The credibility of the project and the team: in particular the personal investment of the project leader and of course the credibility of the project leader.
- The financial need.
- Prospects for exit and valuation gain.
Convince them of the interest of the project and the relevance of going further, by asking you for your business plan and by welcoming you to discuss your project in more detail.
In summary
The executive summary is the CV of the company. First document that the investor receives, it must allow you to arouse his interest and to get an appointment.
It has its own codes and writing it is a real challenge. You must take into account its stakes for you and for the investor.
Understanding NDAs (Non-Disclosure Agreements) for Investor Presentations with Samples
3 Mistakes to avoid when writing it
1. Write too much.
You have understood: the Executive Summary is not intended to replace the business plan. You don’t have to “give away” everything: only the most interesting points. For example, there would be no point in including a forecast balance sheet or a detailed study of the competition in the Executive Summary.
2. Drowning in details, and using technical language.
For a pleasant reading, it is necessary to use simple and understandable terms by everyone. The reader of your Executive Summary may not be an expert in your industry: give him or her the job of understanding by remaining simple, efficient and structured.
3. Do not mention the reason for the business plan.
Generally, you make a business plan (and an Executive Summary) to present your project as part of a funding request.
If you request funds, you will have to give the amount, justify it and explain what the money will be used for. Also, specify what you expect from an investor (integration of a network, mentoring, industrial partnership, etc.).
4. Put a commercial brochure.
The executive summary is not the commercial brochure that you send to your customers. We repeat: this is the teaser of your business plan. It is therefore not a question of selling a product or service but your project and your team in 2 pages.
5. Oversell.
Although the purpose of the executive summary is to inspire and unlike the business plan, only the positive aspects of your project will be emphasized, you should not turn your executive summary into a subjective Sales Representative for the project either. This is the art of the executive summary: Highlight the strengths while remaining realistic.
6. Forgetting to ask why you want an appointment.
If you write an executive summary and a business plan, it is in order to obtain something: a loan, an appointment, financing, incubation, etc. Therefore, you must indicate why you are contacting your interlocutor, at the end of the executive summary.
7. Forgeting the team.
If the executive summary is used to sell the project, it is also used to sell the team! Never forget: A good horse cannot win a race without a good jockey. We must detect, from the executive summary, that your team is the right team to carry out the project. Devote time and space to it. Show that you are the best!
Make spelling mistakes: Be careful, your credibility would take a hit.
Sources: Cambridge University Press, Wikipedia
Photo credit: congerdesign via Pixabay
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