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Two_Types_of_Executive_Summaries
| Two Types of Executive Summaries
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.
About the author:
As President of Growthink, Dave Lavinsky has helped the company
become one of the premier business plan development firms. Since
its inception, Growthink has developed over 200 business plans.
Growthink clients have collectively raised over $750 million in
financing, launched numerous new product and service lines and
gained competitive advantage and market share. For more
information please visit http://www.growthink.com.
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