The executive summary may be the most important part of your business plan. It is the first part everyone will read, and it may be the only part that some individuals will read. Faced with a large pile of funding requests, venture capitalists have been known to separate business plans into “worth considering” and “discard” piles based on nothing more than reading the executive summary. The lesson outline is: What is the Executive Summary? Content of the Executive Summary Length of the Executive Summary When to Write the Executive Summary What is the Executive Summary? The executive summary is a synopsis of the key points of the entire e-business plan. Its purpose is to explain the fundamentals of the business in a way that both informs and excites the reader. If, after reading the executive summary, the investor or manager understands what the business is about and he/she is eager to know more, the executive summary has done its job. As a miniature version of the e-business plan, the summary usually contains a key point or two from most sections of the plan. Due to space limitations some sections may get missed, but an accurate summary will provide the reader with a succinct explanation of the entire plan. Another way to describe an executive summary is to describe what it is not, based on ineffective summaries that we have seen in student and professional business plans. * The executive summary is not just a brief description of the business and its products. This informationis presented in the business description section inside the plan and should not be duplicated here. Because the summary is a synopsis of the entire plan, don’t let information from any one section dominate your executive summary. * The executive summary is not an outline of the plan. First-time summary writers sometimes make the mistake of creating an extended table of contents. For example, don’t tell the reader there is a competitor analysis inside, instead summarize the analysis by identifying one or two key competitors and your company’s primary source of advantage in the competitive marketplace. * The executive summary is not hype. While a goal of the executive summary is to excite the reader enough to read the entire plan, the temptation to make exaggerated claims or accentuate only the positive must be avoided. For example, you might want to point out a significant risk or a well-established competitor and suggest how the business will deal with this problem. This provides a sense of balance and realism in what can be an over-glorified summary of the plan. An experienced investor or businessperson will recognize hype and this will undermine the plan’s credibility. * The executive summary is not a cut-and-paste exercise. Drafting the summary can begin with key paragraphs and sentences from inside the plan, but the end result should be written “fresh” without large-scale duplication of content and with a smooth flow of plan highlights from the beginning to the end. Content of the Executive Summary In addition to summarizing the business idea and business plan, the content of the executive summary must be written with the intended reader in mind. If the plan is being written for an investor, then important content about financial requirements must be included. Similarly, avoid terminology and concepts which may be unfamiliar to the reader. For example, don’t use e-business terms such as infomediary, digital divide, or mass customization unless you explain the meaning or know with absolutely certainty that the reader will know what they mean. The best executive summary, and the plan itself, shows an understanding of what issues and questions are important to the reader and addresses them in a straightforward and comprehensive manner. One effective way to begin the executive summary is with an interesting and compelling statement that grabs the reader’s attention. This could be an interesting very short story (e.g., for Purma Top Gifts, how volcanic rock laid down 160 million years ago produces bloodstone jewelry that Purma is now famous for), a question (e.g., “What is Purma’s most popular baby gift? A sheepskin! Soon Purmaian sheepskins from Purma Top Gifts will provide warmth and comfort to infants around the world.”), or a startling statistic (e.g., “In 2001, over 256,000 tourists with incomes in excess of US$40,000 visited Purma. These tourists need a place where they can shop to give the best that Purma has to offer to their friends, their families, and themselves.”). Alternatively, the traditional way to begin the executive summary is with a statement of the firm’s purpose, perhaps by integrating the firm’s mission statement (e.g., “Purma Top Gifts is an e-business that sells top quality Purma-made gifts and souvenirs to customers who want the very best that Purma has to offer.”) and a few sentences about the product or service the business will provide. Then try to highlight a key point from each section of the plan — the primary target market from the market analysis section, the principal source of competitive advantage from the competitor analysis, the return on investment from the financial statements, and so on. Because of length restrictions you may not have room for everything, so a section that doesn’t offer anything important or interesting to the reader may be skipped. Conclude the executive summary with the purpose of the e-business plan (e.g., “The purpose of this plan is to propose the launch of the Purma Top Gifts Web site and seek funding for its development.”) and a specific statement of what you expect from the reader. For example, don’t leave the banker to sort through the plan to page ten before he/she finds out the amount of the loan you require. Clearly state your capabilities and needs in the executive summary and you will have a greater chance that the reader will turn the page. Length of the Executive Summary There is really only one answer to the question “how long should an executive summary be?”. The answer is “short”. Most business ideas need more than one page to tell the reader what the business is about, but only rarely will more than two pages be required. Conventional wisdom is that if you can’t summarize your business plan in two pages, then this is an indication to the reader that you are indecisive and can’t set priorities. Unless your instructor tells you different, the executive summary should be at least one page and not more than two pages in length. It is also fairly important that you use most of the space available. A lot of white space on the second page of an executive summary page tends to tell the reader that there isn’t much content inside the plan. So, generally, write either one or two full pages for your executive summary. When to Write the Executive Summary A good rule is that the executive summary should be started in the middle of the plan-writing process and be finished last. If the executive summary is put off until the last minute it is likely to be written in a hurry and not be a coherent statement of the business plan’s contents. The summary is too important for that. Assignment 1: After you have written the competitor analysis, draft a 1-2 page draft executive summary (you will be reminded of this at the end of that lesson). Then review and finalize the executive summary at the end of the tutorial (a reminder will be included at the end of the last lesson). Navigation Guide for the e-Business Plan Tutorial Introduction to the E-Business Plan Tutorial –Top Ten Resources for Writing an e-Business Plan Fundamentals of e-Business Planning Writing a “Read Right” Plan Executive Summary Business Description –Mission Statement –Business Goals –Project Objectives Market Analysis Competitor Analysis Operations Financial Statements Making an Effective Business Plan Presentation Appendix: e-Business Plan Tutorial Assignments
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