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EXECUTIVE SUMMARY The executive summary is potentially the most important section of your business plan. It is normally the first section of your business plan that investors will read, and could be the last if it is poorly written. An executive summary should briefly describe the company, the product or service, and the unique opportunity your company is offering. It should also provide a short description of your key management team members and an outline of the investment you are seeking. Don’t forget to tell the reader why you need the money and how and when they can expect to be paid back! A good executive summary is essentially a condensed but powerful summary of your entire business plan. It creates a first impression in your reader's mind of both you and your business. Use clear and concise language - although this applies to your entire business plan, it is especially important in your executive summary. Use words that command attention and get your reader excited about the opportunity you are presenting. The following excerpt is from David Gumprt's book, "How to Really Create a Successful Business Plan". What is an executive summary? Probably the best way to begin defining it is to explain what it isn't. The executive summary is not an abstract of the business plan. The executive summary is not an introduction to the business plan. The executive summary is not a preface. The executive summary is not a random collection of highlights. Rather, the executive summary is the business plan in miniature. The executive summary should stand alone, almost as a kind of business plan within the business plan. It should be logical, clear, interesting - and exciting. A reader should be able to read it in four or five minutes and understand what makes your business tick. After reading your executive summary, a reader should be prompted to say, "So that's what those people are up to."

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EXECUTIVE SUMMARY

The executive summary is potentially the most important section of your business

plan. It is normally the first section of your business plan that investors will read, and

could be the last if it is poorly written. An executive summary should briefly describe

the company, the product or service, and the unique opportunity your company is

offering. It should also provide a short description of your key management team

members and an outline of the investment you are seeking. Don’t forget to tell the

reader why you need the money and how and when they can expect to be paid back!

A good executive summary is essentially a condensed but powerful summary of your

entire business plan. It creates a first impression in your reader's mind of both you and

your business. Use clear and concise language - although this applies to your entire

business plan, it is especially important in your executive summary. Use words that

command attention and get your reader excited about the opportunity you are

presenting.

The following excerpt is from David Gumprt's book, "How to Really Create a

Successful Business Plan".

What is an executive summary? Probably the best way to begin defining it is to

explain what it isn't.

• The executive summary is not an abstract of the business plan.

• The executive summary is not an introduction to the business plan.

• The executive summary is not a preface.

• The executive summary is not a random collection of highlights.

Rather, the executive summary is the business plan in miniature. The executive

summary should stand alone, almost as a kind of business plan within the business

plan. It should be logical, clear, interesting - and exciting. A reader should be able to

read it in four or five minutes and understand what makes your business tick. After

reading your executive summary, a reader should be prompted to say, "So that's what

those people are up to."

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Limit the length of your executive summary to no more than 2 to 3 pages and stick to

the facts. Investors are searching for evidence that justifies the soundness of your

opportunity, and that gets them excited about what you intend to achieve. If your

executive summary is clear and concise, you are one step closer to impressing your

reader, and on your way to a terrific business plan.

The following are several common mistakes that lessen the effectiveness of your

executive summary:

• Lacking a specific focus

• Too long and wordy, and failing to get to the point

• Trying to be all inclusive (it should be a powerful summary)

• Failing to demonstrate a special or unique opportunity

• Failing to outline the terms of the investment sought

• Failing to generate enthusiasm in the reader

Limit your executive summary to a maximum of 3 pages (at the very most). If

possible, attempt to present your executive summary in a single page. Focus on the

opportunity you are presenting your investor and explain why it is special. Make

certain that the opinions and claims in your executive summary are fully supported in

the other sections of your business plan. Attempt to use only concrete facts and

figures that explain your business concept, market niche and financial projections.

Don't forget to include the details of your investment (the amount you need, what you

will spend it on, and the return you offer your investor).

Also consider who your reader is most likely to be, why they are reading your

business plan, and the response you hope to generate.

A well-written exit strategy increases your chances of cashing in with investors

because it addresses one of their most important issues - how they will ultimately cash

out. However, most potential investors will never even bother reading your exit

strategy if you can’t grab their attention from the start and excite them about your

business. How do you do it? Simple. Write a brilliant executive summary.

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Never forget that capital sources are always buried under a desk full of business plans

and financing proposals. With this many funding requests, the time dedicated to

making an initial judgment about a business plan is limited. Investors normally

remedy this backlog of business plans by simply reviewing the executive summary to

determine if any further investigation is warranted. To some degree, the executive

summary resembles a resume, allowing the reader to quickly decide which business

plans will receive serious consideration.

Your business plan may be outstanding. It may look wonderful and include colourful

graphs and charts. And it may be very impressive and compelling if it was read from

cover to cover. But, to the surprise of many entrepreneurs, the executive summary is

often the only part of your business plan that an investor ever reads. Essentially, you

have five minutes to grab the attention of your reader with a concise description of

your opportunity and motivate them to read further. Following the tips listed below

and avoiding bothersome pitfalls will help keep your business plan from landing on

the bottom of the pile, or even worse, in the trash.

A successful executive summary presents the highlights of your basic business

concept and opportunity. Which highlights should be included?

A good executive summary should demonstrate:

• A business concept that makes sense

• A clear plan for success

• A capable management team

• A clear, specific, and definable market

• Significant competitive advantages

• A solid and believable summary of the financial projections

• An excellent chance for investors/lenders to receive a healthy return

The format should start with an executive summary describing the highlights of the

business plan. Even though your entire business is well described later on, a crisp, one

or two page introduction helps to capture the immediate attention of the potential

investor or lender.

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The format could be the following

• Company name (include address and phone number)

• Contact person (presenter's name and phone number)

• Paragraph about company (nature of business and market area)

• Securities offered to investors (preferred shares, common shares,

debentures, etc.)

• Business loans sought (term loan, operating line of credit)

• Highlights of Business Plan (your project, competitive advantage and

"bottom line" in a nutshell--preferably one page maximum)

This summary page is extremely important in capturing the reader's attention. Make

sure it sells your idea so the reader will retain interest and continue reading

The format and organization of your executive summary will vary based upon which

issues are most important for your particular business. However, regardless of the

format, every executive summary should include the following areas or subsections:

• The concept and opportunity

• The product or service description

• The market

• The management team

• The finance requirements

Now that we've outlined the issues to address in your executive summary, lets

consider the things you should avoid. What areas would lead a reader to the

conclusion that you have a poorly written executive summary?

If you:

• Fail to identify your special or unique opportunity

• Fail to clearly demonstrate what your venture is all about

• Fail to identify what management will accomplish and how

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• Make general and unsubstantiated claims

• Use wordy and unorganized language

At what point in the writing process is it best to write your executive summary? There

are three schools of thought. The first says prepare it before you write the rest of the

business plan. The second says write it before, then again afterward to combine the

best of both. The third says prepare the executive summary only after the rest of the

plan is complete.

Which approach is correct? Think of it as 20/20 hindsight.

One last thought. Remember, to review your executive summary many times and ask

yourself whether it grabs the reader's attention. Will they be excited about your

business? Will they want to read the rest of the business plan? If the answers to these

questions are no, rewrite it. Show it to a friend, loved one, or businesses associate and

ask them to be critical. Many times after someone reads your executive summary they

will say "It's great, but what about…” If you find yourself explaining important

information to someone after they have read your executive summary, then it is likely

that that information should be included in the document.