As a business, pitching an idea to an investor or convincing a lender to give you the required capital might be challenging. Once you have written that proposal or business plan, you need to find a way that entices these individuals to take the required actions. That is why you need an executive summary. An executive summary is a short statement or synopsis that highlights the main points of a larger document.
It is located at the beginning of a long document to provide the reader with the most important points and key takeaways that they should focus on. It allows you to pitch your ideas in a brief yet interesting and captivating manner which will grab the attention of your readers. An executive summary should not only describe the contents of the document in a brief manner but should also include the business’ mission or vision statement.
A business can prepare an executive summary for long documents such as business plans, project proposals, and research studies. You can also choose to prepare an executive summary as a separate document from the main long document. This summary should be less complex than the longer document to allow the reader to quickly read through it and understand the main focus of the larger document.
In this article, you will learn more about an executive summary, the information you should include in this document or statement, its importance, and the tips you should observe when writing it.
Why Do You Need It?
The main reason a business needs an executive summary is to easily grab the reader’s attention and motivate them to read the longer document for more information. That means the executive summary usually provides the most valuable information, enticing the reader to take the desired action. If you have a well-written summary, the reader might take action without even reading the entire document.
Also, an executive summary allows readers to stay focused on the most important details by providing a shorter and complete version of the longer document. This way, the reader will easily understand your content, which may generate new partnerships and help you meet your business goals. This means that busy readers can quickly understand the key points of your document by quickly reviewing the executive summary.
Another reason you need an executive summary is to give the reader details of your company’s goals and principles. It is all about informing the reader in a simple and concise manner what you and your company represent when it comes to business. You can include this executive summary on your website, marketing campaigns, and business plans.
Note: Investors will need compelling information about your business plan to help them decide whether or not they will invest in your business. Ensure that you know how to write an exciting summary to encourage your reader to go through the long document.
Executive Summary Vs. Abstract
In project management, the term executive summary is at times interchanged with other terms such as abstract and introduction. However, these two terms are different from an executive summary.
While an executive summary is a brief description of the most important information in a long document, such as a project proposal, an abstract is a summary of a document, such as a journal article. An abstract is mainly used in academia to summarize a paper, book proposal, or research article. This makes it different from an executive summary, the main target of which is the business audience.
Also, an executive summary uses simple language as the aim is to make it easy for readers to understand the longer document quickly. On the other hand, an abstract uses technical language for orientation purposes.
Executive Summary Vs. Introduction
An introduction is the first part of your project proposal or business plan. It entails a few details about the project and the objectives you want your business to achieve. However, an executive summary highlights the main points of an entire document in a catchy and compelling manner to interest the reader to take a particular action.
An introduction ‘welcomes’ you and prepares you for the content you are about to read while an executive summary provides you with brief details of the whole document. Also, an introduction cannot be a stand-alone while an executive summary can be a document by itself.
Information to Include in an Executive Summary
Having an executive summary for your project proposal and business plan is important. However, to have an effective summary, you need to know which information you should include.
Below is the information to include in your executive summary when writing a project proposal or a business plan:
For project
Start by stating the problem you are going to solve with your project. The opening paragraph of your summary should inform the reader of the problem, the aspects that highlighted this problem, and why it needs to be solved now.
Once you have established the problem your project is trying to solve, proceed to state the solutions. These are the steps or methods you want to take to solve the issue and the objectives you wish to achieve at the end of this project.
Ensure that you also include the value proposition. This is where you will explain to your reader the value of the desired outcome. It is all about showing them how solving this issue will benefit your business, your customers, and other involved parties.
Finally, conclude your executive summary by providing details of the steps or actions you want the reader to take in regard to solving the problem. With these details in your executive summary, you will easily grab the reader’s attention and interest them in taking the next step.
For business plan
When it comes to your business plan, start by stating the name of your company or organization. Ensure that you also include your business location, mission and vision, and the overview of what you do. After that, proceed to describe your company by providing details of your organization, such as the management, staff, and business partners. You can also include a brief history of your company or organization.
The next information you should include is the market analysis. This is about your product or service, the position it holds in the market, the features that make it unique, and the benefits it has to make it competitive in the industry.
Your business plan should also include details of your financial analysis and a funding request. For this section, you should include details of the funds you are asking for, your other funding sources, and how the reader can help you achieve your financial considerations. Then, proceed to highlight the analysis of a problem that your business intends to solve or a unique proposition you have as a business. Finally, include data supporting your proposition, figures, hard numbers, and verifiable facts.
Once you have identified the problem, you need to include the solutions you have and justify why this is the best solution for the problem you have stated. For this section, you should include the product or service that the market needs. For the next part of your business, you should include your financial projections. This information is meant to show prospective investors that the funds you are asking for from them are important and will significantly benefit your business. Ensure that you use your financial data to forecast your future income and expenses as a business.
Finally, write a well-crafted conclusion highlighting all your main points, including the key findings, problems to be solved, and the proposed solutions. The whole idea is to ensure that you entice the reader, such as an investor or a lender, to provide you with the funding you need for your business.
How to Write an Executive Summary
Here is a guide on how to write a proper and effective executive summary for your long business document to capture the reader’s attention and motivate them to take the needed stepL
Project’s overview
Start your executive summary by including an overview of your project. This is the introduction section which should entail your organization’s details, such as the name, address, type of business, and your product or service. You should also include essential information about your industry that is relevant to your business. This project overview is meant to help the reader better understand your company and its objectives.
Discuss target market, competition, and marketing strategy
For the second section, include details about your target market, your competition, and the marketing strategy set in place for your business. It is all about highlighting the problem(s) in the market and how your product or service is the best solution for that problem. Keep in mind that your marketing strategy is all about how you intend to solve the problem with the solution you have.
This section will differ depending on whether you are writing a business plan, a project proposal, or a research document.
Offer insights
For the third part, you will proceed to offer insights about your business. That means you should include the details of your operations, such as the office or location, the type of ventures you have, such as online or an actual office, and other relevant operational details.
Information about projections
For the next part, you should include information about your financial projections. These are your business’s financial details and sales forecasts for a period of one to three years, once your business plan is executed. You should also include your projected profits and breakeven point details (when your expenses and revenues are equal). It is all about the financial milestones you intend to achieve as s business within that time frame.
Highlight funding needs
Finally, highlight your funding needs regarding the money that will help you execute your business plan. You should mention the exact amount of money you need for your project. Including accurate figures that align with your sales and financial projections is important. This section can also include manufacturing costs to ensure the reader receives proper financial details about your business.
It is all about the funding you need for research, experiments, logistics, and other resources you will require for your project. You can include a conclusion to complete your executive summary document or section at this point. Your conclusion can restate those important financial details and needs in relation to your project.
Note: If you have used other people’s ideas in your executive summary, ensure that you include citations and a short list of references at the end to cite those ideas properly.
Executive Summary Templates
Tips
When writing an executive summary, there are special tips and considerations that you should observe to ensure that you do it effectively. Here are tips you should consider when preparing it:
Conduct market analysis
As a business, it is important to do extensive market research before preparing a report. The market analysis will help you understand current trends and how to benefit from them. In addition, conducting market research will show the investors that you understand the market and have statistical data and figures to show in your summary.
Remember that it is a summary, not a plan
An executive summary should be drafted after you have created a detailed business plan. Therefore, the summary should briefly outline and describe the important information contained in the business plan. Note that if you create a summary before a business plan, there are chances that you may omit important information.
Use financial projections
In your executive summary, use financial projections to show investors where you want your business to be in the next few years. The financial projections will outline the market share you will take, the number of customers you will reach, and the revenue your business is likely to generate. This is an effective way of retaining and attracting more investors and partners.
Tell a story
As a business, you can use an executive summary in a storytelling manner to explain the vision and mission of your company to potential investors. Additionally, you can use storytelling in your summary to explain the solutions you will have for the highlighted problems.
Be concise
The executive summary should be well-detailed such that individuals without knowledge of the topic should be able to understand the ideas and information being conveyed. Therefore, the words used in the summary should be meaningful and impactful to the readers. Therefore, it is important to keep the executive summary brief, engaging, and workable.
Proofread
Before presenting the summary to the investors or partners, it is important to review it several times to make sure it makes sense and correct errors. You can also send the summary to your friends and colleagues for review and corrections.
Make sure it can stand alone
The executive summary needs to be detailed and be able to stand on its own. The introduction, the body, and the conclusion of the summary should be detailed and to the point. The executives, investors, and collaborators should be able to make accurate decisions based on the information provided in the summary.
Use formal tone
The executive summary should entirely be written in a formal tone. However, ensure that the investors and the target audience can easily understand the information conveyed in the summary.
Use proper language and style
You should avoid overly technical language, generalizations, and assumptions in an executive summary. Make use of active verbs and active voice throughout the summary. Moreover, use the present tense and choose a style that best conveys the message you are trying to pass to the investors.
Round off numbers
If you have used figures to expand the financial expectations of the project at hand, you can avoid using decimal numbers and round off the numbers for easy understanding. Additionally, you can use charts and graphs to explain the numbers projected in the summary; this makes it easier for the audience to understand the figures conveyed.
Frequently Asked Questions
How do you write an executive summary for a business plan?
An executive summary should be perceived as the only business plan the investors will read. Therefore, the summary should be detailed with important and accurate information contained in the large business plan. A good way to write an executive summary is by making it brief and ensuring it contains everything the investors need to know about the business plan.
How long should an executive summary be?
An executive summary should capture the attention of the collaborators while delivering the important points effectively and quickly. Preferably, an executive summary should be short and straight to the point. Usually, the summary should be two pages long or a maximum of 10% of the whole business plan.
Where does an executive summary go in a report?
An executive summary should be placed before the table of content and after the title page of the report. It is important to add a page break before and after the summary.
Who is the audience of an executive summary?
The target audience for an executive summary may include; C-level executives, the management committee, investors, partners, venture capitalists, and project stakeholders.