Famous venture capitalist, author, and speaker Guy Kawasaki said in his book, The Art of the Start, “Of the effort you put into write a business plan, 80 percent should go into the executive summary. These are the most important paragraphs of your organization’s existence.” Knowing just how important the executive summary is can scare many entrepreneurs away from even trying to write an executive summary. In reality, you already know how to write an executive summary. In fact, in the next hour you could answer the following 8 questions and be 90% of the way to a powerful business plan executive summary.
1. What is the single most interesting thing about your business? You need to grab the reader’s attention right from the start, so you might disclose one of your key partners, a large client, or your sales growth over the last 6 months.
2. What problem does your business solve? Your goal is to make the reader feel the pain or annoyance that you are solving.
3. How is your solution unique? Your solution should be different than other options currently on the market. Are you cheaper, faster, longer lasting?
4. How many people have this problem? The answer to this question determines your market potential.
5. How will you make a profit? You need to clearly outline your business model. It is not enough to simply sell a product or service, you want to demonstrate how your business can be profitable.
6. Why is your team right for the job? Describe your background and experience. Bankers and investors want to put their money behind great people.
7. Do you have any traction? One of the best ways to show credibility in your executive summary is through traction. Are you growing? Have you signed on any major clients that could demonstrate that you have gained some traction in the market?
8. How much money do you need? You should always include a request in your executive summary. It would be terrible if you did a great job convincing a banker or investor to put some cash behind your business, and then didn’t actually ask.
If you can answer these questions clearly and concisely, then you just need to worry about the formatting, flow, and accuracy of your executive summary. Do these things and you might just be able to raise the capital you need to take your business to the next level.
Adam Hoeksema is the Founder of ExecutivePlan. ExecutivePlan helps entrepreneurs write more powerful business plan executive summaries in order to raise capital. The ExecutivePlan Executive Summary Toolkit provides entrepreneurs with executive summary templates, samples, and a detailed ebook on how to write an executive summary.
