This is the final post in my four-part series on how to write a business plan. So far we have covered Part I: How to develop a Business Model, Part II: Your Marketing Plan and Part III: Operations and Cash Flow Projections. In Part IV, we will discuss developing your executive summary.
The Executive Summary: What is It?
Your executive summary provides a snapshot of your business. It is essentially a sales document that highlights the main points of an in-depth business plan and is written for people who want to understand quickly whether or not your business idea is worth their time. The executive summary should contain enough information for the reader to get interested in reading the full plan and therefore should be the most compelling part of the business plan.
The executive summary should provide answers to the following questions:
- Who are you and who is your management team?
- What is the business idea?
- Where is your market opportunity?
- When will your business be profitable?
- Why will your target customer do business with you?
- How much money do you need and what will you do with it?
Your executive summary should be written last - after the bulk of your business plan has been developed. It should be no more than two pages. If you can't sell your idea on paper in two pages, well then perhaps you need to reconsider your business idea.
Your executive summary should list the highlights of your business plan in the order that your plan is organized. Avoid using unnecessary technical material or industry jargon. It is likely that the person reading the business plan may not know anything about your business and if they are in a position to make a funding decision, it is best to not frustrate them.
Use plain language and do not hesitate to add supporting sentences to further explain. As a test, ask a friend or family member to read your business plan's executive summary to make sure your business idea is clear, conveys passion and, above all, entices the reader to read further into your business plan.
A business plan is the small business owner's hypothesis of what they think will happen in once they open for business. The plan will change once the business is exposed to the marketplace, which means the plan must change regularly. In fact, in the first few years of running a small business, the business owner should review and update their business plan every two to three months to make sure the business is on the right track.
I strongly suggest that you use business plan software. Check out bplans.com for great business plan examples or use enloop.com. Then, sign up for a business plan course to finish your business plan. Find a business plan course at a local community college, Small Business Development Centers, 1-800-8-ASK-SBA or a local nonprofit serving small business.
Having a business plan is essential to attract investors and keep your business on track to achieving its goals.
Melinda F. Emerson, SmallBizLady is America's #1 small business expert. She is an author, speaker and small business coach whose areas of expertise include small business start-up, business development and social media marketing. She writes a weekly column for the New York Times, publishes a resource blog, www.succeedasyourownboss.com, which is syndicated through The Huffington Post. She also hosts a weekly talk show on Twitter called #SmallBizChat for small business owners. As a brand, she reaches 1.5 million entrepreneurs a week on the internet. As CEO of Quintessence Multimedia, Melinda develops audio, video and written content to fulfill her mission to end small business failure. Forbes Magazine named Melinda Emerson one of the #1 Woman for Entrepreneurs to follow on Twitter. Melinda has been featured on MSNBC, Fox News, NBC Nightly News and in Fortune, The Washington Post, USA Today, Wall Street Journal and Black Enterprise. She is the bestselling author of "Become Your Own Boss in 12 months; A Month-by-Month Guide to a Business That Works," and the ebook How to Become a Social Media Ninja; 101 Ways to Dominate Your Competition Online.