When trying to get investors on board with your business or convince a customer that you have the perfect solution, a powerful executive summary can be incredibly persuasive.
The reason? Many important decision-makers and those controlling access won’t go beyond the first page of your business plan unless you give them a compelling reason.
Unfortunately, this is where many people falter. An executive summary isn’t just a shortened version of your business plan. It’s the attention-grabbing highlight reel. It’s like a movie trailer. This is where you demonstrate to a busy client or executive how your company can benefit them.
So, if you’re planning to create any kind of business plan or project proposal, mastering the art of writing executive summaries is essential.
This article will break down the essential elements of a winning executive summary. We’ll share numerous tips to make your summary persuasive and provide a sample executive summary you can adapt, making writing yours a breeze.
What exactly is an executive summary?
An executive summary provides a concise overview of a longer document, like a business plan, designed to capture a reader’s attention and introduce them to the key points of the full report. It’s not just a teaser; it should offer a condensed and easily digestible version of everything in the complete document. This summary is placed at the beginning of your business plan, allowing readers to quickly grasp the essential information without having to go through the entire plan. You can also repurpose a version of your summary for your “About Us” page. In essence, an executive summary for a business plan should achieve three things:
- Highlight the problem: Briefly explain the issue you are aiming to address.
- Propose a solution and its costs: Provide an overview of your proposed solution and its value proposition.
- Outline the benefits: Summarize the advantages for clients and investors. To achieve these objectives, your executive summary should mirror the structure of your business plan and address all the same topics. In fact, it’s safe to assume that some readers will base their decision solely on your summary without delving into the full plan.
Why is an executive summary important?
Let’s face it, most people won’t invest the time to read your entire 15-page business plan, at least not initially. You need a concise pitch they can absorb in about five minutes that convinces them to consider your proposal further. That’s precisely what an executive summary accomplishes. Let’s delve into how an executive summary assists your reader in making an informed decision about your business.
Provides Information
An executive summary equips the reader with all the necessary information to make a well-informed decision. It should present the most compelling data from your business plan, providing context regarding the current market, competitors, financials, and growth strategies. Take the men’s grooming brand Harry’s, for instance. Their About Us page serves as an executive summary, offering website visitors comprehensive details about their company.
Substantiates Claims
Simply stating a problem exists and presenting your solution as the answer isn’t enough. You need to provide sufficient background information to support these assertions. Your executive summary should instill confidence in the reader about the opportunity you are presenting.
Persuades the Reader
Your executive summary should aim to convince the reader within a few paragraphs that collaborating with your business is the logical next step. You’ll use persuasive language and compelling statistics to build a case towards this objective. Similar to Harry’s, hammock maker Yellow Leaf utilizes its About Us page as an executive summary of their company. They present a compelling argument that doing good and enjoying relaxation are not mutually exclusive.
Includes a Call to Action
Unlike academic papers, business plans often include a call to action, prompting the reader to take a specific step. This could be a request for a loan or an encouragement to choose your product or service. Regardless, the call to action (the desired next step) should be unambiguous.
Essential Components of an Executive Summary
While every executive summary is unique, your target audience, goals, and business type will shape the final product. However, certain elements are common to most types of summaries.
- Problem Statement: What is the current situation? Why is it problematic? What gap needs to be addressed?
- Solution Statement: What business or product idea will effectively solve the problem and bridge the gap?
- Company Background: How did your company come about? Who are the key people leading the company? What successes have you achieved so far?
- Market Analysis: Who are your target customers? How big is the market for your solution? How is this market evolving?
- Competitive Analysis: What other businesses are currently targeting this market? What sets your solution apart? What insights does a competitive SWOT analysis reveal?
- Financial Statement: How much funding do you require? What are your operating expenses? How do you anticipate these figures changing in the future?
- Conclusion: What decision do you need the reader to make? What outcomes are associated with that decision?
Crafting an Effective Executive Summary
We’ve established the significance and value of a well-written executive summary. Now, let’s explore the process of writing one. Follow these steps to create a summary that generates excitement about your business and motivates readers to take action.
1. Start with Your Business Plan
Although a strong executive summary can stand alone, it draws its essence from your business plan. Therefore, the first step is to finalize your business plan and use it as the foundation for your summary.
2. Define Your Target Audience
You might need different versions of your executive summary, each tailored to a specific audience and purpose. If you’re approaching a bank for a loan, emphasize your short-term and long-term financials. If your goal is to persuade someone to hire your company, focus on social proof and your capabilities. Before you start writing, clearly identify your target audience and the information they need to make a decision.
3. Create a Structure
An outline of your executive summary will help you visualize the placement of each piece of information, ensuring a logical flow from the problem to the conclusion. It also simplifies the writing process.
4. Write a Captivating Introduction
Your opening sentences should hook the reader and make them want to learn more. Your introduction should concisely explain your business and why it’s relevant to the reader. When a one-woman operation evolves into a billion-dollar industry pioneer, capturing attention in an executive summary isn’t difficult. Take inspiration from Spanx and highlight what makes your business unique.
5. Use Storytelling
People connect with information presented in a story format. Incorporate characters (customers, business leaders), your mission statement, and a narrative that explains the current and future states of your business. With a focus on sustainability and comfort, fashion brand Allbirds has a compelling story to tell. They effectively communicate this through their About Us page, which easily translates into an executive summary.
6. Maintain a Professional Yet Approachable Tone
As the name suggests, an executive summary is written for an executive. Therefore, your language and formatting should reflect professionalism and confidence. However, avoid overcomplicating the summary. Remember, your audience is busy. The easier it is to understand your summary with a quick skim, the higher your chances of getting a favorable response.
7. Seek Feedback
Ask a few people to read your executive summary within five to ten minutes. Then, ask them questions like, “What does my company do?” and “How does my business address the problem?” This helps determine if your summary is clear and easily understood in a short timeframe.
Tips for a Compelling Executive Summary
Your executive summary plays a critical role. Ensure it’s capable of captivating attention and inspiring action with these tips.
Keep it Concise
Just like any important message, your executive summary should be brief and to the point. Aim for a one- to two-page summary for most business plans, never exceeding 10% of the total length. In essence, make it as concise as possible without sacrificing comprehensiveness.
Avoid Jargon
Overused jargon like “industry-leading” and “bleeding edge” adds little value and can even harm your credibility.
Highlight Your Unique Selling Proposition
Do you offer a budget-friendly alternative or premium service? Will you cater to a market segment that others overlook? Clearly articulate your unique selling proposition, as it’s important to customers, lenders, and investors. Magic Spoon, a breakfast cereal company, targets adults who crave childhood cereal flavors without compromising on health. They effectively leverage this product comparison on their About Us page.
Incorporate Social Proof
Social proof elements, such as positive reviews, referrals, and customer ratings, enhance your credibility. If you have them, include these testimonials to demonstrate that your business resonates with people.
Make it Easy to Read
Use visuals, bullet points, and subheadings to communicate your message effectively, even to those who skim. Ideally, a reader should be able to summarize your key points after a quick 60-second scan.
Cross-Reference Your Business Plan
Your executive summary should serve as a roadmap to your business plan. For example, if your plan contains detailed financial data not included in the summary, mention it and indicate where it can be found. This allows readers to explore specific sections based on their interests.
Executive Summary Example
When tackling a new task, it’s always helpful to see a practical example. Here’s an executive summary for a fictional business, “Nirvana Studios.” Feel free to use this template as a starting point for your own executive summary.
Nirvana Studios Executive Summary
Established in 2016, Nirvana Studios offers accessible boutique health and wellness services to communities throughout New York City. Our communities consistently show high demand for our Reiki, sports massage, yoga, and nutritional support classes, often resulting in waitlists. A recent survey confirmed that people of all ages now view holistic wellness as essential for long-term health. However, middle-income earners in New Jersey often lack access to these valuable services. Existing providers primarily cater to affluent clients, leaving a significant portion of the population unable to afford holistic wellness options. By utilizing a proven and profitable operational model, streamlined technology, and strong vendor relationships, Nirvana Studios aims to bring these sought-after services directly to underserved communities in New Jersey. We anticipate high demand for our services, especially at rates accessible to the average working individual. A History of Successful Expansion In 2015, Nirvana Studios co-founders Imani Evans and Rosa Diaz, both experienced yoga and Reiki instructors, realized they couldn’t afford the very classes they were teaching. To address this, Diaz and Evans collaborated with business consultants, commercial real estate agents, and technology experts to develop a business plan that would reduce overhead costs for wellness studios while ensuring fair compensation for instructors. The result is a business model that enables Nirvana Studios to provide services comparable to competitors but at a 30% discount.
The combination of skilled instructors, welcoming studios, and affordable pricing has facilitated Nirvana’s rapid expansion to 20 locations across the five boroughs.
An Exceptional Investment Opportunity
Current market trends and company financials strongly indicate that this is the opportune time to invest in Nirvana Studios.
Public interest in holistic health has never been higher. A recent Prudential Insurance report revealed that 93% of their clients expressed a desire for greater access to yoga and stretching classes. Furthermore, social media mentions of preventative health have skyrocketed by 483% between 2021 and 2023.
Nirvana is well-positioned to thrive in this environment of increased demand. With significantly lower operational costs, the projected net profit for the proposed New Jersey locations exceeds 45%, based on maintaining client pricing 25% lower than competing studios in the area.
Class fees from ten new locations are projected to generate $50 million in the first year of operation. Additionally, Nirvana is forecast to generate $5 million in retail sales of branded apparel and products in the first year of operations in New Jersey, with an 80% profit margin.
Funding Needed for Growth
To maximize the growth potential in the New Jersey market, Nirvana Studios is seeking a $5 million investment. These funds will be allocated towards securing long-term leases, setting up physical locations, purchasing equipment, and covering marketing expenses until the studios become operational.
In return for this investment, the investor will receive a 10% ownership stake in Nirvana Studios NJ, LLC, a subsidiary of Nirvana Studios Inc.
The Right Strategy at the Right Time
Nirvana Studios’ mission has always been to increase access to holistic wellness through operational efficiency. Your investment helps accelerate this mission, making these valuable services available to thousands more individuals.
Given the anticipated growth and the company’s successful financial track record, Nirvana Studio’s expansion into New Jersey presents an exciting opportunity to capitalize on an unprecedented growth trend in the wellness industry.
Writing a Convincing Executive Summary
Creating a compelling executive summary demands a balance of creative passion and sound business acumen. Keep these pointers in mind as you craft yours:
- Remember to persuade as well as inform
- Structure your executive summary to align with your business plan
- Cut out the jargon but include all the essential details
- Limit it to a maximum of two pages and ensure it’s skimmable
- Maintain a professional tone while making your introduction engaging