Step 2 Business Plan – The Executive Summary

Executive Summary

Even though the Executive Summary is written at the end of the Business Plan, it is normally inserted into the beginning of the plan. Some investors with only look at this part of the plan, so it is important that you include all of the relevant, important information about your business in the summary. The executive summary summarizes the key points of the business plan. It should define the decision to be made and the reasons for approval. The specific content will be highly dependent on the core purpose and target audience. To get a sense of the difference the purpose and target audience can make, here are three different sets of key points for an executive summary – one for a loan request, one for a start-up seeking venture finance, and one for an internal plan. Items unique to a particular kind of plan are highlighted in bold:

A loan request executive summary might contain the following information:

  • Company information: name of company, years in business, legal structure, minority and majority owners
  • Brief description of project
  • Amount and length of loan
  • Objective reasons why the bank should be confident that the loan will be paid back. This likely will include
    • Financial track record
    • The future revenue stream
    • Any contracts in place that might guarantee the revenue stream is more than just a forecast.

For a new venture, the executive summary might contain:

  • Company information: name of company, proposed legal structure, current legal structure, minority and majority investors.
  • Amount of investment requested
  • Expected terminal value
  • Description of market opportunity
  • Objective reasons why the market opportunity can be exploited by this particular team

For an internal project plan, the executive summary might look like this:

  • Company information: not applicable
  • Description of project
  • Project mandate: who requested the proposal, who is being assigned to carry it out
  • Strategic, tactical and financial justifications
  • Summary of resources needed: staff, funds, facilities

In some cases the business plan as a whole contains similar information, but for one type of plan it is mere detail and for another it is a key decision making factor. For instance, both start-ups and internal projects need staff and facilities. However the staffing and facilities needs are considered details in a plan for start-up financing. In a plan for internal projects they are key elements and, in fact, may be the only resources needed.

Step 3 is a description of the rest of the business plan.



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