Whether just starting a business or seeking additional investment or funding for an existing business, a clear, polished business plan is essential — and a strong executive summary is the most critical part.
What is a business plan? Investors and potential partners or employees will want to see an outline of the business, the company’s purpose, plans and strategy. Typically, a plan includes:
- Description of the problem to be solved
- Description of the company’s solution and value proposition
- Market analysis, including competition
- Business model
- Organization and leadership
- Description of service or product line
- Marketing and sales strategy
- Financial projections
- Funding request (if applicable)A few tips on how to write a successful business plan:
Each of these sections should be targeted to both your business and your business plan’s intended audience, and should present information as succinctly as possible.
A few tips on how to write a successful business plan:
Hit the highlights in the executive summary, which should be only one or two pages long. Determine your priorities. What would you want a potential investor or funder to know about your company if they only read this one section? Reserve more in-depth discussions for the respective full sections of the business plan.
Remember that whomever is reading your business plan has likely read several that day or that week. Be sure the executive summary includes any aspects of your business that distinguish you from the pack.
Have a second or third set of eyes look over the document and provide constructive feedback. Presentation can matter as much as content. Is content clearly presented? Is it persuasive? Free of errors? Research has proven that even minor writing errors — typos, grammatical mistakes or word misuse — can change a reader’s perception of the entire message and the person delivering it, for the worse.
Explain why you need money and how you will use it — and highlight the projected return on investment. Note that friends and family may be interested in different aspects than, say, angel investors (often looking for moderate rates of return and hands-on involvement), venture capitalists (generally seeking annual compound rates of return around 35-50% with an exit in 3-5 years, with exit strategy paramount), or bankers (who tend to be risk averse and so look for cash flow to pay back the loan and collateral to secure it).
Often referred to as “serial position effect,” people tend to remember most clearly the first and last things they hear or read — consider this when writing your executive summary and, indeed, in all communications with potential investors or funders.
This is a business document intended for a business audience; while a business plan is also a marketing piece, avoid filling the plan with hyperbole, extraneous words or unsubstantiated claims.
Ensure all facts are accurate and supportable, and nothing material is omitted (such omissions could mislead your audience). The last thing you want is for an investor to feel misled or, even worse, deceived or defrauded. Consider consulting with your attorneys to address any concerns you may have.
These general tips can help you start or review what you have already created. But given the importance of your business plan, you should spend considerable time discussing and thinking about each section. The audience question alone could consume hours of research and days of conversation.