Page 58 - Business Plans that Work A Guide for Small Business

Getting Started • 49

Executive Summary

This section is the most important part of the business plan. If you don’t
capture readers’ attention in the executive summary, it is unlikely that they
will read any other parts of the plan or contact you for more information.
In a recent interview of 10 venture capital veterans, all of them said they
discarded a plan after reading the executive summary if it didn’t present a
compelling story. Therefore, you want to hit them with the most compel-
ling aspects of your business opportunity right up front. Hook the reader.
That means having the first sentence or paragraph highlight the potential of
the opportunity. We have read too many plans that start with “Company
XYZ, incorporated in the state of Delaware, will develop and sell widgets.”
Ho-hum. That doesn’t excite us, but the first sentences could instead state
the following: “The current market for widgets is $50 million, growing at
an annual rate of 20 percent. Moreover, the emergence of the Internet 2.0
is likely to accelerate this market’s growth. Company XYZ is positioned
to capture this wave with its proprietary technology; the secret formula
VOOM. The founding team has over 60 years of experience in starting and
building three companies in a related technology and market area. Two of
these businesses were sold, and the third is a public company with sales over
$100 million.” This creates the right tone. It tells us that the potential oppor-
tunity is huge and that company XYZ has some competitive advantage that
enables it to become a big player in this market. Moreover, the strength of
the founding team and its track record would be attractive to investors. We
don’t really care, at this point, whether the business is incorporated or that it
is a Delaware corporation (aren’t they all?).
Common subsections within the executive summary include the follow-
ing: Description of Opportunity, Business Concept, Industry Overview, Target
Market, Competitive Advantage, Business Model and Compelling Econom-
ics, Team, and Offering. Remember that, since this is an executive summary,
all these components are covered in the body of the plan. As such, we will
explore them in detail as we progress through the remainder of the book.
Because the executive summary is the most important part of the finished
plan, it should be written after you have gained your deep learning by going
through all the other sections. The summary should be one to three pages,
3
although we prefer executive summaries to be no more than two pages.

3 Don’t confuse the executive summary included in the plan with the expanded executive
summary that we suggested you write as the very first step of the business plan process.
Again, the two summaries are likely to be significantly different as the later summary
incorporates all the deep learning that you have gained throughout the process.