Knowing how to write an executive summary is one of the most prominent parts of your business plan. This is the very first part of your business plan, as it should give a nice introduction to the reader of your company’s mission, the product or service you provide, basic information such as your company’s location and leadership team, and why your company specifically will be successful. Think of it like an “introductory” paragraph to your longer essay which is the business plan as a whole. It should outline the key points and important information that you hope your reader will take away from the business plan. It should not only be worded in the most clear and concise way possible, but it also needs to be appetizing. An executive summary should pique the reader’s interest to want to know more about your company- and for that reason many consider it the most important part of your entire comprehensive business plan.
As with any other important document, you’ll want to get some trustworthy writers to put together, or at the very least look over your executive summary, if not the entire business plan itself. Anyone and everyone who reads this document should walk away feeling as though your company is legitimate, exciting, and has profitable potential. And our goal today is to give you all the tools you need to write a business plan that encompasses all of that.
What needs to be addressed in an executive summary anyway?
Like we said before, an executive summary is meant to be clear and concise, and for that reason you’ll want to make sure you hit a few major points that lenders or investors will specifically be looking for. Exactly what should be in your executive summary differs for new versus established businesses. For new businesses just launching, an executive summary should include: business opportunity; how to take advantage of said opportunity; your target market; your unique business model; marketing and sales strategies; competition; financial analysis; owners and key staff members; and finally, the launch plan.
But let’s get into some more specifics below.
Executive Summary Snapshot
- Start with a little background on your business. What’s the name; what do you do to make profit; and what year were you established? This can be one short and concise sentence.
- If applicable, you can add your reasoning for presenting the reader with this business plan, i.e. “We are seeking initial funding to start our business.” Again, keep it clear and concise.
- Next, address the “business opportunity,” or why you’re sure this business will be profitable. What will be your business’ “claim to fame,” so to speak. Are you the only luxury option on the market? Are your services faster? Cheaper? More environmentally friendly? Basically, why would customers choose you over the competition, if any?
- Talk about your target market. Who’s buying your products or services? Where do they live? Why would they choose you over a competitor?
- Tell the reader about your business model. If it’s pretty straight forward, like a restaurant business might be, then you don’t need to spend a lot of time on this part. But, if your business model is groundbreaking and likely the reason you’ll be profitable, then take some time explaining it.
- Touch on your marketing and sales strategy – how will you bring in and retain customers? Remember, this is just a “summary” section and you’ll have lots of opportunities later for specifics, so only hit on the key, most appealing or creative points here.
- Mention the competition. Who are they and how do you fit into the market with these top players?
- Give a brief financial analysis. How much money do you need to get your business off the ground running, and what does your profit and sales, if you have any so far, look like?
- Definitely mention “key players” in your business, i.e. the founders, CEOs, managers, partners, etc. and what qualifies them to be in charge and call the shots.
- Last but not least, talk about your launch plan. How will you open the doors to this business in a financial sense, and how will you draw in customers to ensure your initial and continued success?
What an Executive Summary Should Look Like: In Detail
More specifically, your business opportunity section should explain why this good or service will be profitable right now. What is going on in today’s world/what new need do people have that isn’t being met…but will be met because of your business? While later on in your business plan document you’ll want to get into the specifics of your target market i.e. statistics and demographics, for the brief target market section of your executive summary, you’ll want to put in as few words as possible your specific market. Who wants your product or service? How old are they? Where do they live? Etc.
In the next part of your executive summary, where you discuss your business model, you’ll want to get into the specifics of how your business works. If you sell products, where do you make them? How do you sell them? Who is your manufacturer and raw material supplier? Do customers have multiple buying options i.e. personalized products? Or, conversely, if you’re selling a service, how do customers contact you to get the service? Is there one price or does the price vary based on the service provided? Do you have preset service packages? Etc.
In the marketing and sales strategy section, your goal is to outline as briefly as possible how you plan to advertise to your target market. Online? In print? Via radio ads? What websites do they frequent? What magazines do they read? How do you know that you’re placing your ads in the right place to reach your intended market?
Next up comes one of the sections many entrepreneurs fear: describing the competition. While it might feel scary knowing that your business has some competitors, it’s also normal. America thrives on capitalist competition, and you can beat the competition by being uniquely you. Express in this section what sets you apart from your competitors. Is it your high-quality products? Your faster service? An amazing brand identity that connects better with consumers? Whatever you have or can do that your competitors can’t is what needs to be very clearly spelled out in this section. Think of it as your “make it or break it” section.
Afterwords, you’ll want to be transparent to the reader about your financial plans. What does it cost to launch your business? What does it cost to keep your business running? What are your profit margins? And, knowing all of that information, how profitable do you expect to be? Outline a financial projection of the next three to five years that is honest, accurate, and yet enticing for investors or lenders. And remember, you’ll be expected to support this with graphs and data later on in the business plan.
Next, share with the reader the founders, owners, CEO, and key staff members of the company. Only include those people who’ve had an influential hand in making this business a reality, and highlight what they bring to the table. Do they already have other successful businesses? Are they bringing high level expertise from another successful company in this same field? Why is this the right team to make this company successful?
Finally, end your executive summary with a BANG by describing your launch plan. What is your intended schedule leading up to opening day? Are your timelines reasonable? Have you budgeted enough time (and money) to register the proper permits, patents, hire sufficient staff, etc.? And remember, just like every other part of the executive summary, your launch should be reasonable and make sense, yet at the same time, it should also excite the reader and show unique creativity and ingenuity.
Executive Summary Example
So, we understand that many people learn best by looking at completed examples. If that sounds a lot like you, don’t worry, we’ve got you covered.
Below, please find an executive summary example for a fictitious new dance studio in the Dallas area: Dallas Dance Factory.
Dallas Dance Factory is a new dance studio that will offer drop-in and subscription based classes to the youth and adults of the Dallas, Texas area. We will also host birthday parties and “Mommy and Me” classes.
For our main service, dance classes, we will offer our customers two options: subscription-based and drop in classes. Classes will last 60 minutes each and be offered in ballet, jazz, tap, lyrical, hip-hop, and Zumba. We will have two open dance studios which will allow us to offer one subscription-based class and one drop-in class simultaneously. We will operate from 4pm to 8pm on weekdays, 10am to 3pm on weekends, and Tuesday and Thursday mornings at 10am – 12pm for “Mommy and Me” classes.
On the subscription-based plan, customers will pay $85 per month per weekly 60 minute class. The expectation is customers will attend weekly classes from September – June to prepare for our annual recital.
For our drop-in classes, customers will pay $15 per stand alone class they want to attend. This allows busy families/customers flexibility to not keep up with a weekly commitment, try out different dance styles, or not feel the performance pressure of the annual recital.
Family discounts of 15% off for three or more family members signed on and multiple class discounts (15% off for five or more weekly classes) will also be available.
Birthday party packages will start at $350 for 2 hours and up to 15 children. This covers the cost of set up, use of space, staffing, and planned dance activities. Add-ons will be available in an a la carte fashion for decorations, goodie bags, cake, and food.
Our target market is active families (more specifically mothers and daughters) who want to dance for recreational or physical health purposes.
There are currently 56,116 dance studios in the USA, an increase of 3.3% from 2020. It’s estimated that dance studios profit $4 billion per year in the US.
To attract new customers, Dallas Dance Factory intends to utilize social media with relevant location and hashtagging to attract families in the Dallas area with quick dance combinations or dance moves. Tik Tok will also be key as this app is popular with dancers. Additionally, we plan to advertise on Google. We will also hand out fliers at daycares, preschools, and local gyms. We plan to partner with local preschools and daycares to offer families free trial classes.
We will remain competitive in the Dallas market as most dance studios in this area are hypercompetitive, leaving room for a more recreational, family-based studio to enter the market. Additionally, we understand that children and families have many commitments and therefore may want to attend dance classes without committing to an entire year or one dance style for the year up front.
Dallas Dance Factory is requesting $55,000 in startup costs. $5,000 to launch our website, $10,000 for Google and social media advertising, $15,000 for studio renovations and local permits and inspections, and $25,000 to cover the first three months of our lease, security deposit, etc. We expect to pay this off within our first 30 months in business on a monthly schedule at an agreed upon interest rate.
All in all, your executive summary, which is the opening of your business plan, shouldn’t exceed two pages. It should get the reader excited for the prospect of your business by using facts, not outrageous claims. Be sure not to fall into the trap of claiming your business is the “next Instagram” or relying on the opinions of you or close friends, family members, or colleagues to tell you the value of your business. Stick to the facts in the clearest way possible and we’re sure your executive summary will knock it out of the park!