What is the Executive Summary?
A business plan executive summary is a short overview of your business plan for investors who are interested in learning more about your startup or existing business. It should be concise, engaging, and informative.
What is the Purpose of the Business Plan Executive Summary?
The purpose of an executive summary is to give potential investors insight into your goals and intentions as well as an understanding of the specifics surrounding your business. It includes all the information the reader needs to know in order to make an investment decision.
The executive summary is the first thing that your audience will read to get an idea about what your business is all about. You can make it easy for them by providing a concise explanation of what your business does, why it’s needed, how you plan on making money from it, and what customers you’re targeting. This means that the document needs to cover all these important points while being brief enough to not scare away readers who might want more information about your business venture.
How Long Should a Business Plan Executive Summary Be?
The executive summary for a business plan should generally be between one and three pages long; more than that may appear excessive to the reader, while less may not provide enough information to convince an investor to provide funding for your company.
Steps to Writing an Executive Summary
- Write the Executive Summary Last. Once you’ve completed writing your entire business plan, you’ll have learned the key points which set your business apart and which should convince readers to join you.
- Make a List of the Most Important Points. Write a sentence or bullet point for each argument you want to include in the executive summary. Include all the things you want to cover in your summary, including market research and analysis, management team, financial information, product development plans, and projected growth plans. You can also use headers to keep your thoughts organized.
- Describe Your Company’s Unique Background. Potential investors will want to know what makes you qualified to execute on your ideas, so here’s where you elaborate on all of your experience and insight into the business world. Include any other projects that your team members have been successful with in the past along with information regarding why you’re qualified to achieve the business’ goals.
- Identify Your Product or Service. You need to provide a description that gives potential investors a clear image of what you’re offering whether it’s something tangible, like a product, or something intangible, like software or a service.
- Explain the Benefits of Your Product or Service. This is a key part of your executive summary. Here you need to identify why your product or service is better than other options and how it appeals to your target audience.
- Address Issues or Concerns Head On. Your potential investors are going to want to know if there are any risks involved with working with their company so they can decide if they want to take them on. Here you need to talk about the problems that may arise from implementing your plan and how they can be addressed if or when they happen.
- Describe Your Management Team. Document the qualifications of your team and how your team has the experience and expertise to make your company a success.
Tips for a Great Executive Summary
Make it short but informative. If you can summarize the key points in just one page, do it. If you need up to 3 pages to detail the key information, that’s ok too.
Investors invest in people more than ideas. The most successful business plan summaries highlight the founders’ passion and enthusiasm for their project as well as their background and achievements. Investors want to know about the team members involved in the venture – who are they? Why do they matter? Who is managing whom? How experienced are the entrepreneurs?
Explain exactly what your product or service does. This includes how it will benefit customers and why there’s a need for it. You should also show how your business is different and why you’re better than the competition.
Make sure you proofread everything. It all comes down to attention to detail, so make sure there are no spelling mistakes or grammatical errors before you distribute the document. Not only will this make it look professional, but it’ll also show potential investors that you respect their time and don’t plan on wasting it by making careless mistakes during your business endeavors.
Business Plan Executive Summary Example
The executive summary is a brief overview of your business that serves as the first thing an investor will read when they consider investing in your business. It should be concise and informative without sounding like a marketing brochure. It includes all the information needed for them to make their decision about whether or not they want to invest in your business venture.
Below is an example of an executive summary:
Hosmer Sunglasses Executive Summary
Company & Concept
Hosmer Sunglasses (hereinafter referred to as “Hosmer” or “the Company”), is a California-based sunglass manufacturer offering the most cutting-edge sunglass frames in the world today. Along with a chic appearance, DNS frames have a unique characteristic that satisfies sport enthusiast consumers – silicon hinges. These hinges are exceptionally flexible and can be bent from a 90-degree angle to a 180-degree angle without breaking. This characteristic results in an intricate blend of comfort and durability heretofore unseen in the sunglass industry.
The Hosmer brand is poised for success in the U.S., and throughout North America, because it is a proven, unique product with meaningful consumer benefits. Consider the following:
- The Hosmer brand is currently distributed in France, Germany, Belgium, Spain, and England, where over the past two years, over 1 million pairs have been sold per year.
- The brand’s success in fashion-conscious France and western Europe should translate well to fashion-conscious Americans.
- Hosmer’s hinge differentiates the brand from every other sunglass company. It is a unique product difference that provides consumers with both fashion and performance, two key consumer needs.
- Hosmer recently launched U.S. operations and has already sold Hosmer sunglasses through nearly 15 retailers in four western states, and has established endorsements with over 20 sports celebrities.
Hosmer has a solid foundation from which to grow, great products with unique features, a superb management team, and an ideal climate to break into the $2.9 billion U.S. sunglass industry.
According to the Sunglass Association of America, retail sales of plano (non-prescription) sunglasses, clip-on sunglasses, and children’s sunglasses (hereinafter collectively referred to as “sunwear”) totaled $2.9 billion last year. Premium-priced sunglasses are driving the plano sunwear market. Plano sunglasses priced at $100 or more accounted for more than 49% of all sunwear sales among independent retail locations last year.
The Sunglass Association of America has projected that the dollar volume for retail sales of plano sunwear will grow 1.7% next year. Plano sunglass vendors are also bullish about sales in this year and beyond as a result of the growth of technology, particularly the growth of laser surgery and e-commerce.
Customers and Competition
Buyers of premium sports sunglasses are typically males aged 15-35 who participate in non-traditional outdoor sports referred to as “extreme sports” — i.e., skateboarding, snowboarding, surfing, mountain bike riding, and motorcycling. They also include participants of certain traditional sports, including skiing, volleyball, and golf.
Customer ratings show that a key need of extreme sports participants with regards to sunglasses is durability. While many participants are satisfied with the looks of sunglasses by manufacturers such as Oakley, they vigorously complain that such glasses tend to break easily. Since sunglasses are most prone to break at the hinge, and since Hosmer sunglasses have silicon hinges, they are unlikely to break. And, although several companies market premium sports sunglasses to this customer base, none manufactures sunglasses with silicon hinges or with the superior quality of DNS frames.
Within the premium sunglass market, it is projected that Hosmer’s primary competitors will be Smith, Dragon, Arnette (owned by Luxottica Group), Spy, Black Flys, Oakley, and Bolle.
Hosmer’s initial target market is males aged 15-35 who participate in the extreme and traditional sports noted above. This group consists primarily of “early adopters” who are most likely to be attracted to the unique Hosmer brand. Penetrating this segment will build a “buzz” around the brand, which will cause other customer groups to purchase the product soon thereafter.
Hosmer will initially offer the 8 DNS frames that have hinges. These frames will be available in a variety of colors and lens types, resulting in a selection of approximately 50 different SKUs. Hosmer controls the lenses it installs in the DNS frames. Currently, the Company uses Paletz Sulter lenses and is considering a switch to Sola lenses for some or all its frames. Both Paletz Sulter and Sola are top-notch brands, either of which would protect Hosmer wearers from the well-documented perils of excessive exposure to sunlight. By virtue of the superior design and quality of both its frames and lenses, Hosmer’s sunglasses command a premium price of $90 to $130.
Distribution will be developed through a network of representatives. At the outset, Hosmer will utilize the following outlets for distribution of the Hosmer brand: (1) independent sporting goods specialty stores; (2) sporting goods retail chains; (3) sunglass specialty stores; (4) specialty/trendy stores; and (5) optical retailers.
Hosmer has developed a comprehensive promotions strategy. It will market to retailers through advertisements in trade journals and trade show exhibitions, in addition to direct sales from representatives. Consumers will be targeted via grassroots marketing campaigns including attending and sponsoring various surfing events, biking events, and skateboard tournaments and exhibitions. The company will also advertise in the print and cable media that is most popular among the target audience. Hosmer will also continue to recruit celebrity endorsers and create strategic alliances. Dozens of professional and amateur athletes already wear the Hosmer brand. Finally, Hosmer is developing a comprehensive website that educates consumers about the Company and its products.
The Company has not only assembled a top-notch management team but one with extremely strong marketing backgrounds. The team includes:
- Jane Smith, President, whose experience includes…
- Bob Smith, Vice President of Sales & Marketing, whose experience includes…
- Jen Smith, Sales Manager, whose experience includes…
- Mike Smith, Manager of Endorsements, whose experience includes…
The average pair of Hosmer sunglasses wholesales for $55.39 and costs Hosmer approximately $15 landed (after shipping, etc.). The result is substantial gross margins of 72.9%. The Company expects sales and profitability over the next five years to be as follows:
|Year||Pairs Sold||Revenues (mil)||$ Market Share||Net Income/Loss|
Year 1 losses result from the substantial infrastructure (e.g., staffing, general and administrative expenses, etc.) and marketing expenditures needed to promote the Hosmer brand. The long-term increase of sales due to these efforts yield a nearly break-even Year 2, and increasing sales and net income thereafter.
Hosmer currently seeks $5 million, primarily for infrastructure, marketing, inventory, and working capital needs. The Company’s exit strategy is the most likely strategic acquisition or sales of distribution rights in the U.S. and/or other regions.
How PlanBuildr Can Help
If you need help writing an executive summary, our business plan writers are here to help. We’ve worked with 1,000+ entrepreneurs, business owners, and executives to help them craft a successful business plan including an executive summary to grab an investor’s attention from the very beginning.