How to write a Mesmerizing Executive Summary for your business Plan
With Clear step-by-step Instructions and Examples… So you can Intrigue, Inspire, and Excite Lenders and Investors.
Image: Entrepreneur pitching business idea
Does writing an executive summary for your business plan bring back bad memories from English class?
Not sure what information to include, how long it should be, or how to get started?
Maybe you're considering using ChatGPT to do it?
But you know that ChatGPT and other AI writing (without editing) can be too mechanical and misleading... that hurts your business plan and reduces the odds of getting funded.
As a professional business plan writer, I focus more time on the Executive Summary than almost any other section of the business plan (the only exception is the financial projections).
Because it’s a "mission critical" section.
Writing an executive summary, doesn’t have to be painful and can be done relatively quickly.
Want to know how?
In this blog post, I will show you a proven formula that gets readers excited about your business plan.
You can even use it to edit the output of any AI tool like ChatGPT.
But first, let me show you why your executive summary has the potential to make or break your business plan.
Why the Executive Summary Matters
The executive summary is the first section of your business plan and paints a picture in your readers' minds.
First impressions matter!
In psychology, this is called the “halo effect”. The psychologist Edward L. Thorndike’s work described how a person’s initial impressions will determine how they feel about something even if the information is later shown to be complete or incorrect.
Think about that for a second…
People are more likely to stick to their first impressions, even if more information shows them something different.
In the case of a business plan, the executive summary forms the reader’s first impression. If it’s a positive first impression, then they are more likely to have an overall favourable impression of the whole business plan.
The opposite is also true.
If they form a negative impression, it will be difficult to change their mind.
Hence why the executive summary is one of the most important sections of your business plan.
Now that we understand the importance of an executive summary let's get into how to write an effective executive summary that creates a positive first impression.
How to write a Mesmerizing Executive Summary
A well constructed executive summary is perfectly balanced with just the right amount of information and makes a compelling case for your business.
“The best way to predict the future is to create it—and your executive summary is where you define that future in a way others can believe.”
Here is what to include in an easy seven part structure:
Business Description
Ownership and Management
Key Initiatives and Objectives
Market Opportunities
Competitive Advantage
Marketing Strategy
Summary of Financial Projections
Begin with a business description
This section is where you describe your business. You tell the reader what products or services your business offers and what makes the business unique.
Start this section with a "hook" to get your reader excited.
A hook is a statement designed to grab the reader’s attention and spark their interest in the business.
In his book, The Righteous Mind: Why Good People Are Divided by Politics and Religion, Jonathan Haidt says, "The human mind is a story processor, not a logic processor".
People respond more to stories so begin your executive summary with an anecdote, a customer testimonial, or a short story about your business and why it exists.
Here's an example from a restaurant business plan:
"Finally, healthy fast food that is not a contradiction in terms. Lettuce Live is a new business in [Toronto, Ontario] that will provide quick and nutritious meals of lettuce wrapped around various vegetarian and meat fillings."
In the example above, the first statement plays on the notion that healthy food is usually not fast and that fast food is typically not healthy. It is clear from this statement that the business is solving this problem for consumers.
Here is the rest of the business description for the Lettuce Live business plan.
"Finally, healthy fast food that is not a contradiction in terms. Lettuce Live is a new business in [Location] that will provide quick and nutritious meals of lettuce wrapped around various vegetarian and meat fillings. Lettuce wraps have been a part of Asian cuisine for nearly two centuries. Introducing lettuce wraps as a take-away fast food business is a service concept that will meet consumer demands for nutritious fast food for people ‘on-the-go’. According to 2015 research released by the Restaurant Association, 76% of consumers prefer to visit a restaurant that offers nutritious options and the number one trend in restaurant dining for the past three years has been healthy food."
The description above is effective because it tells the reader what the business does and puts a narrative around the concepts. It shows that the business is:
a food business
serving healthy food - fast
in-line with recent consumer trends
targeting people on-the-go
An ancient staple of Asian cuisine
You know what the description above does NOT have?
It does NOT have any Jargon.
We’ve all read too many business plans (especially those produced by AI tools) that contain outlandish, unrealistic exaggerated statements.
For example, a statement like, "we have the best food around" is not useful and can actually hurt the credibility of your business plan. There is no way to measure "the best food around" so in the best case, the reader ignores the statement or worse they form a negative impression of the business.
A better, more trustworthy, way of writing this would be if it was proven by data. For example, "Lettuce Live was rated the best lettuce wraps at the local fair in 2023 by Food inc. magazine".
Be more specific and provide evidence for your statements. This will give your business plan more credibility and builds trust with your readers.
Describe Ownership & Management Structure
One of the most important consideration for investors and lenders when reviewing a business plan is the qualifications of the business owners.
"Organizations are successful because of good implementation, not good business plans."
Guy Kawasaki
In this section you want to highlight all the things that make you and your partners (if you have any) the best people to run this business. For example, years of experience, education, special certification or previous success with entrepreneurship are all great additions.
Here is what this section looks like for the Lettuce Live business plan example:
"Mary Smith has worked in the food and beverage industry for the past 15 years in the kitchen, the bar and front of house in both management and promotion positions. Mr. Smith is a silent partner and advisor holding 40% of the shares. Mr. Baer is a very successful businessman. He is the President and CEO of Deine Heim Furnishings, an exclusive Anywhere retailer of finely crafted Amish hardwood furniture. Mr. Bare will be a business mentor to Mary Smith providing guidance on management and financial strategies."
List Key Initiatives and Objectives
The aim of this section is to outline a clear and measurable path for company success. Include the most critical metrics only here, but adding more detailed objectives and initiatives in the body of the business plan.
The most critical metrics will depend on the type of business plan, but, for most business plans, there are two main metrics that are important to highlight in the executive summary; a target date for when you'll be open for business and sales and revenue targets.
For Lettuce Live, the key initiative is to have the restaurant operational by June 2016.
Here's what this section looks like for Lettuce Live business plan:
“The company's primary objectives are:
Sell 100 wraps per day in the first month of operation and 200 per day in the second month of operation
Increase sales to 400 wraps per day by the end of Q1 in the first year of operation
Increase sales by 5% per year in Y2 and Y3 of operation
Achieve 10% of wrap revenue with sales of healthy drinks."
The key initiatives and objectives for Lettuce Live are clear, measurable and realistic.
Speak to Market Opportunities
Market opportunities section of the executive summary should convince the reader that there is demand for the company's products or services. You do this by highlighting important market trends.
Be as specific as possible here... statistics by reputable sources can be very convincing.
It's easy to end up adding a ton of stuff here but remember to highlight the strongest evidence leaving all the details to the market opportunities section in the body of the business plan.
Here's what this section looks like for the Lettuce Live business plan:
NOTE: We use the term “Anywhere” to hide the name of the city with this information as it is likely not up to date information and don’t want to mislead anyone reading this”.
"Albertans make 2.5 million visits to a restaurant every day, generating $10 Billion in annual sales. On average, Canadian households visit a restaurant for a meal or snack 520 times a year. A study conducted by the BDC (Business Development Canada) found that Canadian’s health awareness is completely transforming food demand; 50% of Canadians consider the health impact of a product when making purchasing decisions, while one-third claim they are willing to pay a premium for healthy products. Every year for the past decade one of the ten top trend in food services has been health and wellness. Another key trend that’s important for this business is the increasing reliance on snack foods as an alternative to full meals — and lettuce wraps can be either a snack or a full meal.
The steady growth in restaurant food consumption is attributed to the fast-paced lifestyles of families and a higher level of disposable incomes. Anywhere has the highest median family income of all Canadian cities and single adults living in Anywhere are the highest income earners in their cohort group. The fact that those with higher disposable incomes, and adults between 18 and 35 years are the largest consumers of restaurant food, combined with consistently increasing demands for healthy dining alternatives, are strong indicators of success for Lettuce Live."
Showcase Your Competitive Advantage
In their book "The Unfair Advantage" authors and investors Ash Ali and Hasan Kubba say that an unfair advantage in business "is a condition, asset or circumstance that puts you in a favourable business position". This is a great description of what you should highlight in the competitive advantage section of the executive summary.
In the body of the business plan you can do a deeper dive into your competitors and how your startup will stand apart from competitors. In the executive summary, you want to highlight the most compelling reason why your customers will choose you over the competition.
For the Lettuce Live business plan, their competitive advantage could be the variety of fresh healthy foods they provide. Here's what this section could look like for Lettuce Live:
"The primary advantage for the company is their healthy fast food concept; customers can benefit from eating lettuce wraps as either a full meal or a snack and there is simply no other fast food alternative the provides this range of delicious and nutritious food. The second advantage is the location; Lettuce Live expects to open in the downtown core with access to the +15 walkway. More than 140,000 people are in Anywhere’s downtown core every day, and the City hosts 4 million visitors a year. Lettuce Live is ideally positioned to capture a strong share of the foot traffic in the area."
Marketing Strategy
Investors and lenders are interested in how your company will get and retain customers. Demonstrating a detailed marketing plan is an important success factor for the business plan. But how do you summarize this in the executive summary?
The key is highlighting the main parts of your marketing strategy AND demonstrating the rationale for why you chose it.
For example, for Lettuce Live, they may choose to use social media marketing as a large part of their marketing strategy. Here's how their marketing section of the executive summary looks like:
"The most significant marketing strategy available to any company is social media; and this is especially true in the food business. For example, a study by HubSpot found that 80% of consumers expect companies to respond to their social media messages within 24 hours. Furthermore, 71% of customers who have a positive experience with a brand on social media are likely to recommend it to others . The owners will ensure their website is mobile friendly and they will establish a presence through social media and will manage their connections on a daily basis during the start-up period, and then on a weekly basis. They will launch their advertising campaign in April, in preparation for the July opening, and will hold a grand opening celebration. Their ongoing marketing strategies include weekly promotions such as buy-one-get one free and coupons sent out through their social media channels."
The marketing summary shows that social media is important for food businesses which provides the rationale for their focus on social media as a main marketing tool.
Summarize Financial Projections
If you've ever watched the popular TV show shark tank, you've probably noticed that a large part of the questioning from the Sharks has to do with financial projections of the business. Kevin O'Leary aka Mr. Wonderful, is known to focus more on the financial aspects of the business by grilling founders on their sales projections and company valuation.
In the executive summary, you want to paint a picture of the start up financials and demonstrate the feasibility of your business... while avoiding getting into too much detail.
Here's what to include:
Funds required to start the business and where you anticipate getting these funds. Whether your business is seeking a start-up loan, investment or grant funding make sure to highlight that here. This helps readers understand what funds are being requested and how the startup will be funded.
Sales Revenue projections. Three year projections are typical although some banks and investors prefer to see five years.
Cost of Sales
Net Income
Cash Balance
Retained Earnings.
This can be shown in a simple table summary. For example, here is what Lettuce Live financial summary looks like:
Image: Sample Financial Summary Table
Here is what the description of the table in the business plan would sound like:
"Private investors are providing the owners with $90,000 to start the business. The company is seeking a forgivable grant of $100,000. Funding will be used to lease and fit-up the outlet, buy equipment and supplies and launch the website and marketing strategies."
This type of summary contains enough information to give the reader a sense of the business profitability and get them curious enough that they will flip through the business plan body to learn more about how you came up with these projections... which is the intent of the executive summary.
Finally, if your business plan is for investors, then make sure to highlight the return on investment (ROI) in the executive summary financial section as well.
Conclusion
After you've spent hours working on your business plan, you might be tempted to speed through the Executive Summary…but don’t.
Instead, slow down and take your time.
Remember that the Executive Summary sets the tone for the rest of the business plan, so spend time to make it memorable.
Be concise. Be positive. Be realistic.
You got this!
Here's to your Wildest Success!
-Michael
