An executive summary is often times the first piece of documentation an investor will ask you to provide when you express interest in raising capital for your business. An executive summary is usually a short version of the main body of an entire business plan. There are three main sections of a business plan—the business plan, marketing plan and financial plan (i.e. the financial projections). The intended audience (i.e. investors) should have a full understanding of your business industry, the products or services sold, target market, marketing strategy, and estimated sales, revenue, and return on investment after reading your executive summary. In this blog I identify what information needs to be included in an executive summary. Before approaching an investor, you’ll want to be 100% sure you cover all of the details they’ll want to hear. It will make you look well-prepared and potentially increase your chances of raising business capital from the investors you present to.

Describe the Who, What, and How

The first few paragraphs if the executive summary should outline the name of the company, when it was founded, where it is located and who started it. It’s important to discuss the career experience of the company owners (and founders) and how the business came about (i.e. the company history). Investors will want to know if the company owners, founders and/or management team has experience in the industry in which the business is operating. Lastly, outline how the company is able to provide its products or services to its target market and how the company separates itself from its competitors. Any investor who reads this section of the executive summary should have a good understanding of who runs the company, what the company has to offer and the benefits of its products or services.

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Discuss the Past, Current, & Future State of the Business Industry

Completing this section of the executive summary will require some research. I strongly suggest using industry research databases like First Research and IBISWorld to find factual, up-to-date information on hundreds of different business industries. Both First Research and IBISWorld industry reports will give you a detailed overview of the past and current success of a business industry as well as its prospects for future growth. An investor should have a clear understanding of how the industry has sustained itself in the past and how it will do so in the future after reading this section. I’ve included several screenshots from First Research and IBISWorld that identify industry revenue growth for a 5-year time period. The screenshots should give you a better idea of what information is needed in this section.

Identify Your Target Market & Marketing Strategy

Your target market should be described in detail in this section of the executive summary. Their age, location, educational attainment, occupation, income, hobbies, (or business industries, sales receipts and payroll if your company is B2B) should be identified. (Target market data can be found using the U.S. Census Bureau’s American FactFinder Tool). All marketing strategies and techniques that will be used should also be identified. Investors should know who you are selling your products or services to and if they can afford to buy them after reading this section. They should also know exactly how you are going to reach them and promote the company in a way that separates it from competitors. Here are examples of the types of marketing strategies you can outline in your executive summary:

• Word of Mouth Marketing
• Organic Search Engine Marketing
• Radio Advertising
• Bulk Mail Advertising
• Event Marketing
• Networking/Network Marketing
• Television Advertising
• Marketing via Chambers of Commerce or Business Associations

Provide the Estimated Sales, Revenue & Return on Investment

This is by far the most important part of the executive summary. After you have told the story of the business and how it will operate, you need to clearly explain how it much it will cost to run the business and how much money the business will make. An investor will want to know how big their return on investment will be. The past performance of the company (if applicable) along with the sales forecast, expenses, and gross revenue forecast should be outlined. This helps an investors understand how many the sales the company will make, how much money the company will spend to make those sales, and how much money the company will actually make from those sales. By the time they are done reading this section of the executive summary, they should have a complete understanding the company’s cash flow for (at least) the next 3 years and be able to determine if your business is a worthwhile investment.

An Executive Summary Should Be Less Than 10 Pages

Your executive summary should be less than 10 pages long. Some investors will ask for a one page executive summary. If you follow the guidelines outline in this blog, you will be able to fit all of the information investors want to know in a one page executive summary. The exact number of pages of an executive summary depends on who you are presenting it to but keeping it under 10 pages will make it easy to edit when presenting it to different people (or investors).

An Executive Summary Can Be Turned Into a 3 Minute Pitch

A clear, concise executive summary can be turned into a 3 minute pitch. Some investors will want you to immediately pitch your business to them (verbally) before reading your executive summary. If you include all of the required information (as I have outlined here) in your executive summary, you will be able to use it to create a 3 minute pitch for investors. A good pitch should cover the who, what, why, where, when, and results of your business. (The exact same information covered in an executive summary). By the end of the 3 minute pitch, investors should know what products or services you sell (and to whom), how much you’ve profited from the business so far and how much you (and the investors) will profit from the business in the future.

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