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When you are trying to raise capital for your interest, an investor will ask you to provide a piece of documentation called an executive summary. An executive summary is a short version of the body of the business plan. There are three main sections of a business plan which are the business plan, marketing plan, and financial plan. The investors need to have a full understanding of your business, the industry, the products, or services sold, target market, marketing strategy, sales, revenue, and return on investment when they look at your executive summary. Before approaching an investor, you need to be sure that you cover all the details they want to hear. This makes you look like you are well-prepared and can increase your chances of raising business capital from the investors you speak with.
Describe the Company
The first few paragraphs of the executive summary should outline the company’s name, when it was founded, where it is located, and who founded it. It is important to talk abut the career experience of the company owners and the history of the business. Investors want to know if the company owners, founders, or management team has experience in the industry in which the business is operating. Also, outline how the company provides its products or services to its target market and how your company separates itself from competitors. By the time, the investor finishes reading this section of the executive summary, they should have a good understanding of who runs the company, what they company offers, and the benefits of the products or services.
Discuss the Past, Current, & Future of the Business Industry
This section of the executive summary will require some research. The investor should have a clear understand of how the industry has sustained itself in the past and how it will sustain itself in the future.
Identify the Target Market & Marketing Strategy
The next section of your executive summary should include your target market. This includes their age, location, occupation, income, hobbies, and more. Any marketing strategies and techniques that will be used should also be identified. Investors need to know who you are selling your products or services to. They should also know how you are going to promote your company in a way to separate it from competitors.
The following are some examples of some types of marketing strategies that you can outline in your executive summary:
- Word of mouth marketing
- Organic search engine marketing
- Radio advertising
- Bulk mail advertising
- Event marketing
- Networking
- TV advertising
- Social media marketing
Estimate the Sales, Revenue, and Return on Investment
This is the most important part of the executive summary. You need to explain how much it is going to cost to run the business and how much money the business will make. The investor is most interested in knowing what their return on investment will look like. Outline the past performance of the company if applicable along with the sales forecast, expenses, and gross revenue. This will help the investors understand how much your company will make, how many sales it will make, and how much money the company is going to spend to make those sales. The investors should have an understand of the company’s cash flow for the next 3 years and determine if your business is worth the investment.
The Bottom Line
Your executive summary should be less than 10 pages, but sometimes investors will ask for a one-page executive summary that is concise. The information you include in it should be that included in this article. You will want to use it to create a 3-minute pitch for the investors. By the end of the pitch, the investor should have a good idea about your company and if they will want to work with you.
