There’s a literary legend in which Ernest Hemingway places a brash wager on the power of brevity.
Insisting that just a few well-chosen words are enough to tell a compelling story, Hemingway bets several other writers $10 each that he can compose a complete story – one with a beginning, middle and end – in just six words.
Once his buddies ante up, he pens this on a napkin: “For sale: baby shoes, never worn.”
Short. Engaging. Powerful.
Whether it's true or not is a matter for literary scholars to debate. But when it comes to writing the executive summary of your business plan, it’s a good idea to channel Hemingway just a little.
Whether you’re thinking about starting a business, you’ve recently launched or you’re a well-established company, a business plan is always a good idea.
If you’re in the exploratory stages, a plan can help you decide whether it’s truly feasible (or even desirable) to take the next steps and invest more time and money in your start-up idea.
If you’ll need financing to launch or expand, a business plan is an important tool for convincing banks to lend you money or for raising capital from outside investors.
If your company’s already established, a business plan provides a sense of direction and a detailed operational plan. It’s an important management tool for setting expectations, monitoring growth, and charting future direction.
Considered by many business consultants to be the most important section of the plan, the executive summary is your chance to tell a compelling story about you and your company. So, you need to be sure you’re telling the right story, the right way.
It has to be concise. Nuts-and-bolts practical. The right details. Too many people write a business plan as an exercise in describing an ideal company. It sounds nice, but it doesn’t get at the most important issues: How will you be competitive? How will you succeed?
That’s the story you really need to tell in the executive summary. But do it like Hemingway. "My aim," he once said, "is to put down on paper what I see and what I feel in the best and simplest way." Good idea, whether you're writing the great American novel or a blockbuster business plan. Choose your words well. Use only as many as you need. And make every one of them count.
If you’re looking for money (and who isn't?) the summary should make such a compelling case that it convinces a lender (or investor) that it's worthwhile to read the plan in full. Start with these basics:
It’s important to demonstrate that you know as much as there is to know about your product, service, industry and market. Anticipate the questions that a potential lender is going to ask and then answer them.
What is the market? What are the barriers to entry? Who are my chief competitors? How will they react to my entry? What advantages do I have in the market? Who are my customers? How will I reach them? What makes me think they’ll choose my products? How do I know I have enough capital to weather the difficulties of a start-up phase?
The task is to make crystal clear just how your company is going to attract customers, keep customers and make money in a dynamic market full of competitors. In short, how you're going to survive and grow.
It goes without saying that it would be silly (and next to impossible, really) to write the executive summary before you’ve noodled through and composed the individual sections of your business plan. But we’ll say it anyway. The summary may appear first in your plan, but it’s the last section you’ll write.
The basic building blocks of your plan come first, starting with detailed descriptions about the company, its ownership and management, its products, services, production and technologies, its market analysis and strategies, and its financial projections.
Sound research and analysis are at the heart of any good business plan. Don't race. Dig in. Take the time to do it right. Lenders care more about the numbers than the words.
If the actual task of writing has got you tied up in knots, remember that even the masters tremble at the sight of a blank computer screen and a flashing cursor. Hemingway quipped that there is nothing to writing ... "All you do is sit down at a typewriter and bleed."
Your job won't be that hard. You'll probably just sweat a little. But the outcome will be worth every drop.
Consultants at our Small Business Assistance Office can help you understand more about business plans. And our network of Small Business Development Centers has experts located in nine main regional offices and several satellite centers statewide. Use this online tutorial on business plans developed by the Small Business Administration.
For a comprehensive look at business plans, see our Guide to Starting a Business in Minnesota. Available for download in PDF, formatted for e-readers, or available in print (all free of charge), the book covers the major issues, questions and concerns about business start-ups.
Nothing we cover in this blog should be taken as legal advice. It’s not. And it’s no substitute for the professional guidance of a lawyer or accountant.
Jason Gray, owner of Real Meal Deli, explains the importance of having and using a business plan. Gray operates Real Meal Deli in three locations, two in Minneapolis and one in St. Paul