The Executive Summary
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.
When it comes to writing the executive summary of your business plan, it’s a good idea to channel Hemingway.
How to Tell Your Story
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:
- Name of the business
- Business location
- Discussion of the product, market and competition
- Expertise on the management team
- Summary of financial projections
- Amount of financing requested
- Form of and purpose of the financing
- Purpose of the project, if financing is sought
- Business goals
Share All You Know
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 startup 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.
The First Comes Last
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.
Our Guide to Starting a Business in Minnesota provides a detailed look at this and other important issues.
Watch this 30-minute tutorial on business plans developed by the Small Business Administration.