When making applications to lenders or investors, you will often be asked to provide an executive summary with your proposal. This is the first thing that will be read, and a poorly written document can be a red flag for lenders and investors.
In this post, we will look at how to write an executive summary, starting by understanding what the document is, what it should include and how you can optimize your chances of success with lenders, venture capitalists, and others.
What Is an Executive Summary
An executive summary is usually the first part of the proposal or business plan that you submit to your would-be financial partner. It should sum up your proposal in a brief and to-the-point format, touching on the main points and value propositions that the full plan covers.
The job of the executive summary is to engage the funder with your ideas. It should set the stage, pique their interest and reassure them that you are a reliable proposition. It’s a short document that does a lot of work.
It might be tempting to write one summary and use it for all potential funders. Better business practice would be to create a different summary for each funder you approach to ensure that you emphasize the elements of your proposal that are most appealing to them.
What to Include in an Executive Summary
The perfect executive summary finds the balance between keeping things brief and including all the relevant information. Using an executive summary template, such as this one provided by the SBA can be helpful.
- Company description
- Market Analysis
- Organization description
- Management team
- Product line
- Marketing plan
- Funding request and use
- Financial projections
These are of course simply headings, and they may not all be relevant to your business. If you are providing a service rather than a product, for example, you could substitute in a more relevant heading.
As a rule of thumb, your executive summary should be around 5% of the length of your complete proposal and no less than one page. The key word is summary, you don’t need to get into the nitty-gritty when writing this document. Describe ideas in broad terms.
Style & Focus
The purpose of an executive summary is to engage the reader with your ideas. While you might find your product or service utterly fascinating, the sad truth is that lenders are less likely to be passionate about what you’re doing. For them, the measure of a product is in the bottom line.
The advice often given in marketing is to talk about benefits, not features and that holds true when looking for funding, too. Your executive summary should outline what is special about your proposal, and what makes your certain it will be a success.
Your job is to persuade the lenders that your proposition is viable. Show them that you have considered risks, and mitigated them as much as possible. Let the executive summary be a roadmap for them, to show how they will be repaid.
You should also consider who you are approaching. If you are speaking to a venture capitalist, then telling an exciting story with your summary might help seal the deal. If you’re seeking funding when you are unemployed (follow the link for more information about these loans), emphasizing security and stability could be a better tactic.
If you’ve never seen an executive summary before, it would be a good idea to find some and read them to see what others have done. Using a search engine to look for, ‘executive summary example’ along with keywords for your business should bring up some links to explore.
Best Practice for Executive Summaries
- Stay Focused on the Lender. While you are talking about your business, remember you need to appeal to them to get it funded. Address their concerns.
- Justify your Business. Explain where the customer base is, what hot buttons your product or service addresses and how you will reach them.
- Write in a concise tone and avoid technical jargon. The document should be something that a layperson can understand.
- Aim to Compete. If you know you are up against other projects to secure funding, don’t be afraid to mention how your project avoids or addresses their known shortcomings. Just don’t talk down your competition by name.
Preparing to Write Your Executive Summary
If you’re not sure what points you should be addressing in your proposal, consider using tools such as SWOT analysis to help you come up with talking points. This should allow you to identify your strong areas, but to also identify weaknesses and ensure that you have mitigated them in the plan.
While it can be daunting to write a document like this if you take the time to properly plan your executive summary it should be much easier to put your points into a clear order. It’s important to know when you’re not the right person for the job, though. The APMP (Association of Proposal Management Professionals) can put you in touch with a qualified proposal writer who could carry out this task for you.
Whether you decide to hire in help or write the proposal yourself it’s important to read it carefully and ask others to do the same. Fresh eyes can be helpful because something that seems obvious to you might confuse a person unfamiliar with the idea or industry. You don’t want to confuse your funder!
We hope that this article has helped you feel more comfortable about writing an executive summary. It’s an important document, but one that every successful business you know has already completed successfully. Writing a compelling and compliant summary is perfectly possible.
Taking the first step to reach your dreams is always an exciting and nerve-wracking time. It’s the same if you are saving every penny yourself, to get your business up and running or asking a bank for a loan. If you found this article useful, you might also like our other business tips – check us out today.