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September 22, 2010

How to Write the Executive Summary of Your Business Plan

If you want to raise capital, you need a business plan.

Click here for a free presentation that shows you how to finish your business plan in 8 hours or less.

Your executive summary is one of the first impressions you will make on investors. As the first section of your business plan, the executive summary entices the reader to delve into the rest of the document. To make it a good one, you must tell a story – in as few words as possible – about how you are going turn a substantial investment into a satisfying return.

The fastest way to tell a story and get the point across is through the news story formula known as the 5 W’s and H: Who, What, When, Where, Why, and How. Cover all six story attributes in whatever combination makes the most sense. For example:

Who are you? Who is your management team? Describe their past accomplishments. Show investors you have the right people for success.

Where are you based? Most venture capital firms only work with companies located within 200 miles.

When were you formed? How long has your company been in business?

What do you do? Make it succinct. If the average person cannot understand your product or service, no venture capitalist will fund you. Even if your product or service is technically complex, state the benefits in lay terms.

How do you do it? Write about the everyday processes your management team will carry out to make the business a success.

Who do you do it for? Who is your target market? Write a customer portrait using demographics, psychographics, and decision processes. Also describe the market size and growth rates.

When will you reach certain milestones? Include such projections as product releases, partnership formations, and revenue benchmarks.

Who is your competition? Tell who your company is up against, honestly covering their strengths and weaknesses.

How will you overcome the competition? Describe what “barriers to entry” your company has against the competition. You could have an unparallelled management team, a product no one else can deliver, proprietary technology, exclusive access to certain market segments, or strategic partnerships.

When will everyone cash out? When do you expect to reach an initial public stock offering (IPO) or buyout by another company? This should be a natural result of your business milestones.


And the single most important “W” is…

Why are you uniquely qualified to succeed? Describe why your company is the only one that can do what it does, as well as it does, for the long term.

Click here for a free presentation that shows you how to finish your business plan in 8 hours or less.

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