Most experts in the field of business planning and management whose decisions determine whether your project will receive the desired investments pay attention to an executive summary as the most important part of the project. The better the concept is presented in the executive summary, the more deeply your project will be studied by your potential investors or lenders. Pay close attention to executive summary writing.
That’s why many experts advise writing an executive summary at the end, once you have all the main points and a clear idea of how exactly you plan to achieve your business goals. How to write an effective executive summary so that all your investors are interested in “buying” your product? Let us get all this straightened out.
What’s Executive Summary?
A project summary (executive summary) is the main marketing document that briefly describes the most important aspects, basic details, and financial specs of a business idea. The main objective of the document is to motivate potential investors, and not just to describe your business.
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An executive summary can be used for various purposes, but it is prepared with the aim of raising funds. An executive summary is the first necessary document to be drawn up when to search for venture capital. Executive summary is the first informational material that comes into the view of a venture capital investor. It is important that information presented within the executive summary draws the attention of a potential investor. The document should be short, structured, concise, and clearly written. It shouldn’t be long and written in a common language. Instead of writing three-four pages, cover everything on a single page of an executive summary. Let’s start!
Some Executive Summary Criticism
It has been said that, by providing an easy digest of an often complex matter, an executive summary can lead policy makers and others to overlook important issues. Prof. Amanda Sinclair of the University of Melbourne has argued that this is often an active rather than a passive process.
In one study, centred on globalization, she found that policy makers face "pressures to adopt a simple reading of complex issues" and "to depoliticise and universalize all sorts of differences". She claims that "all research was framed under pre-defined and generic headings, such as business case points.
The partners' reports were supposed to look the same. The standardization of research occurred via vehicles such as executive summaries: “executives only read the summaries” we were told”. Similarly Colin Leys, writing in The Socialist Register, argues that executive summaries are used to present dumbed down arguments: "there is remarkably little adverse comment on the steep decline that has occurred since 1980 in the quality of government policy documents, whose level of argumentation and use of evidence is all too often inversely related to the quality of their presentation (in the style of corporate reports, complete with executive summaries and flashy graphics)."
Important Points of Executive Summary Writing
- An executive summary should be accurate and specific, not abstract and conceptual. It must provide a brief description of the project so that the reader understands the underlying specs of the business.
- An executive summary should answer the questions that your potential investors might have to decide on financing your project asks you.
- For each statement you made with an executive summary, there must be evidence and extended descriptions to provide at the request of the investor. It could be a company description, market attractiveness, technology description, price justification, etc. It can be anything required for making an investment decision.
- Even if your technology or business idea is brilliant, it should be supported with facts and numbers within an executive summary. Use statistics are your main argument.
Executive Summary - Structure
In order to make your project intro sound effective and interest-grabbing, you are to follow some structure requirements and ensure all the elements are in place. An executive summary should be the maximum informative. Each statement should correspond to the title of the entire document.
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If you break the structure of the executive summary, the potential investor will lose the logic and understanding of your business project. As a result, the text will not be read in full, and it will be most likely put aside without a positive decision. It is important you follow a “question-answer” sequence, giving the appearance of talking to the customer.
- Element #1 - Company Description
If you have not registered your company yet, it is not a reason to skip this section. If a company is established, it is necessary to briefly outline its history, list products, and services, assets, facilities. It would be a good idea to talk about company sales and profits.
- Element #2 - Project Description
Provide a clear description of your business idea, business project, product, and service. Any investor would be interested in knowing more about the essence of innovation and commercial attractiveness of what you are going to offer.
- Element #3 - Business Goal
Formulate your strategic goals and indicate ways to achieve them. The goal should be formulated according to the SMART principle. It should be specific in time, revenue, and approach.
- Element #4 - The Problem and Its Solution
The importance of the section “The problem and its solution” cannot be underestimated; it introduces your plans. Finding a problem and proposing its effective solution is what you are selling; readers want to see how your technology can revolutionize existing technologies or business practices. Show the specific problem that exists on the market and describes the solution you offer.
- Element #5 - Market Opportunities
Market size is the main factor influencing investment decisions. Investors want to get evidence that the company founders have studied the market, understood it, and are driven by the desire to satisfy the market needs.
You should analyze the following things when working on an executive summary:
- market size, growth rate, and purchasing characteristics;
- market segments for a specific product/technology/service;
- the main driving forces of this market segment, purchasing processes.
Within this section, you should briefly analyze the main competitors and their products, as well as show differences between your products and their competitive advantages.
- Element #6 - Technology Overview
This is one of the most important sections of the investment project summary, especially for companies whose technologies are at an early stage of development. Investors are looking for a business that is based on new technologies. These are expected to change existing procedures and processes, create new segments on the market. Do not be afraid to provide technical details. Most venture capital investors are professionals in the area in which they invest; they understand technical language.
- Element #7 - Business Model
Describe how specifically your business or business project will generate revenue, how cash flow and profit will be generated. Discuss how your way of doing business can maximize your competitive advantage, and how you can grow it. It would be relevant to talk about how your product will be sold and what sales channels will be used for that.
- Element #8 - Main Stages of Development & Budget
The main stages of project development are the goals that a company must achieve as a result of funding or operating activity. This is a significant leap in the level of business development. For example, it could be proof of the technological concept, development of a working prototype, successful research, specific sales, etc. Provide a realistic budget and time frame to reach these stages of development. Plan how you are going to achieve each goal.
- Element #9 - Project Risks
Describe what risks may hinder the successful implementation of the project. A SWOT analysis of the target investment project will be a benefit to provide.
Say “YES” to Your Project Success!
Executive summaries should be compiled as a separate holistic report that briefly explains the essence of the project. There are many key specs to highlights in this marketing work. It should explain the essence of the project, provide a brief description of the product or service, including business goals, development prospects, and staff competence. Do not forget to include stages of project implementation, sources of investment, and project performance indicators. Having all the important data in place, your project will be a success!