Writing Executive Summary. Why is it Important and How to Write It?

The executive summary is crucial as it allows investors or banks to be able to understand the nature of your business by just reading a few paragraphs. Investors who constantly receive new business proposal do not have the time to read every page of what you submit.

This is where the summary becomes essential. It gives the investors/banks an idea of the nature of your business instantly. Based on it, they will also get to understand your business, what makes you – unique. With enough reasons, they can decide whether to read further or even end up investing.

1. First paragraph

The first paragraph is always the most crucial and the most difficult to write.

Structure systematically about what you want the investors to know about your business. What is the problem you’re trying to solve? What product and which audience? These are the things you need to focus on in the first several sentences.

Then, write about how do you operate and sell? What equipment or assets you have at your disposal to run your business?

Finally, write in one sentence what your business needs from them (investor/bank) to grow? Write in general terms, with little details. Keep it simple. If your investor is interested, they will read further to find out more.

Use the guidelines below to help structure your executive summary. Use them as guidelines, make adjustments to which you feel fit your industry.  

What you want your investors to know about your brand?

  • What problem you’re trying to solve?
  • To which audience?
  • Operation and how you sell?
  • Equipment and asset?
  • Why and where will the money be invested?

2. Second Paragraph

This is where you talk in details about your operations and sales; and how the money invested will be spent on improving your business activities.

Your focus on this one should be inclined more towards how you intend to reach your market and eventually selling your service. This, followed by how you intend to support your selling effort. Inform the investor how your supply chain functions

Remember, always keep in mind how investor’s money will be spent and how it improves your profitability when you write. Just be careful not to be too redundant.

3. Third Paragraph

It’s best I divide this into 2 sections.

In the first few lines, this is where you talk about how you want to grow the business using the money. Where will your business be in another 3 or 5 years?

Then, explain generally how you intend to use the money from the revenue on paying back the investor. Do not over promise your investors about paying back the principal plus dividend. Be realistic and honest. Investors can sense you’re being dishonest if you intend on paying them back quickly as it affects company’s survivability if you do.

4. Fourth Paragraph

Describe briefly where will the money go in supporting your business justifying the amount you request. Write from general perspective. Let the investor know the overview of the money flow.

Imagine yourself in their own shoes, you’d definitely want to know how the money will be spent and how you will be getting paid.

This is the closure of your summary.

5. Other Tips

It becomes a difficult task to write as you need to squeeze in almost everything about your business in one paragraph. Business proposals consist of many content ranging from your financial statements and forecasts to competitive edge. How is it possible to share all the depth of information in one paragraph? Well, it becomes easier if you truly understand the ins and outs of your business. It is why the best person to write the proposal is yourself, the owner. If you feel you lack the stomach to write, be participative when it is being written.

Heard of ‘write your executive summary once you’ve completed your proposal’? Well, it’s true it does help. Do this as soon as you complete writing it as your brain is still fresh from it. If you’re short on time, take note of all the important things that make your business unique. Keep it for when you’re ready. Even then, try not to wait too long to write it down. I’d still recommend to write it immediately after completing the proposal though.

6. My Final Two Cent

Personally, I am surprised to see ‘experts’ advising aspiring entrepreneurs to keep the executive summary to one or one and a-half page. The advise immediately constricts the flow of writing. It does not help the process gets easier.

Instead, focus on what you want the investors to know. Tell them what separates you from the rest. You might end up with one or two or three pages, but the very least, you have done your job on informing them accurately about your business and why you need the money. If you summarize correctly, meaning you remain on point and concise, you will get it done much better than focusing yourself to write one page as advised in the first place.

Most important of all, do not digress. Stay on point.

If you’re looking for an example of the executive summary I wrote back when I started Mirsky Mode, click to download. It’s FREE.

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