July 17, 2012

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While only one to two pages in length, an executive summary is by far the most important component of your business plan. Ultimately your business plans’ executive summary is designed to summarize the key elements, capture attention and most importantly, showcase the financial highlights.

According to the SBA, “The executive summary is often considered the most important section of a business plan. This section briefly tells your reader where your company is, where you want to take it, and why your business idea will be successful. If you are seeking financing, the executive summary is also your first opportunity to grab a potential investor’s interest.”

So, if you only have limited time and space to convey a significant amount of information and summarize the financial upside, how do you decide what to put in and what to leave out? Which financial features are critical to emphasize?

How to Develop an Executive Summary

Depending on the purpose of your document (investment, sale, partnership, strategic alliance, joint venture etc.) and the intended audience, you should tailor your financial disclosures to suit their needs and expectations. What would they want or need to see in order to make an informed decision?

At a minimum, you should clearly state what financial input is required from them and what they will get in return – i.e. shares, a debt instrument, licensing rights, exclusive right etc. Next, highlight the expected net profit and cash flow over 2-3 years. Also, give a clear indication of return on investment (ROI) and a realistic, well-defined exit strategy.

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