How to Write an Effective Executive Summary

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How to Write an Effective Executive Summary
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Pitch First1

• Your business plan will be a pitch
• Create your presentation first
• Your executive summary is a concise write-up of
  your presentation
• It should truly summarize your entire business
  plan
• Assume it is all the investor will read

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What to Cover2

• The context
• The opportunity
• Your business model
• The people
• Risks and rewards

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The Context

• Every opportunity exists within a context
• What events and trends in the environment create
  your opportunity?
• There may be a gap
• There may be a change occurring
• There may be a problem that needs solving
• What circumstances make your opportunity timely?

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The Opportunity

• Explain the need/problem/demand that your
  business will address
• How do existing offerings by others fall short?
• Or, if your idea is something entirely new, why
  customers will want it?
• How large is the potential market?

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Your Business Model3

• Value proposition
• Value creation and delivery
• Value capture

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Value Proposition

• Your offering
• Your target market
• Your basic strategy and approach to competitive
  advantage why will customers want to buy this
  from you?

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Value Creation and Delivery

• Your value chain what activities you will
  undertake?
• Your position the value network how will you
  reach key suppliers, complementors, and customers
• Key resources and capabilities what do you have
  or are good at that enables you to deliver your
  value proposition?

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Value Capture

• Sources of revenue
• Economics of your business cash flow and margins

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The People

• Identify each team member and key advisers
• What do they know?
• Who do they know?
• How well known are they?

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Risks and Rewards

• Projected sales and net income
• What are your key assumptions?
• What could go wrong?
• What will you do?
• How much money do you need?
• How will investors be rewarded?

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References

• The Art of the Start by Guy Kawasaki
• How to Write a Great Business Plan by William
  Sahlman, Harvard Business Review, July-August
  1997
• The Business Model Framework by James
  Richardson, jamesr_at_hawaii.edu
• Executive Summary Guide on the PACE website