Although this is always the first part of a business plan, it is also the last chapter to be written. An executive summary summarizes every chapter you will discuss in detail in just a few lines, so that the investor can get a general idea of the business. It is not true that investors do not read business plans in detail. If the executive summary is attractive enough, the potential investor will take the time and read through the whole plan. This is the exact reason why it must be written after all else is known.

Since every chapter holds sub-chapters, let’s discuss each one in detail:

1. Goal of Business Plan – Since this kind of plan can have several objectives, it is necessary to explain in the first paragraph what it is that you are talking about. Refrain from unnecessary quotes and put down, in plain English, what your goal was when you wrote this plan.

Example: “The goal of this business plan is to provide relevant information regarding a new endeavor in the field of online advertising with an emphasis on search engines as a growth factor. Kadooki will provide its clients with an innovative service that allows for the focusing of search results based on the user’s shoe size, quality and worth”

Continue this paragraph with a brief explanation of yourself and your business history. No matter how good the idea is, no investor will risk money on an entrepreneur that can’t deliver.

2. Business Summary – Every business needs a solid business model. The goal of every company is to provide financial value to its share holders. Explain in brief the revenue channels of the company and the reason that people might consider using its services.

Example: “Kadooki wishes to create an advertising network that will track the shoe size, quality and worth of a specific web viewer and report it back. Each of the websites participating in the network, commonly named “publisher”, implements a unique piece of programming code into the source code of their website, thereby providing backward reporting to the Kadooki servers. By using advanced technological solutions, Kadooki can determine the parameters discussed and provide extended targeting abilities to both the publisher and the advertiser.”

3. Product / Service Summary – Explain the area in which you intend to position yourself. If this is a product, explain briefly how it works and what added value will it bring to the consumer. If this is a service, explain why would a consumer agree to pay for it and what benefits will they receive.

Example: “Kadooki developed several products that when working together constitute a working method.

Focuser - A management console designed for the specific use of advertisers. Using this console, advertisers can focus their advertising campaigns based on the web viewer’s orthopedic analysis.

Determinator - A point of entry for publishers providing the ability to view exactly what happens within their website visitors, including detailed statistics regarding their orthopedic habits, as well as additional value added services designed to maximize the publisher’s benefits.

Kadooki administration module - This is the core of Kadooki’s activity, centralizes all captured data from the Kadooki network.”

4. Market Summary – This is the place to provide a few quotes and statistics regarding the state of the market and its maturity stage. Identify your target market well so that you can provide relevant quotes. Provide some information about the growth potential of the market and its potential. This is also the place to briefly mention the competition…

Example: “The online advertising world has yet to reach its maturity stage. As a rule of thumb it can be now determined that the online advertising market is undergoing constant growth with no intentions on stopping in the near future In 2006, online advertising in the U.S. accounted for only 6.5% of the total advertising budget.”

5. Financial Summary – As the name states, this section puts in table form the essence of your financial plan. The financial summary must be spread over fixed intervals of time (yearly, quarterly, etc.) the sales projection, cost of sales, operations and marketing expenses.

Example: “The following is a summary of the financial projections (In U.S Dollars) that can be viewed in full in the annexes to this business plan.”

For clarification purposes, the term EBIT means “Earnings before Interest and Taxes”. These parameters cannot be determined at this phase, hence overlooked.

This concludes part one of this blog series. Next week I will post part two that will cover the subject of “Product / Service Description”. If you missed out on previous posts in this series, here is a link to the first post in the series

If you have any comments or feedback about this post, feel free to drop me a line at doron@dhconsulting.info and I will gladly answer all your questions.