How to write an Executive Summary for your Business Plan

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A short, powerful tool to write a winning Executive Summary for your B-Plan.

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How to write an Executive Summary for your Business Plan

  1. 1. Center for  Entrepreneurial Leadership February 3rd , 2007
  2. 2. What is it? Brief summary of all the sections of the B‐Plan Also includes important financial numbers Center for  Entrepreneurial Leadership February 3rd , 2007
  3. 3. Why? Executive summaries are also usually the first things  read and analyzed by potential investors So, it's a very important part of your plan Center for  Entrepreneurial Leadership February 3rd , 2007
  4. 4. More importantly It’s the first step of any B‐Plan competition Center for  Entrepreneurial Leadership February 3rd , 2007
  5. 5. Cover Page & Length Cover Page shouldn't be cluttered Include only essentials like Company Name Team Members L Logo with Tag line   ith T  li 2‐3 pages, excluding the cover page 2 3 pages  excluding the cover page Center for  Entrepreneurial Leadership February 3rd , 2007
  6. 6. It should start with, Product / Service Description  Business Concept and Description of the Opportunity Company Description Mission Statement Center for  Entrepreneurial Leadership February 3rd , 2007
  7. 7. Center for  Entrepreneurial Leadership February 3rd , 2007
  8. 8. What and Why? Market = The world of commercial activity where  goods and services are bought and sold.  Therefore, Market Analysis deals with the various  Th f  M k  A l i  d l   i h  h   i   aspects of the market which the reviewer may or may  not be familiar with. not be familiar with And Why? Center for  Entrepreneurial Leadership February 3rd , 2007
  9. 9. Market analysis consists It should enable you to identify target customers, their  expectations, income levels, expenditure, your  distribution strategies  etc distribution strategies, etc. It should be based on facts like surveys and established  data Center for  Entrepreneurial Leadership February 3rd , 2007
  10. 10. Center for  Entrepreneurial Leadership February 3rd , 2007
  11. 11. How? Document current strategy of each primary  competitor‐Spy on them!! Sources‐ S Public Information Market research project Newspaper reports, catalogs, interviews  with distributors Else, go GOOGLE‐ing!!! Center for  Entrepreneurial Leadership February 3rd , 2007
  12. 12. Contd. SWOT( Strengths Weaknesses Opportunities & Threats) Analysis  of each competitor Are you filling a void in the Market? Formulate the market strategy. Center for  Entrepreneurial Leadership February 3rd , 2007
  13. 13. In the Ex‐Sum… You can write a few lines about your market which you  would have learnt from your Market Analysis It is a good idea to use Visual aids like Figures and Graphs  for the above purpose It is recommended to mention the source of surveys and  data You should also write about your Market Strategy Center for  Entrepreneurial Leadership February 3rd , 2007
  14. 14. Center for  Entrepreneurial Leadership February 3rd , 2007
  15. 15. Financials – Why do we need one? Assessment Confirmation Quantification Calculation Budgeting Center for  Entrepreneurial Leadership February 3rd , 2007
  16. 16. Components Financials Income  Balance  Assumptions Cash Flow Statement Sheet Center for  Entrepreneurial Leadership February 3rd , 2007
  17. 17. Assumptions Always specify assumptions in financials Valid assumptions such as Rate of revenue exchange Depreciation Rate Seasonal Trends Royalty etc… y y Center for  Entrepreneurial Leadership February 3rd , 2007
  18. 18. Cash Flow Transfer of money in and out of the enterprise Can be calculated as: cash + source of revenue – expenses – capital h      f      i l Avoid: Unrealistic Assumptions Underestimation of Needs Center for  Entrepreneurial Leadership February 3rd , 2007
  19. 19. Income Statement How good the company is at making money. Include Sales Revenue Sales Costs Gross Profit Operating Expenses Operating Income p g Net Income Center for  Entrepreneurial Leadership February 3rd , 2007
  20. 20. Balance Sheet What the company owns and owes. The main formula is: assets = liabilities + shareholders’ equity    li bili i     h h ld ’  i To create a balance Know your assets Learn different liabilities Shareholder’s Equity q y Center for  Entrepreneurial Leadership February 3rd , 2007
  21. 21. Center for  Entrepreneurial Leadership February 3rd , 2007
  22. 22. Wikipedia says: Risk analysis is a technique to identify and assess  factors that may jeopardize the success of a project or  achieving a goal. g g Center for  Entrepreneurial Leadership February 3rd , 2007
  23. 23. Analyze… Conduct a business risk assessment against each  business function. Eliminate non‐critical business processes from a  contingency planning project. l List and prioritize business functions that require a  contingency plan. contingency plan Revise contingency planning project tasks to reflect  the new priorities. Manage the identified risks as part of operational  management practices. Center for  Entrepreneurial Leadership February 3rd , 2007
  24. 24. Assess… Economic/Financial Legal Operational Marketing Growth Center for  Entrepreneurial Leadership February 3rd , 2007
  25. 25. Continued… Determine the criticality of a process to your business. Assess the failure probability/risk criticality score. Develop a contingency plan based on the score. Center for  Entrepreneurial Leadership February 3rd , 2007
  26. 26. Center for  Entrepreneurial Leadership February 3rd , 2007
  27. 27. To some it is THE critical factor. Include Personal Details P l D il Field of Expertise Title of Position Previous Experience Previous Success Education Specific Skills Center for  Entrepreneurial Leadership February 3rd , 2007
  28. 28. Avoid Depending on unqualified friends or family. Presenting ‘one‐man theory’. Failing to attract a knowledgeable board of directors. Assume previous success in other industry applies to  your current industry.    i d Center for  Entrepreneurial Leadership February 3rd , 2007
  29. 29. Center for  Entrepreneurial Leadership February 3rd , 2007
  30. 30. What is it? It is not about shutting down your business rather  exiting it gracefully. Al  i l d     Also includes a strategy for investors to cash out.  f  i     h  Center for  Entrepreneurial Leadership February 3rd , 2007
  31. 31. Developing an Exit Strategy Ask: Why are you getting into the business? y y g g Do you see yourself running the business 20 years from  now? Are you in it for big money or a steadily growing family  business? Who are the investors in your business? Center for  Entrepreneurial Leadership February 3rd , 2007
  32. 32. Sample Exit Strategy Nike Maneuver Merger/Acquisition Buyout by a partner Initial Public Offering Franchising your business Family Handover Center for  Entrepreneurial Leadership February 3rd , 2007

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