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What Is an Executive Summary in Simple Words?


The executive summary is often one of the most important features of a business plan.

It is both the heart and the soul of the entire business plan.

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It succinctly puts forward your objective for the business and encapsulates the core purpose of putting forth the venture.

Executive SummaryWhether an investor reads it or a banker, whoever the reader might be, they get an instant idea of the overall business and the processes involved.

In very simple words, therefore, the executive summary is a precise version of the entire business plan in simple and lucid fashion.

Often also known as a management summary, this is a rather short document in comparison to the entire business plan.

In common terms, you can say it is a non-technical statement that summarizes the longer business plan.

This makes possible to easily read through the entire details of the plan quite rapidly without losing the key highlights.

The key elements of the business plan include:

  1. Statement of purpose
  2. Key proposal
  3. Background document
  4. Analysis of business plan
  5. Conclusion

The main purpose of this executive summary is to help readers make a quick decision and provide an overall overview of the entire business.

As I explained above, the reader can be an investor who wants to invest in our company.

He can even be a banker who is going to approve our loan application.

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Structure of an Executive Summary

Structure of an Executive Summary

A typical executive summary has a set structure that it follows.

A condensed version of the overall detailed business report, the structure is very important to bring to light the true purpose of the business plan.

Not only it makes the document more readable, but also becomes successful in the main purpose of this executive summary, i.e. enabling a quick portrayal of the overall business details.

So what are the key parts of this set structure?

If you look at any training material or book on the issue, here is a quick lowdown of the main elements:

1) The summary should not be very long.

2) On an average, it should not be more than 5-10% the overall length of the business plan.

3) The choice of the language is very important.

4) Only when the report is in a way that is appropriate for the target audience it can make the necessary impact.

5) Decide on the target audience and ensure the language of the executive summary follows that brief.

6) It is always a good idea to split up the executive summary into number of paragraphs.

7) Therefore a summary should not only be short and crisp, but also you need to ensure it is not monotonous.

8) The order that you follow in your executive summary is also very important.

It should be essentially the same that is in the entire business plan.

9) Also, that implies that there cannot be any difference in the content of the executive summary and the business plan It should essentially be same.

10) You have the option of including justification and recommendation in it.

11) The introduction and conclusion are very important elements.

12) They improve the readability of the document and also help highlight the core points.

13) Though it should have the same content as the business plan, you must ensure that it is also a separate document without the detailed report as well.

14) Depending on the nature of the business plan, an executive summary could also be a summary of more than one document.

15) It should be only page one and two.

16) You could include the Vision of your firm and the mission statement for your business too.

17) You can briefly give a sketch of your basic goals of your business.

Therefore when you ask, what is an executive summary, it is the structure of it that can most easily help answer the question.

This is because the structure is often self explanatory and easily brings the primary aspects to foray.

Example of an executive summary:

Sample of an executive summery

The Importance of Executive Summary

That brings us to the core point that what is the importance of the executive summary?

Firstly, it needs to be very catchy so that the reader is instantly hooked on to it.

The advantage of this is that the potential investor or the business partner can easily get an idea of the purpose that you have in mind.

It also highlights the key pointers that your potential readers might pay attention in the overall business plan.

It helps them identify sections in the broader plan that could yield answers to the questions that they might have in mind along with the portions that could hold special interest for you.

Moreover, you must remember that the executive summary is often the most strategically advantageous position for posting the mission statement of the company.

The mission statement is often the outline of the key objective of the core business purposes and placing it appropriately is crucial.

While the executive summary is the right place to place it, you must position this correctly to get a fair perspective of the entire business motive.

Overall, it also serves the same purpose as window shopping does to any avid shopaholic.

You must remember the kind of attention that retailers spend on placing products for window shopping and that exactly should be the kind of attention that you must give to the overall executive summary and especially the mission statement in it.

Broadly it gives you a peep into the gems hidden inside and makes the business plan a compelling read for even someone who might not be very keen.

That’s exactly why just like the showcasing of the right kind of products enable proper selling of the products, intelligent placement of elements in the executive summary would always ensure a much better response to the entire plan as such.

It not just enhances the reach of the overall business, but also improves the rate of acceptance of the business idea.

You must understand that often the way the executive summary represents the core factors, it becomes far more acceptable than you would have considered otherwise.

Therefore, if your idea is to win over more readers with your executive summary, you must work towards making it:

  1. Clear
  2. Concise
  3. Precise
  4. Direct
  5. To the point

These are the features that help your readers to connect with the content of the entire plan quite easily.

This also means that the set of readers, who get motivated by the executive summary that you have created, also spread the word to others who would not have otherwise spent that much attention to the business plan.

In a way, it also becomes part of your publicity plan as such.

Advantages of Executive Summary

That, therefore, brings us to the next chapter, that is identifying the key advantages of the executive summary.

1) Appropriate Business Description

An executive summary inevitably describes the overall details of the business in a concise manner.

That ensures that for anyone interested in understanding the business basics, all they need to do is simply refer to the executive summary.

They will be able to grasp the fundamentals as well as the strategy employed by the entrepreneur in conceptualizing the broad business plan.

It also describes the nature of target customers and clients, and therefore you can easily get a clear idea who the business is targeting.

2) The Power of Number

The executive summary is inevitably trying to convey the basic business plan in a concise manner so as a result, you need to use a lot more numbers to convey the same set of messages that could have been achieved in a couple of paragraphs.

That is why it also becomes a lot more impactful.

Here is a short example, if you just said that with mere 20 employees working, your average monthly reach is 2000 clients, it sure does convey the same message in a more powerful manner than saying, despite the small size, your business has potential to reach a large cross-section of people.

4) Projections Are Attractive

That takes us to the next important advantage of the executive summary, attracting the viewer attention.

As a result of the key numbers used like future projections, client reach, turnover and expected revenue, the executive summary becomes a crucial positive point.

Readers get genuinely excited about reading these, assessing the relevance in future and responding as per that.

These projections therefore surely enhance the readability of the entire business plan.

5) Improves Risk Appetite

It is needless to mention that positive projections beget positive responses.

Given the paucity of space, the executive summary, in general, crams up all the highlights of the business and the major attention grabbing details.

As a result, the potential investor who might be reading the executive summary surely gets more excited about the whole plan.

As a result, it won’t be wrong to say that it spikes up an investor’s relative risk appetite and helps them take on challenges that they might not have considered otherwise.

This greater risk appetite can often be credited to a well written executive summary.

6) Highlights Unique Business Senses

I am sure that when you conceptualize the business plan, there is a unique motive that goes with it.

Whether you are looking at serving a niche area or providing a better quality of service in an already overcrowded space, a well written executive summary can work as an effective tool in helping convey this information.

Moreover, the style of presenting it or in short the way the executive summary is created can totally transform the whole impact of the plan and the response that you can expect.

So it acts as an appropriate medium to convey the message more effectively.

7) Criticism

That said, the executive summary is not without its set of demerits.

Many corporate veterans have often claimed that too much importance is often ascribed to this executive summary.

By providing an easy to read version of a complex issue, it could often lead to key issues being overlooked.

Unlike how business books have you believed, your business is never just as good as the executive summary looks.

Sometimes the original and longer plan could be way more complex and multi-textured than the actual plan.

This by extension, one could argue that this summary might actually provide a dumbed down version of the actual plan and might miss out some highlights.

As a result, often key elements of the business might be missed for the paucity of space in the executive summary.

Let’s face it that the summary hardly comprises of a few pages.

It would just not be possible to cram every detail in it.

Therefore, if you decided to take a decision on the entire business on the basis of the mere executive summary, the possibility of misses are quite high.

Using an old corollary that we used, this executive summary is after all the mere window to attract shoppers.

The shopping plan cannot be completed on the basis of this mere element.

While it surely helps you woo readers to your business plan, your readers need to get past the executive summary.

That’s why equal attention needs to be given to the other elements of the business plan.

There is no reason why you should devote your entire attention to just writing this executive summary.

You also need to ensure that the other elements of the plan are equally well conceptualized.

They should give your readers a detailed perspective of every element of the entire business process.

The idea to create a comprehensive content is crucial.

An Executive Summary Is Like the Central Pendant

To conclude, an executive summary is like the central pendant in a beautifully carved necklace.

While each element in the necklace is beautiful and attention grabbing, the centerpiece is what actually pulls the buyer to the shop eventually.

Therefore, quite understandably the quality of it has to be undeniably great.

While a well written and properly conceptualized executive summary can enhance the business prospects, the reverse is also true.

If due attention is not given to the overall summary, it could also result in the entire business plan falling apart.

A badly written executive summary might also result in creating a sub-par response for the overall business plan.

Inevitably when the readers cannot get past the first few pages, the chances of them reading the entire plan becomes even lesser.

They might not be able to devote the desired attention if the executive summary is not able to make the desired attention.

Consistency and cohesiveness form the key pillars of the executive summary, and whether you like it or not, a great version of this summary could often shape the direction of your overall business success.

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