What Makes a Good Business Plan?
The Executive Summary
For many hopeful deals, the only part of the business plan that gets read is the executive summary --- sometimes just before the document is thrown in the garbage --- and sometimes just before the fateful first telephone call from your investor is made. Learn how to maximize the impact of this all-important eye-catcher!
The executive summary section of a business plan is in many respects the most important, if only because it often is the only part that gets read. Consider that your preferred reader, a venture capitalist or financier, is a busy person who gets hundreds of plans to read. He or she cannot and will not read all of them cover to cover. Like a publisher receiving unsolicited manuscripts, a financier will only read a few, and whether yours will be one of those few will depend almost entirely on two factors:
1. Does your plan come recommended by someone the financier trusts?
2. Does the Executive Summary grab his or her interest and compel further reading?
Fortunately, both those factors are to some extent within your control, especially the writing of a compelling Executive Summary.
Here are the basic rules for a good Executive Summary:
1. Be concise.
2. Cover all the important aspects of the Plan.
3. Make it visually inviting to read.
4. Make the writing crystal clear and easy to read.
The Executive Should be no more than two pages long. The reader should be able to read it in a few minutes. Any longer risks losing the reader's attention. Any shorter and you will not have said enough to interest him or her in the rest of the Plan
The Executive Summary should be written first, but it should be under constant revision and be edited last. By writing the Executive Summary first, you force yourself to outline the entire Plan. Then, when you write the Plan itself, you will have in mind the main points that will go (or have already gone) into the Executive Summary. However, remember that your first draft of the Executive Summary is just a first draft, so don't be a slave to it when writing the Plan. If you find that the Plan writes itself differently than the Executive Summary, then change the Summary.
The Summary is, in the final analysis, derived from the more detailed exposition of the Plan, although as a matter of technique the Plan may start as an elaboration of the Summary. Does that sound contradictory? It isn't really. Just consider that the Plan and the Summary are each evolving together during the writing process, the Summary guiding the Plan, and the Plan informing and buttressing the Summary. When you are finished, the Summary and the Plan should fit each other uniquely. A Summary that is not supported by the Plan is dishonest; a Plan whose essence is not fully captured in the Summary is stupid. Avoid both fates.
To be visually attractive is to invite attention, which is just what you want. Attractive visual copy sends a number of cues to the reader. It suggests that reading the text will not be too taxing. The use of "white space" especially is easy on the eyes and gives the illusion that the accompanying text is shorter than it really is. It also suggests that you have worked to make the copy inviting, and that gives a good first impression.
However, you must avoid appearing frivolous. You are about to ask for money, after all, and no one will give you any if you appear goofy in your efforts. The words that comes to mind in describing a good looking Executive Summary are "dignified," "serious" and "elegant," not "flashy," "showy," or "dazzling." Real investors may enjoy or be amused by an off-beat presentation, but they are not as likely to invest in one.
* Use a two-column layout
* Try to summarize key points
One technique that I like using is to prepare the Executive Summary in a two-column format, with the text on the right, and a set of bullet points about the text on the left, sort of a summary of the summary. This makes it easy for the reader to access and remember the basic points of the plan. There are many other techniques to make copy attractive. Find one that appeals to you.
By far the hardest part of writing a good Executive Summary is the editing. If you are not an accomplished wordsmith, this is where professional assistance will be worth it. The text of the Executive Summary must be edited and re-edited until all distracting words, phrases, and thoughts are eliminated, until all that remains is the essence of your business described with a clarity that an intelligent eighth grader can understand. Most people, unfortunately, don't know how to do it, and even fewer can do it well. And yet, to state your business in a nutshell and make it memorable to a stranger in a hurry is exactly what an Executive Summary must do. I cannot in these pages teach anyone how to right well. If you can, then go at it diligently. Write, rewrite, edit and rewrite again. There is no substitute for time and effort when crafting a polished bit of prose. If you know you do not have the skills, call in a professional for help.
A professional what? Beware! Many so-called professional business plan writers are themselves not particularly good writers. They may know what needs to go into a plan, and they be able to layout the sections of a plan so that they look pretty. However, if they are not good prose stylists, the plan they produce will be wooden and clumsy, and will not appear to be anything more than a "paint by numbers" exercise.
The best plans are not written by business plan specialists. They tend to be written by executives themselves if they are well educated and literate, or by other professionals that are comfortable with and who use words with facility. My own background is as a litigator and trial lawyer. I learned to write composing legal briefs, and that is the view I take when I write a business plan for a client. First, I make sure I understand every facet of the proposed business. Then I make a case--I advocate--using the business plan to try to persuade a skeptical investor that the business is worth gambling on. My approach is substantially the same as preparing a case for trial--first understand the case and then advocate it in clear English to a judge or jury. Good journalists engage in a similar process.
I happen to think being a legal advocate is ideal training for writing business plans, but I don't think too many business plans are written by trial lawyers. There are fine writers in every field, and not all litigators are great writers. The point is that the writing must be clear, concise and compelling. Don't underestimate the importance of that.