What is an executive summary? Short. Concise. Powerful. Executive summaries are the first page (or pages) of a business plan or proposal. The best grab attention as they offer a compelling snapshot of what’s to come — but also possess the ability to stand alone. They don’t mince words, since stakes are high, as they cover the touch points necessary to win that next meeting, advocacy, support, and even the holy grail: an investment partner.
Let’s be honest: The executive summary is the most important part of a business plan. You might think it’s all those pages behind it with rich detail, impressive stats and long, flowing paragraphs describing your awesomeness… but it’s not.
The executive summary is the first thing your readers will see. The teaser. The cheat sheet. Your best shot. It’s your one chance to grab a potential investor’s interest — and keep it. If you win it, a capital investment could follow. Lose it, and said opportunity could go bye-bye. Not good for you, your company or the business plan to follow, which consequently, is now dead on arrival.
The executive summary is the first thing seen, but it should be the last thing written — because it’s a snapshot of the business plan to come. So, knowing that fact, let’s get into the kind of persuasive copy that goes into this ever-so-important opening act. Yet, before we do that, please know there’s not one way to do an executive summary — but there are best practices and guidelines to keep in mind as you write yours. Points to hit, things to be cognizant of, ways to win interest as the eyes move down the page.
To that end, I asked Dave Lavinsky, business plan expert and co-founder of Growthink, a Los Angeles-based company that helps private companies raise capital — what he thinks. He was nice enough to walk us through various elements he deems essential.
In Lavinsky’s opinion, here are the questions an executive summary must answer in the first two paragraphs:
- What do you do? In a clear-and-concise one-liner, the reader needs to know what it is that you do as a company. Not a long story here — remember, these people are busy and may not have a lot of time.
- Why does it matter? What’s the market size? Is the idea meeting an unmet opportunity in the market? Why does it work now?
- Why are you uniquely qualified to succeed? Essentially, why you? Is it your background, the team you’ve assembled, your partnerships, or simply how rare the opportunity is? Ask yourself: Has anybody done this before?
According to Lavinsky, the single most important goal of the executive summary is “to get investors to read more and then cut right to the chase to say, ‘Hey, let’s have a meeting.’ Because they’re not going to write you a check without meeting with you.”
If you’re going to achieve that, there are some other things you will need to keep in mind as you get into writing your executive summary — otherwise known as the most important part of the business plan that could make or break your company!
How to write an executive summary: stylistically
1. How long should an executive summary be?
The general consensus is that most executive summaries are anywhere between 1 to 3 pages long, however, this is not a hard-and-fast rule. The content is what’s most important so based on certain variables — including how long the plan is and what you need to say to present the most compelling case — you should let that dictate the length, not “a rule” per se.
Lavinsky says, “it does depend on the complexity of the business. I tend to like a one-page executive summary… that being said, I wrote a business plan years back and needed two pages because the technology was so sophisticated that it required a little more space.”
2. What tone of voice should be used?
- Be straight, not silly: Whether you’re trying to get someone to invest in a Silicon Valley startup or secure a bank loan for a small business, you should always know what’s at stake and not mistake this all-important document for a casual thing. Lavinsky cautions against getting too fancy saying your goal should be “straight business writing without a ton of personality… just getting the key facts across.” In other words, let the idea create excitement by speaking for itself.
- Know your audience: Think about who you’re ultimately talking to. “Even if you’re a pizza shop, you’re still asking a bank for a $100,000 check… that’s real money to a small bank. And so they want to see the pizza shop owner being as professional as possible, not taking it lightly,” reveals Lavinsky. “This is the pizza shop owner’s livelihood; their life… and to the bank, it’s real money in the local community — so keep everything very professional and not casual at all.”
- Show a degree of urgency: Understand that your executive summary (and accompanying business plan) is essentially selling something: you. You hope it will all resonate because you have something to offer the world… now. Something that changes the status quo, revolutionizes a market or gives the world something they need. So, write with purpose and a degree of urgency. You’re competing against who knows how many other proposals, so create the need for a response… now.
3. What is the traditional executive summary format?
This is where getting down to brass tacks matters.
Because you’re dealing with extremely busy people — decision-makers at companies — you’re going to want to serve this information up in digestible, not daunting fashion. Usually, that means paragraphs and supportive bullet points. Big picture items, not excruciating detail; bullets instead of bulky blocks of text; and precise, deliberate language instead of prose-y purgatory.
That’s the format people reading a business plan expect to see. It’s what keeps people engaged, eating it up, and wanting to read more. One popular way to lay out your executive summary is to do it in a way that mirrors the order of things to come in the plan itself. Have a look at the executive summary template that Dave Lavinsky likes below and decide if it could work well for you.
[Author note: This is just one example of an executive summary template. Depending on how complex your business is — there certainly could be other ways to do it, so feel free to tweak accordingly.]
Here’s an example of the executive summary template that Lavinsky likes:
Who We Are
This opening paragraph section (addressed previously) is the one that answers the essential question in a line or two about who you are as a company, what you do (as a product or service), and even where you’re located to give a sense of the geography.
Why It Matters
Your second paragraph. It covers the market size, the lack of competition in your space (if that applies) and why your company is uniquely positioned to capitalize on a unique opportunity. This is the place to instill a dose of urgency, if it applies. Remember: There are windows of opportunity. Don’t let this one close on account of forgetting to make your proposal feel well-timed.
Overview
[*The following can appear as bullets or small paragraphs depending on what style suits your fancy, and your company.]
Industry Analysis
- Here you can start to get into bullet points to give a top-line overview of the research done regarding the industry your product or service lives within, the market size, where things are headed, etc. Maybe a compelling statistic or two.
Customer Analysis
- If you’re going to win customers, show a brief snapshot that supports what you know about your core customers. For example, “We’re serving single moms 32-47 living in Midwestern cities.” Here you can show who you’ll be selling to — without getting into too much demographic or psychographic detail. Leave that to the business plan to follow.
Competitive Snapshot
- Who are your competitors? What will you be doing that is different from what they’ve been doing? How will you go about standing apart from them in your competitive space?
Marketing Plan
- An overview that teases how you plan to market your product or service. What you put here is crucial as it speaks to your strategic mindset and business savvy — while offering an insightful peek into how well-thought-out your approach is.
Management Team
- Who are the 1-3 key management people involved with this venture? Those you’ll be going into battle with should this business get funded or win a capital investment from this business plan or proposal. Do tell, but briefly.
Financial Plan
- Give a top-line overview involving the monetary investment you’re seeking and what kind of capital infusion will be necessary to help this business succeed. Here is a good place to mention financial projections, company goals and expectations around profits for the next 1 to 5 years. Also, the ask. e.g., “We’re asking for x dollars as equity or a loan.”
Another section to consider is “Company Analysis.” According to Lavinsky, “I always talk about how the best indicator of future success is past success. So, if there are milestones that your company has already achieved, it’s important to show the investor or lender that you have a track record of hitting milestones and achieving goals (if you’re looking for capital). This lends credibility that if they lend you money, you will do the same and they’ll get a return.”
Now, here’s an actual example of an executive summary — and why it works:
In 2011, Jennifer Sexton founded the company Tot Squad during her time at Kellogg School of Management at Northwestern University. In fact, it was based on a business idea that took first place in the Kellogg Cup MBA Business Plan Competition in 2010. As with most startups, the company has evolved a bit since its original conception, but as Sexton points out, Tot Squad is now “a marketplace that connects new parents to all of the services they need, both in person and online via video chat.”
As the company has grown and evolved, so has the information she puts into her executive summary. I’ve included an example below of one comprehensive executive summary Sexton wrote for Tot Squad back in 2018 — right before her company won a 60-second elevator pitch competition at Launch Scale in 2019. At the event, her company was deemed “most likely to achieve $50-100M in sales and be the next startup Unicorn or Pegasus” by entrepreneur/angel investor, Jason Calacanis.
[Please note: Many sections in Sexton’s executive summary are consistent with Dave Lavinsky’s advice, but the headers have different names.]
Tot Squad
Incorporation type: C-Corp, Consumer Services
Contact: Jennifer Saxton [contact info] totsquad.com
Tot Squad is a platform of services with expertise in the maintenance, safety education and installation of baby gear.
Company Summary: Tot Squad is a baby gear services company aiming to be the “Geek Squad” of the baby industry. Our mobile fleet provides cleaning, repairs, and installation of car seats and strollers, in partnership with retailers like Nordstrom, Babies R Us, and Whole Foods. We have corporate operations in SoCal and NYC, our first franchise recently opened in Washington, DC, and we have over 200 car seat safety affiliates in 40 states. We plan to pilot an in-store service center with a major big-box baby retailer this spring, and expect to sign a service contract with Uber this month.
Management Team: Founder & CEO Jen Saxton graduated from the Kellogg School of Management at Northwestern, where Tot Squad won the prestigious Kellogg Cup MBA Business Plan Competition. CFO John Mattox and Head of Marketing, Ann Singhakowinta, are both graduates of the Fuqua School of Business at Duke University. COO Shanna Johnson is a graduate of Columbia University and has spent 10 years scaling people-intensive start-ups. David McKinnon, co-founder of franchise conglomerate Service Brands (Molly Maid, Mr. Handyman, other service co’s with $300M+ sales) is an investor/advisor, and leader of this round of fundraising.
Customer Problem: Busy parents struggle with the time, hassle and frustration that baby gear can present. Car seats and strollers are dirty, break easily, and are challenging to assemble/install. 90% of car seats are misused, and car accidents are the #1 cause of death for kids. Simultaneously, retailers are struggling to compete vs online retail, and bringing services in store draws foot traffic and boosts sales. Rideshare companies want to appeal to families and need experts in car seat safety and cleaning/quality assurance to provide kid-friendly services.
Target Market: Our end consumers are busy, affluent parents in desirable neighborhoods who spend hundreds, up to a thousand dollars, on a stroller and want to maintain their investment. 65% of Tot Squad customers are women, with 70% between 25-44 years of age. Customers shop in higher-end retail and boutiques. We target both time-stretched working mothers, as well as more budget-conscious parents who need occasional cleaning/repairs help.
Customer Segments: We are growing via franchise sales and B2B partnerships with large companies like Uber and Amazon. Expansion through B2B sales, from gear manufacturers to automotive partners, grows the brand’s equity and creates consistent revenue streams. As a first mover with no major threats, we’ve got great traction.
Business Model: Our business brings foot traffic to stores, creating a captive audience that increases sales (Nordstrom Baby Dept sees 30-40% comps on days of events). In addition to scaling through franchising, we plan to offer a kiosk-style “in-store service center” within a big box retailer, a la Geek Squad, where we can sell 1-2 year “extended warranty” service packages on registries.
Competitive Advantage: Our strategic partnerships with national retailers and manufacturers provide brand credibility, lead generation (zero customer acquisition cost) and key retail locations (for new franchisees) from Day 1 and create competitive barriers to entry. Our team of certified Child Passenger Safety Technicians also sets us apart from competition. For franchisees, the proven business model, turnkey marketing/sales/operations, technology infrastructure and insurance accessibility are key.
Product & Services: We do the dirty work that busy parents don’t have the time or energy to deal with. We clean car seats and strollers using eco-friendly products and steamers. We offer car seat installations by Child Passenger Safety Technicians and are an Authorized Service Center for major stroller brands. Most services can be performed in less than 60 minutes for $20-80. We do daily popups with major retailers for moms’ convenience.
Competitors: There is a handful of small competitors, sprinkled around the country, mostly home-based businesses with only a local radius. Our largest competitor, Stroller Spa, is a low-volume, high price point player that works as a hobby business. BabyBubbles is a NYC-based company whose main growth driver is not their gear services, but their privately labeled cleaning products and diaper laundering services. Parents also use local police for safety checks. There are no national brands in any of the service lines on our platform.
Financials (USD thousands) 2016 2017 2018 2019 2020 Systemwide Sales $225 $837 $5,687 $19,685 $50,563 EBITDA -$457 -$506 $668 $4,404 $9,780 Raising $1.0M-$1.5MM at $5.0M pre-money valuation, ~$1.1M committed. Round led by David McKinnon.
Download a PDF version of the Tot Squad executive summary.
Here are four things I love about this executive summary for Tot Squad:
1. I love the opening line in Sexton’s Company Summary: “Tot Squad is a baby gear services company aiming to be the ‘Geek Squad’ of the baby industry.” It gives a clear, quick descriptor of what Tot Squad is, their industry and who they aspire to be.
2. In the Management Team section, not only is Sexton sure to highlight the impressive college credentials and business school degrees of her management team, but also the highly relevant industry experience of the person leading this round of fundraising for her company, “David McKinnon, co-founder of franchise conglomerate Service Brands (Molly Maid, Mr. Handyman, other service co’s with $300M+ sales).” A morsel sure to catch the interest/attention of the reader and win credibility.
3. Having already legitimized her company’s position by stating their existing partnerships (Nordstrom, Babies R Us, and Whole Foods), Sexton does a great job of speaking to the Customer Problem they’re solving while addressing their Customer Segment, citing Tot Squad as well-positioned to succeed, i.e., “As a first mover with no major threats, we’ve got great traction.”
4. In the Financials section at the bottom, Sexton lays out her company earnings to date and shows impressive growth projections into the near future. Most importantly, she also cites the financial ask so the reader knows what’s being proposed.
Now that we’ve covered all the things to do in your executive summary, here’s a quick list of things not to do. Things that will inevitably repel investors and potentially drive away the capital investment (or partner) your company oh-so-needs to survive.
Here are five things NOT to do in an executive summary:
- Don’t open with lengthy banter: The last thing you don’t want to do is open with a story that takes paragraphs to tell. Lavinsky says, “Get to the point. Particularly with venture capitalists that are getting so many plans and executive summaries. They need to know what you do really, really quickly.”
- Don’t make claims you can’t back up: If you’re going to call something “the best” or “revolutionary,” you better offer something to back it up. Not only do investors see through this stuff, but flimsy claims call your legit stuff into question.
- Don’t get technical: Depending on what you’re ultimately selling or trying to stir up interest in, you may feel obligated to give a rich level of detail — analysis, charts, graphs — in the executive summary to support your claims. Don’t. You only have someone’s attention for a few short minutes, even seconds. Titillate with the summary, then substantiate.
- Don’t copy/paste — it’s not an art project: The last thing you should do is think of this section as a place to recycle things written in the business plan to come. The content in this section here should be original, for this space only, and use professional pronouns that speak to a broader team (“we” and “our”) while using present-tense language.
- Don’t have completely unrealistic financial models: According to Lavinsky, you don’t want to say things like, “We’re going to a billion dollars by year three. It’s never happened before… why are you the first one to ever make that happen?”
Now that we’ve gone through the do’s and the don’ts, think about the approach that will work best for your business. If you’re a business person, entrepreneur, even a freelance writer, it can only help to understand your end-game by having a sound business plan — highlighted by a powerful executive summary that demonstrates why you’ll swim where others sink.
Now, get to work.
