If you belong to a commercial organization, you will most certainly be required to prepare a business plan or an investment proposal. In both cases, you will need to include an executive summary in the preamble.

An executive summary is an abridged form of a business plan or an investment proposal. It is usually contained in the introductory pages as a synopsis of the entire document. As a section of a strategic document, the executive summary is popular in industry and business entities. However, it is not uncommon to have them in academic reports.

Essentially, executive summaries should be brief, preferably between one to four pages in length. As it does not contain analysis or evaluation of any form, it should be presented in short blocks of text without being too complex or simple for the intended readers. As a result, it is necessary to make adequate preparations for your executive summary to deliver your message effectively. You will be off to a great start if you do some background research on your audience. In addition, it is mandatory to outline your summary the same way the primary document is structured.

Many people are unable to tell the difference between the executive summary and the abstract. While both are placed in the foremost pages of the document, the abstract provides a harmonized perspective of the entire document. However, it is not sufficient in and of itself to give the reader a feel of what the outline of the document is.

However, as a shortened version of the document, the executive summary is more useful for readers who are interested in having all the main themes at a glance. As such, it can be read independently of the main document as it contains the main points.

So a good executive summary should concentrate on the main themes without detailed analyses, tables, diagrams, and in-depth review of the document. This approach is necessary if you are to hook your reader into your business plan or proposal: it serves to entice prospective readers to go through the whole document. It also justifies the stature of the executive summary as the most crucial section of the business plan.

Another distinction between the executive summary and the abstract is that the former is mostly used in commercial or industrial write-ups while the latter is preferred in academic write-ups.

As a business executive or a manager, the executive summary may be the starting point in identifying areas in business operations that offer the greatest value and which ones require some form of tweaking. For instance, a manufacturing plant manager may find the executive summary more useful as it condenses every activity (or process) in the value chain into a page. This approach offers leaders the opportunity to reflect on every activity or process, identify the profitable ones, giving them greater control of the business.

Significance of an executive summary

Imagine you are a business owner who is trying to attract an investor or a financier. One thing that immediately comes to mind is a business plan. However, it is a fact, that potential funders are busy people who may not have the time to go through the entire document. They will instead ask for an executive summary to familiarize themselves with the key points. Executive summaries are most critical for individuals and entities that are external to the organization.  However, business plans that are meant for use within the company should not necessarily have an executive summary.

In cases where internal plans (such as strategic plans) are involved, an executive summary can outline important areas effectively.

The formula for writing an executive summary

An executive summary of a business proposal can be written in five paragraphs.

The first paragraph should give a synopsis of your operations. You can shape the thinking of your audience by inserting a fascinating quote, or an engaging piece of data, in the introductory paragraph of your summary. It is appropriate to provide pertinent data on the industry as well as the name of your business.

On the second paragraph, you can briefly describe the target market, other players, and approaches. The strategy should detail your plans you will activate to access the target market. You also need to identify the challenges that you will resolve, the competitive edge, and the relative strengths of other players. It is standard practice to focus on just three strengths that will deliver the envisioned results.

The next paragraph should highlight the working features of the business. These include the physical address, the form of business organization (whether it’s a sole proprietorship or a partnership), or any other necessary information. 

The penultimate paragraph should include an estimate of sales in the next one or two years as a way of forecasting the breakeven point

Finally, if the aim of the business plan is to request financial assistance, it is important to go into the specifics of the areas in which you are deficient and require support and match them with projections in your strategic plan.

Overall, it is advisable to write your executive summary after completing every other section of the document. This approach gives greater control to the writer as far as making sure that every important point in the document is concerned.

Regardless of your line of business, the executive summary will be more useful if it can influence decisions that strengthen your value proposition and prospects of profitability as a business. However, it is worth noting that you cannot develop a good summary from a poorly developed business plan. An effective business plan should be preceded by a meticulous study of the market for credible research that can inform strategy. In other words, the plan should contain recommendations from credible study outcomes.

It pays to develop a good executive summary. But, significant amounts of time and intellectual stamina are needed to develop an effective summary. So, as you write one, you should tailor it to suit your commercial interests. If you are not developing it for your business, then simply don’t do it. Alternatively you can source for assistance from a reputable and renowned professional!