Contrary to many entrepreneurs' expectations most investors will not read an entire business strategy plan, especially when the plan is more of an operational plan with too much detail. A strategic business plan is critical to your success in business although it is not as critical as you might expect when raising capital. If your proposal does not appeal to an investor then many will not read beyond the executive summary. In assessing between 10-30 businesses per month, investors and venture capitalists need to be ruthless and can not just waste their time reading every proposal hoping that a more exciting proposition will come along at the end. Importantly the investor will draw conclusions from various facets of the proposition, such as the track record of the management team to work out whenever it is necessary to check out every last word written in the strategic plan.
The message of the story – make the executive summary correct.
An executive summary is a 2 to 5 page summary of the significant information in the actual investment business plan.An exec summary is a 2 to 5 page synopsis of the really important points in your investor business plan.The executive summary is a 2 to 5 page synopsis of the critical points in the strategic plan.
Usually an investor will assess the executive summary and gauge whether the opportunity and this investment really adds up, whether management look like they know what they are doing, and has been carefully thought through. Is this business reasonably going to take advantage of the mentioned opportunity? They'll also want to conclude that the timing in the venture is appropriate – not too late & not too early. Cosmetically, the plan on the whole has to be clear, concise where it has to be and fleshed out where applicable.
Keep in mind the company idea does not have to be a paradigm shift, simple can be best and so where it is not do not make it any more more complex than it has to be.
To arrive at the above concluding, a excellent executive summary would include the following – and this is as much a information for what a great proposition looks like as what should be included in the executive summary:
1) The issue must be stated clearly, how large the issue is and that this problem is fitting for a company answer – following all not all difficulties within the planet bought to attract a business answer.
2) The market must be growing and be large sufficient for an expenditure chance to make sense. Investing in a shrinking industry is not an appealing proposition. Further, the expense will make much more feeling when the market discuss targeted is not a materials share from the overall market less less than 5%, and still results in an appealing return for the investor.
3) The answer to the problem should be strong and shielded against the opposition, through a reasonably competitive edge, or patented protection all of which indicate the service or product will be outstanding, which is important. Further we must have a wide understanding from the competitors and what they have achieved and are likely to accomplish.
4) To be given uniqueness, the executive summary must articulate what the value proposition is to the end client, and determine that end client, and qualify the group targeted.
5) The management team must be introduced briefly (and in more detail within the investor business plan, exhibit why their history is appropriate for that business, and if they have not come from the business, demonstrate their desire to seek proper support.
6) The synopsis should demonstrate robust financials, with a return five-to-ten times inside of a 5 yr timeframe and note that recurring revenue reduces risk
7) The valuation should be sensible – thought should be paid to industry benchmarks – do this carefully as this what an investor will do. If there is one flag against management and entrepreneurs that often causes disappointment it is extreme valuations by entrepreneurs. It does nothing for management standing.
8) An exit should be stated, if possible with a selection of specific strategic partners quoted. So if you are seeking to be acquainted … who are you ideal targets
If all these points were included in the executive summary, presented clearly and concisely and made logical sense, an entrepreneur advised to expect strong results, subject of course to the proper numbers falling out and matching the investors expectations.
