Most business owners have a general idea of the executive summary that comes with the traditional business plan. However, in the real world, summaries come up much more often than just in the business plan. How to create the summary—and how to use it—depends on the business objective.
The summary you say every day
I’ve always liked “Say your business plan every day,” which I heard first from Jim Blasingame, a small business advocate. Business is normally chaotic so a quick reminder is a good idea.
Start with a sentence or two describing the fundamental strategy. Keep that in mind as you go through the day.
- What do you do for whom?
- How do you do it differently?
- Why are you particularly good at it?
Add a sentence or two highlighting your most important tactics. It might be low or high price, high value, distribute via the web, market via social media, focus on repeat business—or whatever.
Then add the next major milestone you are working towards. Maybe that’s some number, like 100 lunches in a day or 1,000 subscribers. Maybe it’s the new website launch, or the new product, or the new location. Give yourself an attainable nearby goal that is measurable.
Remind yourself once a day by reciting your personal business summary.
Create written summaries for special uses
Every business has to provide business summaries from time to time. For these you want to focus on the specific details so you can tailor your summary to your real business needs.
The general summary for publications & listings
Have a good summary on hand for general use. Think of it as a marketing document whose key goals include defining a target market and sending a message to that market. Often it starts with a tagline that comes straight from your main marketing. Follow that with information that generates a call or inquiry.
You have to fit word count to the words allowed in your situational summary. Within that word count, optimize the information you can include to generate interest, include a call to action and the information needed to follow up such as phone number or website.
The executive summary for business loans & allies
For these summaries you start with either the personal summary or the general business summary above. Tailor these summaries to the specific use. The summary of strategy, tactics and milestones is more likely to be appropriate for banks—and the more sales oriented summary of product, market and main messages is likely to be more appropriate for allies, partners and vendors.
For a summary going to a bank—related to a commercial loan—you probably want to add a financial summary including recent annual sales and profitability. The bank will require submission of detailed financial information as part of the application, so you do not need to go in detail in the summary. You should make sure to include two or three sentences on business history, and two or three sentences describing the management team. It is also common that you add a paragraph about how the money involved will be used to help your business.
The executive summary for investors
To create a summary to be sent or submitted to potential investors, it is good to start with a description of the problem you solve, how you solve it and why you are well positioned to offer such a solution. Being well positioned includes your secret sauce like proprietary technology or a special position in the market.
Investors also want to know the highlights of the recent past, recent milestones met and key milestones for the future. Often that is a matter of projected revenues for the next three years. But in some cases, other measurements such as numbers of users or subscribers can be used even if they are free. Investors want to see growth and growth potential.
For investors you also have to include a description of the management team with key details from team members’ track records and backgrounds.
Form follows function
Build a repository of text summaries, somewhere in your business materials online with backup copies in print. These are texts you have used in the past. Business summaries and executive summaries have to meet specific objectives. Most businesses end up saving various versions of different summaries. They pull them up and tailor them to the specific need each time a need is found.
Tim Berry is the founder of Palo Alto Software , a co-founder of Borland International and a recognized expert in business planning. Tim is the originator of Lean Business Planning. He has an MBA from Stanford and degrees with honors from the University of Oregon and the University of Notre Dame. Today, Tim dedicates most of his time to blogging, teaching and evangelizing for business planning. Find out more on his website at www.bplans.com.