Business Plan Executive Summary

Private Equity Business Plan Executive Summary

Contrary to plenty of entrepreneurs’ expectations most investors will likely not read a complete business strategy plan, especially when the plan is more of an operational plan with too much detail. When raising capital your strategic business plan is not as critical as you might think nonetheless it remains important to your overall business success. If your proposal doesn’t appeal to an investor then many will not read beyond the executive summary. In assessing between 10-30 businesses a month, investors and vc’s have to be ruthless and can’t 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 several facets of the proposition, such as the track record of the management team to ascertain whether it is necessary to look at every last word written in the strategic plan.

The message here – get the executive summary spot on.

An executive summary is a 2 to 5 page summary of the significant information in the actual strategic plan.The executive summary is a 2-5 page summation of the vital details in the actual investor business plan.The executive summary is a 2 to 5 page brief summary of the vital factors in the actual investor business plan.

Generally speaking an investor will examine the executive summary and determine whether the business and this investment decision 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 suggested opportunity? They’ll also want to conclude that the timing in the venture is appropriate – not too late & not too early. Cosmetically, the plan generally needs to be clear, succinct where it needs to be and fleshed out where suitable.

Remember the company idea does not have to become a paradigm shift, easy could be best and so wherever it isn’t don’t allow it to be any more complicated than it has to be.

To arrive at the above conclusions, a great executive summary would contain the following – and this is as much a information for what a good proposition appears like as what should be integrated in the executive summary:

1)The problem must be stated clearly, how big the issue is and that this issue is fitting for the company answer – following all not all difficulties within the world ought to attract a business answer.

2)The industry should be developing and be big sufficient for an investment opportunity to create feeling. Investing in a shrinking industry isn’t an attractive proposition. Further, the expense will make much more feeling when the market discuss targeted is not a material discuss from the general industry eg less than 5%, and still results in an appealing return for the investor.

3)The answer to the issue should be strong and protected against the opposition, through a reasonably competitive edge, or trademarked protection all of which imply the service or product will be different, which is very important. Further we must have a wide overview from the competitors and what they have accomplished and are likely to accomplish.

4)Given uniqueness, the executive summary must state what the value proposition is to the end client, and define that end client, and qualify the demographic aimed at.

5)The management team should be introduced in short , (and in much more detail within the investment business plan, demonstrate why their background is appropriate for the venture, and if they have not come from the business, show their motivation to seek suitable assistance.

6)The summary must demonstrate strong financials, with a return 5-10 times within a 5 year time period and note that repeat revenue lowers risk

7)The valuation must be reasonable – thought must be paid to business 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’s extreme valuations by entrepreneurs. It does nothing for management credibility.

8)An exit must be stated, ideally with a range of targeted strategic partners quoted. So if you are seeking to become acquired…who are you ideal marks

If all these factors were included in the executive summary, presented clearly and concisely and made logical sense, an entrepreneur ought to expect strong results, subject of course to the correct numbers falling out and matching the investors expectations.

About the Author

For more information on venture capital visit the Venture Capital Centre at www.VentureCapitalCentre.com.au

How to Write a Business Plan – The Executive Summary

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