The executive summary is the first, and often only, part of your business plan that potential investors will read. Treat it as a living document, constantly refining and rewriting it to perfection. It’s your plan’s storefront, designed to captivate and entice investors. Conciseness is key. Avoid using five words when three will suffice, and favor directness over vagueness. Your executive summary must pack a punch, so revise it relentlessly until it’s ingrained in your memory.
Each critical aspect of your business plan deserves a concise paragraph, avoiding any repetition. Clearly articulate what your business does, who it serves, why it exists, and how it generates revenue. Include specific funding requirements and your proposed repayment or exit strategy. Precision is paramount.
Knowing when to conclude your business plan is crucial. While a dynamic internal document is valuable, an unending plan deters external investors. Many investors find lengthy business plans overwhelming, leading to disinterest. Conversely, a plan that’s too brief suggests insufficient research or a lack of thorough consideration, potentially raising doubts and deterring investment. Aim for the ‘Goldilocks’ zone: a length that is neither too short nor too long. A plan between 12 and 25 pages often hits the sweet spot.
Demonstrate market understanding by showcasing your market research and its implications for your business. Focus on your specific niche or subsector. For instance, the global car market’s size is irrelevant if you operate a local hand car wash. Prioritize relevance and the customer’s perspective. Illustrate how customers need or desire your product or service; don’t assume investors will understand this intuitively. Explain how your offerings fulfill these needs, detailing how customers will discover you and how you’ll communicate your message. Consider the frequency of customer need, often called the ‘itch cycle.’ Most car owners require annual servicing, and ketchup users will replenish their supply. Incorporate these buying cycles into your market research.