Executive Summary

By Entrepreneur Staff

Pencil

Executive Summary Definition:

A nontechnical summary statement at the beginning of a business plan that's designed to encapsulate your reason for writing the plan

Anyone looking at your business plan will first want to know what kind of business you're starting or already have. So the executive summary, or statement of purpose, should succinctly encapsulate your reason for writing the business plan. It needs to tell the reader what you want and why, right up front.

Because it's the first thing the reader of your business plan sees, it must make an immediate impact by clearly stating the nature of the business and, if you're seeking capital, the type of financing you want. Are you looking for a $10,000 loan to remodel and refurbish your factory? A loan of $25,000 to expand your product line or buy new equipment? Would you like to find a partner to whom you'd sell 25 percent of the business? What's in it for him or her? The questions that pertain to your situation should be addressed here clearly and succinctly.

Your executive summary should be short and businesslike--generally between half a page and one page, depending on how complicated the business or use of funds is. It should touch on the following key elements:

  • Your business, its product, the market it serves and its competitive advantage
  • Your business's legal form of operation (sole proprietorship, partnership, corporation or limited liability company), when it was founded, the principal owners and key personnel
  • Major achievements, which would be anything noteworthy, such as patents, prototypes, important contracts regarding product development, or results from test marketing that have been conducted
  • If you're looking for funding, include the amount and purpose of the loan requested, the repayment schedule, the borrower's equity share, and the debt-to-equity ratio after the loan, security or collateral is offered.
  • The company's current market value, estimated value or price quotes for any equipment you plan to purchase with the loan proceeds.

More from Business Plans

Financial Projections

Estimates of the future financial performance of a business

See full definition

Financial Statement

A written report of the financial condition of a firm. Financial statements include the balance sheet, income statement, statement of changes in net worth and statement of cash flow.

See full definition

Business Plan

A written document describing the nature of the business, the sales and marketing strategy, and the financial background, and containing a projected profit and loss statement

See full definition

Executive Summary

A nontechnical summary statement at the beginning of a business plan that's designed to encapsulate your reason for writing the plan

See full definition

Latest Articles

Leadership

Why Your AI Strategy Will Fail Without the Right Talent in Place

Using fractional AI experts through specialized platforms allows companies to access top talent cost-effectively, drive innovation and scale agile strategies for growth.

Business News

Here's What the CPI Report Means for Your Wallet, According to JPMorgan and EY Experts

Most experts agree that there will be another rate cut next week.

Business News

These Companies Offer the Best Work-Life Balance, According to Employees

The ranking is based on Glassdoor ratings and reviews.