In this series of installments I am discussing the executive summary and how to make it stand out.  The executive summary should present the compelling reason for the investor to buy into the company.

This is one of those “hit your head” moments.  If you are asking for money, tell the investors how the money will be used.  It may seem obvious that it is always stated in a business plan but that is not the case.  Often, the proforma financials show not only investment but income from sales.  The cash from both streams are mingled. Expenses are paid from this mixed stream. Without the investors money, which expenses would still occur?

Many people just say that investor money will be used for marketing and sales expenses.  That is very vague. Without investor money, they will cash-flow it, you just said that investor money will go to marketing and sales. Does this mean without investor money, there will not be any sales (or marketing)?

The answer is no.  The point is to dive deeper into how the money will be used by stating clearly what the business is planning to do and how the goals will be achieved.

Several key questions can answer this:

1. What will you make?
2. How will it be made?
3. How will it be distributed and/or sold to the customer?
4. Are you in a contractual relationship with a key player? Who and what do they enable you to do?
5. Are you in negotiations with a key player? Who and what would they enable you to do?

From these questions it may not be clear how this answers the question.  Any business is creating something, whether it is a product or a service.  Typically, investors money is used to get the project started or to the next level.  These questions address the specifics of what you will do and how you will achieve success.

The next element, marketing, will be discussed tomorrow.