Posts Tagged executive summary
Short, quick, to the point ideas
Posted by Steve in For Job Seekers, Pitch on November 6, 2009
I like ideas presented short and simple. I want ideas presented to me on one sheet of paper, maybe up to four pages if it’s a process. That’s like an executive summary. Maybe we need a format for it?
New product idea: the standard format for short ideas
Problems addressed (or are they solved): people do not have a lot of time and need to determine quickly if it’s a worthy idea to pursue, need to understand the basic solution and how to implement it without a lot of fluff.
Examples already out there: Harvard Business Review Breakthrough Ideas for 2009 (Harvard Business Review Lists). The book is really short with each idea taking up a couple of pages (one or two pages in Word).
So, what should this format look like? I’ll leave that up to you to think about.
Take it to the next step, how about a web site that has ideas and then ways you can send these ideas to people with the following?
1) Please develop this
2) Hire me to develop this.
Get the idea? Create short ideas, present them in a concise manner, and then create an opportunity for yourself or someone else.
Executive Summary does NOT need a conclusing paragraph
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.
At this point, we have discussed nine sections of the executive summary. Since this is a very short document, that is all you need. Do you need a concluding paragraph that summarizes the entire page? Typically no, unless you have a good way of wrapping up the most salient points on the page in one or two sentences AND you can keep it within the limited space. Most people will have a tough enough time keeping the necessary information to the confined space. If you run out of space, then do not worry about the concluding paragraph.
There are a few extras that are useful, which I will address in the next few posts:
- A summary table of financials
- Flow chart of the business process
- Flow chart of the business plan
Summarize Risk Solutions in Your Executive Summary
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.
Probably the most forgotten item in the entire business plan is the discussion of risk and how it is handled. Since this is often missed in the business plan, it is definitely missed in the executive summary. It is remarkable that this element is missed because it is this one element that will set one business plan apart from another. How the management mitigates the risk of business, plans for the unknown, will show how well the management thinks and uses their experience.
Clearly, the business plan can discuss risk and all its elements. The executive summary should just address it briefly demonstrating that management is thinking about the problems.
Three questions should be addressed:
- What other products/services is this company considering (if any) that would be launched instead of the main product/service? How will it affect costs and revenues?
- What other products/services is this company considering, for further growth, if they are different from the previous question? How will affect costs and revenues?
- If something goes wrong with your ability to make, sell, distribute, etc. what else could you do, that will ensure that the investors will get at least some of their money back?
The answers to these three questions could fill hundreds of pages of any business plan. In the executive summary, the risk elements should be addressed completely in one or two sentences. People remember the bad, and too much information will focus on the negative. Rather, by recognizing that there can be negative situations, a few sentences will focus the reader that the management plans for obstacles but will be successful.
List What Makes This Company Unique and Special
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.
Have you ever had someone just look you straight in the eye and ask: “Enough telling me about who you are, what you are going to do, and the market size; tell me why is THIS COMPANY and project going to be successful? How am I assured that I will get my money back and more?”
In this section of the executive summary, you should list all the reasons the company will be successful and will pay back the investors. Rather than just write that, the following list of key questions can be answered, and help build a compelling story for the investors:
- What key management experience will be used for this?
- What key management decisions (i.e. focus of the company) will enable this company to be successful?
- How will the budget/cost be managed successful and affect the profitability?
- Where (channels, markets, etc) will the profits come from?
- What is the compelling need of the market? What is the PROOF of this need?
- Who are the customers? Include demographics of the largest segment. How big and what is their purchasing power?
- What makes this company and product unique or special?
- What barriers to entry exist (from outsiders and competitors)?
- Are there other reasons that this project will be successful (i.e. short ROI, short payoff of capital expenditures, key contracts)?
Notice that there are many sections of the business plan incorporated into this one section: marketing, management, sales, operations, finance. These questions pull in the key winning points from each section. When these questions are compiled into a single story, the investor will see that another company making the same or similar product/service will not be as successful. It can be simply stated as a bullet point list with the header: “How We Will Be Successful”. This section delivers the key idea that this company will be the next big winner. More importantly, it addresses how the investors will win with this company in their portfolio.
Avoid Boilerplate Phrases
Posted by Steve in For Job Seekers, Pitch, Plan on July 9, 2009
Quick aside from writing the executive summary, but still related.
Are you familiar with boilerplate phrases? Check out Liz Ryan’s article on Yahoo Hotjobs titled, “10 Boilerplate Phrases That Kill Resumes“ The point of her article is that these phrases have been so commonly used that they no longer indicate a strong resume. Instead she says they indicate the writer is vocabulary challenged and non-compelling. Worse, I think they hurt your credibility.
This ties into John Lucht (who I have a link in the sidebar to his website) writes in his book, “Rites of Passage at $100, 000 Plus: the Insider’s Guide to Absolutely Everything About Executive Job-Changing” about resumes: avoid catch phrases but use examples showing how you demonstrate the intention of that catch phrase.
The same thing applies in the executive summary and the business plan. People put in catch phrases and instead of making themselves stand out, they lose impact.
Ryan suggests 10 catch phrases to avoid (I am using these without permission, but linking to her article). I am reprinting them below, but please check out her article!
Check your executive summary and business plan for these phrases. Without specific examples they stand out as meaningless today. Especially check the resumes that are typically put in an Appendix in the business plan.
FYI, I did check my resume, and can safely say I have none of these phrases.
Key Players need to be stated in the Executive Summary
Posted by Steve in Leadership, Pitch on July 8, 2009
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.
Alternative title: Credibility is more important than secrecy.
For good reasons, entrepreneurs should keep their key players whether in a contractual relationship or in negotiations secret. However, when presenting to investors, or other key players, they need to weigh secrecy versus credibility.
Have you ever heard someone say, “Very important people are in the know”? Do they ever really state those “very important” people? Not really. The sad reality is that they probably do not have the connections. Investors have to be wary of this. Credibility should be more important than secrecy.
If you plan involves key players, state those key players. If it is in negotiations, state it is in negotiations. Include in the body of the plan, the backup if things fail; but state specifics.
Remember, investors invest in people. They need to see that these people are credible.
Talk about the marketing in the Executive Summary
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.
Yesterday, I wrote that when you ask for money, you should state how it will be used. I discussed how the products and services will be made and sold. Marketing makes that initial connection with the buyer and builds that relationship. Often, the money is used towards marketing; however, simply stating that may not be enough.
On the other hand, going into depth with a marketing plan is going to be too much for an executive summary. Remember, the point of the executive summary is to demonstrate that this company and management team will be successful. Therefore, what about the marketing of this product will make it successful enough to entice an investor to want to buy in?
Approach the question by addressing five basic aspects of the marketing plan:
- How will this be promoted? (Remember, who is the audience for the product/service?)
- How will this be sold? (Could be a very different channel than the promotion!)
- Is there a specific price or range of prices, not already discussed that will be a major factor?
- Are you in a contractual relationship with a key player that will help you market (that is different from yesterday’s answer)?
- Are you in negotiations with a key player that will help you market (that is different from yesterday’s answer)?
From these five questions, you can come up with the key elements that will distinguish this marketing, and make it successful. The critical element is that marketing must be addressed, whether or not the funds from the investors will be used for it.
Tell the Investor Why this Management Team and this Company are the Right Stuff
Posted by Steve in Leadership, Pitch on July 2, 2009
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.
Investors invest in people. More than one company can come up with the same idea, but the difference between them is the way they execute it and handle the ups and downs along the way.
The executive summary needs to show proof that these people are the right people. I look at six key points and then come up with a concise story covering what the investors need to know:
- Which top management and key members will be integral to the company’s performance?
- What experiences or types of products have they done, that the experience will be integral to the company’s performance?
- How long has the company or team been working on this project together?
- What major accomplishments (milestones) has the company hit in achieving their goals?
- What is the current state of the product/service line?
- What validation exists that this team can sell the product/service line?
When looking at this list it starts off with the information about the company, and the accomplishments. It ends with questions about the product line and the future of the company. With this information, you build your case that this team not only has achieved success so far, but can continue to do so with the advantages they have. Item 6 also includes outside forces that further validate that this team has formed in the right place at the right time to make this successful. Items 5 and 6 can also be used later in discussing other elements (like what is the money going to used for and how will it be marketed) but the focus in this section is how this management team as opposed to another management team will take advantage of the situation.
This may be the most important section as the investor will want to keenly observe how this management operates and then determine whether or not they will be successful.
A win may not just be about money… other types of wins
Taking a break from talking about the executive summary…
I want to take a moment to think about this. Yesterday, I wrote that “it is about the win”, and I was relating it to how much money you are making.
Have you ever thought about other forms of wins, other than just making a lot of money? Are you saving something in the environment? Are you helping out your fellow inhabitant of Planet Earth?
There is nothing wrong with focusing your big win on something other than money. In many cases, this will actually help you get the attention of the investors. However, and unfortunately, investors have to answer to someone (if not just to themselves and their families), so they need to make money.
If your big win is saving a rare fish and you want investors; then figure out how you can make a big win for both: the fish and the investor.
Most likely, someone else will, and they will get the investment instead of you.