Business plans are often considered blueprints for entrepreneurial success. In the first part of this series (September 1997), you learned about the function of a business plan. A living document that provides a road map for guiding and financing your operation, it may run 50 pages or more and can easily take over six months to complete. Business plans can differ based on the type of operation, but there are basic elements common to each. The first is the executive summary, also called the introduction, business description or statement of purpose.
The executive summary is a synopsis of your company’s history, objectives, financial status, management and marketing structure. It falls at the beginning of your business plan (after the cover page and table of contents). However, because it is a summary of all the details of the document, it should be prepared last. The primary purpose of the executive summary is to aggressively sell your business to investors or lenders. Generally two to four pages in length, this section should include:
- A mission statement. This should outline your company’s goals, commitments and philosophy. For example “The CAREERTEMPS Temporary Employment Agency is to provide quality service to commercial operations by using a highly skilled group of individuals.”
- The objective of the plan. Determine the purpose of your business plan and what you want it to accomplish. Some are fashioned to organize a joint venture while others are crafted to obtain start-up capital. If you want to borrow money, include the amount, potential return on investment and payback period.
- A business description. This portion of your summary should identify the specific type of business you have. Indicate whether it is a new enterprise or franchise or whether you purchased an existing company. Include your company’s name, location, hours of operation and how long it has been in existence. Also define the company’s legal structure (a sole proprietorship, partnership or corporation. If you have a market niche, explain what advantages your company has over the competition and outline your customers and suppliers.
Max Fallek, director of the American Institute of Small Business in Minneapolis, suggests that you briefly describe the remainder of the document while outlining these portions of the plan. “In just three to four sentences, summarize each of the remaining components of the business plan,” says Fallek. This includes the operating, marketing, management, financial, long-range and succession plans. Since the body of your document will provide great detail about your operation, avoid in-depth descriptions here. Each section should be one to two paragraphs in length.
Next month, we will look at how to craft your operating plan.