BANK IT: CA$H For Your Ideas – Three “Musts” for Executive Summaries

by Amanda Peyton

Published March 11, 2009 @ 09:01AM PT

I sometimes forget that some would-be entrepreneurs can be both completely passionate about their ideas and totally allergic to even the most benign business jargon.

Example: After listening to a brilliant pitch from one of my friends about emerging mobile technology in various countries in Africa I made the mistake of asking if he had put together an executive summary. Then, I had to repeat myself. EXECUTIVE SUMMARY. You know, the two-page piece of brilliance that convinces even the most ardent naysayer that your idea is a winner?

Most business plan competitions require executive summaries, and even if one is not required, it's a good idea to write one anyway.

If Step 1 is idea generation, the next logical step should involve expanding those ideas into a digestible summary.

Step 2 - Writing an Executive Summary or "Shock and Awe in 2 pages or less"

The executive summary is simply a short description of your business idea. Note the word SUMMARY - the "sweet spot" length is by most standards around two pages.

Most of what's been written on executive summaries can be distilled down into these three *musts*:

1. The executive summary should answer the following questions: Why this? Why you? Why now? Or rather, why is your product special and different from what already exists? Why are you and your team qualified/able to execute? What is your market opportunity? Most investors respond to clarity of purpose over flowery language. Communicate almost immediately what your business does, what void it fills and how it will sustain itself (make money/survive).

2. Don't try to describe every detail in the executive summary - that's what the business plan is for. As Garage Technology Ventures Managing Director Bill Reichert points out "you do not need to explain the entire business plan...you need to convey its essence, and its energy." You'll get better at identifying the "punch" of your idea by pitching it to as many people as possible. See what your audience responds to, and you'll have a better idea of what might excite a potential investor.

3. Emphasize your competitive advantage. Your idea is not new. (Sorry). However, because of the skill set of a team member, a patented technology, privileged access of some sort, etc. you will have some competitive advantage. Highlight this in the executive summary - the readers of your business plan will want to know why your product/service is better positioned to compete than all the others like it they've seen.

Even if you are totally turned off by business jargon, writing a stellar executive summary is a great skill to develop if you plan on ever attempting to write a full business plan. Just sayin.

This is the second column in Amanda Peyton's "Bank It: Ca$h For Your Ideas" series about how to be successful in business plan competitions. Amanda is an MBA student at MIT Sloan and one of the lead organizers for the MIT $100K Business Plan Competition. She is also on the executive committee for Sloan Entrepreneurs for International Development (SEID).