IVMF Business Plan Lab | Executive Summary

Hello this is John Torrens from
Syracuse University’s Whitman School of Management, and today we’re together for Session 9 about your executive summary. We’re going to go over
the executive summary, do an overview: talk about why it’s important, how to
handle it in the written plan, and then of course using nuts and bolts as a
guide for executive summary. So the critical thing about the executive
summary is that this is the first, and sometimes the only thing, that an
investor will use or read when trying to evaluate your proposal. So it’s
really important that it’s clear, concise, and well-written. And the difficult part
of the executive summary usually is because you’ve got so much information,
and so much great stuff that you put into the business plan, it’s hard to
select the most salient, most important information to put into the executive
summary. But this is critical, so don’t think of it from your perspective–like, what do you want to put forward as a demonstration of all the
work you did–think of it from the perspective of an investor or a judge,
and what’s the most important thing for them. What’s going to make them want to
read the rest of the plan? That’s the critical part, because all the detail in
the plan you can get them to read later as long as you pull them in with the
interest that you generate from the executive summary. That’s
basically why it’s important, and even though it’s the last thing you
write, it’ll be the first thing in your business plan after the cover page,
basically. All right, so this slide just shows you all the different parts of the
executive summary–we’ll go through all those in detail in just a second. But as
you can see, there’s quite a few things there and to fit this into three pages
is very difficult. The writing of the whole plan was
difficult enough, and now you’ve got to go ahead and condense everything into the
most important sections, and we’ll go through each one of these individually.
So Problem Opportunity Statement: this is where you basically outline what problem you’re solving, or the pain you’re alleviating–which is
critical, because this is what excited peoples. You’re not a solution in search of a problem, you’re actually solving a problem for real customer in a way that’s better than the next best
alternative, at a price they’re willing to pay, in a way that’s just amazing. So this is what draws them in. So you talk about the
problem, talk about your solution. Very briefly: what are the forces that create
the opportunity? And a lot of times it’s just your personal experience–“hey, I noticed something and this is how I’m addressing it”–and then
it talks about the timing, and why this opportunity is good right now, and why
it’s important to seize upon it. Again this is a couple sentences,
maybe three–it’s not very long, but it’s got to be concise and very compelling.
Then we’ve got your Business Concept and Product or Service. We don’t put that first.
When you lead with “me, me, I, I, my mission statement, my concept,” that kind
of turns people off. They first want to know what problem you’re solving, then
they’re interested enough to know how you propose to resolve it. Again, you’re going to develop a very brief, but powerful,
concept statement. Say what it is that you’re doing–how it will be used, all those types of things. Make sure you talk about what’s unique
about it, and then just real briefly talk about the legal structure. So you don’t have to go into a lot of detail, just say, “We’ll be an S Corp, we’ll be an LLC and here the owners,” and then you can move on, that’s really all you need to do.
Again, this is a brief, concise, compelling concept description and you take
this right from your section one of your business plan, where you went
over the company concept and products or services, but you make it very clear and
concise. The next slide is the competitive advantage, and this is where
you’re talking about that micro industry domain from your Mullins text. You’re
talking about what is it about your company that’s hard to imitate–do you have special knowledge, technology, do you have a special value chain
relationship, do you have a really viable or innovative economic model, do you have
access to unique resources? How is it that you are going to fend off
competitors–even if you’re creating new market space and you don’t have direct head to head competitors, how do you start to build those barriers to entry
for people who are going to come in and try to compete with you? Once you’re making money somebody’s going to want to come in and grab a
piece of that. So how you erect barriers to entry, and what your competitive
advantage is, how you’re different from all the other options that are out there
right now. And again, you’ve got to do this in a sentence or two. Description of
the Target Market–again, briefly, concise. You’ll see those words a lot in this
this presentation, but you’re going to briefly define your relevant market and if you have a common name for them, for example. Like,
“our market is working females age 24 to 36, with an average
income of X,” you can call those “soccer moms,” for example–and I know soccer moms
is a terrible descriptor, but if you have a descriptor like that, that you’ve
attached to your your market, then that’s great because you can use that as part of your presentation and your business plan and so on. Talk about
segments if you have any, and it’s usually a good idea to talk about who
your very first customer is. Like, if you had to guess, if you had to put money on
it, or bet, give the profile of who your first customer is going to
be. Again, that’s that’s only if you have time, or space and real estate to do that. Essence of your Marketing Approach: again, this is an essence, okay? It’s just got to make sense based on who your market is, so if you’ve got an online or digital product you’re probably not going to go with a lot of
print ads. You’re going to go to Google Adwords or semantic based search, or whatever it happens to be. So just make sure it makes sense and talk
about, in general, what you need to do well to win this market, a couple methods– your channels, your media, whatever they
happen to be–pricing position relative to the rest of the industry. I hope that at this point none of you are the low-cost competitor–hopefully I’ve talked to you out of that over the course of time here–and then
just a real quick summary of the distribution channel approach. Like, “I need rack space and Macy’s to sell my shirts, how is it that I’m
going to get rack space at Macy’s?” Again, this is this is limited to a
couple sentences, maybe a paragraph. It’s important that investors know how
you plan to get distribution, but you can’t take up a lot of time to explain
it to them. Technology and Operational Issues: the key with this–kind of like we talked about in our session on this–is how you turn
operations into a source of competitive advantage, because these are all the
things that are hard to imitate. If you have technology, what are you
going to use it for? Do you need R&D, if so where are you in regards to your R&D? How
are you going to do production? Are you going to do it yourself, are you gonna outsource it? Which kind of dovetails nicely with your economic model, are you high operating
leverage, are you low operating leverage? All those types of things. And then what’s so special or unique about how you’re doing this? The Team: and we talked about this last week. So, who are you and why can you do this?
And briefly summarize your team’s qualifications–it’s often good just to
refer to the appendix where you can put your CV or your resume or something like
that. Then you might want to just highlight a few key board members
or advisors–don’t have to get into a lot of detail, but just say name, title, and why they’re important. Again. the reason for this is that it
rounds out the talent that you don’t have on your team already. Economics: this
is just very briefly–are you a high operating leverage company, low operating
leverage company? Do you have multiple revenue drivers, do you have single revenue
drivers? What are your margins? What is your intended volume? Very, very simple. Make the model for making money very clear, and explain how you’re going
to do it. Financial Highlights: the key here is when you’ll break even. So what level of sales, what dollar volume, how many units and what point in time? Pull all those things together and give us a nice clear look at how that’s going to work for you. How much money are you gonna make once you do break even? And obviously one of the best
sources of financing for your company is cash flow from operations, so
you’ll talk a little bit about how you’re going to use the cash flow from
operations to continue to operate the company. Then talk a little bit about, “hey this is our burn rate.” I hate that term burn rate, I mean
who really likes to burn money? But when you talk about your breakeven, you know how long it’s going to take you to break even, you know what your fixed
costs are every month, so you kind of take the fixed cost times the number of
months to break even and that’s roughly the amount of cash you should have on
hand to get you to break even. So that’s kind of an important aspect. Another thing you could put in here, too, is the use of proceeds–“So hey, when
we raise money in this competition this is how we’re going to leverage it, this
is how we’re going to use it”–a lot of the things that we talked about last
week. I know this was a relatively brief presentation, all of
this information you can find in the Nuts and Bolts Guide to Great Business
Plans and this is all in the executive summary section. Again this is
probably one of the more critical parts of the plan that you’ll write, because like
I said earlier it may be the only part that anybody reads in a real life
simulation. For the business plan competition, of course the whole thing
will be read because we’re looking for how well you did the whole plan, but if
you actually use this plan that you developed in this process to pitch to investors
this executive summary may very well be the only thing they read.
Or they may read it and flip back to the financials, but this could be
about it. So if they read it and they like it, they may set it aside and just try
to set up a meeting, or they may read it and read on and read the whole plan. So
it’s a really critical piece of the entire document. We’ve only got one more session–oh, I’m sorry, I missed a slide. Apparently Financial Need, so my apologies. Financial Need: s this is where you talk about how much money you’re requesting. where is it coming from. In a real
life situation you’re talking to investors, you talk
about what the return on the investment would be. For a business plan competition,
you’re talking about how you’re going to use that money, how you’re going to turn it
into revenue or sales right away. Which again. is building up your inventory,
completing some R&D, building a prototype, hiring a sales force, doing some
marketing, things like that. So that’s what’s important with the
financial need. Next week will be our final week, and we will talk about some tips
for presenting to judges and investors. It won’t be a very long session, but
hopefully we’ll have some some good tips, just things to get you calm and
confident and ready to rock this competition. So congratulations for
sticking with it this long, we’re really proud of you here, and we’re looking
forward to seeing you in the competition

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One thought on “IVMF Business Plan Lab | Executive Summary

  1. One question.  I started my company almost three years ago when services for transitioning veterans outside the military were limited.  Today, I am updating my business plan.  I believe I should talk about today's climate in the executive summary  to reflect this.  It sort of dilutes my niche but its ok.   Just need to confirm my approach.  Thank you. 

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