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B-Plan: The Power of the PrĂŠcis A well-written executive summary can prompt investors to read the entire business plan. Clarity of thoughts and brevity with words can do wonders
Vimarsh Bajpai
B
ack in the school, it used to be a regular exercise in the English language class to summarize a story into as limited words as possible. The prĂŠcis-writing class, as it was called, was all about the economy of words put into use without losing track of the central idea of the story. Much of that comes to haunt an entrepreneur when he sits down to draft the executive summary of his business plan. The B-Plan is a written piece of document that acts not only as a roadmap for the founding team but also as a sales pitch while hunting for funds from some quarters. For every busy investor who sifts through a deluge of such plans, all vying for funds, it is quite a challenge to pick the right one for deeper analysis. Much depends on the first few paragraphs that are said about the idea, the business model, the team and the prospective customer. 22 MARCH 2011 | dare.co.in
While placed right after the title page, it is best to write it after your have written the entire business plan. Spend more time on writing this summary instead of just jotting down in a hurry. If you are a good story teller, the executive summary is like a blank sheet that is used to tell your prospective investor about the birth of the idea and how you would execute it on the ground. The business plan itself is a dynamic document, particularly for a startup, because the market forces may prompt you to keep tweaking it in bits and pieces. The executive summary tells the central idea behind the business. As investors would have little time to read through the entire business plan, this summary becomes all the more important. Here are a few elements of an executive summary and how it could be improved:
The Idea and the Founder(s): It is said that investors put their money on people behind the business. Talk of who you are and why you believe in the idea that you want the investor to back with money and time. Talk of the form of the business entity, if it would be sole proprietorship, partnership or company. The vision and the mission behind the business and a macro picture of where your business reach in the next 3-5 years. If you are a technology startup, don’t waste this precious space in talking at length about the technical jargon. Investors are interested in the business side of technology and how it will solve the problems of the customers, how to market it, and build a regular stream of revenue. The Market Opportunity: You could talk of the big business opportunity in terms of its size that prompted you to look at the specific sector to launch your product or service. Market analysis, if done in advance, could come in handy. Investors look at num-
first mover advantage. Therefore, be straight forward as to the timeframe during which you need the money. If you are looking to raise a loan, instead of equity, let them know the source of the collateral that would be pledged. Return on Investment: Financials is an important section of a business plan. In the executive summary, however, you should touch upon the big picture related to key financial data such as earnings, revenues, expenditure. This would give an investor a sense of how he would get return on his investments over the 5-7 year horizon. Say it out as to what kind of returns the investor can expect by backing your venture. You should also talk of the risk involved and how you plan to deal with it. This would let the investor know that you have thought of this aspect of the business as well. Language and Length: Keep it simple with short sentences without the use of loaded words and phrases. If you are using acronyms, expand them every now
Avoid using expressions such as “cuttingedge technology” and “out-of-the-box idea”. They add to the word count, without telling anything concrete bers and the source. Therefore, highlighting it right in the beginning would be a good idea. Vague terms such as “substantial” business opportunity should better be avoided. You could also mention the reasons why you think this opportunity is worth tapping. You are asking investors to put their time and money into the project and therefore the opportunity should be clear enough for them to seek more details. Fund Requirement: Instead of beating around the bush, put straight on record the amount of money you need to raise and how you plan to spend it during the course of growing your business from scratch. If you are putting your own funds or that of your friends and family, clearly specify, so that the investor would know of your level of financial commitment to the project. Some startups would need the money as quickly as possibly otherwise they risk losing out the
and then for clarity. Respect the time of your reader by using a more direct language than formal addresses. Write short paragraphs and highlight key words related to the business. Spelling mistakes leave a bad impression and so do very small fonts. Avoid using expressions such as “cutting-edge technology” and “out-of-the-box idea”. They add to the word count, without telling anything concrete. The entire business plan should not be more 15 pages. The executive summary should not exceed two pages. Vimarsh Bajpai is a content and communications consultant. As the founder of Samvad Sutra, he works with organizations and individuals to help them communicate better. Interact with him on Twitter @vimarshbajpai. To write to the author, please send an email to dare@cybermedia.co.in with the subject line 'Vimarsh Bajpai'. The views expressed here are that of the author and do not represent the magazine's.
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