Executive Summary- Business Plan

Why Executive Summary?

Definition

 A nontechnical summary statement at the beginning of a business plan that's designed to encapsulate your reason for writing the plan -Source-Entrepreneur India

Executive Summary- The Need

Is the gateway to possibly convincing your investor to reading the whole business plan…or to by-pass that step and invite you to give a full business model presentation. - Biz Plan Plus.

 Venture capitalists and Bankers read the executive summary to decide whether it is worthwhile spending their time. They also invite the entrepreneur for a discussion based on the quality of this document.

An entrepreneur or established business owner writing their plan for investors may complain…”How can this be, after all the research, strategizing and agonizing over every word and number in my business plan, I have to accept it may not be fully read, or read at all, in favor of a few well-concocted pithy paragraphs?” As callous as it seems, experienced investors may only glance at the body of your business plan. They are generally very busy business people who necessarily scan multiple documents daily to choose one that is worthy of reading each page.

Elevator Pitch

Executive summary facilitates the entrepreneur to make an elevator pitch, which is short and compelling to the investor. Normally the first twenty seconds is what matters if you get an invite to meet the investor.

A few tips 

  1.   Executive summary not more than two pages
  2.   Should be prepared once the full business plan is ready
  3.  The investors look at the team strengths and  market opportunity

Components 

“A good executive summary gives me a sense of why this is an interesting venture. I look for a very clear statement of long-term mission, an overview of people, the technology and the fit to market.”- An Angel Investor

  1. Should contain the most important aspects
  2. Value to the customer, market opportunity and growth prospects
  3. Innovativeness, uniqueness of the offering
  4. Management expertise/competence
  5. Financing requirements and profitability
  6. Readiness to launch the growth project
  7. Risk analysis and mitigation measures
  8. It is opportunity to present your case clearly, compellingly and concisely

#link_2776940

Executive Summary- Arecanut Peeling Machine

An extract from a business plan

Market Opportunity

‘Commercialization of Dried Arecanut Peeler’ will be the first effort to bring the motorized equipment close to the farmer. Arecanut is largely grown in many parts of Karnataka and India accounts for 54 percent of total global arecanut production. Malaysia, Singapore and Indonesia form 8 percent of the world’s production. China accounts to 28 percent and Bangladesh and Myanmar together comes to 10 percent.

The pain of the Customer

The peeling of arecanut is a labor-intensive activity. However, there is a huge scarcity of skilled labors to peel the arecanut. This gives an opportunity to commercialize dried arecanut peeler. 

Team

 Two engineers with MBA started the venture and they belong to Shimoga. Their families grow arecanut and they have sound domain knowledge. One member looks after operations and the second looks after Marketing and Finance.

Operations

This motorized equipment running with the aid of electricity is capable of peeling 40 Kgs per hour and costs Rs. 50,000. The husking efficiency is about 92 percent with less than 2 percent breaking validated by Central Plantation Crops Research Institute (CPCRI). A patent application for the equipment is pending.

A plant for assembling the components will be located at near the consumers. As the equipment does not involve any critical components, the manufacturing process is outsourced. The assembly would take place in the plant.

Sales and marketing strategy

 The product is unique and has a huge market potential. There are around 10 lakh arecanut growers in Karnataka alone. This would be the target segment for market penetration. Product distribution would be through co-operatives, panchayats, farmers associations like NABARD, self-help groups. Target individual farmers with live demonstration. The company will tie up with co-operatives for providing loans to customers.

Finance

The projected sale is 300 units in the first year. The breakeven sale is 150 units. The revenue for the first year would be INR 15 Million. The sales volume for second year is projected to be 1000 units and for consecutive years, 3000 units. With continuous innovation and research, the  machine will be upgraded. There is scope for diversification at a later stage.

Key to Success

  1. Proper market survey that revealed the opportunity for commercializing the motorized equipment
  2. First mover advantage
  3. Goal to reach every farmer
  4. Strong networking with co-operatives
  5. Continuous development and research

Conclusion- Advantages

  1. A key to meet potential Investors
  2. Helps to make elevator pitch
  3. Can attract other stakeholders