In my last guest blog post I addressed 10 rules to follow when writing your business plan executive summary. Today I want to highlight a few of the reasons that your executive summary is so unbelievably important.

Famous venture capitalist Guy Kawasaki said in his book, The Art of the Start, “Of the effort you put into writing a business plan, 80 percent should go into the executive summary. These are the most important paragraphs of your organization’s existence.”

Here are 3 reasons that your executive summary might be the most important paragraphs you will ever write.

• Your Key to Startup Funding – According to the Angel Capital Education Foundation (ACEF) 90% of outside equity for startups comes from angel investors. This amounts to $20 billion in annual funding. The ACEF also approximates that only 25% of applicants for angel investment will make it past the pre-screening round. Typically the pre-screening round will consist of submitting your executive summary to the angel investor or investor group. If 75% of applicants are thrown out before even getting a chance to meet face-to-face with their potential investors, it is clear that your executive summary deserves your time and consideration.
• Your First Impression – The typical reader of your executive summary is a banker, potential investor or maybe a business consultant, who have all read hundreds if not thousands of business plans before. If your first impression on these VIPs is just a typical executive summary, how will they ever remember your business from all the others? Because you will not have the opportunity, in many situations, to meet with a potential investor before submitting your executive summary, this will be your only chance to make a great first impression.
• The Only Thing Most People Read – Most busy bankers and investors will consider themselves “executives”, which means they probably think they are only supposed to read your executive summary. Obviously you are hoping to compel the reader to continue through the business plan, but you should write your executive summary with the assumption that this will be the only thing the reader ever looks at. This does not mean you need to discuss every detail of your business plan, but rather focus on developing a persuasive argument for why your business opportunity is special.

Clearly your executive summary is a vital ingredient to many of the most important elements of your business. Follow the advice of Guy Kawasaki and invest significant time and resources into developing the perfect executive summary. It it may just be the two most important pages you will ever write.

Author Bio: Adam Hoeksema is the Co-Founder of ProjectionHub which is a web application that helps entrepreneurs create a full set of financial projections without the need to have a Phd in spreadsheet modeling.

Whether you write your own business plan, or you work with a professional business plan consultant to craft the perfect document, you will soon notice that you will need to change your plan for various purposes.

For instance, if you are seeking a loan, you may want to focus on your balance sheet and collateral. If you are submitting your plan to an angel investor group you may want to focus on growth, market potential, and your management team.

Rather than re-work the entire business plan for each new audience, it may make sense to simply write a new 2 page executive summary highlighting the information most relevant to your audience. As you write your executive summary there are 10 rules to keep in mind. (You can also refer to our virtual business plan template for additional tips and examples)

1. Know Your Audience – This is the first rule in speaking and writing. If you are applying for a loan your banker probably does not care too much about your exit strategy, but they will be interested in your cash flow projections. Be sure to cater to the needs of your unique audience.
   
   
2. Do Not “Summarize” – Why would the reader want to continue reading your business plan if the whole document was already summarized? Rather than summarize, you should write with the intention to sell. Sell the reader on your idea, don’t bore them.
   
   
3. Leave Out the Company History – If your executive summary starts out with, “12 years ago I had an idea…” your reader is probably already looking for the next section heading. Sorry, but they don’t care. Your company history is important, but not in your executive summary.
   
   
4. Ask Yourself “So What” – Always ask yourself “So What?” Is each statement relevant, and important in communicating your message? If not then change it, throw it out. Every word should be valuable and vital to your message.
   
   
5. One Size Does Not Fit All – If your executive summary was successful in impressing your banker then you should probably change it before you hand it over to a potential investor. Each set of stakeholders will have a different set of priorities and experiences that will give them a unique perspective.
   
   
6. Write NO More Than 2 Pages – K.I.S.S. stands for “keep it simple stupid”. If you can’t convey the essence of your business in 2 pages then you need to simplify. The executive summary should be simple and short, leave the detail for the business plan.
   
   
7. Be Intriguing – Sell. Intrigue. Tantalize. Compel. These are the words that you should focus on in your executive summary. Your goal is to intrigue the reader to ask for more detail or to dig into the business plan. The executive summary should do just enough to get them excited.
   
   
8. Write at a High School Level – You may be an engineer with a novel invention, or a software designer who speaks in HTML. If you are a technician, while you are writing your business plan please come back down to earth and use terminology that the average Joe could understand.
   
   
9. Use Bulleted Lists, Headings, Tables, and Graphs – Everyone likes a picture book. Unless you are writing to an audience full of PhD scientists, make sure to make your executive summary look good. Two pages full of paragraphs will give the reader nightmares about your 40 page business plan. If you went 2 pages without a list, or a graph, one can only imagine how dry your business plan will be.
   
   
10. Leave Out Key Information – The purpose of your executive summary is to get the reader to read on. So feel free to leave out some important details. Even make it clear that the subject will be covered in depth throughout the business plan. Again, the goal is to compel and intrigue the reader so they just have to know more, and leaving out some of the details is an effective way to accomplish this.

These 10 rules will guide you through the process of writing and re-writing your executive summary.