business plan executive summary

Business Plan Executive Summary Makeover

The following business plan executive summary sample is from PricewaterhouseCoopers Vision to Realty series. For more information about PwC's Vision to Realty series or to get a free copy of the Generico, Inc. complete sample business plan.

In this article, we are going to review a sample executive summary and show how to improve its appeal to prospective investors who are not at all familar with the business. Remember, your business plan executive summary has to interrupt prospective investors and get them to read your business plan. A plan that never gets read will not attract investors.

The first business plan executive summary is the original executive summary. I picked this business plan executive summary because it is professional and reflects the format used in most business plans. After you read the first business plan executive summary, I provide my comments. Then, I'll present a second business plan executive summary based on the original only this time modified to fit the needs of busy investors. At end, I'll ask you to decide which business plan executive summary is more likely to interrupt and engage a busy investor and more importantly get read.

Sample Business Plan Executive Summary
"Before" Version

This business plan will be sent to a broad list of prospective investors. For many, the business plan executive summary will be their first introduction to the business. You'll have to use your imagination to picture the text printed on 8 1/2" by 11" plain paper stock.

Now, look at this "before" version of Generico's Business Plan Executive Summary. Pay special attention to the headlines, because if they don't grab you and make you want to read more, you'll never even get exposed to what's inside the rest of the business plan.

The Before Version

EXECUTIVE SUMMARY

Company

Generico, Inc. was formed in April 1999 to develop, manufacture and market a flexible product line of highly cost effective assembly robots. Generico's initial product, the Automaton 10, will be directed specifically at printed circuit board manufacturers. While a prototype has yet to be built, the design and specifications of the product are substantially complete.

Products

Generico's robotics products, whether addressing the electronics industry or other light assembly manufacturing applications, all share a common goal: production flexibility and cost reduction for end users. Current and future Generico products encompass proprietary designs which yield substantial benefits over competitive products as follows:

Simplicity - Manifested in ease of use and maintenance in addition to lower cost of manufacture

Performance Capacity - Six axis movement ranging from 30 inches per second (IPS) at 30 grams or less to 20 IPS at four kilograms maximum capacity (in the Automaton 10)

Precision - Limitless repetition to an accuracy of .001 inch

Flexibility - Smaller size reduces space requirements and allows either permanent (ceiling or floor) mounting or portable applications

Price/Performance - Significant savings to end users through state-of-the-art performance at highly competitive price-performance ratios

Market

As domestic labor costs continue to increase and the logistics of foreign production become ever more burdensome, the demand for robotics solutions to these problems becomes more and more evident. The robotics market has grown substantially, from a base of approximately $20 million in 1988 to an estimated $320 million in 1998. Both DATAASK and the Rebel Group predict the domestic market to reach $1.7 billion by 2000. As foreign labor costs continue their inevitable rise, the global market for robotics is expected to approach $3.5 billion by 2000. Generico believes it can realistically capture 3% of the domestic market, or $54 million by its fifth year of operations.

Underlying the phenomenal growth anticipated for the robotics industry is an equal or faster growth in competition among manufacturers of a wide range of products requiring a flexible process as products change. These manufacturers must find ways to achieve manufacturing flexibility while containing costs. Generico's products address this issue by incorporating reprogrammability, which reduces the need for additional capital equipment and worker retraining.

To the extent the assembly process is labor intensive, as labor costs rise, Generico's products can also reduce the average hourly cost of assembly.

Financial

Generico is seeking $2.5 million in first-round financing. The funding will enable the company to build its product line, to implement aggressive sales and marketing plans, and to establish an initial manufacturing facility. The company anticipates that the initial round will be sufficient to carry it to profitability and to allow building assets to a level where outside debt financing can be obtained to fund further growth.

Initial revenues are expected in the second half of 2000. The company is anticipated to become profitable during 2001. Revenue and profit information for the first five years is summarized below:

In millions	2000	2001	2002	2003	2004
Revenue	$0.7	$8.2	$18.4	$36.2	$54.0
Net Income/(Loss)	(1.0)	0.4	1.2	3.8	6.1

Management

The ultimate success of Generico will depend upon management’s ability to develop an innovative product line and to cost-effectively deliver the line to a large and receptive market. Generico’s founding executives comprise the following high caliber professionals whose experience will create immense synergy for the company.

Vincent Losciallo, CEO: Former CEO and founder of MIME, Inc., a multimillion dollar manufacturer of robot welders and painters acquired by Major Motors in 1997.

Stephen Daniels, V.P. of Marketing: Twelve years of industrial marketing experience culminating as a divisional marketing director for a Fortune 500 manufacturer of capital equipment.

Harold Ginjeans, V.P. of Engineering: Former design engineer at MIME, Inc., Ginjeans was a major contributor to the MIME EME, the company’s largest selling product to date.

Priscilla Sproviero, Controller: Seven years of “Big Five” accounting experience, the last two of which were consulting to start up businesses; Stanford MBA.

George Forrester, Director of Manufacturing: Former director of manufacturing at Acme, Inc., a $100 million producer of audio visual equipment and microwave ovens.

Each of the founders has contributed substantially to the company in the form of sweat equity and capital. Management believes that it is addressing a market destined to grow substantially with a well-conceived line of products. It is confident that both market share and revenue projections will, at a minimum, be achieved in the projected time frame.

Sample Business Plan Executive Summary
"After" Version

Review the "before" version of Generico's sample business plan executive summary before reading this section.

Here now are my comments on what this business plan executive summary needs to get a better response. To its credit, the "before" version avoided the most common mistake in business plans: no headlines. However, the headlines that are used are merely section headings and do nothing to pull you into the document and read more. However, Generico does provide excellent information in the copy that follows each section heading. But, why bury it? The section headings in the business plan executive summary need more pizzazz to maximize the business plan's appeal.

The "before" version of the business plan executive summary doesn't include enough information about how an investment in Generico would benefit investors. It also doesn't provide a succinct statement that captures what Generico is all about, or explain how or why it or its products are any better or different than the competition.

Finally, the business plan executive summary as a whole fails to lead investors to conclude that they would be foolish not to invest in Generico, if Generico met their investment criteria.

The After Version

EXECUTIVE SUMMARY

Start-up Robotics Manufacturer Ready For Prototype Stage

Proprietary Designs Speed-up Assembly, Reduce Change-over Time, And Lower Circuit Board Manufacturers' Costs

Simplicity - Manifested in ease of use and maintenance in addition to lower cost of manufacture

Performance Capacity - Six axis movement ranging from 30 inches per second (IPS) at 30 grams or less to 20 IPS at four kilograms maximum capacity (in the Automaton 10)

Precision - Limitless repetition to an accuracy of .001 inch

Flexibility - Smaller size reduces space requirements and allows either permanent (ceiling or floor) mounting or portable applications

Price/Performance - Significant savings to end users through state-of-the-art performance at highly competitive price-performance ratios

High Labor Costs And Burdensome Foreign Logistics Projected To Drive Demand For Robotic Solutions To $1.7 Billion By 2000

Underlying the phenomenal growth anticipated for the robotics industry is an equal or faster growth in competition among manufacturers of a wide range of products requiring a flexible process as products change. These manufacturers must find ways to achieve manufacturing flexibility while containing costs. Generico _ s products address this issue by incorporating reprogrammability, which reduces the need for additional capital equipment and worker retraining.

To the extent the assembly process is labor intensive, as labor costs rise, Generico _ s products can also reduce the average hourly cost of assembly.

$2.5 Million In First-Round Financing Funds First Product Line And Two-Year Profitability Plan

Initial revenues are expected in the second half of 2000. The company is anticipated to become profitable during 2001. Revenue and profit information for the first five years is summarized below:

In millions	2000	2001	2002	2003	2004
Revenue	$0.7	$8.2	$18.4	$36.2	$54.0
Net Income/(Loss)	(1.0)	0.4	1.2	3.8	6.1

Experienced, Invested Management Team With Past Accomplishments In Robotics Market

Vincent Losciallo, CEO: Former CEO and founder of MIME, Inc., a multimillion dollar manufacturer of robot welders and painters acquired by Major Motors in 1997.

Stephen Daniels, V.P. of Marketing: Twelve years of industrial marketing experience culminating as a divisional marketing director for a Fortune 500 manufacturer of capital equipment.

Harold Ginjeans, V.P. of Engineering: Former design engineer at MIME, Inc., Ginjeans was a major contributor to the MIME EME, the company’s largest selling product to date.

Priscilla Sproviero, Controller: Seven years of “Big Five” accounting experience, the last two of which were consulting to start up businesses; Stanford MBA.

George Forrester, Director of Manufacturing: Former director of manufacturing at Acme, Inc., a $100 million producer of audio visual equipment and microwave ovens.

Now, note what happens when a reader just reads the headlines of the "after" version of this Business Plan Executive Summary:

Start-up Robotics Manufacturer Ready For Prototype Stage

Proprietary Designs Speed-up Assembly, Reduce Change-over Time, And Lower Circuit Board Manufacturers' Costs

High Labor Costs And Burdensome Foreign Logistics Projected To Drive Demand For Robotic Solutions To $1.7 Billion By 2000

$2.5 Million In First-Round Financing Funds First Product Line And Two-Year Profitability Plan

Experienced, Invested Management Team With Past Accomplishments In Robotics Market

By just scanning the headlines of this Business Plan Executive Summary, an investor knows what the business does, why and how much funding is being sought, that the management team already has a proven track record in this market and has some "skin in the game," and, in general, why this market is going to grow.

Compare this to reading the headlines of the "before" version of the Business Plan Executive Summary:

Company

Products

Market

Financial

Management

You tell me, which Business Plan Executive Summary is more likely to appeal to a busy, scanning investor who knows little or nothing about this business venture? And, we haven't even addressed the content following the headlines!

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