For new businesses or businesses seeking funding, credibility and excitement are key elements of the executive summary. Venture capitalists receive hundreds of plans each month, and just a few are actually being read from cover to cover. A quick 20-second scan of the executive summary is the basis for screening which plans to read and which companies to interview for investment. When the plan is the vehicle used to attract financing or investment, the executive summary should make it clear to the reader who is a potential source of funds why this is a sound investment.
The business background section of your business plan generally consists of two to four sections that present information that is specific to your business. You may have gathered substantial information about competitors and the industry in general in the course of considering your business plans. This is not the place for that information. Instead, concentrate solely on those characteristics of your business that are specific to your particular business.
The business background generally includes the following:
a document describing the business entity and its general operation a document describing the product or service that your business will provide a document describing your facilities, if appropriate
a document describing the people in your organization, if appropriate
The Business Entity
The business entity portion of the plan provides information that is specific to your business. This document sets forth the current status of operations, the management structure and organization, and the identification of key personnel. If the plan is being created for an existing business, historical information is also included. The business background provides the reader with information regarding:
the type of business (e.g., wholesale, retail, manufacturing, service, etc.) type of legal entity (e.g., corporation, partnership, sole proprietorship, etc.) when the business was established
where it is located
the type of facilities, if any (e.g., retail establishment, manufacturing plant, etc.), although you may need to devote a separate section to this subject if your facilities are very important to your business the number and type of employees
the organizational structure (table of organization showing who is responsible for what) operational information, such as a schedule of the hours the business is open identity of key employees, including a description of their abilities that make them vital to the success of the business. You may decide to devote a separate section to employees, if you think they are key to your success.
The information provided should go beyond a simple statement of facts. For example, if you chose to incorporate rather than to operate as a sole proprietor, what factors influenced your decision? Explaining why a particular decision was made goes a long way in helping the reader understand your decision-making process.
Don't forget yourself when you think about key employees, particularly if you're starting a new business. You need to present your educational background and prior business experience in a way that establishes your ability to succeed. While you probably won't include a copy of your resume, much of the information that appears on your resume will appear in the plan. Don't be afraid to present yourself in the most favorable light that...