The most important part of a Business Plan is the Executive Summary. The Executive Summary is generally only two pages and is an overview of the pertinent information contained within the business plan itself. Generally Venture Capital Executives, Angle Investors, or Investment Bankers will read these two pages and either put you into ‘sounds interesting pile’ or ‘trash can pile.’ Your Executive Summary must be complete, honest, and it must be compelling.
Many times entrepreneurs will write a rough draft Executive Summary and then write their business plans. Then go back and re-write the Executive Summary after re-considering all the important points. You should be able to give your executive summary to just about any competent person and after they read it, they should not have more than one or two questions. Below is a sample Executive Summary I have prepared for this discussion on an non-existent product, which is under consideration by at least one entrepreneur to make this widget a reality and available to the public.
2005 Business Plan for The JoggingLight
The JoggingLight is a Brand Name of the parent company, “The Human Group, LLC. of Alpine Meadows, CA. The JoggingLight is a new innovation in miniaturization of LED lighting using electromagnetic induction for increased visibility while walking or jogging. These lights will require no battery source, but rather work of the vibrational energy, which comes from human movement while walking.
The JoggingLight will provide light and safety to consumers who want piece of mind while exercising at night. We also intend sell these units to industry, neighborhood watch groups, military and security professionals as well. By increasing the light while engaged in such activities we will reduce injury, crime and allow folks to exercise after dark to stay at their ideal weight, thus improving their health.
We intend to sell these items to consumers through Internet sales, Television Infomercials, specialty high-tech stores, as our primary strategy for consumer sales. Industrial, military and security sales will be done through direct sales meetings with purchasing agents, procurement officers as well as bidding on official solicitations.
We will start by producing the first units in-house and may later expand such operations or outsource the manufacturing within the United States or US Territories as needed.
Our mission is to sell these units to anyone wishing to own them anywhere in the world and making the JoggingLight easy to purchase online and in selective retail outlets. We also intend to explore other possible markets when and where we see demand, which we can fulfill, while making a significant profit. We will strive to provide quality lighting for the human endeavor, which uses no external power source such as batteries and constantly explore additional market sectors to sell our JoggingLight Concept in, while continuously innovating.
The Human Group is a closely held corporation with Mr. Bob Smith as President.
Other than small flashlights, miner’s hats and hand held lights, which generally use batteries there is currently little competition in this sector. Jogging and walking lights, which have harnesses are cumbersome, irritating and too heavy, with poor battery life. There is one flashlight company with a “Shaking Light” however it too is cumbersome and too heavy to use while jogging and there is no way to attach it. We do, however, expect copy companies to start up. This is not too alarming, since they will go through a similar learning curve and we do not plan on letting up on our new market exploits or innovations including space and NASA.
When selling to retailers we will require timely payments, upfront initial orders and intend to continually ramp up efforts online and through infomercials to maintain adequate cash flows incase of extended receivables as we expand.
Our target price to consumers will be $29.95 plus shipping and handling on our e-commerce website and Infomercial sales campaign. At this price we can expand without excessive capital requirements after the initial capitalization. Phase II will be to enter the selective retail sales market with companies such as Sharper Image with retail and catalog sales.
To finance this operation, we will need $ 300,000 of capital, which will come from investors, personal friends and family. This will enable Kevin Humphrey to remain in complete control of The JoggingLight Brand throughout its development. It is very important for start-up personal high-tech products companies to remain in control until they reach critical mass and are large enough to afford adequate payroll to attract experienced executives and build a corporate structure. This money will be used for;
· Patent and Legal Work
· Legal Business and Organizational Fees
· Building of Prototypes
· One year of salary to Primary Staff
· E-commerce Website
· Compelling Infomercial TV Video
· Brand Art Work
· Packaging Material
· Parts and Supplies Inventory to Build Units
· Business Operational Costs for 6-months (travel, phone, etc.)
Kevin Humphrey will draw a salary of $5,000 per month for the one-year and dedicate 10-hours per day to running of the company 5-days per week and will carry out the necessary steps and sales calls in this business plan to make this possible. Prototypes will be build, consumer tested and/or sold and this money will become part of cash flow. Each rendition will be digitally photographed for history on the company website. This business will remain a Garage Start-up” until sufficient orders warrant additional space to fulfill demand. We will absolutely max out or home business capacity times two before moving into a more costly location. (Please see attached start-up costs breakdown).
With more and more people throughout the world concerned about their weight and health the JoggingLight solves a need and an untapped consumer niche. There are indeed additional applications in the security industry and military sector as well as Space. We see the total need for JoggingLight and subsequent applications at 100 million units with plenty of additional currently unknown and unseen “killer aps” out there waiting for a well positioned company to take advantage of and we intend to be that company.
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Now then, at this point the entrepreneur would work thru the business plan and then come back to the Rough Draft “Executive Summary” and then re-write it to make sure everything matches. In doing so the Executive Summary would be tightened up and checked for duplication of content and accurate information. I hope this case study helps you in the formation of your Business Plan, specifically your Executive Summary which is the most important part. Think on this.
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