Effective Business Plans: The Executive Summary
By Eri Cuanalo (www.innovateurs.com)

The executive summary is the most important part of the written business plan. Many people will only read this. If it does not capture the attention swiftly, your plan will be discarded so work hard to ensure it is an effective document.

Executive Summary - Structure & Content
The executive summary should ideally be one page. If longer you run the risk of only the first page being read. If it is longer it must not be all text !

It must:

1. Introduce the project in terms of what area it is concerned with, what it is trying to do, and list the key individuals and advisors involved

2. Explain, very clearly and simply, the proposition - exactly what are you going to produce, what need does it satisfy that is not being satisfied at present (will it do something better, faster, cheaper, more conveniently, is it easier to operate, smaller in size, longer lasting, lower maintenance ...). Be specific and do not assume the reader will immediately see an advantage that you consider obvious

3. State specifically the competitive advantages of products and/or processes in relation to other alternatives in the market, and then explain and substantiate how these are important to customers - this includes in particular confirmation that consumers are actually willing to pay for such 'advantages'

4. Describe the stage the project reached particularly in terms of the "readiness for market" of its products, or product concepts, and any intellectual property such as patents, that may support the products

5. Outline the main characteristics of your market, including size and growth, and specify the market opportunity that you are addressing. Be specific about the main target groups of consumers

6. Highlight any "evidence of success" - this may be trade reviews, analyst comments, sales or partnership agreements, working prototypes, etc. which help to make the project more tangible and raise confidence

7. Summarize the objectives of the company in the short and long term and outline the key strategies you will use to achieve them

8. State your finance requirements and, if the plan is for equity finance, what stake in the company is available for this. What is the planned exit route for the investor (How will they get their money, and profit, back !)

Test for Clarity and Effectiveness of Communication
It is always difficult for entrepreneurs to objectively evaluate what they have written. We are all often too close to the project. Any executive summary must be tested on a non-technical person - they need not be a business person. Use a person unfamiliar with what you are doing, perhaps a friend.

You need to ensure that following reading the individual can have an intelligent conversation with you about the project, and that they appear impressed with it. You want them to be motivated to ask you questions about detail, not basic questions about what you are doing!

Ask them for specific and direct feedback - cruel to be kind!. What do they like about your summary and what don't they? Is the proposition clear - i.e. can they explain it to you? Do they find the proposition compelling? Ask them how you can improve the document. Were there any areas that gave them reason for doubt or skepticism? ...etc.

Eri Cuanalo
Chairman, Innovateur

For more on business planning and venture development see: http://www.innovateurs.com

© Innovateur, 2004


Claim your share of £5 billion worth of UK grants
By Matt Weston of www.businessbricks.co.uk

Over £5 billion in development capital grants are available to UK businesses and start-ups this year.

Let's make that figure a bit more digestible. Spread over each of the UK's 500,000 or so start-ups, it's £10,000 each.

And - as I've said before - this is free money! As long as the terms of the grant are met, you don't have to pay it back. And you don't even have to give up a stake in your business to qualify.

HOW DO YOU GET YOUR SHARE?
Shockingly, only 5% of us access our share of the £5 billion (according to a 2002 survey by the Federation of Small Businesses).

But the truth is that there are ways around both these problems. It's just that 95% of small businesses don't know about them.

Today I want to share with you my advice: a 4-step plan to help you claim your share of that £5 billion.

STEP #1: Apply whilst the pot is full
The best possible time to apply for a grant is always when the scheme is first launched or opened.

That's when there's the most money in the pot. And that's when the administrators are keenest to get the scheme moving. Strike whilst the iron is hot - whilst the pot is full - and you give yourself the highest chance of success.

I've linked in several previous bricks to specialist grants website j4b. The best way you can keep up-to-date with new grants is to sign up to its free fortnightly newsletter.

In my opinion, j4b has a real monopoly when it comes to giving bang up-to-date information on UK grants. I've used the service for over 3 years now. It's invaluable. There are several paid-for services that don't match half of what j4b offers for free.

In addition:

>> Regularly search Google with your town or area and the phrase "business grant" (eg "exeter grant" or "devon grant")

>> Sign up for your local business link email newsletter (to find your local operator visit http://www.businesslink.gov.uk:80/bdotg/action/directory?r.s=e
or call 0845 600 9 006)

>> Talk to your local enterprise agency
(see http://www.nfea.com/index.htm?page=find_lea.htm)


STEP #2: Keep a keen eye on government fads
Recently, I asked an old contact of mine at j4b, Richard Wynne, for the single, most-important bit of advice he could offer business bricks readers.

Richard reckons that it's this: to stand the best chance of securing a grant for your business or new project, take advantage of government fads.

Fads are a result of a wider government agenda. At the turn of the millennium, the government was diverting all of its resources into trying to get businesses online.

Now the key watchwords are innovation; research & development; export; arts; heritage; training; and community (supporting businesses that benefit disadvantaged groups of people and help regenerate run-down areas).

It's often possible to tweak, or re-present, your business plan to fit with the criteria of such schemes.


STEP #3: Clarify the criteria
The grant application process is notoriously long-winded.

People who write the descriptions and criteria for business grants shouldn't be let near a keyboard. The big problem is that that the published criteria for schemes are often vague and shrouded in jargon.

Once you've identified a grant you think you're eligible for, work hard to establish the criteria the decision will be based on.

(1) Ask your business adviser or the scheme administrator to explain in plain English exactly what the deciding criteria are; what your chances of success are; and how long the process is likely to take.

(2) Ask who else has qualified for funding from the scheme you're applying to

(3) Pick up the phone and speak to those who have secured funding via the scheme you're applying to, and ask their advice.


STEP #4: Show you can't proceed without a grant
Most schemes offer between 10%-50% of funding for a start-up business or new project. So you need to at least match the amount you are applying for.

Invariably, you will need to show that your project or start-up idea cannot go ahead without the grant you're applying for. Your business plan needs to reflect this position.

Richard Wynne from j4b argues that every business could qualify itself for a development capital grant.

So the reason 95% of businesses don't access grants isn't because they're not eligible.

The real reason is that small businesses get lost in a jungle of bureaucracy and red tape. Today's brick should give you a shortcut through that jungle - and to your share of the £5 billion that's available.