BUSINESS ENTERPRISE SIMULATION Prof. Juancho M.

Babista

Module 08
EXECUTIVE SUMMARY

The pressure of writing an executive summary comes from the fact

that everyone will pay attention to it, as it sits at the top of that heap of
documents. It explains all that follows and can make or break your business
plan or project plan. The executive summary must know the needs of the po-
tential clients or investors and zero in on them like a laser. This module will
show you how to write and format your executive summary.
At the end of this module, you are expected to:
1. be aware of the contents of the executive summary of a busi-
ness plan;
2. value the importance of vision and mission company; and
3. formulate vision and mission statements for the intended
business enterprise simulation.
Executive summaries vary depending on the
document they are attached to. You can write an execu-
tive summary for a business plan, project proposal, re-
search document, business case, among other docu-
ments and reports. The executive summary component
of your business plan exists to give readers an overview
of the entire document, allowing them to understand
what they can expect to learn. Investors will read the
executive summary to decide if they will even bother
reading the rest of the business plan. It is rare for an investor or lender to read an entire
business plan, at least in the initial stages of analysis and consideration for funding.

Executive Summary
The executive summary is the first page of your business plan. It is a brief outline
of the company's purpose and goals. It is an overview of your business and your plans. It
is the most important section of your business plan, because it needs to draw your read-
ers into your plan and entice them to continue reading. If your executive summary does
not capture the reader's attention, they will not read further, and their interest in your
business won't be piqued. As the executive summary is the initial representation of the
complete document, it should cover the main parts of a plan or proposal and indicate the
points that are elaborated on in the final document.
The primary goals of the executive summary are to provide a condensed version
of the main document, such as a business plan, and to grab the attention of the readers.
Since investors, lenders, and C-level executives generally do not have time to read all the
lengthy documents they receive, a well-written summary can help you to grab their at-
tention and subsequently achieve your business goals.
Even though the executive summary is the first section in your business plan, you
should write it last. When you are ready to write this section, summarize the problem or

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BUSINESS ENTERPRISE SIMULATION Prof. Juancho M. Babista

market need you aim to solve, your solution for consumers, an overview of the founders
and/or owners, and key financial details. The key is to be brief yet engaging.
It comes first in your plan and is ideally only one to two pages. While it can be
tough to fit on one or two pages, a good summary includes:
1. A mission statement which explains the main focus of your business
2. A brief description of products and services offered
3. A summary of objectives
4. Basic information such as ownership structure
5. A solid description of the market
6. A high-level justification for viability (including a quick look at your competition
and your competitive advantage)
7. A summary of your plans
8. A snapshot of growth potential
9. An overview of funding requirements
The Executive Summary is often the make-or-break section of your business plan.
A great business solves customer problems. If your summary cannot clearly describe, in
one or two pages, how your business will solve a particular problem and make a profit,
then it is very possible the opportunity does not exist, or your plan to take advantage of a
genuine opportunity is not well developed. Since a business plan should above all help
you start and grow your business, your Executive Summary should.
Ideally, the executive summary can act as a stand-alone document that covers the
highlights of your detailed plan. In fact, it is very common for investors to ask for only
the executive summary when they are evaluating your business. If they like what they see
in the executive summary, they will often follow up with a request for a complete plan, a
pitch presentation, and more in-depth financials.

Writing the Executive Summary

Even though it appears first in the plan, write your executive summary last so you
can condense essential ideas from the other nine sections. For now, leave it as a place-
holder. In writing the executive summary, the following may prove beneficial:
1. Refine and tighten your concept.
Your summary describes the highlights of your plan, includes only the most
critical points, and leaves out less important issues and factors. As you develop your
summary, you will naturally focus on the issues that contribute most to potential suc-
cess. If your concept is too fuzzy, too broad, or too complicated, go back and start
again. Most great businesses can be described in several sentences, not several pages.
2. Determine your priorities.
Your business plan walks the reader through your plan. Consider which ranks
high in terms of importance: product development, research, acquiring the right lo-
cation, or creating strategic partnerships, etc. Your summary can serve as a guide to
writing the rest of your plan.
3. Make the rest of the process easy.
Once your summary is complete, you can use it as an outline for the rest of
your plan. Simply flesh out the highlights with more detail. Then work to accomplish
your secondary objective by focusing on your readers. Even though you may be creat-
ing a business plan solely for your own purposes, at some point you may decide to
seek financing or to bring on other investors, so make sure your summary meets
their needs as well. Work hard to set the stage for the rest of the plan. Let your ex-
citement for your idea and your business shine through. Make readers want to turn
the page and keep reading.

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BUSINESS ENTERPRISE SIMULATION Prof. Juancho M. Babista

Model No. 02 – Executive Summary

57 Quezon Avenue
4328 Lucban, Quezon
Tel. No. (042) 540-4245
Beans&Books@yahoo.com.ph

Introduction
Beans and Books offers different varieties of coffee and other drinks such
as tea, juices, and shakes. Moreover, there is a mini-library section in the shop
that contains books for customers to read. The store is in a strategic location near
a university and a private high school. Likewise, it is located near the entrance of a
subdivision where there are a lot of boarding houses. Our primary strategy is to
develop Beans and Books as the most convenient and cost-effective café for the
customers while stimulating their desire to read.
Once underway, we will expand our scope and take advantage of new
products relative to coffee concoctions and other tea and juices drinks to sell.
Moreover, as in-house reading is free, we are planning to employ book rentals for
those loyal who want to read at home and order our products for takeout. Within
three years we intend to create the area as a premier hub for coffee and book en-
thusiasts.

Company and Management

Beans and Books Cafe is located at 57 Quezon Avenue, Lucban, Quezon, a
location providing extremely high visibility in front of a university and a block
away from a private Senior High School. Moreover, it is near the two entry points
od a subdivision where boarding houses are located. The owner of the company, a
coffee enthusiast, has over 30-year experience in running a food business as con-
sultant for food business startups.
Because of his extensive industry contacts, the initial equipment inventory
was purchased at significant discounts from original equipment manufacturers
(OEM) suppliers as well by sourcing excess inventory from shops around the
country. Moreover, additional equipment inventory will be purchased from the
same OEM suppliers.
Because of the somewhat high seasonal nature of the business during
school days, part-time employees are hired to handle spikes in demand. Those
employees are attracted college students looking for part-time jobs to augment
their allowance while in the university.

Market Opportunities
o There are a total of 7,800 college students and 1,600 junior and high school
students in the nearby university. Added to this is an approximate 10,000 high
school students in the locality.
o The store has an open space across the subdivision lane that can be used to
house small gazebos for open-air dine-in and reading.
o The store has opened up a takeout service between 9:00 to 11:00 pm for stu-
dents within the area. This is open after the store’s closing time at 9:00 in the
evening and manned by part-time student crew members.
(continued next page)

Strictly Confidential

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BUSINESS ENTERPRISE SIMULATION Prof. Juancho M. Babista

57 Quezon Avenue
4328 Lucban, Quezon
Tel. No. (042) 540-4245
Beans&Books@yahoo.com.ph

o The market potential inherent in those students is substantial. According to

third-party research data, approximately 50 percent of college students enjoy
coffee. Likewise, 40 percent of college students and 75 percent of high school
students like milk tea drinks. 20 percent of them love fruit juices and 30 per-
cent go for shakes.
o The market potential for book rentals is also substantial. Although college stu-
dents recorded a 20 percent interest in reading books, and 15 percent among
high school students, the startup program for adding books in the café shows a
steady increase every week.

Competitive Advantages
The coffee shops located in Lucban, Quezon are direct and established
competitors. Our four primary competitive advantages will be location, lower
costs, highly-selected coffee beans and tea products, and books that can be read
for free while in the shop.
Our location is also a key disadvantage for those clients who private vehi-
cles when parking is concerned. We will overcome that issue by requestion the
Homeowners’ Association to let us show the lane in front of the store as parking
for clients, and eventually earn from parking fee for the association. The Home-
owners’ Association is very interested since the lane is seldom used for traffic and
two private residential houses without carports are alongside the lane.
We will also use online tools to better engage customers, allowing them to
reserve and pay online as well as create individual profiles regarding sizes, prefer-
ences, and special needs.

Financial Projections
Beans and Books Cage expects to earn a modest profit after year one based
on projected sales. Our projections are based on the following key assumptions:
o Initial growth will be moderate as we establish awareness in the market
o Initial equipment purchases will stay in service for an average of five to six
years; after four years we will begin investing in "new" equipment to replace
damaged or obsolete equipment
o Marketing costs will not exceed 10 percent of sales.
o Residual profits will be reinvested in expanding the product and line.

We project first-year revenue of Php510,000 and an 8 to 10 percent

growth rate for the next two years. Direct cost of sales is projected to average 50
percent of gross sales, including 40 percent for the purchase of equipment and 10
percent for the purchase of ancillary items. Net income is projected to reach
Php990,000 in year three as sales increase and operations become more efficient.

Strictly Confidential

Keep in mind this is just a made-up example of how your Summary might read.
Moreover, keep in mind this example focused on the coffee shop business, so a descrip-
tion of products was not included. These products will show up later in the body of the

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BUSINESS ENTERPRISE SIMULATION Prof. Juancho M. Babista

business plan. If your business will manufacture or sell products, or provide a variety of
services, then be sure to include a Products and Services section in your Executive. In
this case of the coffee shop, the products and services are obvious, so including a specific
section would be redundant.

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