Executive summary

An executive summary should be exactly that – an outline of the overall content of the business plan.

It should be no more than a page long, looking to grab the attention of the person reading it and give them a complete flavour of everything that is contained within the plan. It should be a brief, no-waffle, outline of the facts. Bullet points can be useful in keeping the summary to the point and sharp, they are also easy to read and digest.

A good executive summary will include:

  • An overview of why the business plan has been put together – the detail on expansion plans or infrastructure investments, or maybe just to secure the ongoing working capital for the farm
  • A brief business background – including any current potential future business partners who will be introduced as a result of the plan – plus a rough idea of the value of assets held within the business
  • Capital costs and ongoing working capital requirements
  • Timelines of any investment – especially with a completion date as a minimum, noting if planning permission is required or if it has been gained
  • If the business is reliant on rented land – very brief details of agreements – tenancy type and length
  • Key people to deliver the plan – their experience and position within the farming business (including contractors for building or infrastructure work) and any consultants being used
  • The KPIs relevant to the farm needed to hit the budget, with an idea of the current business performance if it is an expanding enterprise
  • Projections for earnings before interest, tax, depreciation and amortisation (EBITDA) and an indication of when the business will start to generate cash
  • Any other capital expenditure expected in the coming years as it is always good to have an idea of how much further funding might be required down the line
  • A sensitivity analysis should also be included – noting what movements in the farmgate price and key inputs do to working capital requirements
  • Potentially, a ‘what if’ option should be included – if the project does not work out as projected. Is there a plan to:
    • de-gear and continue
    • reduce the size of the enterprise
    • gain external income to ease cash-flow pressures
    • or perhaps even a complete exit plan

It is not negative, but it shows the bank that the business has really thought about the implications of the plan should it not work out; it is a sign of open and good management

As with any business plan, the need is to be realistic, honest and pragmatic. If the business plan is constructed in a biased way, given a slant to make sure the numbers add up, it does no one any favours – with the first people being deceived being the business partners and family.