Executive Summary, Environment

Analysis, and Business Description

At the end of • Describe the executive summary,

• Identify the major areas of an executive
this lesson, the summary included in the environmental analysis,
and
learner should • State the important areas to be included in the
be able to business description
 EXECUTIVE SUMMARY

EXECUTIVE SUMMARY
Its point out the over all highlights of the business plan as well as a bird’s-eye view of its
sections. However, the executive summary must not,in any manner,provide a summary of
the different major sections of the business plan.
Commonly the last section to be written after all other major parts have been completed,
it is the next major part of the business plan after all the introduction.
It must be written in simple language that can easily understood and at the same time
attract the attention and influence the decision of the reader.
Investors, creditors, and other significant parties usually proceed to the details of the
business plan once they find the executive summary interesting, convincing,and worthy of
further reading.
There are no standard format as to its sections and contents, the executive summary must
include the following sections:
1. Vision, mission, goals, and objective of the business
2. Business model
3. Business and product position
4. Wealth improvement approaches
5. Parties supporting the business
At the very outset, the business plan must depict the fundamental characteristics, nature,
philosophical values, identity and image of the business. This important concerns are
embodied in the (VMGO) of the business.
(VGMO)-Must be clearly stated and easily understood.
They must be reviewed and revisited at least three yrs. to determine whether they are still
reasonable and achievable in view of the rapid changes in the business community.
Business Model Template
BUSINESS MODEL

Partner Key Customer Customer

network activities Relationship segments
Offer
Key Distribution
resources channels

Cost structure Revenue statements

Figure 6.2.1 Sample Business Model

The business model defines the perspective of the business in terms of its
structure,production, operation, and financial activities that will lead to the achievement of
the VGMO.
There is no standard model that will exactly fit all types of business because they have
dff.strengths and weaknesses, infrastructures, networks, and value propositions.
The business model must basically reflect certain innovations that will indicate the
competitiveness of the business in the industry.
It must define how the business gives importance to its relations with customers,
creditors, suppliers, and internal human resources.
 Business and Product Position

It will help determine how the business defines its course and the process of accumulating
wealth.
Tells the size of the market and the target market share of the business and product.
The business and product position must be able to convince the readers that the proposed
business has a competitive advantage in the market.
This section of the executive summary describes the methodologies or approaches that will be
taken by the business in order to
1. Maintain a competitive advantage
2. Position the business in the market
3. Improve the market share, and
4. Maximize the utilization of resources.
o This section also includes a brief discussion of the marketing policies and financial
operations of the business, and the profitability level of the industry and of the
business.Standard benchmarks are good indicators in assessing the economic performance
of the business.
The last section of the executive summary is a description of the parties that strongly support
the business. The parties that have direct relationship with the business are as follows:
1. Consumers
2. Creditors
3. Suppliers
4. Employees and staff
It is important since the proposed business may conduct transactions with
them later

The executive summary must cover at least three pages but must not go
beyond five pages
Is either too short or too long may discourage the reader to continue
reading.
 ENVIRONMENTAL ANALYSIS

• A strategic tool that helps determine the external and internal factors
affecting the performance of the business. These factor may be political,
economic, social, or technological in nature.
• May consist of at least 20 pages including the graphical representations,
stables, and computations
• It is considered as the heart of the business plan.
Since the business that you intend to open 9in this entrepreneurial course is considered small
in terms of capitalization, the industry analysis will focus mainly on the consumers and
competitors. The presence of the consumers after all, is the ultimate reason for the existence
of any business endeavor.

In todays competitive business environment, an environmental analysis is ready a necessity. It

is perceived as the basic element for business survival. It may consist of global analysis,
societal analysis, and industry analysis.
• A common mistake in this section is describing a business entity that operates in the global
environment because a global analysis evaluates the business trend in the worldwide
market. As a future entrepreneur, you should not devote the whole section of the global
analysis by simply describing the business trends, for example, in the whole Asian region, in
European communities, or even in mainland USA. Remember that it is not the business
that has the most significant bearing on the global analysis but rather the possible business
opportunities or ideas that the global business trend offers.
• The trend in the global market is the result of what happened in the past, while a possible
business idea is the expected event that may happen in the future.
• Investors are more interested in what will happen in the future
• Global trend simply acts as an indicator of any favorable sign for a business idea,
however there is a direct relationship between these two concepts. Once the world market
is properly described, the business opportunities that the global trend provides must also
be described. The reader, therefore, must be convinced that it is worth to exploit the
business idea or opportunity based on the global business trend.
 2.Societal Analysis
• Dff. Variables affecting the societal environment
1. Political forces
2. Economic forces
3. Socioeconomic forces
4. Technological forces
5. Ecological forces
6. Legal forces
• Societal analysis – must tell how the environmental forces affect the proposed new
business and great their effect are.

Assuming that you consider the interest rate and disposable income as economic variables
that may affect on the proposed new business, the description of the analysis may appear as
follows;
Economic environment. The prevailing interest rate by given by most commercial and
industrial banks ranges between 10 and 12% and is expected to increase to 15% with in a two
year period because of the new monetary policy of the Bangko Sentral ng Pilipinas (BSP). The
move of the BSP has a substantial or very high effect on the financial operation of business
that have high financial leverage. However, since the start up capital requirements of the new
business will be funded solely by the owners, the interest rate may appear to have a low effect
on the proposed business.
 According to National Economic Development Authority & National Statistics Office
The disposable income of Filipino consumers has substantially increased which has been
attributed mainly to new salary rates of all employees both public and private, coupled with
the high remittances of overseas contract workers. It is expected that the remittances will
continue to increase at the rate of 10% for the next 6 to 8 years. This present trend on the
disposable income may appear to have a very high favorable effect on the operations of
new businesses.
o Basically involves the three important related tasks as follows;
1. Conducting a critical evaluation of the forces in the industry that affect the proposed business
2. Evaluating the probable position of the business in the industry
3. Determining the most appropriate strategy that may adopted by the proposal business
 Conducting a Critical Evaluation

• The most delicate, tedious, and difficult task in industry analysis.

• There are some business plans that do not even show any indications that a critical analysis
has been conducted but rather, the evaluation