The Small Business Executive Summary – What it is and why you need it

The Small business show episode 365 for Wednesday, February 2, 2022. Greetings folks and welcome to the small business show here@businessshow.co the episode 22222. If you do the date out that way, it's craziness. What's happening here? These are the things that I think about when actively small businessing, but usually I'm here. Small businessing sponsors for this episode include shopify.com SBS we'll talk more in depth about that shortly. For now here Small businessing in Durham, New Hampshire, I'm Dave Hamilton.

And I'm Shannon Jean. Out here in Lafayette, California. Happy and ready to talk about small business ing. Call it that because it's a verb because we know how important, because you've been, you've heard us drilling it into your brain for the last six years about how action is the most important part of small, of becoming a successful small business owner.

It's true, man. You know, you know me, even before we started the show I, I used to like to say, and still like to say if you want an idea to be worth a hundred bucks, write it on a hundred dollar bill. Because that, because ideas don't matter unless you do something with them. And I like ideas to be worth more than 100 bucks. Of course I generally tend to take action instead of just writing it on a hundred dollar bill.

Yeah. And I wonder if there's a timeline for that. Successful small business owners. This would be a fascinating survey if you could get some accurate data of how many times a successful business owner has been approached by an idea person that wanted, you know, basically to see if I can say it in a friendlier way than, you know, ride them like a horse to get the stuff done. And there are a lot of, of people that are, have a, have an idea and also want to take action on it. Those are, those are. That's great.

That's different. That's right.

Totally different.

Yeah.

Those people I respect and, and I admire them and they usually become successful business owners. The ones that are here I have this idea, you run with it and I'll split it with you kind of thing though that's. It doesn't take long to where you can identify those people but you got.

To suss them out. I like it's, that's one of the reasons I love your idea of a working agreement as the first project of a business because putting that together and at working agreement we'll link to it in the show notes. But the idea is you just spell out what you're gonna do together, what the business is gonna do, what you're each going to contribute. And it's a living document. You collaborate on building it. And the beauty is that collaboration is a great litmus test.

It's a test. It's a test and it's amazing.

People fail it.

I, I, you know, I have the, the kind of framework laid out, and I'll be like, hey, that's a, oh, that's an interesting concept. Okay, let me put together our, you know, you have a call, a phone call, typically, or a meeting, and then you, you know, put your ideas, you know, down, and then you, you kind of create this working agreement. It's not a contract, it's just a, hey, I recognize you. We're going to do this. I'm going to do this part. You're going to do that part. Here's how the compensation is going to work.

Yes.

Here's how the, the ownership would work. Here are some benchmarks that we've agreed upon. Like, okay, once we achieve this, we're going to get a bank account. Once we achieve this, we're going to hire people once, all these kinds of things. But I'm constantly amazed at how many times that stops everything.

Yeah.

As it should.

I've had people that say, oh, no, let's write a business plan instead. And business plans have value. I suppose I've never experienced a scenario where they have, but I know that they must exist. Right. However, when somebody says, I don't want to participate in one way, shape or form, I don't want to participate in the creation of this working agreement I want, which is because it's a commitment. Right. Like you said, you're putting things in there, you're setting goals, you're being realistic about it. With business plans, the ones I've seen created especially for small businesses, get this pie in the sky thing. I mean, I had this one business plan that somebody created with a business I was a part of a number of years ago. And they built it all out. They're like, oh, here's the money we're gonna make. So now we should start paying ourselves ten grand a month based on the business plan. And it's like, we're not generating any revenue. Where's that money gonna come from? And they did not have an answer for that question. They were coming from corporate America. This was like their first foray into small business. I was like, where's the reality in this? Like, dollars don't just fall from trees. You got to make It, Yeah.

And all along with this working agreement concept. And if you, you know, if you go up to BusinessShow Co and search for working agreement, I put a link.

In the show notes too.

Perfect. And you can hear episodes where we've, we've discussed this at length. But it, the whole thing is a test. Okay. We're going to do this thing. Who, who's going to write this agreement? I always do it. That's fine. I have this template but I send it off. How long does it take for someone to get back to you?

Yeah.

Is it, are you chasing them down? Like, hey, did you get that? Is it days before they respond? Weeks before they respond? Because that's what's going to happen when you go into business with them. If you go into business with them. If you want time, you know, like I, I, you know, like to move quick. So even if you need some time to go over it, it's nice to get, hey, I got this. Thank you so much for putting it together. I'm reviewing it. I'm going to get back to you by Friday or whatever. You know, all those things are little indicators of how your relationship is going to work and man, it is terrific. And when it works great, it's wonderful. I've built great businesses that all started with a simple two page working agreement that we then morphed into a partnership agreement.

Yeah, that can be the foundation of your. Yeah, your partnership agreement, your llc, whatever it is.

Yeah, yeah, yeah, it's great. So check it out up there. And we're going to talk about another type of document that I really like. It's called the executive summary. It's going to talk about, we're going to talk about why I think you should write one, how, what goes into it and the benefits of doing that. So we're going to do that today on the show, right?

Yeah, we absolutely are. In fact, we're about to do that. The one thing that I want to do before we do that is talk about our sponsor for this episode. If that works for you.

Yeah, let's do it, man.

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And it sounds really formal and maybe that's a problem, maybe we should come up with another name for it. But I mean, as I talked through some of these points here, I'll tell you how I do it and you'll realize how it's not formal at all. So executive summary, right? It's a new year, we're all hustling, moving forward, all this kind of stuff, dealing with problems, solving things, looking at opportunities. But it's also time to look back. And it's even better if you can do this like on a quarterly basis. But let's just say you haven't. You've never done one of these before. Let's talk about it like that. It's also really good to do the executive summary in as it relates to your. If you're a corporation or an LLC and you need to create notes, also known as, you know, company minutes, from an annual meeting requirement, this. It ties in really well. It gives you some great content to use. It's basically just a narrative and a timeline of important events that occurred in your company during the past 12 months. And like I said, it is easier to do this on a quarterly basis. Here's how I do it. I actually just keep the notes app on my. I got on my phone, on my computer, use a Mac, and I just typed in this one note all year long. Hey, this. Oh, I should put this in my executive summary. Oh, I should mention this. Oh, I just leased this thing, I bought this forklift, we hired a new general manager. Whatever. Just little. I've just put one little sentence and then, you know, every three months, it's great if you can sit down and just kind of formalize a little bit more. But if you can't, just do it at the end of the year over the. I try to do mine between the break between Christmas and New Year's. I'm usually sitting in a cabin somewhere Ideally, surrounded by snow and relaxing. And I can kind of put my thoughts together. And when you're writing it, I think the first thing to ask you is who's going to read it? Because it takes some nuance depending upon if you're just going to write it for yourself. Okay, that's one thing. And maybe just doing it in your notes is enough. Just something to look through. Because I want you to save this. Because you're going to look through it again next year and compare. And that's when it gets. The more you get these. This stuff together, the more it, it helps you because it becomes part of your story. Right? Your origin, how you got started, the problems you solved in the first few years, all that. It's great to look back. It's like looking back at memories and photographs of your kids as they grew up. Right? But we all know way more important than your kids because it's your company.

Hey, kids.

Yeah, exactly. But. But you know, if you're writing it for yourself, that's one thing. If you're writing it for a banker or you're an accountant, business partners, investors, and maybe even you're writing it to share with your employees and have them give you some input on it. It's all the same kind of content, but of course you need a little nuance based on who's going to read it. So adjust as needed. But your basic content is going to be the same. Here's what I like to put in there. Things that are happened.

So I want to get into the nitty gritty of it. I had always, when we'd had this conversation before, I had come away with everything from a big picture, everything you just said, all the stuff that has happened over the last year. But one of the things that we've talked about in years past, and maybe you're about to share this as something that should be in there too, is what are your plans for this year? Right. Like, looking forward. Here's what we've done, here's what we're looking forward. And I realized that might be the way to lean on this, to embrace that and use that as the catalyst to creating the first one of these. Right?

Yeah, I like that idea. You mentioned that to me and I was like, yeah, that's a good way to look at it because it's more engaging. You know, hey, this is what we're working on. And getting that first one is important because then next, then it becomes a.

Habit, then you're fine.

Easier.

It's way easier.

And there's Carryover, right? Oh, we got this contract, and it took this month or this many months to get in place or doing X.

Look, what we thought we were going to do. Here's what we actually did, right? Because that stuff happens, and that's totally fine. But the way that I approached this, and I did it not just for myself, but definitely for myself because I'd never done one of these before. We talked about it every year. You have this. It's a great idea. I never bothered to do it. And I wanted to. And then with one of the businesses, I really wanted to dig in with my partners and do this. And so in order to incentivize or to catalyze all of us, me included, but also my partners to do it, I came up with a way to frame it. And the way I said it was okay. And now, now, remember, you know, last year was, you know, knee deep in the pandemic. I don't know if we're still knee deep in it or not, but certainly looking back, I can say last year was knee deep in it. I don't know what I'll say a year from now. It was knee deep in the pandemic. And I said, all right, fast forward five years. This is. This was our assignment to. To. To which we were both accountable to one another, you know, with my partner. And I said, fast forward five years, and you're at a cocktail party and someone asks you, man, how did you get that business to grow so well starting in the middle of a pandemic? And this is your answer to that story, right? Or this is your answer, which now becomes your story. And I know, because you've taught me that once you've told a story, it's way easier to go and then make it happen. Because you know, the story that you want to tell in five years at this cocktail, and you're convincing yourself, you're convincing yourself. Absolutely.

It's a trick.

It's a total trick. Yeah, well, you know, I always say somebody, not me, but I latched onto this decades ago. I heard somebody say you wake up with a finite amount of discipline points to spend every day.

Oh, yeah.

And so the trick is to figure out how to get the stuff done that you don't really want to do without spending any of those discipline points, because once you've spent them, they're gone, Right? You don't get to dig more up. Once you've done the things you don't want to do, you're not going to be able to do any More things you don't want to do. And certainly you can get better at discipline, but the trick is not needing them in the first place and telling the story that you. Writing the story that you want to be able to tell is the key to that or one key to that. So this was the assignment. And as soon as I did that, I was like, oh, man, now I'm ready to go. And I started digging in and writing the thing, and my partner did the same thing. And it was a really valuable exercise for us. Not only did we. We didn't really focus as much on the past for that particular exercise. It was, again, far more about the future. But there was enough of the immediate future in there because it was going to be like, all right, well, this. The origin of this story was, you know, we had this business going, pandemic hit. What did we do to really, like, what were the changes we made to really rock this thing forward? Right. What opportunities did we capitalize on to do that? And it made writing that so much easier. And now this year, it's like, oh, well, I have that. I can just sort of build on it. And now it's not a new thing. Because starting new things is always the hard part. Right. Like, I'm a terrible procrastinator when it comes to starting new things, so I have to trick myself into starting something. And then it's good to go, because now it's habit, it's safe and all of that stuff. It's not new, it's not scary.

No, I think it's great. And I love that way to do it. And it goes both ways, because once you create this summary, next time you have to tell your story, especially if you have to document it. If you're going to get a new credit line or you're going to sell your company or bring on an investor, whatever, you already have all this content there to go pick and choose pieces out of it and present it to somebody. It's really powerful. And you don't have to sit down and, okay, well, when did we do this? You've got all this eventually years worth of data that you can go, oh, that was worth talking about. This is what I'm creating for this audience. You've got it in front of you. It's great. It's really powerful. I mean, it's basically like a journal for your business, right?

It's totally a journal.

That's right. Yeah. And I don't care how you do it, don't do it in the notes app, record it you know, use a service like that, Otter AI or use the Apple Transcription thing and record it on your phone. Just do it because it's going to help you down the road. It may take a while to get this kind of content up, but. Or created, but once you have it, it's very easy. I just had to dip back into the last three years of an executive summary, notes from a business that I'm working on selling. And it's like, okay, I have to create this narrative. Because when you're selling a company, yeah, the numbers are obviously critical and the foundation of what you're trying to do, but there's a lot more to it. The reputation, the credibility, the opportunity, the amount of time that you've put into it, all this kind of stuff. And I was able to just dip in and tease out little bits. I mean, just cutting and pasting sentences. Oh, yeah, hey, look at this. And we added this and we got to, you know, 275,000 followers and we did this this year. And all that stuff helped me create a document that was just, it was so much easier to produce. So there's a lot of ancillary benefits to doing this other than just looking back and go, what worked and what didn't.

Yeah, for sure. Yeah. No, yeah. Getting something together is all you need to get started.

Yes.

It doesn't need to be much formal or informal.

It doesn't matter.

Yeah. And if you're sitting here thinking, oh, crap, I, you know, I didn't take notes all year, so I'm not going to remember everything. That's okay. Just write down. Yeah, well, a. Write down what you do remember. Yeah. And then that will teach you what you want to write down as the year progresses for the next one. That's it.

Yeah. What it is too is if you're a good data miner, if you know places to go look for important things, it helps you. And I can tell you where I go to find the data for this stuff. I use Slack, I look at my email, I look in the notes app, because I'm constantly using that. I look at my accounting software and I'm looking for like big things, anomalies. Whoa. Why was this month so much better or so much worse? What happened? Oh, we spent X, you know, that kind of thing. Meeting minutes, if you got somebody, you know, if you're meeting with employees and somebody's taking notes, you should be saving that stuff. HR reports or hiring info you could talk about. Oh, we went from, you know, 40 employees to 60, all that kind of Stuff. Another place I really like to look. Like sometimes I like to look, sometimes I don't. But is your bank statements.

I was just going to say when I, you know, like I said, we have this. We did sell, obviously, we sold Mac observer recently. We have another business that we don't really. I don't really talk about it much on the show here, but we are putting that one up for sale. And so it's required a lot of. We're working with an M and A firm, as I think I mentioned back in the fall, and it's required a lot of digging and recasting of financials, but it just has me in there going back a few years. And, yeah, they tell a story, or at best, they remind you of the story. Like, oh, I forgot about that, man, that seemed like a really big deal at the time when that particular partner dropped us or, you know, whatever. And it was like, wow, look at. Look at how we survived that. Like, I'm going to tell that story. Right. You know, it felt awful that day that we got that note from them, but look how far we've come. It's no big deal.

It can be really helpful.

Yeah.

Also, you know, there's that old saying is you should always be running your business, like you're going to sell it tomorrow. And there's a lot to unpack with that statement. And I think right now, because I'm going through this as well, getting a company ready to sell it, we could do a whole episode on that. We probably should.

We should. Because I. I've said that. I've said that many times until we actually sold. I don't count what we did with deals on the web, to be honest. We didn't. I didn't know enough to know. I didn't to learn from that experience what I needed to learn, to be perfectly frank. That's right. But I would agree. But after having gone through what we went through with Mac observer, selling a business that was not prepared to sell it, now I am fundamentally changed because I see things differently. It's like, oh, why would I want to do that? This would be much better. I'm a better delegator now because I'm finding myself just habitually delegating more. It's like, oh, that's new. Like, I'm you. I'm a control freak. Right?

Right.

Like, you know, I want to do it myself. And it's like, no, I'll just hand that off to this person. It's like, oh, why is that happening? And I think oh, well, it's because I, I learned about that, you know, and that's a good thing. Yeah. So it's easy to say, but I like, yeah, we should do, we should do an episode on that.

Yeah, we will. I think it's important and it's timely for both of us. Yes. So a few more things on this executive summary, you know, is what, what to put on it. Just some examples if you need, you know, some starting points, you know, we talked about, you entered into some new contracts or a contract ended for you, somebody pulled out whatever large purchases or leases, you know, if you leased a new fleet of trucks, if you bought forklifts, if you moved your building, all that kind of stuff. Bankers love to read that. I don't know why they want to see you moving and that kind of stuff. So it's real important. Employee changes, you know, new managers, staff, whatever you can do, new departments, new products or services that you added, obstacles that you overcame or encountered that you're still working on. Really good to put that down. And maybe personal changes in your own life that have impacted the business. Right. Oh yeah, you have a kid. So now you're thinking, wow, I can't work until 8 o' clock every night anymore or whatever those are. Things are great and they're wonderful to come back and they, and look at, they can really help guide you down the road once you do it. And you know, some, some people are just really data driven and they just want to do, you know, here's a date, June of 2021. This, this that I like to do that too. But I also like to have a narrative because it kind of gives a snapshot of where I'm at and I like to go back and read it. And we've talked about this. I had notes from executive summary discussion we had back in 2015 and I started looking at those notes, I'm like, oh, yeah, I was in a different place then, that's for sure. So maybe an introduction about how the year went and then you could jump into a month to month breakdown of events if you want. And that's why I do like starting it after the end of a quarter. You could talk about it. Maybe you do it monthly, maybe you do it just ongoing on a stream of consciousness in that notes app, like I talk about.

Yeah. And it doesn't have to be, you know, I, in my example to catalyze us doing this, which worked, it was what am I telling to someone at a cocktail party? So that's going to be a different Set of detail, a different level of detail than I might write if I, if it wasn't going to go to anybody else. Right. You know the narrative. Yeah. So, you know, so when you're doing this, treat it like you're talking to your therapist. If you need to pick an external person, a confidant. Right. Your best friend, your whoever. And maybe you do share this with your circle of advisors, right?

Yeah, I think so.

And that wouldn't be a bad thing. In fact, if you've got a group of people that you're using as advisors, maybe you write this for each other and, and you talk it through and that's not a bad way to go. Yeah.

How about delegating it to your managers and having them write a summary for their department or their division or whatever. And so it immediately gets you off the hook and requires them to give you some information. And you can, again, it can be as informal or formal as you want, but then you can combine those things to build an overall company summary of how it went. They're probably, you know, or I guarantee you they have a different outlook on the way things went, of course, for them, or they're, you know, they're, you know, they're drilling down into the, the micro instead of the macro. So I think that's another, you know, good way to do it. I like to start, I always like to read the previous year stuff before I jump into to doing the new one. So once you have some of that data, it's, it's really great to, to be able to look and helps you kind of recall things or, you know, things that are in the process. And then lastly, we've talked a lot about, you know, I'm a big believer that small business owners are really under, under underrated and undervalued and I'm biased, of course, but there's not a lot of people patting us on the back. You know, you're the one handing out compliments and, you know, telling people they did a good job but, but rarely, you know, you're, you're getting that as a business succeeds. That's your rubric, right? Yeah, but we talked a lot or we've talked before on the show about creating a success list of what has been successful, whether it's today, this week, this month, or this year. Everything from the fact that you're listening to this podcast, which is, should be on your success list because you're learning new things to, you know, benchmarks you and achieve. But we'll put a link in the show Notes about a blog post we did and how to create a success list and why it's important to pat yourself on the back and to recognize the things you're getting done, even if they seem not as important. I guarantee you, as you move through your small business career and you just knock things out, those things are very important. They build to your eventual success. So check that out up at BusinessShow. Cool.

Yeah, you're hacking your brain with these things. You're, you know, reminding yourself of your successes. It fuels your next success because you'll definitely remind yourself of your failures. Like, and you will be reminded of them.

Well, you're gonna. We. You go back. You should also go learn what a failure resume is, which we've posted and I've posted examples. I have one up on my website@shannonjean.com you can read my failure resume. And I read it because sometimes I get. Get a little cocky and, you know, yeah, it can propel you forward to be like, oh, I'm succeeding. I'm knocking these things out. But sometimes you have to read, you know, your story a little different. Go, oh, yeah, but I failed at that. But boy, I got through it, you know, that kind of thing. So there's a lot to this hacking your brain thing. I think that's a really good way to. To wrap this up.

Yeah. Yeah, for sure. I like it. I like it. I. I have not written my. My executive summary this year, but. But I will. I always. I always. I want to get through. You know, I had to get 1099s out and all that crazy stuff. But that's.

January's always nuts.

Yeah, January is always nuts. Yeah, exactly. Yeah. But.

Yeah. Well, we'd love to hear from you. Feedback businessshow Co. Tell us what works for you or go to BusinessShow Co Facebook and that'll reroute you over to the small business support group and share your story there. We would love to see you there.

We'd love to see you there, in fact. Yeah, we got to do better with that this year, Shannon. That. That could be great. Talk about a failure resume. I. I certainly put that on our on hours.

It's hard to get engagement. It's very tough.

Yeah. Well, I think we have to be the first to be engaged, and we are not. Yeah, I'm, you know, I think that's just how it is. Yeah.

Up there, I would agree.

Yeah. We'll figure it out. If you have ideas, though, if you want to help us with that, let us know. Feedbackus show we'd love to. We'd love to make it a family event, a family effort. So that's what I got. You got anything else for today, man?

That's it, man. That work on your executive summary? Send us, you know, a link or send us an email with stuff you come up with. Feedbackusiness show.

Keep living that charm life. See you next week.