FREE online courses on Business Plan Basics - The Essential Elements of a
Good Business Plan - Part 4 - Organization & Management
This section should include: your company's organizational
structure; details about the ownership of your company; profiles of your
management team; and the qualifications of your board of directors.
Who does what in your business? What is their background and
why are you bringing them into the business as board members or employees? What
are they responsible for? These may seem like unnecessary questions to answer in
a one or two person organization, but the people reading your business plan want
to know who's in charge. So tell them. Give a detailed description of each
division or department and its function.
This section should include who's on the board (if you have
an advisory board) and how you intend to keep them there. What kind of salary
and benefits package do you have for your people? What incentives are you
offering? How about promotions? Reassure your reader that the people you have on
staff are more than just names on a letterhead.
A simple, but effective, way to lay out the structure of your
company is to create an organizational chart along with a narrative description
of what the chart means. This will prove that you're leaving nothing to chance.
You've thought out exactly who is doing what. There is someone in charge of
every function of your company. Nothing will fall through the cracks, and
nothing will be done three or four times over. To a potential investor or
employee, that is very important.
This section should also include the legal structure of your
business along with the subsequent ownership information it relates to. Have you
incorporated your business? If so, is it a C or S corporation? Or perhaps you
have formed a partnership with someone. If so, is it a general or limited
partnership? Or maybe you are a sole proprietor.
Important ownership information that should be incorporated
into your business plan includes:
-
names of owners
-
percentage ownership
-
extent of involvement with the company
-
forms of ownership (i.e., common stock, preferred stock, general
partner, limited partner)
-
outstanding equity equivalents (i.e., options, warrants, convertible
debt)
-
common stock (i.e., authorized or issued).
Experts agree that one of the strongest factors for success
in any growth company is the ability and track record of it's owner/management.
So let your reader know about the key people in your company and their
backgrounds. Provide resumes that include the following information:
-
Name
-
Position
(include brief position description along with primary duties)
-
Primary responsibilities and authority
-
Education
-
Unique experience and skills
-
Prior employment
-
Special skills
-
Past track record
-
Industry recognition
-
Community involvement
-
Number of years with company
-
Compensation basis and levels (make sure these are reasonable - not
too high or too low)
Be sure you quantify achievements (e.g. "Managed a sales
force of ten people" - "Managed a department of fifteen people" - "Increased
revenue by 15% in the first six months" - "Expanded the retail outlets at the
rate of two each year" - "Improved the customer service as rated by our
customers from a 60% to a 90% rating.")
Also, highlight for the reader how the people surrounding you
complement your own skills. If you're just starting out, show how each person's
unique experience will contribute to the success of your venture.
The major benefit of an unpaid advisory board is that it can
provide expertise that your company cannot otherwise afford. A list of
well-known, successful business owners/managers can go a long way toward
enhancing your company's credibility and perception of management expertise.
If you have a board of directors, be sure to gather the
following information when developing the outline for your business plan:
-
Names
-
Positions on the board
-
Extent of involvement with company
-
Background
-
Historical and future contribution to the company's success
