Organization and Management
This part of your business plan includes:
- your company’s organizational structure
- details about the ownership of your company
- profiles of your management team
- 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?
I understand that you may not have a board of directors, as such. Perhaps you are the "Board" as well as the management team. My point is don’t be put off by the language. It doesn’t matter if you are just a one person business. You still need to specify who does what. That is, you want to think about your divisions of business and how each part of your business gets done what it needs to do.
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)
- 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?
Organizational Structure
A simple but effective way to lay out the structure of your company is to create an organizational chart with a narrative description. This will prove that you’re leaving nothing to chance, you’ve thought out exactly who is doing what, and 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. Drawing out an organizational chart is no less important for a one person business than for a larger company.
Ownership Information
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)
Management Profiles
Experts agree that one of the strongest factors for success in any growth company is the ability and track record of its 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 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.
Board of Directors’ Qualifications
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