How to Write a Business Plan – Part 4 – Organization and Management

How to Write a Business Plan – Part 4 – Organization and Management

How To Write A Business Plan

The business plan boot camp will consist of nine parts in total, each tackling a portion of the plan and the basics of how to handle its successful creation as prospective businesses look to secure funding and backing. Put together, these skills will help create a business plan that will wow potential investors.

Part 4. Organization and Management

The organization and management section of the business plan mainly serves to help your potential investors understand who will be involved in the decision-making as it pertains to your company. You’ll need to be able to answer a few key questions

  • Who are the members of your management team and what is their background?
  • Who are your board of director members and what has been their career and service experience?
  • What unique skill sets and experiences are they bringing to your company?

Your potential investors want to know who you are bringing into the company and what they will be responsible for doing. This is your chance to give them a full report that introduces them to each member of your team and the skills and backgrounds that accompany them.

There are several key elements that this section should include:

The Structure of the Organization

It is important to explain in detail how your business will be organized from top to bottom and take into account payment structures and key people. This description should include the following aspects:

  • The organizational structure of your company
  • The ownership of your company
  • Bios of your company’s management team
  • What are the details of the benefits package you plan to offer your employees?
  • Are you offering any incentives?
  • The qualifications you require for your company’s board of directors
  • Who is on your board and their bios?
  • How do you plan to keep your board members serving on your board?

In this section you can use an organizational chart along with a narrative to add extra details to the chart. It is important to provide immense detail. Potential investors need to know that you have thought carefully of each detail as you build your business. You also want those potential investors to understand all of the functions of your business down to exactly who will do what.

Make sure you include the resumes of your management team. This will provide positive and impressive information about your management team. You’ll want the resumes to include the following information:

  • Name
  • Education
  • Position in the company and detailed description of duties
  • Tenure with company
  • Relevant employment before joining your company
  • Unique skills and abilities
  • Awards (industry and community)
  • Compensation information and detailed levels of progression in company

The (Legal) Structure of the Organization

You’ll also want to address the legal structure of your startup. In this section you’ll again want to be able to answer a number of important questions.

  • What kind of business do you have?
  • Is it incorporated?
  • If it is, what kind of incorporated business is it?
  • Do you have a partnership with another person?
  • Is this a limited or general partnership?
  • Are you a sole proprietor?
  • Outline the legal structure of your business to be completely clear with the potential investor.

A solid way to present this information is to put it together in an easy to read outline. The outline should provide each item of information follow the following outline:

  • Owner names along with the percentage of the company they own, their role within the company and their specific forms of owning the company (general partner, limited partner, common stock, etc.)
  • Common stock issued to other people who are not owners (issued, authorized, etc.)
  • Equity equivalents such as options and convertible debt that are still outstanding

The Qualifications of the Board of Directors

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.

You want to give your potential investors details in this section, as well. For example, are you board members paid or unpaid? When you do not pay your board members, you are getting unique skills and advice that you otherwise don’t have to spend money on — or simply can’t afford.

Include each board member’s position on the board, extent of involvement with the company and background. You can and should include how each member will assist in the business’ future. Try to form your board of renowned, professional, established people that can add to your business’ expertise and credibility. Getting this across, like the rest of your organization and management section, should be done with care, and both intrigue and pacify potential investors.

About author

Michael Barry
Michael Barry 31 posts

Michael Barry is the Editor-In-Chief at AgeOfTheSmallBusiness.com. Currently living in Boston, Massachusetts, he received his B.A. in Financial Economics from St. Anselm College and his MFA in Creative Writing from the Stonecoast Program at the University of Southern Maine.

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