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Creating Your Business Plan: Organization & Management

From the Small Business Administration

This section of your Business Plan should include the following: 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.

Individuals reading your business plan will want to see answers to important questions including who does what in your business, what their backgrounds are, why you are bringing them into the business as board members or employees, and what they are responsible for. A detailed description of each division or department and its function should be outlined.

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. 

WHAT TO INCLUDE IN THE ORGANIZATION & MANAGEMENT SECTION…
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. To a potential investor or employee, that information is very important. 

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.

The following important ownership information should be incorporated into your business plan:

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: