How To Prepare A Management And Oranizational Plan
The quality of the people determines the success of your business. No matter how exciting the business concept is, without the right people in the right places your business is doomed to failure. I know, it's a bold statement but it's true.
It is for this reason a lot of business plan analysts and investors base their investment choices almost entirely on the strength of the people involved in the enterprise.
Most business plan reviewers are reluctant to make any kind of commitment to a venture unless they are comfortable with those involved in it. Why would they? An investor wants to know that you and your team has the right stuff to turn a profit.
If you or your team doesn't have the necessary experience, chances are that the investors will not go forward with a project . Success in generating the interest of reviewers and the ultimate success of the business often depends on effective staff and organization.
It is for this reason, investors and funding agencies are likely to review the management portion of a business plan before they read many other sections. Personally, it's the first thing I look at when I'm reviewing a business plan. I must be confident knowing that the owners or board of directors know their business.
As a business plan reviewer, I look at this section thoroughly, carefully scrutinizing the qualifications of the people behind a business. Management has to have the necessary experience to run the business and not only that, the internal structure makes maximum use of the talents of the team members.
So, if you are preparing your business plan for financing purposes, you need to take particular care in crafting your management section. Even if you are developing your business plan for internal use, an honest evaluation of your key employee's strengths and weaknesses will help you make the best use of your management team.
Many ventures ultimately fail because the proper talent has not been assembled. Individuals with strong technical backgrounds might ignore the importance of including on a management team people with the appropriate business background, and vice versa.
A word of advice. Don't be shy about boosting you and your team up with this section. You want to leave no doubt in your reader's mind that you and your team know the business and have the experience to go forward. Success in generating the interest of business plan reviewers and the ultimate success of the business often depend on effective staff and organization.
Therefore, when you are developing your management plan, begin with an objective assessment of the company's requirements. Based on these assessments, the composition of the rest of the company may be defined. A number of questions need to be addressed:
What will management be doing? Will they be directly involved in day to day operations of behind the scenes
- Do they possess the skills necessary for their specific jobs?
- Do they have a record of success?
- Do their personalities make them effective members of the team?
- If they have supervisory responsibility, are they able to direct and motivate employees effectively?
- Will responsibilities and tasks be sharply defined or will a more flexible approach be needed?
When your are completing your management plan, the following issues must be treated:
One of the most important parts of the business plan, and certainly the most important part of the personnel plan and organization section, is a presentation of the backgrounds of those individuals expected to play key roles in the initiation and operation of the venture.
This group might include the entrepreneur (s), investors, members of the board of directors, key employees, or almost anyone who will have a significant impact on the company's ultimate success or failure.
Management Structure and Style
How will you actually run your company? How will decisions be made? What are the lines of authority? How do you want employees to feel about the company? What voice do employees have when company sets out policies and goals?
Policy and Strategy
The business plan should include a statement as to how employees will be selected, trained, and rewarded. Such a background can be important for business plan reviewers to give them a feel for the company's style. A brief reference to the type of benefits and incentives planned may further help define the company's spirit.
Advisors or mentors are individuals or friends who are not involved in your day to day operations but can be relied upon for advice and insight into matters such as marketing, business planning, financial matters, and personnel.
If you have a small company with no employees, you will have to outline your strongest attributes. The importance of your involvement should be evident. You want to convey to your reader that you have the necessary management skills to carry out your business in an efficient and effective manner.
When I review a business plan, I look very closely at the management of the owner (s). I want to make sure that they have the necessary management skills to handle any problems that they might incur.
In you management plan, outline the attributes of you managers, as follows:
State the specific positions held and job responsibilities that directly relate to the current position. Outline the skills and talents of the manager and how they directly relate to that position.
Include the education of the managers and how they will be transferred to the position. Always play up the education of the manager and, this is important, how that education will directly affect the position. Don't include any irrelevant stuff.
If you are the only one involved, play up your education levels to the management of the business.
Describe the individuals best attributes in a business setting, including traits such as the ability to motivate others, industry knowledge, and financial capabilities.
If there are any weaknesses in the management, state what they are and have a management plan in place. I like to see this if there are weaknesses in management. For example, let's say the owner has loads of experience but is lacking in the management area, I want to see a business support plan that outlines how this individual is going to improve his/her management skills.
A well rounded management team with business skills across marketing, accounting, and operations is the ideal solution, but not always realistic for a small business.
This section is needed to outline how you are going to manage your business. Business plan reviewers want to know who's in charge of what part of the operation and how qualified they are to carry out the operation.
The reviewer must figure out whether a business has at least some managers with knowledge of the type of business in question.
Whether the management skills complement each other is also an indicator of how a company will handle decision making of key issues. Succession plans for managers are a good indicator of future continuity of business performance.
If the business has one manager, the reviewer considers whether the duties of the business are too diverse to be handled by one individual.
If you are a sole owner/manager, show that you are able to handle the important functions that relate to the operations of the business.