When developing a business plan, the “Management” section describes your management team, staff, resources, and how your business ownership is organized. This section should outline not only who is in your management team but also how each person’s skills contribute to the final outcomes of your business. In this article, we will explain exactly how to structure and highlight your management team.
Ownership Structure
This section outlines the legal structure of the company. It may be just a single sentence if your company is a sole proprietorship. If your company is a partnership or corporation, the section may be longer. You want to ensure that you explain who owns a percentage of the company.
Internal Management Team
The internal management section should describe the relevant management categories for your business, identify who will be responsible for each category, and then include a brief profile highlighting each person’s skills.
Core business categories such as sales, marketing, management, and production operate in many small businesses. If you have employees in your company, you will also need a section for human resources. You may also find that your company requires additional management categories that fit the unique circumstances of your business.
It is not necessary to have a separate person responsible for each category; often, some key managerial individuals take on more than one role. Identify the key managers in your company and explain the functions and experiences of each team member. You may want to present this as an organizational chart in your business plan, although a list format is also appropriate.
In addition to this section, full resumes for each member of the management team (including your own resume) should be included. Follow this with an explanation of how each member will be compensated and the benefits package they will receive, and describe any profit-sharing plans that may apply.
If there are any contracts directly related to your management team members, such as employment contracts or non-compete agreements, you should include them as an appendix to your business plan.
External Management Resources
Although external management resources are often overlooked when writing a business plan, effectively utilizing these resources can be the difference between success and failure for your managers. Think of these external resources as support for your internal management team. They provide your business with credibility and an additional pool of expertise.
Advisory Board
An advisory board can increase consumer and investor confidence, attracting talented employees by demonstrating your commitment to company growth and bringing diverse contributions. If you choose to have an advisory board, list all of the board members in this section, including a resume and all relevant specialties. If you carefully select your board members, the group can compensate for unique areas of expertise that internal managers may lack.
When choosing your board members, look for individuals who genuinely care about the success of your business and have the patience and time to provide reliable advice.
Former executives or general managers, other successful entrepreneurs, and/or suppliers can be good options for the advisory board.
Professional Services
Professional services should also be highlighted in the external management resources section. Describe all external professional advisors that your company will use, such as accountants, bankers, lawyers, IT consultants, business consultants, and/or business coaches. These professionals provide a network of advice and support outside your internal management team that can be valuable in decision-making and making your new business successful.
Human Resources
The last point to address in the management section of your business plan is your human resources needs. The trick to writing about human resources is to be specific. Writing “We will need more people when we start” is not sufficient. Follow this list:
- Identify
Number of employees your company will need at each stage and how much they will cost. - Specify exactly how you can meet your company’s human resources needs. Will it be better to have employees or should you work with contracted workers or freelancers? Do you need full-time employees, part-time employees, or a mix of both? Identify your hiring requirements, including a description of the specific skills that your workers should possess.
- Calculate your labor costs.
- Determine how many employees you will need and how many clients each employee can serve. For example, if one employee can serve 150 clients and you expect 1,500 clients in the first year, your company will need 10 employees.
- Decide how much each employee will receive and calculate the total salary costs for all your employees. Add the cost of worker insurance (mandatory for most businesses) and the cost of any other employee benefits, such as company-sponsored health and dental plans.
After you have outlined the points above, describe how you will find the employees your business needs and how you will train them. Your employee hiring description should explain whether there are enough local workers available and how you will hire employees.
When writing about employee training, you should include as much detail as possible. What specific training will your employees undergo? What continuous training opportunities will you offer your employees?
Even if your business plan is to start as a sole proprietorship, it should include a section on potential human resource needs as a way to show that you have thought about the employees your company may need as it grows.
Business plans relate to the future and the challenges and hypothetical successes that await. It is worthwhile to envision and document the details of your business so that the materials and network surrounding your dream can begin to take shape.
Frequently Asked Questions
What is the management section of a business plan?
The “management” section describes your management team, staff, resources, and how you will structure the ownership of your business.
What are the five sections of a business plan?
A business plan provides a roadmap outlining your company’s goals and how to achieve them. The five sections of a business plan are as follows:
- Market analysis: shows the demand for your product or service.
- Competitive analysis: outlines the strengths and weaknesses of your competitors and your strategy to gain market share.
- Management plan: outlines ownership structure, management team, and hiring requirements.
- Operational plan: outlines your business location, facilities, equipment, and supplies needed for operations.
- Financial plan: outlines a roadmap for financial success and sources of funding, such as bank loans or investors.
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Source: https://www.thebalancemoney.com/management-section-of-business-plan-2947028
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