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Define Organizational Structure & Management – How to Write a Business Plan : Part 3 of 8
THE COMPANY DESCRIPTION
The next section of your Business Plan should contain a description of your company. Be sure to cover the following topics:
• Why you started the business.
• The nature of your business — what needs your business provides solutions for and how.
• What will make your business successful.
• The advantages your business has over the competition.
ORGANIZATION & MANAGEMENT
Following the Company Description is the Organization and Management section. You must show potential investors and banks that you are organized and ready to do business. If they don’t see that, they won’t invest.
Map out the structure of your business. Provide a brief description of each position within your business, from CEO to mail room clerk, and indicate who holds that position. If you don’t have a staff yet, but intend to hire one when you have the finances available, then describe the staff positions you desire to fill.
Next, you need to provide information about the distribution of ownership of the company. First, identify your business entity. Is the business a sole proprietorship, a partnership and limited liability corporation? If you have yet to determine this information, and aren’t sure which entity to choose, refer to a previous four part post series Which Business Entity is Right for You?
Name each owner in the business, their percentage of ownership and the form of ownership they have (stock holder, partner, etc.). Additionally, describe the extent of each owners’ involvement in the daily practices of the business. And, include information regarding the business’ outstanding equity equivalents and common stock.
While you may have a number of people on staff, you only need to provide more detailed information on two main groups: the owners/managers of the company and the Board of Directors (if you have one).
For the owners/managers, in addition to their name, provide the following information:
• Description of position held and the responsibilities and authority of that position
• Education, skills and achievements
• Employment history
• Community involvement
• Industry recognition
• Amount of time with the company and compensation
• How that person contributes to the success of the company
For the Board of Directors, provide the following:
• Name and position
• How he/she is involved with the business, outside of board meetings
• Background information (education, experience, etc.)
• Contributions to the company — past, present and future
While simply obtaining a resume from each owner, manager and board member will suffice, you will need to contain these resumes to the Appendix section and use the Organization and Management section to summarize the important points covered above.
Tomorrow’s post will cover Marketing & Sales Management and the Service/Product Line.
Business Plan – Part 1: Overview
Business Plan – Part 2: Market Analysis
Business Plan – Part 3: Define Organizational Structure & Management
Business Plan – Part 4: Define Strategies, Service & Product Line
Business Plan – Part 5: Funding Request & Financial Information
Business Plan – Part 6: Executive Summary, Table of Contents and Appendix
Business Plan – Part 7: Common Business Plan Mistakes
Business Plan – Part 8: Obtaining a Business Loan
Related Small Business Buzz Posts:
Overview – How to Write a Business Plan : Part 1 of 8
Executive Summary, Table of Contents and Appendix – How to Write a Business Plan : Part 6 of 8
Funding Request & Financial Information – How to Write a Business Plan : Part 5 of 8
Market Analysis – How to Write a Business Plan : Part 2 of 8
Common Mistakes – How to Write a Business Plan : Part 7 of 8