The management team is a section of your business plan that most often follows the Introduction or Company Background. If your business has been operating for a while, the Management Team section would likely follow the company background. If you have a new business, you may not need to discuss the company background if some of the business’s inspiration was discussed in the cover letter and introduction.
Your business plan will likely serve any of three situations:
1. You need to get capital so your business plan is a detailed document to explain to the bankers how that potential capital would be spent.
2. You are finding partners who can build the business with you so your business plan is your vision of what can be accomplished if everyone works together.
3. You are planning the business and – even if you aren’t going to show it to anyone – you want to be prepared for every eventuality. With these three purposes in mind, your Management Team section is ultimately meant to describe the “pecking order” in your business and (in the case of purpose 1 or 2) to answer the question: “Who is in charge?” or “Who makes the final decision?”
Bankers want to know this because they want to see that the management team is experienced and capable to handle the ebbs and flows of business. Your potential partners want to see this because they want to know who answers to whom, who is responsible for what, and how each member of the business will share in the windfall (or downfall) of the business. You want to make sure this section is detailed, even if you’re a sole proprietor, because it will help you to identify your strengths and weaknesses (and account for them) and anticipate and plan for future growth (rather than hiring your first employee and then having to decide “Okay, I’m the boss but you’re in charge of this and this and this”).
Your Management Team section should include:
1. Organizational chart. A sole proprietor shouldn’t just have “me” on the page, but should include the owner as well as a future anticipated organization should business grow. The organizational chart should also include a numbered order of people you anticipate hiring, in the order you plan to hire them, so that you can budget for them appropriately.
2. Job descriptions. This is a “must do” for every business whether you are starting as one person or you have partners. With partners, these descriptions help you to proactively eliminate disputes before they arise over what job should be done by whom. But as a sole proprietor, job descriptions will eliminate “on the fly” decision making when you hire your first employees.
3. Resumes. This is critical for lending institutions who want to see that their money is being given into experienced hands. You should include proof that the management team is experienced, but also try to include assurances that you are reliable and will work well together.
4. Additional resources are also good to include too. One example that you may want to include in your management team section is a list of consultants who will be significant contributors to your business. That way, even if your management team isn’t fully experienced, the bankers can see that you are being guided by someone who is.
Your business plan is your roadmap to success. Make sure each section is detailed to help you improve your odds of success.