Our business plan resource guide is free to anyone interesting in learning more about effective business planning. In the following information, you'll learn the importance of The Organizational Structure section of a business plan.
In this section you will need to detail how your various departments are organized. One way of doing this is through the use of organizational flow charts, complete with brief descriptions for each job function.
"Knowing who is in charge of what is key to effective managment."
Use of an organizational chart is very helpful to all parties involved. It defines the various roles and responsibilities associated with each group or individual.
While it might appear to be a useless exercise for a business with only one or two employees, the truth is that any time you can clearly define individual accountabilities the company will benefit as a result of this communication.
Individuals reading your completed business plan resource want to know who is in charge and why each person has been chosen to oversee a particular area. They will judge the quality of the business and its chances of success, in some measure, by the background and expertise of the various people in charge.
This section also shares the legal structure of the business and details how ownership is structured. Is the business entity a C or S Corporation; a Partnership (general or limited); or a Sole Proprietorship?
Key ownership information to include in your business plan resource might include:
Make sure to include how each owner is compensated. Investors understand that each dollar paid in salary expense takes away from the bottom-line profits of the organization, so they will be looking to see that owners aren’t putting the business as risk through increased leveraging of the company’s assets.
The late Andrew Carnegie suggested in a speech he once made that the following statement would make for an appropriate epitaph for his own tombstone; “Here lies a man who knew how to get around him much cleverer men than himself.”
The great majority of men and women who succeed in business and in life, do so by surrounding him or herself with smart, eager and able associates. No man should make the mistake of thinking he needs no other person in order to succeed. We all need others to compliment or make up for our own weaknesses. No one knows it all.
You cannot lead a great enterprise; stand at the head of a board room table; or maximize your limited resources most effectively, unless you have established a network of mentors and business partners to help guide and support your efforts. You must use every business plan resource available to you.
"A strong network expands a leader's ability to succeed over a long period of time."
Each person has his talents. Just because a man can write a great book on business does not ensure that he can successfully manage others. Writing about management theory is not the same as practicing business it in the real world. Humans are complex creatures that require leadership along with clear and effective communication.
Not everyone is cut out to be the next Jack Welch, Michael Eisner or Donald Trump. In fact, each of these highly successful business tycoons would no doubt credit many on his management team and/or members of his circle of influence, as being somewhat responsible for his success.
As you work through the business plan resource process, make certain you have surrounded yourself with the most highly engaged, talented people available.
Pay high performing people whatever you must in order to gain their commitment. If they are as good as you think they are, then the upfront costs will be well worth the investment over time.
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"Leadership is the art of accomplishing more than the science of management says is possible."- Colin Powell