management and organisation business plan

Business Plan Organization and Management: How to Write Guide .

Sep 17, 2023 | Business Consulting , Business Plan , Organization and Management , Organizational Development , Strategy

Writing the Business Plan Organization and Management Section

It provides critical information for those looking for evidence that your staff has the necessary experience, skills, and pedigree to realize the objectives detailed in the rest of your business plan.

What Is the Organization and Management Section in a Business Plan?

The organization and management section of your business plan should provide details about your business structure and team. This section typically comes after the executive summary. However, some people have it further in the document after the market analysis section.

This section generally is separated into two parts. The first concerns the organization as a whole. It gives readers an overview of the company structure, which is an excellent opportunity for the reader to lift the roof off your office and peer into its inner workings. For your legal design, you may set up as a limited liability company (LLC) or nonprofit/ charity or form a partnership. It’s crucial to include this section. However, suppose you’re starting a home business or have an already operating business where you’re the only person involved. In that case, you can skip this section or show the company registration details from either the company’s house or the awarding .gov.

The second part focuses specifically on your management team and introduces readers to each member — your chance to impress them with the many accomplishments pinned to your organization’s management team.

This section may seem less important than some of the other parts of your business plan, but the truth is that your people are your business. If they’re highly competent and accomplished, the implication is that so is your business.

Of course, if you’re a sole proprietor with no management structure or any employees, this section is unnecessary other than to talk about yourself and your achievements.

The section on organization and management should outline the hierarchy, individual roles, and corresponding responsibilities. It should also highlight each person’s strengths and qualifications for their positions.

Business Plan Organization Section

The organizational section of your business plan outlines the hierarchy of individuals involved in your business, typically in a chart format. This section identifies the President or CEO, CFO, Director of Marketing, and other roles for partnerships or multi-member LLCs. If you’re a single-person home business, this section is straightforward as you are the only person on the chart.

Although this section primarily focuses on owner members, you can include outsourced workers or virtual assistants if you plan to hire them. For example, you may have a freelance web admin, marketing assistant, or copywriter. You may even have a virtual assistant who coordinates with your other freelancers. While these individuals are not owners, they hold significant responsibilities in your business.

There are various business structures, such as sole proprietorships, partnerships, LLCs, and corporations.

Detail the Legal Structure within the Business Plan Organization and Management Section

Here is an indicative list of business structures. It would help if you talked to your accountant and legal advisors to determine which legal form is the best for your business proposition.

Sole Proprietorship

When embarking on a business venture, it’s essential to consider the various structures available. A sole proprietorship is a structure whereby the business is not regarded as separate from its owner’s finances. The owner retains complete control and responsibility for the company. However, they are unable to sell stocks or bring in new owners. The business becomes a sole proprietorship if not registered under any other structure.

Partnership

When forming a partnership, it can either be a limited partnership (LP) or a limited liability partnership (LLP). One partner assumes most liability in a limited partnership (LP). In contrast, the other partners have limited liability and control over the business. Alternatively, in a limited liability partnership (LLP), all partners have limited liability from debts and actions of other partners, and there is no general partner.

Limited Liability Company

A limited company (LTD) or limited liability company (LLC) is a mixture of business structures that mixes aspects of partnerships and corporations. It offers limited personal liability to the owner and passes profits through to their tax returns.

Corporation

There are various types of corporate structures. A C-corporation enables the issuance of stock shares, pays corporate taxes instead of personal returns, and provides the highest level of personal protection from business activities. On the other hand, nonprofit corporations are similar to C corporations. However, they do not aim to make profits and are exempt from state or federal income taxes.

More information on company legal structures is available on UK.Gov and USA.SBA websites.

Describe Your Company’s Organizational Structure

This first step illustrates the positions in your organization’s employee hierarchy and how they all relate to each other.

This is usually done graphically as a guide, using an organizational chart, or “org chart” for short. People use a Microsoft tool, i.e., PowerPoint or Excel, to help.

Organization Charts typically follow a top-down hierarchy, starting with your CEO/ Managing Director in the top box at the top of the page. Lines extend down from that person’s name to boxes containing the terms of the CEO’s direct reports.

We have included an example organizational chart below for guidelines only.

Identify your business organization structure and list your team members’ strengths and skills.

Those managers then have lines extending to those who report to them, and so on, down to your lowest staff positions.

This section will give your readers a quick understanding of your management and governance structure, the size of your organization, and your lines of control and communication.

Describe your Team in your Business Plan Organization and Management Section

In your business plan’s Organization and Management section, please provide a detailed description of your team. Y ou will discuss the company’s management team, starting with the owners.

This section highlights who is involved in the running of your business and who are the support professionals. It also includes the roles and responsibilities of managers.

Suppose the company structure is a multi-owner arrangement or some other multi-owner arrangement. In that case, you’ll want to include information for every member and their percentage of ownership and ongoing involvement in the company.

It’s important to discuss how ownership interests are split, their responsibilities, what they did before securing their current position, and how they came to be involved with the company.

Here, it would help if you talked about some of your critical team members. These people are directly responsible for large portions of your business operations.

Owner/Manager/Members

Within your business o rganization and management section, y ou should introduce the team and talk about their experience, qualifications, previous companies and achievements, role in the company, and any special skills they bring with them. Please provide the following details for each owner, manager, or member of the business within your business plan:

• Percentage of ownership (if applicable)
• Level of involvement (active or silent partner)
• Type of ownership (e.g., stock options, general partner)
• Position in the company (CEO, CFO, etc.)
• Responsibilities and Duties
• Educational background
• Relevant experience and skills
• Previous employment history
• Skills that will benefit the business
• Awards or recognition received
• Compensation structure
• How each individual’s skills and experience will complement and contribute to the business’s success

Perhaps they’re an entrepreneur, business coach, exclusive advisor, or industry specialist to help you grow.

This is an ideal opportunity for companies with an Executive Board of Directors, Governance Structure, or Advisory Board to introduce them to your readers.

Executive Board

Having a board of directors is essential for your management team. Without one, you may be missing out on crucial information. This section includes details similar to those found in the ownership and management team sub-section, such as the names, areas of expertise, positions (if applicable), and involvement with the company of each board member.

Strategic Advisors

Suppose you’re looking for funding for your business or to fill a gap in your knowledge, or you may not have the funds to hire an executive board. In that case, you must inform potential partners and investors that you have a team of professionals assisting you. This includes lawyers, accountants, and any freelancers or contractors you may be working with. When listing these individuals, include their name, title, educational background, certifications, services they provide to your business, and their relationship with you (i.e., hourly rates, projects, retainer, as-needed, regular). Additionally, highlight their skills and experience that make them an asset to your team you need

Does anything else make them stand out as quality professionals (awards, past working with credible brands)?

Spotlight on the Wider Team Structure

Now, you’ve showcased the management team in its entirety. You can provide brief bios for hiring team needs or secondary members and talk at length about how the team’s combined skills complement each other and how they amplify the team’s effectiveness.

It’s also important to point out any gaps in the knowledge your team is currently suffering. Your readers will likely be savvy enough to pick up on existing holes.

Therefore, you’ll want to get ahead of these criticisms and demonstrate that you’re already aware of the positions and complementary skill sets your management team still requires and how you plan to address the knowledge gaps with future hires.

Do you need help writing your business plan o rganization and management section ? 

Every successful business plan should include the organization and management section, helping you communicate your legal structure and team.

Writing a business plan can seem overwhelming, especially when starting a small, one-person business. However, it can be a reasonably simple task. This section of the plan should be updated if there are any changes to the organization structure or team members, such as additional training, awards, or other resume changes that benefit the business.

Creating your comprehensive business plan takes planning, research, time, and a herculean effort. If, at any point, the work becomes too much to handle, we can step in to assist.

Do you want an expert “second opinion” before creating your business plan or financial forecasts? Let’s talk !

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Business Plan Section 3: Organization and Management

This section explains how your business runs and who’s on your team. Learn how to present the information in this section of your business plan.

This section of your business plan, Organization and Management, is where you’ll explain exactly how you’re set up to make your ideas happen, plus you’ll introduce the players on your team.

As always, remember your audience. If this is a plan for your internal use, you can be a little more general than if you’ll be presenting it to a potential lender or investor. No matter what its purpose, you’ll want to break the organization and management section into two segments: one describing the way you’ve set up the company to run (its organizational structure), and the other introducing the people involved (its management).

Business Organization

Having a solid plan for how your business will run is a key component of its smooth and successful operation. Of course, you need to surround yourself with good people, but you have to set things up to enable them to work well with each other and on their own.

It’s important to define the positions in the company, which job is responsible for what, and to whom everyone will report. Over time, the structure may grow and change and you can certainly keep tweaking it as you go along, but you need to have an initial plan.

If you’re applying for funding to start a business or expand one, you may not even have employees to fit all the roles in the organization. However, you can still list them in your plan for how the company will ideally operate once you have the ability to do so.

Obviously, for small businesses, the organization will be far more streamlined and less complicated than it is for larger ones, but your business plan still needs to demonstrate an understanding of how you’ll handle the workflow. At the very least, you’ll need to touch on sales and marketing, administration, and the production and distribution of your product or the execution of your service.

For larger companies, an organizational plan with well-thought-out procedures is even more important. This is the best way to make sure you’re not wasting time duplicating efforts or dealing with internal confusion about responsibilities. A smooth-running operation runs far more efficiently and cost-effectively than one flying by the seat of its pants, and this section of your business plan will be another indication that you know what you’re doing. A large company is also likely to need additional operational categories such as human resources and possibly research and development.

One way to explain your organizational structure in the business plan is graphically. A simple diagram or flowchart can easily demonstrate levels of management and the positions within them, clearly illustrating who reports to whom, and how different divisions of the company (such as sales and marketing) relate to each other.

Here is where you can also talk about the other levels of employees in your company. Your lower-level staff will carry out the day-to-day work, so it’s important to recognize the types of people you’ll need, how many, what their qualifications should be, where you’ll find them, and what they’ll cost.

If the business will use outside consultants, freelancers, or independent contractors, mention it here as well. And talk about positions you’d want to add in the future if you’re successful enough to expand.

Business Management

Now that we understand the structure of your business, we need to meet the people who’ll be running it. Who does what, and why are they onboard? This section is important even for a single practitioner or sole proprietorship, as it will introduce you and your qualifications to the readers of your plan.

Start at the top with the legal structure and ownership of the business. If you are incorporated, say so, and detail whether you are a C or S corporation. If you haven’t yet incorporated, make sure to discuss this with your attorney and tax advisor to figure out which way to go. Whether you’re in a partnership or are a sole owner, this is where to mention it.

List the names of the owners of the business, what percent of the company each of them owns, the form of ownership (common or preferred stock, general or limited partner), and what kind of involvement they’ll have with day-to-day operations; for example, if they’re an active or silent partner.

Here’s where you’ll list the names and profiles of your management team, along with what their responsibilities are. Especially if you’re looking for funding, make sure to highlight the proven track record of these key employees. Lenders and investors will be keenly interested in their previous successes, particularly in how they relate to this current venture.

Include each person’s name and position, along with a short description of what the individual’s main duties will be. Detail his or her education, and any unique skills or experience, especially if they’re relevant to the job at hand. Mention previous employment and any industry awards or recognition related to it, along with involvement with charities or other non-profit organizations.

Think of this section as a resume-in-a-nutshell, recapping the highlights and achievements of the people you’ve chosen to surround yourself with. Actual detailed resumes for you and your management team should go in the plan’s appendix, and you can cross-reference them here. You want your readers to feel like your top staff complements you and supplements your own particular skill set. You also want readers to understand why these people are so qualified to help make your business a success.

This section will spell out the compensation for management team members, such as salary, benefits, and any profit-sharing you might be offering. If any of the team will be under contract or bound by non-compete agreements, you would mention that here, as well.

If your company will have a Board of Directors, its members also need to be listed in the business plan. Introduce each person by name and the position they’ll hold on the board. Talk about how each might be involved with the business (in addition to board meetings.

Similar to what you did for your management team, give each member’s background information, including education, experience, special skills, etc., along with any contributions they may already have had to the success of the business. Include the full resumes for your board members in the appendix.

Alternately, if you don’t have a Board of Directors, include information about an Advisory Board you’ve put together, or a panel of experts you’ve convened to help you along the way. Having either of these, by the way, is something your company might want to consider whether or not you’re putting together the organization and management section or your business plan.

NEXT ARTICLE > Business Plan Section 4: Products and Services

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How To Write the Management Section of a Business Plan

Susan Ward wrote about small businesses for The Balance for 18 years. She has run an IT consulting firm and designed and presented courses on how to promote small businesses.

Ownership Structure

Internal management team, external management resources, human resources, frequently asked questions (faqs).

When developing a business plan , the 'management section' describes your management team, staff, resources, and how your business ownership is structured. This section should not only describe who's on your management team but how each person's skill set will contribute to your bottom line. In this article, we will detail exactly how to compose and best highlight your management team.

Key Takeaways

• The management section of a business plan helps show how your management team and company are structured.
• The first section shows the ownership structure, which might be a sole proprietorship, partnership, or corporation.
• The internal management section shows the department heads, including sales, marketing, administration, and production.
• The external management resources help back up your internal management and include an advisory board and consultants.
• The human resources section contains staffing requirements—part-time or full-time—skills needed for employees and the costs.

This section outlines the legal structure of your business. It may only be a single sentence if your business is a sole proprietorship. If your business is a partnership or a corporation, it can be longer. You want to be sure you explain who holds what percentage of ownership in the company.

The internal management section should describe the business management categories relevant to your business, identify who will have responsibility for each category, and then include a short profile highlighting each person's skills.

The primary business categories of sales, marketing , administration, and production usually work for many small businesses. If your business has employees, you will also need a human resources section. You may also find that your company needs additional management categories to fit your unique circumstances.

It's not necessary to have a different person in charge of each category; some key management people often fill more than one role. Identify the key managers in your business and explain what functions and experience each team member will serve. You may wish to present this as an organizational chart in your business plan, although the list format is also appropriate.

Along with this section, you should include the complete resumés of each management team member (including your own). Follow this with an explanation of how each member will be compensated and their benefits package, and describe any profit-sharing plans that may apply.

If there are any contracts that relate directly to your management team members, such as work contracts or non-competition agreements, you should include them in an Appendix to your business plan.

While external management resources are often overlooked when writing a business plan , using these resources effectively can make the difference between the success or failure of your managers. Think of these external resources as your internal management team's backup. They give your business credibility and an additional pool of expertise.

Advisory Board

An Advisory Board can increase consumer and investor confidence, attract talented employees by showing a commitment to company growth and bring a diversity of contributions. If you choose to have an Advisory Board , list all the board members in this section, and include a bio and all relevant specializations. If you choose your board members carefully, the group can compensate for the niche forms of expertise that your internal managers lack.

When selecting your board members, look for people who are genuinely interested in seeing your business do well and have the patience and time to provide sound advice.

Recently retired executives or managers, other successful entrepreneurs, and/or vendors would be good choices for an Advisory Board.

Professional Services

Professional Services should also be highlighted in the external management resources section. Describe all the external professional advisors that your business will use, such as accountants, bankers, lawyers, IT consultants, business consultants, and/or business coaches. These professionals provide a web of advice and support outside your internal management team that can be invaluable in making management decisions and your new business a success .

The last point you should 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. To simply write, "We'll need more people once we get up and running," isn't sufficient. Follow this list:

• Detail how many employees your business will need at each stage and what they will cost.
• Describe exactly how your business's human resources needs can be met. Will it be best to have employees, or should you operate with contract workers or freelancers ? Do you need full-time or part-time staff or a mix of both?
• Outline your staffing requirements, including a description of the specific skills that the people working for you will need to possess.
• Calculate your labor costs. Decide the number of employees you will need and how many customers each employee can serve. For example, if it takes one employee to serve 150 customers, and you forecast 1,500 customers in your first year, your business will need 10 employees.
• Determine how much each employee will receive and total the salary cost for all your employees.
• Add to this the cost of  Workers' Compensation Insurance  (mandatory for most businesses) and the cost of any other employee benefits, such as company-sponsored medical and dental plans.

After you've listed the points above, describe how you will find the staff your business needs and how you will train them. Your description of staff recruitment should explain whether or not sufficient local labor is available and how you will recruit staff.

When you're writing about staff training, you'll want to include as many specifics as possible. What specific training will your staff undergo? What ongoing training opportunities will you provide your employees?

Even if the plan for your business is to start as a sole proprietorship, you should include a section on potential human resources demands as a way to demonstrate that you've thought about the staffing your business may require as it grows.

Business plans are about the future and the hypothetical challenges and successes that await. It's worth visualizing and documenting the details of your business so that the materials and network around your dream can begin to take shape.

What is the management section of a business plan?

The 'management section' describes your management team, staff, resources, and how your business ownership is structured.

What are the 5 sections of a business plan?

A business plan provides a road map showing your company's goals and how you'll achieve them. The five sections of a business plan are as follows:

• The  market analysis  outlines the demand for your product or service.
• The  competitive analysis  section shows your competition's strengths and weaknesses and your strategy for gaining market share.
• The management plan outlines your ownership structure, the management team, and staffing requirements.
• The  operating plan  details your business location and the facilities, equipment, and supplies needed to operate.
• The  financial plan  shows the map to financial success and the sources of funding, such as bank loans or investors.

SCORE. " Why Small Businesses Should Consider Workers’ Comp Insurance ."

How to make a business plan

Table of Contents

How to make a good business plan: step-by-step guide.

A business plan is a strategic roadmap used to navigate the challenging journey of entrepreneurship. It's the foundation upon which you build a successful business.

A well-crafted business plan can help you define your vision, clarify your goals, and identify potential problems before they arise.

But where do you start? How do you create a business plan that sets you up for success?

This article will explore the step-by-step process of creating a comprehensive business plan.

What is a business plan?

A business plan is a formal document that outlines a business's objectives, strategies, and operational procedures. It typically includes the following information about a company:

Products or services

Target market

Competitors

Marketing and sales strategies

Financial plan

Management team

A business plan serves as a roadmap for a company's success and provides a blueprint for its growth and development. It helps entrepreneurs and business owners organize their ideas, evaluate the feasibility, and identify potential challenges and opportunities.

As well as serving as a guide for business owners, a business plan can attract investors and secure funding. It demonstrates the company's understanding of the market, its ability to generate revenue and profits, and its strategy for managing risks and achieving success.

Business plan vs. business model canvas

A business plan may seem similar to a business model canvas, but each document serves a different purpose.

A business model canvas is a high-level overview that helps entrepreneurs and business owners quickly test and iterate their ideas. It is often a one-page document that briefly outlines the following:

Key partnerships

Key activities

Key propositions

Customer relationships

Customer segments

Key resources

Cost structure

Revenue streams

On the other hand, a Business Plan Template provides a more in-depth analysis of a company's strategy and operations. It is typically a lengthy document and requires significant time and effort to develop.

A business model shouldn’t replace a business plan, and vice versa. Business owners should lay the foundations and visually capture the most important information with a Business Model Canvas Template . Because this is a fast and efficient way to communicate a business idea, a business model canvas is a good starting point before developing a more comprehensive business plan.

A business plan can aim to secure funding from investors or lenders, while a business model canvas communicates a business idea to potential customers or partners.

Why is a business plan important?

A business plan is crucial for any entrepreneur or business owner wanting to increase their chances of success.

Here are some of the many benefits of having a thorough business plan.

Helps to define the business goals and objectives

A business plan encourages you to think critically about your goals and objectives. Doing so lets you clearly understand what you want to achieve and how you plan to get there.

A well-defined set of goals, objectives, and key results also provides a sense of direction and purpose, which helps keep business owners focused and motivated.

Guides decision-making

A business plan requires you to consider different scenarios and potential problems that may arise in your business. This awareness allows you to devise strategies to deal with these issues and avoid pitfalls.

With a clear plan, entrepreneurs can make informed decisions aligning with their overall business goals and objectives. This helps reduce the risk of making costly mistakes and ensures they make decisions with long-term success in mind.

Attracts investors and secures funding

Investors and lenders often require a business plan before considering investing in your business. A document that outlines the company's goals, objectives, and financial forecasts can help instill confidence in potential investors and lenders.

A well-written business plan demonstrates that you have thoroughly thought through your business idea and have a solid plan for success.

Identifies potential challenges and risks

A business plan requires entrepreneurs to consider potential challenges and risks that could impact their business. For example:

Is there enough demand for my product or service?

Will I have enough capital to start my business?

Is the market oversaturated with too many competitors?

What will happen if my marketing strategy is ineffective?

By identifying these potential challenges, entrepreneurs can develop strategies to mitigate risks and overcome challenges. This can reduce the likelihood of costly mistakes and ensure the business is well-positioned to take on any challenges.

Provides a basis for measuring success

A business plan serves as a framework for measuring success by providing clear goals and financial projections . Entrepreneurs can regularly refer to the original business plan as a benchmark to measure progress. By comparing the current business position to initial forecasts, business owners can answer questions such as:

Are we where we want to be at this point?

Did we achieve our goals?

If not, why not, and what do we need to do?

After assessing whether the business is meeting its objectives or falling short, business owners can adjust their strategies as needed.

How to make a business plan step by step

The steps below will guide you through the process of creating a business plan and what key components you need to include.

1. Create an executive summary

Start with a brief overview of your entire plan. The executive summary should cover your business plan's main points and key takeaways.

Keep your executive summary concise and clear with the Executive Summary Template . The simple design helps readers understand the crux of your business plan without reading the entire document.

2. Write your company description

Provide a detailed explanation of your company. Include information on what your company does, the mission statement, and your vision for the future.

Provide additional background information on the history of your company, the founders, and any notable achievements or milestones.

3. Conduct a market analysis

Conduct an in-depth analysis of your industry, competitors, and target market. This is best done with a SWOT analysis to identify your strengths, weaknesses, opportunities, and threats. Next, identify your target market's needs, demographics, and behaviors.

Use the Competitive Analysis Template to brainstorm answers to simple questions like:

What does the current market look like?

Who are your competitors?

What are they offering?

What will give you a competitive advantage?

Who is your target market?

What are they looking for and why?

How will your product or service satisfy a need?

These questions should give you valuable insights into the current market and where your business stands.

4. Describe your products and services

Provide detailed information about your products and services. This includes pricing information, product features, and any unique selling points.

Use the Product/Market Fit Template to explain how your products meet the needs of your target market. Describe what sets them apart from the competition.

5. Design a marketing and sales strategy

Outline how you plan to promote and sell your products. Your marketing strategy and sales strategy should include information about your:

Pricing strategy

Advertising and promotional tactics

Sales channels

The Go to Market Strategy Template is a great way to visually map how you plan to launch your product or service in a new or existing market.

6. Determine budget and financial projections

Document detailed information on your business’ finances. Describe the current financial position of the company and how you expect the finances to play out.

Some details to include in this section are:

Startup costs

Revenue projections

Profit and loss statement

Funding you have received or plan to receive

Strategy for raising funds

7. Set the organization and management structure

Define how your company is structured and who will be responsible for each aspect of the business. Use the Business Organizational Chart Template to visually map the company’s teams, roles, and hierarchy.

As well as the organization and management structure, discuss the legal structure of your business. Clarify whether your business is a corporation, partnership, sole proprietorship, or LLC.

8. Make an action plan

At this point in your business plan, you’ve described what you’re aiming for. But how are you going to get there? The Action Plan Template describes the following steps to move your business plan forward. Outline the next steps you plan to take to bring your business plan to fruition.

Types of business plans

Several types of business plans cater to different purposes and stages of a company's lifecycle. Here are some of the most common types of business plans.

Startup business plan

A startup business plan is typically an entrepreneur's first business plan. This document helps entrepreneurs articulate their business idea when starting a new business.

Not sure how to make a business plan for a startup? It’s pretty similar to a regular business plan, except the primary purpose of a startup business plan is to convince investors to provide funding for the business. A startup business plan also outlines the potential target market, product/service offering, marketing plan, and financial projections.

Strategic business plan

A strategic business plan is a long-term plan that outlines a company's overall strategy, objectives, and tactics. This type of strategic plan focuses on the big picture and helps business owners set goals and priorities and measure progress.

The primary purpose of a strategic business plan is to provide direction and guidance to the company's management team and stakeholders. The plan typically covers a period of three to five years.

Operational business plan

An operational business plan is a detailed document that outlines the day-to-day operations of a business. It focuses on the specific activities and processes required to run the business, such as:

Organizational structure

Staffing plan

Production plan

Quality control

Inventory management

Supply chain

The primary purpose of an operational business plan is to ensure that the business runs efficiently and effectively. It helps business owners manage their resources, track their performance, and identify areas for improvement.

Growth-business plan

A growth-business plan is a strategic plan that outlines how a company plans to expand its business. It helps business owners identify new market opportunities and increase revenue and profitability. The primary purpose of a growth-business plan is to provide a roadmap for the company's expansion and growth.

The 3 Horizons of Growth Template is a great tool to identify new areas of growth. This framework categorizes growth opportunities into three categories: Horizon 1 (core business), Horizon 2 (emerging business), and Horizon 3 (potential business).

One-page business plan

A one-page business plan is a condensed version of a full business plan that focuses on the most critical aspects of a business. It’s a great tool for entrepreneurs who want to quickly communicate their business idea to potential investors, partners, or employees.

A one-page business plan typically includes sections such as business concept, value proposition, revenue streams, and cost structure.

Best practices for how to make a good business plan

Here are some additional tips for creating a business plan:

Use a template

A template can help you organize your thoughts and effectively communicate your business ideas and strategies. Starting with a template can also save you time and effort when formatting your plan.

Miro’s extensive library of customizable templates includes all the necessary sections for a comprehensive business plan. With our templates, you can confidently present your business plans to stakeholders and investors.

Be practical

Avoid overestimating revenue projections or underestimating expenses. Your business plan should be grounded in practical realities like your budget, resources, and capabilities.

Be specific

Provide as much detail as possible in your business plan. A specific plan is easier to execute because it provides clear guidance on what needs to be done and how. Without specific details, your plan may be too broad or vague, making it difficult to know where to start or how to measure success.

Be thorough with your research

Conduct thorough research to fully understand the market, your competitors, and your target audience . By conducting thorough research, you can identify potential risks and challenges your business may face and develop strategies to mitigate them.

Get input from others

It can be easy to become overly focused on your vision and ideas, leading to tunnel vision and a lack of objectivity. By seeking input from others, you can identify potential opportunities you may have overlooked.

Review and revise regularly

A business plan is a living document. You should update it regularly to reflect market, industry, and business changes. Set aside time for regular reviews and revisions to ensure your plan remains relevant and effective.

Create a winning business plan to chart your path to success

Starting or growing a business can be challenging, but it doesn't have to be. Whether you're a seasoned entrepreneur or just starting, a well-written business plan can make or break your business’ success.

The purpose of a business plan is more than just to secure funding and attract investors. It also serves as a roadmap for achieving your business goals and realizing your vision. With the right mindset, tools, and strategies, you can develop a visually appealing, persuasive business plan.

Ready to make an effective business plan that works for you? Check out our library of ready-made strategy and planning templates and chart your path to success.

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Blog Business How to Write a Business Plan Outline [Examples + Templates] 

How to Write a Business Plan Outline [Examples + Templates] 

Written by: Letícia Fonseca Aug 11, 2023

When venturing into crafting a business plan, the initial hurdle often lies in taking that first step.

So, how can you evade those prolonged hours of staring at a blank page? Initiate your journey with the aid of a business plan outline.

As with any endeavor, an outline serves as the beacon of clarity, illuminating the path to confront even the most formidable tasks. This holds particularly true when composing pivotal documents vital to your triumph, much like a business plan.

Nonetheless, I understand the enormity of a business plan’s scope, which might make the task of outlining it seem daunting. This is precisely why I’ve compiled all the requisite information to facilitate the creation of a business plan outline. No need to break a sweat!

And if you’re seeking further assistance, a business plan maker and readily available business plan templates can offer valuable support in shaping your comprehensive plan.

Read on for answers to all your business plan outline questions or jump ahead for some handy templates. 

Click to jump ahead:

What is a business plan outline (and why do you need one), what format should you choose for your business plan outline, what are the key components of a business plan outline.

• Business plan template examples
• Writing tips to ace your outline 

A business plan outline is the backbone of your business plan. It contains all the most important information you’ll want to expand on in your full-length plan. 

Think of it this way: your outline is a frame for your plan. It provides a high-level idea of what the final plan should look like, what it will include and how all the information will be organized. 

Why would you do this extra step? Beyond saving you from blank page syndrome, an outline ensures you don’t leave any essential information out of your plan — you can see all the most important points at a glance and quickly identify any content gaps. 

It also serves as a writing guide. Once you know all the sections you want in your plan, you just need to expand on them. Suddenly, you’re “filling in the blanks” as opposed to writing a plan from scratch!

Incidentally, using a business plan template like this one gives you a running head start, too: 

Perhaps most importantly, a business plan outline keeps you focused on the essential parts of your document. (Not to mention what matters most to stakeholders and investors.)  With an outline, you’ll spend less time worrying about structure or organization and more time perfecting the actual content of your document. 

If you’re looking for more general advice, you can read about  how to create a business plan here . But if you’re working on outlining your plan, stick with me.

Return to Table of Contents

Most business plans fit into one of two formats. 

The format you choose largely depends on three factors: (1) the stage of your business, (2) if you’re presenting the plan to investors and (3) what you want to achieve with your business plan. 

Let’s have a closer look at these two formats and why you might choose one over the other.

Traditional format

Traditional business plans  are typically long, detailed documents. In many cases, they take up to 50-60 pages, but it’s not uncommon to see plans spanning 100+ pages. 

Traditional plans are long because they cover  every aspect  of your business. They leave nothing out. You’ll find a traditional business plan template with sections like executive summary, company description, target market, market analysis, marketing plan, financial plan, and more. Basically: the more information the merrier.

This business plan template isn’t of a traditional format, but you could expand it into one by duplicating pages:

Due to their high level of detail, traditional formats are the best way to sell your business. They show you’re reliable and have a clear vision for your business’s future. 

If you’re planning on presenting your plan to investors and stakeholders, you’ll want to go with a traditional plan format. The more information you include, the fewer doubts and questions you’ll get when you present your plan, so don’t hold back. 

Traditional business plans require more detailed outlines before drafting since there’s a lot of information to cover. You’ll want to list all the sections and include bullet points describing what each section should cover. 

It’s also a good idea to include all external resources and visuals in your outline, so you don’t have to gather them later. 

Lean format

Lean business plan formats are high level and quick to write. They’re often only one or two pages. Similar to a  business plan infographic , they’re scannable and quick to digest, like this template: 

This format is often referred to as a “startup” format due to (you guessed it!) many startups using it. 

Lean business plans require less detailed outlines. You can include high-level sections and a few lines in each section covering the basics. Since the final plan will only be a page or two, you don’t need to over prepare. Nor will you need a ton of external resources. 

Lean plans don’t answer all the questions investors and stakeholders may ask, so if you go this route, make sure it’s the right choice for your business . Companies not yet ready to present to investors will typically use a lean/startup business plan format to get their rough plan on paper and share it internally with their management team. 

Here’s another example of a lean business plan format in the form of a financial plan: 

Your business plan outline should include all the following sections. The level of detail you choose to go into will depend on your intentions for your plan (sharing with stakeholders vs. internal use), but you’ll want every section to be clear and to the point. 

1. Executive summary

The executive summary gives a high-level description of your company, product or service. This section should include a mission statement, your company description, your business’s primary goal, and the problem it aims to solve. You’ll want to state how your business can solve the problem and briefly explain what makes you stand out (your competitive advantage).

Having an executive summary is essential to selling your business to stakeholders , so it should be as clear and concise as possible. Summarize your business in a few sentences in a way that will hook the reader (or audience) and get them invested in what you have to say next. In other words, this is your elevator pitch.

2. Product and services description

This is where you should go into more detail about your product or service. Your product is the heart of your business, so it’s essential this section is easy to grasp. After all, if people don’t know what you’re selling, you’ll have a hard time keeping them engaged!

Expand on your description in the executive summary, going into detail about the problem your customers face and how your product/service will solve it. If you have various products or services, go through all of them in equal detail. 

3. Target market and/or Market analysis

A market analysis is crucial for placing your business in a larger context and showing investors you know your industry. This section should include market research on your prospective customer demographic including location, age range, goals and motivations. 

You can even  include detailed customer personas  as a visual aid — these are especially useful if you have several target demographics. You want to showcase your knowledge of your customer, who exactly you’re selling to and how you can fulfill their needs.

Be sure to include information on the overall target market for your product, including direct and indirect competitors and how your industry is performing. If your competitors have strengths you want to mimic or weaknesses you want to exploit, this is the place to record that information. 

4. Organization and management

You can think of this as a “meet the team” section — this is where you should go into depth on your business’s structure from management to legal and HR. If there are people bringing unique skills or experience to the table (I’m sure there are!), you should highlight them in this section. 

The goal here is to showcase why your team is the best to run your business. Investors want to know you’re unified, organized and reliable. This is also a potential opportunity to bring more humanity to your business plan and showcase the faces behind the ideas and product. 

5. Marketing and sales

Now that you’ve introduced your product and team, you need to explain how you’re going to sell it. Give a detailed explanation of your sales and marketing strategy, including pricing, timelines for launching your product and advertising.

This is a major section of your plan and can even live as a separate document for your marketing and sales teams. Here are some  marketing plan templates to help you get started .

Make sure you have research or analysis to back up your decisions — if you want to do paid ads on LinkedIn to advertise your product, include a brief explanation as to why that is the best channel for your business. 

6. Financial projections and funding request

The end of your plan is where you’ll look to the future and how you think your business will perform financially. Your financial plan should include results from your income statement, balance sheet and cash flow projections. 

State your funding requirements and what you need to realize the business. Be extremely clear about how you plan to use the funding and when you expect investors will see returns.

If you aren’t presenting to potential investors, you can skip this part, but it’s something to keep in mind should you seek funding in the future. Covering financial projections and the previous five components is essential at the stage of business formation to ensure everything goes smoothly moving forward.

7. Appendix

Any extra visual aids, receipts, paperwork or charts will live here. Anything that may be relevant to your plan should be included as reference e.g. your cash flow statement (or other financial statements). You can format your appendix in whatever way you think is best — as long as it’s easy for readers to find what they’re looking for, you’ve done your job!

Typically, the best way to start your outline is to list all these high-level sections. Then, you can add bullet points outlining what will go in each section and the resources you’ll need to write them. This should give you a solid starting point for your full-length plan.

Business plan outline templates

Looking for a shortcut? Our  business plan templates  are basically outlines in a box! 

While your outline likely won’t go into as much detail, these templates are great examples of how to organize your sections.

Traditional format templates

A strong template can turn your long, dense business plan into an engaging, easy-to-read document. There are lots to choose from, but here are just a few ideas to inspire you… 

You can duplicate pages and use these styles for a traditional outline, or start with a lean outline as you build your business plan out over time:

Lean format templates

For lean format outlines, a simpler ‘ mind map ’ style is a good bet. With this style, you can get ideas down fast and quickly turn them into one or two-page plans. Plus, because they’re shorter, they’re easy to share with your team.

Writing tips to ace your business plan outline

Business plans are complex documents, so if you’re still not sure how to write your outline, don’t worry! Here are some helpful tips to keep in mind when drafting your business plan outline:

• Ask yourself why you’re writing an outline. Having a clear goal for your outline can help keep you on track as you write. Everything you include in your plan should contribute to your goal. If it doesn’t, it probably doesn’t need to be in there.
• Keep it clear and concise. Whether you’re writing a traditional or lean format business plan, your outline should be easy to understand. Choose your words wisely and avoid unnecessary preambles or padding language. The faster you get to the point, the easier your plan will be to read.
• Add visual aids. No one likes reading huge walls of text! Make room in your outline for visuals, data and charts. This keeps your audience engaged and helps those who are more visual learners. Psst,  infographics  are great for this.
• Make it collaborative. Have someone (or several someones) look it over before finalizing your outline. If you have an established marketing / sales / finance team, have them look it over too. Getting feedback at the outline stage can help you avoid rewrites and wasted time down the line.

If this is your first time writing a business plan outline, don’t be too hard on yourself. You might not get it 100% right on the first try, but with these tips and the key components listed above, you’ll have a strong foundation. Remember, done is better than perfect. 

Create a winning business plan by starting with a detailed, actionable outline

The best way to learn is by doing. So go ahead, get started on your business plan outline. As you develop your plan, you’ll no doubt learn more about your business and what’s important for success along the way. 

A clean, compelling template is a great way to get a head start on your outline. After all, the sections are already separated and defined for you! 

Explore Venngage’s business plan templates  for one that suits your needs. Many are free to use and there are premium templates available for a small monthly fee. Happy outlining!

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Business Plan - Management and Organization

Management and Organization Section of a Business Plan

Written by Jason Gordon

Updated at April 21st, 2024

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What is the Management and Organization Section of the Business Plan?

Outline your organizational structure and then tell about your primaries. How your business will be managed and who will be involved is an important consideration in your choice of business entity. For example, in a partnership, it is assumed that partners have equal control in managing the business. In an LLC you make the choice of whether it will be managed by members of the LLC or by hired managers. 

In a corporation, the owners/shareholders may or may not be a part of the management team. In any of the above situations, you will want to develop a plan for the roles of individual members. While individual member roles and responsibilities often change rapidly, you want to have a formalized chain of authority within the business. Remember, too many decision-makers and no single person with authority can be a major challenge to the success of a business.

Business Management

This section should include the names, positions, and general biography of the key business personnel. This section will be incredibly important to outsider investors (angels or venture capitalists) who are assessing your business. Within the Business Management section you should include answers to the following questions:

• Name : Who are the key individuals involved in the management of your business?
• Title : What will be that person's title?
• Responsibilities : What primary responsibilities does that position entail?
• Qualifications : What is their background and qualifications for carrying out their intended responsibilities? (This will include work experience, educational degrees, and prior experience in startup ventures.)

Organizational Chart

I recommend that you create a formalized flow-chart demonstrating the hierarchy of authority within the business. This organizational chart should be cross-laid with the key core operational responsibilities of the business. For example, you may split the business responsibilities into: Operations, Sales & Marketing, and Administration & Governance. Outlining the business in this fashion will give individuals a clear sense of their responsibilities. Further, it will establish formal chains of authority that will become increasingly important as the business grows. As you add new employees you will want to integrate them within the organizational chart.Make clear the chain of authority and reporting. Outline both the responsibilities of each individual and their authority to represent the interests of the business. As the business grows you will gradually become more and more specific about the roles and responsibilities of individual members.You may also consider developing a plan for cross-training individuals for specific tasks? You don't want your business to hinge or become dependent solely on the presence of a single individual. This chart will also serve as credentials for business when approaching outside investors. These investors will want to see that the business is stable and that there is ample talent to perform all of the functions necessary to carry out the business's functions and grow goals.  

Professional and Advisory Support

When forming your business you will begin to forge relationships with outside parties who can provide advice and services to your business. Depending on your business organization, you may have professional advisors, such as a board of directors or you may have a less formal advisory board. Below are a list and explanation of some of the more common professional and advisory support for a startup business.

• Accountant - An accountant can be extremely valuable in 3 areas: Entity formation, business compliance, and tax strategy. An accountant will be able to help you understand the tax considerations that go into choosing an entity type. They can also help you understand the rules for business compliance state and federal income tax, tax deductions, tax credits, sales & use, transfer, deductions, capital gain loss, employee withholding, estimated tax payments, financial statements, auditing, etc.
• Small Business Attorney - A small business attorney is useful in a number of important areas. Entity selection and formation, contracts, intellectual property, employment law, securities regulation, business compliance & governance, collection efforts, etc.
• Insurance Agent - Depending on the nature of the business, you may require various types of insurance coverage. Common types of insurance includes casualty & damage on property, personal injury protection, professional liability, life insurance, health insurance in employee benefit plans, etc.
• Banker - I cannot express the importance of having a relationship with your bank representative. Many small businesses make the mistake of banking with large financial institutions, rather than choosing smaller, more intimate, local banks. When you are seeking loans to operate your business you will have a much easier time working with a banker who knows you personally and understands your business.
• Mentors - Find someone who you know and respect to serve as your mentor. Preferably, this is someone who has experience with startup ventures. Starting a venture can be nerve-racking. It helps to have someone close who has gone through this process before. This person will provide moral support more than expertise in a particular industry.
• Board of Advisors - A board of advisors is like a semi-formal group of mentors. Rather than providing moral support, these individuals help to guide you through the process of starting, managing and growing your business. You should try to assemble a diverse group with a variety of professional experiences. Preferably, these individuals will be a mix of knowledgeable entrepreneurs and industry experts.
• Board of Directors - If you choose the corporate form to do business, you will have a board of directors. Many closely held corporations don't have outside members on the board of directors; rather, the board consists of the owners and key members. As the business begins to grow, you may have directors who are either equity investors or experts who you compensate with equity ownership. In either case, you should seek investors and experts who can provide the greatest degree of guidance and support to your business.

You will want to detail the names, experience, and qualifications of these individuals within the business plan. The primary purpose is to demonstrate to outside investors that you have adequate support to handle your operations and intended growth path.

Related Topics

• Business Plan, Part 1 (Outline Overview)
• Business Plan, Part 2 (The Executive Summary)
• What is a Mission Statement?
• What is a Values Statement?
• Setting Company Goals
• Business Plan, Part 4 (Market Analysis)
• Business Plan, Part 5 (Competitive Analysis)
• Business Plan, Part 6 (Marketing Plan)
• Business Plan, Part 7 (Operations)
• Business Plan, Part 8  (Management and Organization)
• Business Plan, Part 9 (Financial Projections)
• Business Plan, Part 10 (Appendices)
• Business Plan , (Final Modifications)

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How to Write a Business Plan: Step-by-Step Guide + Examples

Noah Parsons

24 min. read

Updated May 7, 2024

Writing a business plan doesn’t have to be complicated. 

In this step-by-step guide, you’ll learn how to write a business plan that’s detailed enough to impress bankers and potential investors, while giving you the tools to start, run, and grow a successful business.

• The basics of business planning

If you’re reading this guide, then you already know why you need a business plan . 

You understand that planning helps you: 

• Raise money
• Grow strategically
• Keep your business on the right track 

As you start to write your plan, it’s useful to zoom out and remember what a business plan is .

At its core, a business plan is an overview of the products and services you sell, and the customers that you sell to. It explains your business strategy: how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

Most business plans also include financial forecasts for the future. These set sales goals, budget for expenses, and predict profits and cash flow. 

A good business plan is much more than just a document that you write once and forget about. It’s also a guide that helps you outline and achieve your goals. 

After completing your plan, you can use it as a management tool to track your progress toward your goals. Updating and adjusting your forecasts and budgets as you go is one of the most important steps you can take to run a healthier, smarter business. 

We’ll dive into how to use your plan later in this article.

There are many different types of plans , but we’ll go over the most common type here, which includes everything you need for an investor-ready plan. However, if you’re just starting out and are looking for something simpler—I recommend starting with a one-page business plan . It’s faster and easier to create. 

It’s also the perfect place to start if you’re just figuring out your idea, or need a simple strategic plan to use inside your business.

Dig deeper : How to write a one-page business plan

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• What to include in your business plan

Executive summary

The executive summary is an overview of your business and your plans. It comes first in your plan and is ideally just one to two pages. Most people write it last because it’s a summary of the complete business plan.

Ideally, the executive summary can act as a stand-alone document that covers the highlights of your detailed plan. 

In fact, it’s common for investors to ask only for the executive summary when evaluating your business. If they like what they see in the executive summary, they’ll often follow up with a request for a complete plan, a pitch presentation , or more in-depth financial forecasts .

Your executive summary should include:

• A summary of the problem you are solving
• A description of your product or service
• An overview of your target market
• A brief description of your team
• A summary of your financials
• Your funding requirements (if you are raising money)

Dig Deeper: How to write an effective executive summary

Products and services description

This is where you describe exactly what you’re selling, and how it solves a problem for your target market. The best way to organize this part of your plan is to start by describing the problem that exists for your customers. After that, you can describe how you plan to solve that problem with your product or service. 

This is usually called a problem and solution statement .

To truly showcase the value of your products and services, you need to craft a compelling narrative around your offerings. How will your product or service transform your customers’ lives or jobs? A strong narrative will draw in your readers.

This is also the part of the business plan to discuss any competitive advantages you may have, like specific intellectual property or patents that protect your product. If you have any initial sales, contracts, or other evidence that your product or service is likely to sell, include that information as well. It will show that your idea has traction , which can help convince readers that your plan has a high chance of success.

Market analysis

Your target market is a description of the type of people that you plan to sell to. You might even have multiple target markets, depending on your business. 

A market analysis is the part of your plan where you bring together all of the information you know about your target market. Basically, it’s a thorough description of who your customers are and why they need what you’re selling. You’ll also include information about the growth of your market and your industry .

Try to be as specific as possible when you describe your market. 

Include information such as age, income level, and location—these are what’s called “demographics.” If you can, also describe your market’s interests and habits as they relate to your business—these are “psychographics.” 

Related: Target market examples

Essentially, you want to include any knowledge you have about your customers that is relevant to how your product or service is right for them. With a solid target market, it will be easier to create a sales and marketing plan that will reach your customers. That’s because you know who they are, what they like to do, and the best ways to reach them.

Next, provide any additional information you have about your market. 

What is the size of your market ? Is the market growing or shrinking? Ideally, you’ll want to demonstrate that your market is growing over time, and also explain how your business is positioned to take advantage of any expected changes in your industry.

Dig Deeper: Learn how to write a market analysis

Competitive analysis

Part of defining your business opportunity is determining what your competitive advantage is. To do this effectively, you need to know as much about your competitors as your target customers. 

Every business has some form of competition. If you don’t think you have competitors, then explore what alternatives there are in the market for your product or service. 

For example: In the early years of cars, their main competition was horses. For social media, the early competition was reading books, watching TV, and talking on the phone.

A good competitive analysis fully lays out the competitive landscape and then explains how your business is different. Maybe your products are better made, or cheaper, or your customer service is superior. Maybe your competitive advantage is your location – a wide variety of factors can ultimately give you an advantage.

Dig Deeper: How to write a competitive analysis for your business plan

Marketing and sales plan

The marketing and sales plan covers how you will position your product or service in the market, the marketing channels and messaging you will use, and your sales tactics. 

The best place to start with a marketing plan is with a positioning statement . 

This explains how your business fits into the overall market, and how you will explain the advantages of your product or service to customers. You’ll use the information from your competitive analysis to help you with your positioning. 

For example: You might position your company as the premium, most expensive but the highest quality option in the market. Or your positioning might focus on being locally owned and that shoppers support the local economy by buying your products.

Once you understand your positioning, you’ll bring this together with the information about your target market to create your marketing strategy . 

This is how you plan to communicate your message to potential customers. Depending on who your customers are and how they purchase products like yours, you might use many different strategies, from social media advertising to creating a podcast. Your marketing plan is all about how your customers discover who you are and why they should consider your products and services. 

While your marketing plan is about reaching your customers—your sales plan will describe the actual sales process once a customer has decided that they’re interested in what you have to offer. 

If your business requires salespeople and a long sales process, describe that in this section. If your customers can “self-serve” and just make purchases quickly on your website, describe that process. 

A good sales plan picks up where your marketing plan leaves off. The marketing plan brings customers in the door and the sales plan is how you close the deal.

Together, these specific plans paint a picture of how you will connect with your target audience, and how you will turn them into paying customers.

Dig deeper: What to include in your sales and marketing plan

Business operations

The operations section describes the necessary requirements for your business to run smoothly. It’s where you talk about how your business works and what day-to-day operations look like. 

Depending on how your business is structured, your operations plan may include elements of the business like:

• Supply chain management
• Manufacturing processes
• Equipment and technology
• Distribution

Some businesses distribute their products and reach their customers through large retailers like Amazon.com, Walmart, Target, and grocery store chains. 

These businesses should review how this part of their business works. The plan should discuss the logistics and costs of getting products onto store shelves and any potential hurdles the business may have to overcome.

If your business is much simpler than this, that’s OK. This section of your business plan can be either extremely short or more detailed, depending on the type of business you are building.

For businesses selling services, such as physical therapy or online software, you can use this section to describe the technology you’ll leverage, what goes into your service, and who you will partner with to deliver your services.

Dig Deeper: Learn how to write the operations chapter of your plan

Key milestones and metrics

Although it’s not required to complete your business plan, mapping out key business milestones and the metrics can be incredibly useful for measuring your success.

Good milestones clearly lay out the parameters of the task and set expectations for their execution. You’ll want to include:

• A description of each task
• The proposed due date
• Who is responsible for each task

If you have a budget, you can include projected costs to hit each milestone. You don’t need extensive project planning in this section—just list key milestones you want to hit and when you plan to hit them. This is your overall business roadmap. 

Possible milestones might be:

• Website launch date
• Store or office opening date
• First significant sales
• Break even date
• Business licenses and approvals

You should also discuss the key numbers you will track to determine your success. Some common metrics worth tracking include:

• Conversion rates
• Customer acquisition costs
• Profit per customer
• Repeat purchases

It’s perfectly fine to start with just a few metrics and grow the number you are tracking over time. You also may find that some metrics simply aren’t relevant to your business and can narrow down what you’re tracking.

Dig Deeper: How to use milestones in your business plan

Organization and management team

Investors don’t just look for great ideas—they want to find great teams. Use this chapter to describe your current team and who you need to hire . You should also provide a quick overview of your location and history if you’re already up and running.

Briefly highlight the relevant experiences of each key team member in the company. It’s important to make the case for why yours is the right team to turn an idea into a reality. 

Do they have the right industry experience and background? Have members of the team had entrepreneurial successes before? 

If you still need to hire key team members, that’s OK. Just note those gaps in this section.

Your company overview should also include a summary of your company’s current business structure . The most common business structures include:

• Sole proprietor
• Partnership

Be sure to provide an overview of how the business is owned as well. Does each business partner own an equal portion of the business? How is ownership divided? 

Potential lenders and investors will want to know the structure of the business before they will consider a loan or investment.

Dig Deeper: How to write about your company structure and team

Financial plan

Last, but certainly not least, is your financial plan chapter. 

Entrepreneurs often find this section the most daunting. But, business financials for most startups are less complicated than you think, and a business degree is certainly not required to build a solid financial forecast. 

A typical financial forecast in a business plan includes the following:

• Sales forecast : An estimate of the sales expected over a given period. You’ll break down your forecast into the key revenue streams that you expect to have.
• Expense budget : Your planned spending such as personnel costs , marketing expenses, and taxes.
• Profit & Loss : Brings together your sales and expenses and helps you calculate planned profits.
• Cash Flow : Shows how cash moves into and out of your business. It can predict how much cash you’ll have on hand at any given point in the future.
• Balance Sheet : A list of the assets, liabilities, and equity in your company. In short, it provides an overview of the financial health of your business. 

A strong business plan will include a description of assumptions about the future, and potential risks that could impact the financial plan. Including those will be especially important if you’re writing a business plan to pursue a loan or other investment.

Dig Deeper: How to create financial forecasts and budgets

This is the place for additional data, charts, or other information that supports your plan.

Including an appendix can significantly enhance the credibility of your plan by showing readers that you’ve thoroughly considered the details of your business idea, and are backing your ideas up with solid data.

Just remember that the information in the appendix is meant to be supplementary. Your business plan should stand on its own, even if the reader skips this section.

Dig Deeper : What to include in your business plan appendix

Optional: Business plan cover page

Adding a business plan cover page can make your plan, and by extension your business, seem more professional in the eyes of potential investors, lenders, and partners. It serves as the introduction to your document and provides necessary contact information for stakeholders to reference.

Your cover page should be simple and include:

• Company logo
• Business name
• Value proposition (optional)
• Business plan title
• Completion and/or update date
• Address and contact information
• Confidentiality statement

Just remember, the cover page is optional. If you decide to include it, keep it very simple and only spend a short amount of time putting it together.

Dig Deeper: How to create a business plan cover page

How to use AI to help write your business plan

Generative AI tools such as ChatGPT can speed up the business plan writing process and help you think through concepts like market segmentation and competition. These tools are especially useful for taking ideas that you provide and converting them into polished text for your business plan.

The best way to use AI for your business plan is to leverage it as a collaborator , not a replacement for human creative thinking and ingenuity. 

AI can come up with lots of ideas and act as a brainstorming partner. It’s up to you to filter through those ideas and figure out which ones are realistic enough to resonate with your customers. 

There are pros and cons of using AI to help with your business plan . So, spend some time understanding how it can be most helpful before just outsourcing the job to AI.

Learn more: 10 AI prompts you need to write a business plan

• Writing tips and strategies

To help streamline the business plan writing process, here are a few tips and key questions to answer to make sure you get the most out of your plan and avoid common mistakes .  

Determine why you are writing a business plan

Knowing why you are writing a business plan will determine your approach to your planning project. 

For example: If you are writing a business plan for yourself, or just to use inside your own business , you can probably skip the section about your team and organizational structure. 

If you’re raising money, you’ll want to spend more time explaining why you’re looking to raise the funds and exactly how you will use them.

Regardless of how you intend to use your business plan , think about why you are writing and what you’re trying to get out of the process before you begin.

Keep things concise

Probably the most important tip is to keep your business plan short and simple. There are no prizes for long business plans . The longer your plan is, the less likely people are to read it. 

So focus on trimming things down to the essentials your readers need to know. Skip the extended, wordy descriptions and instead focus on creating a plan that is easy to read —using bullets and short sentences whenever possible.

Have someone review your business plan

Writing a business plan in a vacuum is never a good idea. Sometimes it’s helpful to zoom out and check if your plan makes sense to someone else. You also want to make sure that it’s easy to read and understand.

Don’t wait until your plan is “done” to get a second look. Start sharing your plan early, and find out from readers what questions your plan leaves unanswered. This early review cycle will help you spot shortcomings in your plan and address them quickly, rather than finding out about them right before you present your plan to a lender or investor.

If you need a more detailed review, you may want to explore hiring a professional plan writer to thoroughly examine it.

Use a free business plan template and business plan examples to get started

Knowing what information to include in a business plan is sometimes not quite enough. If you’re struggling to get started or need additional guidance, it may be worth using a business plan template. 

There are plenty of great options available (we’ve rounded up our 8 favorites to streamline your search).

But, if you’re looking for a free downloadable business plan template , you can get one right now; download the template used by more than 1 million businesses. 

Or, if you just want to see what a completed business plan looks like, check out our library of over 550 free business plan examples . 

We even have a growing list of industry business planning guides with tips for what to focus on depending on your business type.

Common pitfalls and how to avoid them

It’s easy to make mistakes when you’re writing your business plan. Some entrepreneurs get sucked into the writing and research process, and don’t focus enough on actually getting their business started. 

Here are a few common mistakes and how to avoid them:

Not talking to your customers : This is one of the most common mistakes. It’s easy to assume that your product or service is something that people want. Before you invest too much in your business and too much in the planning process, make sure you talk to your prospective customers and have a good understanding of their needs.

• Overly optimistic sales and profit forecasts: By nature, entrepreneurs are optimistic about the future. But it’s good to temper that optimism a little when you’re planning, and make sure your forecasts are grounded in reality. 
• Spending too much time planning: Yes, planning is crucial. But you also need to get out and talk to customers, build prototypes of your product and figure out if there’s a market for your idea. Make sure to balance planning with building.
• Not revising the plan: Planning is useful, but nothing ever goes exactly as planned. As you learn more about what’s working and what’s not—revise your plan, your budgets, and your revenue forecast. Doing so will provide a more realistic picture of where your business is going, and what your financial needs will be moving forward.
• Not using the plan to manage your business: A good business plan is a management tool. Don’t just write it and put it on the shelf to collect dust – use it to track your progress and help you reach your goals.
• Presenting your business plan

The planning process forces you to think through every aspect of your business and answer questions that you may not have thought of. That’s the real benefit of writing a business plan – the knowledge you gain about your business that you may not have been able to discover otherwise.

With all of this knowledge, you’re well prepared to convert your business plan into a pitch presentation to present your ideas. 

A pitch presentation is a summary of your plan, just hitting the highlights and key points. It’s the best way to present your business plan to investors and team members.

Dig Deeper: Learn what key slides should be included in your pitch deck

Use your business plan to manage your business

One of the biggest benefits of planning is that it gives you a tool to manage your business better. With a revenue forecast, expense budget, and projected cash flow, you know your targets and where you are headed.

And yet, nothing ever goes exactly as planned – it’s the nature of business.

That’s where using your plan as a management tool comes in. The key to leveraging it for your business is to review it periodically and compare your forecasts and projections to your actual results.

Start by setting up a regular time to review the plan – a monthly review is a good starting point. During this review, answer questions like:

• Did you meet your sales goals?
• Is spending following your budget?
• Has anything gone differently than what you expected?

Now that you see whether you’re meeting your goals or are off track, you can make adjustments and set new targets. 

Maybe you’re exceeding your sales goals and should set new, more aggressive goals. In that case, maybe you should also explore more spending or hiring more employees. 

Or maybe expenses are rising faster than you projected. If that’s the case, you would need to look at where you can cut costs.

A plan, and a method for comparing your plan to your actual results , is the tool you need to steer your business toward success.

Learn More: How to run a regular plan review

Free business plan templates and examples

Kickstart your business plan writing with one of our free business plan templates or recommended tools.

Free business plan template

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How to write a business plan FAQ

What is a business plan?

A document that describes your business , the products and services you sell, and the customers that you sell to. It explains your business strategy, how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

What are the benefits of a business plan?

A business plan helps you understand where you want to go with your business and what it will take to get there. It reduces your overall risk, helps you uncover your business’s potential, attracts investors, and identifies areas for growth.

Having a business plan ultimately makes you more confident as a business owner and more likely to succeed for a longer period of time.

What are the 7 steps of a business plan?

The seven steps to writing a business plan include:

• Write a brief executive summary
• Describe your products and services.
• Conduct market research and compile data into a cohesive market analysis.
• Describe your marketing and sales strategy.
• Outline your organizational structure and management team.
• Develop financial projections for sales, revenue, and cash flow.
• Add any additional documents to your appendix.

What are the 5 most common business plan mistakes?

There are plenty of mistakes that can be made when writing a business plan. However, these are the 5 most common that you should do your best to avoid:

• 1. Not taking the planning process seriously.
• Having unrealistic financial projections or incomplete financial information.
• Inconsistent information or simple mistakes.
• Failing to establish a sound business model.
• Not having a defined purpose for your business plan.

What questions should be answered in a business plan?

Writing a business plan is all about asking yourself questions about your business and being able to answer them through the planning process. You’ll likely be asking dozens and dozens of questions for each section of your plan.

However, these are the key questions you should ask and answer with your business plan:

• How will your business make money?
• Is there a need for your product or service?
• Who are your customers?
• How are you different from the competition?
• How will you reach your customers?
• How will you measure success?

How long should a business plan be?

The length of your business plan fully depends on what you intend to do with it. From the SBA and traditional lender point of view, a business plan needs to be whatever length necessary to fully explain your business. This means that you prove the viability of your business, show that you understand the market, and have a detailed strategy in place.

If you intend to use your business plan for internal management purposes, you don’t necessarily need a full 25-50 page business plan. Instead, you can start with a one-page plan to get all of the necessary information in place.

What are the different types of business plans?

While all business plans cover similar categories, the style and function fully depend on how you intend to use your plan. Here are a few common business plan types worth considering.

Traditional business plan: The tried-and-true traditional business plan is a formal document meant to be used when applying for funding or pitching to investors. This type of business plan follows the outline above and can be anywhere from 10-50 pages depending on the amount of detail included, the complexity of your business, and what you include in your appendix.

Business model canvas: The business model canvas is a one-page template designed to demystify the business planning process. It removes the need for a traditional, copy-heavy business plan, in favor of a single-page outline that can help you and outside parties better explore your business idea.

One-page business plan: This format is a simplified version of the traditional plan that focuses on the core aspects of your business. You’ll typically stick with bullet points and single sentences. It’s most useful for those exploring ideas, needing to validate their business model, or who need an internal plan to help them run and manage their business.

Lean Plan: The Lean Plan is less of a specific document type and more of a methodology. It takes the simplicity and styling of the one-page business plan and turns it into a process for you to continuously plan, test, review, refine, and take action based on performance. It’s faster, keeps your plan concise, and ensures that your plan is always up-to-date.

What’s the difference between a business plan and a strategic plan?

A business plan covers the “who” and “what” of your business. It explains what your business is doing right now and how it functions. The strategic plan explores long-term goals and explains “how” the business will get there. It encourages you to look more intently toward the future and how you will achieve your vision.

However, when approached correctly, your business plan can actually function as a strategic plan as well. If kept lean, you can define your business, outline strategic steps, and track ongoing operations all with a single plan.

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

Table of Contents

• Use AI to help write your plan
• Common planning mistakes
• Manage with your business plan
• Templates and examples

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How to Write the Management Team Section of a Business Plan + Examples

Written by Dave Lavinsky

Over the last 20+ years, we’ve written business plans for over 4,000 companies and hundreds of thousands of others have used the best business plan template and our other business planning materials.

From this vast experience, we’ve gained valuable insights on how to write a business plan effectively , specifically in the management section.

What is a Management Team Business Plan?

A management team business plan is a section in a comprehensive business plan that introduces and highlights the key members of the company’s management team. This part provides essential details about the individuals responsible for leading and running the business, including their backgrounds, skills, and experience.

It’s crucial for potential investors and stakeholders to evaluate the management team’s competence and qualifications, as a strong team can instill confidence in the company’s ability to succeed.

Why is the Management Team Section of a Business Plan Important?

Your management team plan has 3 goals:

• To prove to you that you have the right team to execute on the opportunity you have defined, and if not, to identify who you must hire to round out your current team
• To convince lenders and investors (e.g., angel investors, venture capitalists) to fund your company (if needed)
• To document how your Board (if applicable) can best help your team succeed

What to Include in Your Management Team Section

There are two key elements to include in your management team business plan as follows:

Management Team Members

For each key member of your team, document their name, title, and background.

Their backgrounds are most important in telling you and investors they are qualified to execute. Describe what positions each member has held in the past and what they accomplished in those positions. For example, if your VP of Sales was formerly the VP of Sales for another company in which they grew sales from zero to $10 million, that would be an important and compelling accomplishment to document.

Importantly, try to relate your team members’ past job experience with what you need them to accomplish at your company. For example, if a former high school principal was on your team, you could state that their vast experience working with both teenagers and their parents will help them succeed in their current position (particularly if the current position required them to work with both customer segments).

This is true for a management team for a small business, a medium-sized or large business.

Management Team Gaps

In this section, detail if your management team currently has any gaps or missing individuals. Not having a complete team at the time you develop your business plan. But, you must show your plan to complete your team.

As such, describe what positions are missing and who will fill the positions. For example, if you know you need to hire a VP of Marketing, state this. Further, state the job description of this person. For example, you might say that this hire will have 10 years of experience managing a marketing team, establishing new accounts, working with social media marketing, have startup experience, etc.

To give you a “checklist” of the employees you might want to include in your Management Team Members and/or Gaps sections, below are the most common management titles at a growing startup (note that many are specific to tech startups):

• Founder, CEO, and/or President
• Chief Operating Officer
• Chief Financial Officer
• VP of Sales
• VP of Marketing
• VP of Web Development and/or Engineering
• UX Designer/Manager
• Product Manager
• Digital Marketing Manager
• Business Development Manager
• Account Management/Customer Service Manager
• Sales Managers/Sales Staff
• Board Members

If you have a Board of Directors or Board of Advisors, you would include the bios of the members of your board in this section.

A Board of Directors is a paid group of individuals who help guide your company. Typically startups do not have such a board until they raise VC funding.

If your company is not at this stage, consider forming a Board of Advisors. Such a board is ideal particularly if your team is missing expertise and/or experience in certain areas. An advisory board includes 2 to 8 individuals who act as mentors to your business. Usually, you meet with them monthly or quarterly and they help answer questions and provide strategic guidance. You typically do not pay advisory board members with cash, but offering them options in your company is a best practice as it allows you to attract better board members and better motivate them.

Management Team Business Plan Example

Below are examples of how to include your management section in your business plan.

Key Team Members

Jim Smith, Founder & CEO

Jim has 15 years of experience in online software development, having co-founded two previous successful online businesses. His first company specialized in developing workflow automation software for government agencies and was sold to a public company in 2003. Jim’s second company developed a mobile app for parents to manage their children’s activities, which was sold to a large public company in 2014. Jim has a B.S. in computer science from MIT and an M.B.A from the University of Chicago

Bill Jones, COO

Bill has 20 years of sales and business development experience from working with several startups that he helped grow into large businesses. He has a B.S. in mechanical engineering from M.I.T., where he also played Division I lacrosse for four years.

We currently have no gaps in our management team, but we plan to expand our team by hiring a Vice President of Marketing to be responsible for all digital marketing efforts.

Vance Williamson, Founder & CEO

Prior to founding GoDoIt, Vance was the CIO of a major corporation with more than 100 retail locations. He oversaw all IT initiatives including software development, sales technology, mobile apps for customers and employees, security systems, customer databases/CRM platforms, etc. He has a  B.S in computer science and an MBA in operations management from UCLA.

We currently have two gaps in our Management Team: 

A VP of Sales with 10 years of experience managing sales teams, overseeing sales processes, working with manufacturers, establishing new accounts, working with digital marketing/advertising agencies to build brand awareness, etc. 

In addition, we need to hire a VP of Marketing with experience creating online marketing campaigns that attract new customers to our site.

How to Finish Your Business Plan in 1 Day!

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Click here to see how Growthink’s professional business plan consulting services can create your business plan for you.  

Other Resources for Writing Your Business Plan

• How to Write an Executive Summary
• How to Expertly Write the Company Description in Your Business Plan
• How to Write the Market Analysis Section of a Business Plan
• The Customer Analysis Section of Your Business Plan
• Completing the Competitive Analysis Section of Your Business Plan
• Financial Assumptions and Your Business Plan
• How to Create Financial Projections for Your Business Plan
• Everything You Need to Know about the Business Plan Appendix
• Business Plan Conclusion: Summary & Recap

Other Helpful Business Plan Articles & Templates

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How to Write Management Team Section in a Business Plan

Free Ultimate Guide On Writing A Business Plan

• May 1, 2024

A business is as efficient as its team and its management. Therefore, it becomes important for business owners to build a structured management team that achieves the objectives and goals set by the organization.

Andrew Carnegie, an American steel magnate, beautifully summarized it –

“Teamwork is the ability to work together toward a common vision. The ability to direct individual accomplishments toward organizational objectives.”

A business management plan helps build an efficient team and formalizes business operations. This helps businesses streamline strategies to achieve their goals.

So, if you are a business owner who is looking to formalize their business structure and write the management team section in their business plans, this guide is for you.

Here’s a sneak peek into what you’ll learn:

Sounds good? Let’s dive in.

What is the Management Section of a Business Plan?

The management section of a business plan is an in-depth description of a business’s team, its structure, and the owners of a business.

The section discusses ‌who is on the management team—internal and external, their skill sets, experiences, and how meaningfully they would contribute to an organization’s mission statement and goals.

Now that we have defined what the management section of a business plan is, let’s understand why it is so important.

Importance of a Business Plan Management Section

The management section helps you to

• Showcase leadership: The management team section helps you showcase how qualified and experienced team you have.
• Clarify team roles: It outlines who does what in your team, ensuring everyone knows their key performance areas and works together towards the same goals.
• Attract investors: Present your team in the best possible way, as it is one of the key factors in making the final investment decision.

What to include in the Management Section of a Business Plan?

Now that you know why exactly a management section in the business plan is necessary, let’s move ahead with what to include in it:

1. The Management Team

An organization’s entire management team can be divided into parts — the internal team and the external team. Let us see those in detail:

The Internal Management Team

A business team consists of several departments. The most common departments are—marketing, sales, IT, customer service, operations, finance, and HR.

These departments depend on the nature and functioning of your business. For example, a dental clinic may not require a sales department per se.

The entire management team is distinguished according to their responsibility. This helps the business owners and investors be aware of the roles, benefits, ESOPs (if applicable), profit sharing (for sales), work contracts, NDAs (Non-Disclosure Agreements), and Non-Competition Agreements of the entire team.

It is recommended that business owners collect and document the following information about their team:

• Educational Background
• Work Experience
• Accomplishments

For example, your present VP of Marketing helped their previous company grow its bottom line from $3 million to $10 million over 18 months.

The External Management Team

The external management team is usually composed of—advisory board members and professional services.

Advisory board members help by:

• Bringing their industry expertise, experience, and knowledge to the table.
• Offering strategic advice and helping the business develop long-term goals with future considerations in mind.
• Having a lot more contacts than any other individual can help businesses grow.

Credible advisory board members show great commitment to a company’s growth. Therefore, it becomes important to mention their experience and specialization in the business management plan.

The advisory board members can help give valuable advice that internal team members need or lack.

Usually, board members meet quarterly or monthly to provide strategic guidance in place of stock options in your company. This helps attract the best advisors and motivates them to invest in your business.

On the other hand, professional service helps by

• Offering highly specialized advice and sharing knowledge.
• Helping through the implementation process of strategies.

Such services help businesses leverage skills that would be difficult to build and acquire over a short period.

Examples of such professional services are:

• IT Consultants
• Business coaches and consultants

After a brief overview of the management team, let’s move forward.

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2. The Management Team Gaps

The management team gap is an important part of the management section. Primarily because it helps document if your management team currently has gaps or missing skills.

Your team may lack a few required skills while starting. The management team gaps help you to be aware and make efforts to close this gap.

As a business owner, you must document what positions are missing and who ought to fill those positions or take responsibility.

For example, if you need a VP of Sales, clearly document this in the section.

Also, write down the job description and key responsibilities to be undertaken. For example—you might mention that the role requires 10 years of experience in the sales domain. The applicant must have experience handling a sales team, closing new accounts, and working in tandem with the marketing team.

Be as detailed as possible. This will help you build a checklist while interviewing the right candidate and also win investor confidence in your managerial skills.

Here are a few key positions you would want to include in your management team business plan:

• Founder and/or CEO
• Chief Technical Officer (CTO)
• Chief Marketing Officer (CMO)
• Head of Product Management (PM)
• VP of Sales
• VP of Marketing
• Business Development Manager
• Customer Service Manager
• Sales Managers/Sales Staff
• Human Resources Manager
• Advisory Board Members

3. The Management Structure

The management structure defines how a business organizes its management hierarchy. A hierarchy helps determine all team members’ roles, positions, power, and responsibilities.

The management structure also depends upon the type of business ownership. Business ownership can be—a sole proprietorship, partnership, or LLC.

Following is a sample management structure of an organization.

Now that we understand what details we need to document in business management plans, let’s have a look at the example.

Example of a Management Section Plan

[management section of a hotel], [management team], internal team members.

Name: Charles Fargo Role: Owner Responsibility: Formulating key strategies, defining budgets, and building a business plan Experience: 35 years of owning multiple hotels in Las Vegas Educational Background: B.Sc in Hospitality Management from South Dakota State University.

Name: Michael Clark Role: General Manager Responsibility: Overall hotel operations – guest interactions, revenue management, brand ambassador of the hotel, customer satisfaction, and experience, leadership to all departments Experience: 25 years working with several technology hotels as the general manager. Educational Background: MBA from Wharton School

Name: George Trump Role: Department Manager Responsibility: Manage employees, smooth coordination amongst employees, plan daily affairs of the department, strategize, prepare reports, and deal with complaints and suggestions. Lead team members to function as a team Experience: 15 years working as a department manager Educational Background: BSc in Hotel Management from Texas University

Note: There can be multiple Department Managers depending on the nature of your business. In the case of hotels, departments can include – housekeeping, logistics, security, food, and banquets.

Name: Donald Clooney Role: Marketing and Sales Manager Responsibility: Increase occupancy and generate revenue. Position the hotel as an option for leisure activities, relaxation, and holidays. Experience: 11 years working as the marketing and sales manager for hotels Educational Background: MBA in Tourism and Hospitality from Midway University

Name: Oprah Williams Role: Human Resources Manager Responsibility: Recruit and train hotel staff, maintain smooth onboarding process for new recruits, train, counsel, and coach staff, resolve conflicts, and conduct performance reviews Experience: 9 years working as human resources manager for hotels Educational Background: MBA in Human Resources Management from California University

External Team Members

Advisory Board Member

#1 Richard Branson Responsibility: Strategic advisory for sustainable growth and expansion Experience: Founder of Virgin Group

Professional Services

#1 Digital Marketing Agency – Neil Patel – Help market and sell our product using digital mediums – blog, website, YouTube, and social media.

[Management Structure]

There is a gap in one key position in our startup.

#1 Chief Finance Officer (CFO) Responsibilities: Finance, Accounting, Tracking Profit and Loss, and overseeing FP&A (Financial Planning and Analysis)

So, that’s it for today! Now that you know how to write a management team section, make sure you write the best one by mentioning all the necessary details.

If you are still confused about writing the management team sections, then you can visit various sample business plans to know more. You can even use smart business planning software to smooth your business planning process.

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Frequently Asked Questions

What tone should i use when writing the management team section.

When writing about your management team in your business plan, use a tone that’s confident, professional, and positive. This shows investors that your team is experienced, qualified, and able to lead your company to success.

Who should be included in the management team's business plan?

In the management team of a business plan, you should include all the key members of the company:

• Top management
• Founder/CEO
• VP of sales

Do I need to include personal information about team members?

In a business plan, it’s not necessary to include personal information about team members unless it directly relates to their role in the business. The focus should be on professional qualifications, experience, and skills that are relevant to their position.

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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How to Write a Business Plan in 9 Steps (+ Template and Examples)

Every successful business has one thing in common, a good and well-executed business plan. A business plan is more than a document, it is a complete guide that outlines the goals your business wants to achieve, including its financial goals . It helps you analyze results, make strategic decisions, show your business operations and growth.

If you want to start a business or already have one and need to pitch it to investors for funding, writing a good business plan improves your chances of attracting financiers. As a startup, if you want to secure loans from financial institutions, part of the requirements involve submitting your business plan.

Writing a business plan does not have to be a complicated or time-consuming process. In this article, you will learn the step-by-step process for writing a successful business plan.

You will also learn what you need a business plan for, tips and strategies for writing a convincing business plan, business plan examples and templates that will save you tons of time, and the alternatives to the traditional business plan.

Let’s get started.

What Do You Need A Business Plan For?

Businesses create business plans for different purposes such as to secure funds, monitor business growth, measure your marketing strategies, and measure your business success.

1. Secure Funds

One of the primary reasons for writing a business plan is to secure funds, either from financial institutions/agencies or investors.

For you to effectively acquire funds, your business plan must contain the key elements of your business plan . For example, your business plan should include your growth plans, goals you want to achieve, and milestones you have recorded.

A business plan can also attract new business partners that are willing to contribute financially and intellectually. If you are writing a business plan to a bank, your project must show your traction , that is, the proof that you can pay back any loan borrowed.

Also, if you are writing to an investor, your plan must contain evidence that you can effectively utilize the funds you want them to invest in your business. Here, you are using your business plan to persuade a group or an individual that your business is a source of a good investment.

2. Monitor Business Growth

A business plan can help you track cash flows in your business. It steers your business to greater heights. A business plan capable of tracking business growth should contain:

• The business goals
• Methods to achieve the goals
• Time-frame for attaining those goals

A good business plan should guide you through every step in achieving your goals. It can also track the allocation of assets to every aspect of the business. You can tell when you are spending more than you should on a project.

You can compare a business plan to a written GPS. It helps you manage your business and hints at the right time to expand your business.

3. Measure Business Success

A business plan can help you measure your business success rate. Some small-scale businesses are thriving better than more prominent companies because of their track record of success.

Right from the onset of your business operation, set goals and work towards them. Write a plan to guide you through your procedures. Use your plan to measure how much you have achieved and how much is left to attain.

You can also weigh your success by monitoring the position of your brand relative to competitors. On the other hand, a business plan can also show you why you have not achieved a goal. It can tell if you have elapsed the time frame you set to attain a goal.

4. Document Your Marketing Strategies

You can use a business plan to document your marketing plans. Every business should have an effective marketing plan.

Competition mandates every business owner to go the extraordinary mile to remain relevant in the market. Your business plan should contain your marketing strategies that work. You can measure the success rate of your marketing plans.

In your business plan, your marketing strategy must answer the questions:

• How do you want to reach your target audience?
• How do you plan to retain your customers?
• What is/are your pricing plans?
• What is your budget for marketing?

How to Write a Business Plan Step-by-Step

1. create your executive summary.

The executive summary is a snapshot of your business or a high-level overview of your business purposes and plans . Although the executive summary is the first section in your business plan, most people write it last. The length of the executive summary is not more than two pages.

Generally, there are nine sections in a business plan, the executive summary should condense essential ideas from the other eight sections.

A good executive summary should do the following:

• A Snapshot of Growth Potential. Briefly inform the reader about your company and why it will be successful)
• Contain your Mission Statement which explains what the main objective or focus of your business is.
• Product Description and Differentiation. Brief description of your products or services and why it is different from other solutions in the market.
• The Team. Basic information about your company’s leadership team and employees
• Business Concept. A solid description of what your business does.
• Target Market. The customers you plan to sell to.
• Marketing Strategy. Your plans on reaching and selling to your customers
• Current Financial State. Brief information about what revenue your business currently generates.
• Projected Financial State. Brief information about what you foresee your business revenue to be in the future.

The executive summary is the make-or-break section of your business plan. If your summary cannot in less than two pages cannot clearly describe how your business will solve a particular problem of your target audience and make a profit, your business plan is set on a faulty foundation.

Avoid using the executive summary to hype your business, instead, focus on helping the reader understand the what and how of your plan.

View the executive summary as an opportunity to introduce your vision for your company. You know your executive summary is powerful when it can answer these key questions:

• Who is your target audience?
• What sector or industry are you in?
• What are your products and services?
• What is the future of your industry?
• Is your company scaleable?
• Who are the owners and leaders of your company? What are their backgrounds and experience levels?
• What is the motivation for starting your company?
• What are the next steps?

Writing the executive summary last although it is the most important section of your business plan is an excellent idea. The reason why is because it is a high-level overview of your business plan. It is the section that determines whether potential investors and lenders will read further or not.

The executive summary can be a stand-alone document that covers everything in your business plan. It is not uncommon for investors to request only the executive summary when evaluating your business. If the information in the executive summary impresses them, they will ask for the complete business plan.

If you are writing your business plan for your planning purposes, you do not need to write the executive summary.

2. Add Your Company Overview

The company overview or description is the next section in your business plan after the executive summary. It describes what your business does.

Adding your company overview can be tricky especially when your business is still in the planning stages. Existing businesses can easily summarize their current operations but may encounter difficulties trying to explain what they plan to become.

Your company overview should contain the following:

• What products and services you will provide
• Geographical markets and locations your company have a presence
• What you need to run your business
• Who your target audience or customers are
• Who will service your customers
• Your company’s purpose, mission, and vision
• Information about your company’s founders
• Who the founders are
• Notable achievements of your company so far

When creating a company overview, you have to focus on three basics: identifying your industry, identifying your customer, and explaining the problem you solve.

If you are stuck when creating your company overview, try to answer some of these questions that pertain to you.

• Who are you targeting? (The answer is not everyone)
• What pain point does your product or service solve for your customers that they will be willing to spend money on resolving?
• How does your product or service overcome that pain point?
• Where is the location of your business?
• What products, equipment, and services do you need to run your business?
• How is your company’s product or service different from your competition in the eyes of your customers?
• How many employees do you need and what skills do you require them to have?

After answering some or all of these questions, you will get more than enough information you need to write your company overview or description section. When writing this section, describe what your company does for your customers.

The company description or overview section contains three elements: mission statement, history, and objectives.

• Mission Statement

The mission statement refers to the reason why your business or company is existing. It goes beyond what you do or sell, it is about the ‘why’. A good mission statement should be emotional and inspirational.

Your mission statement should follow the KISS rule (Keep It Simple, Stupid). For example, Shopify’s mission statement is “Make commerce better for everyone.”

When describing your company’s history, make it simple and avoid the temptation of tying it to a defensive narrative. Write it in the manner you would a profile. Your company’s history should include the following information:

• Founding Date
• Major Milestones
• Location(s)
• Flagship Products or Services
• Number of Employees
• Executive Leadership Roles

When you fill in this information, you use it to write one or two paragraphs about your company’s history.

Business Objectives

Your business objective must be SMART (specific, measurable, achievable, realistic, and time-bound.) Failure to clearly identify your business objectives does not inspire confidence and makes it hard for your team members to work towards a common purpose.

3. Perform Market and Competitive Analyses to Proof a Big Enough Business Opportunity

The third step in writing a business plan is the market and competitive analysis section. Every business, no matter the size, needs to perform comprehensive market and competitive analyses before it enters into a market.

Performing market and competitive analyses are critical for the success of your business. It helps you avoid entering the right market with the wrong product, or vice versa. Anyone reading your business plans, especially financiers and financial institutions will want to see proof that there is a big enough business opportunity you are targeting.

This section is where you describe the market and industry you want to operate in and show the big opportunities in the market that your business can leverage to make a profit. If you noticed any unique trends when doing your research, show them in this section.

Market analysis alone is not enough, you have to add competitive analysis to strengthen this section. There are already businesses in the industry or market, how do you plan to take a share of the market from them?

You have to clearly illustrate the competitive landscape in your business plan. Are there areas your competitors are doing well? Are there areas where they are not doing so well? Show it.

Make it clear in this section why you are moving into the industry and what weaknesses are present there that you plan to explain. How are your competitors going to react to your market entry? How do you plan to get customers? Do you plan on taking your competitors' competitors, tap into other sources for customers, or both?

Illustrate the competitive landscape as well. What are your competitors doing well and not so well?

Answering these questions and thoughts will aid your market and competitive analysis of the opportunities in your space. Depending on how sophisticated your industry is, or the expectations of your financiers, you may need to carry out a more comprehensive market and competitive analysis to prove that big business opportunity.

Instead of looking at the market and competitive analyses as one entity, separating them will make the research even more comprehensive.

Market Analysis

Market analysis, boarding speaking, refers to research a business carried out on its industry, market, and competitors. It helps businesses gain a good understanding of their target market and the outlook of their industry. Before starting a company, it is vital to carry out market research to find out if the market is viable.

The market analysis section is a key part of the business plan. It is the section where you identify who your best clients or customers are. You cannot omit this section, without it your business plan is incomplete.

A good market analysis will tell your readers how you fit into the existing market and what makes you stand out. This section requires in-depth research, it will probably be the most time-consuming part of the business plan to write.

• Market Research

To create a compelling market analysis that will win over investors and financial institutions, you have to carry out thorough market research . Your market research should be targeted at your primary target market for your products or services. Here is what you want to find out about your target market.

• Your target market’s needs or pain points
• The existing solutions for their pain points
• Geographic Location
• Demographics

The purpose of carrying out a marketing analysis is to get all the information you need to show that you have a solid and thorough understanding of your target audience.

Only after you have fully understood the people you plan to sell your products or services to, can you evaluate correctly if your target market will be interested in your products or services.

You can easily convince interested parties to invest in your business if you can show them you thoroughly understand the market and show them that there is a market for your products or services.

How to Quantify Your Target Market

One of the goals of your marketing research is to understand who your ideal customers are and their purchasing power. To quantify your target market, you have to determine the following:

• Your Potential Customers: They are the people you plan to target. For example, if you sell accounting software for small businesses , then anyone who runs an enterprise or large business is unlikely to be your customers. Also, individuals who do not have a business will most likely not be interested in your product.
• Total Households: If you are selling household products such as heating and air conditioning systems, determining the number of total households is more important than finding out the total population in the area you want to sell to. The logic is simple, people buy the product but it is the household that uses it.
• Median Income: You need to know the median income of your target market. If you target a market that cannot afford to buy your products and services, your business will not last long.
• Income by Demographics: If your potential customers belong to a certain age group or gender, determining income levels by demographics is necessary. For example, if you sell men's clothes, your target audience is men.

What Does a Good Market Analysis Entail?

Your business does not exist on its own, it can only flourish within an industry and alongside competitors. Market analysis takes into consideration your industry, target market, and competitors. Understanding these three entities will drastically improve your company’s chances of success.

You can view your market analysis as an examination of the market you want to break into and an education on the emerging trends and themes in that market. Good market analyses include the following:

• Industry Description. You find out about the history of your industry, the current and future market size, and who the largest players/companies are in your industry.
• Overview of Target Market. You research your target market and its characteristics. Who are you targeting? Note, it cannot be everyone, it has to be a specific group. You also have to find out all information possible about your customers that can help you understand how and why they make buying decisions.
• Size of Target Market: You need to know the size of your target market, how frequently they buy, and the expected quantity they buy so you do not risk overproducing and having lots of bad inventory. Researching the size of your target market will help you determine if it is big enough for sustained business or not.
• Growth Potential: Before picking a target market, you want to be sure there are lots of potential for future growth. You want to avoid going for an industry that is declining slowly or rapidly with almost zero growth potential.
• Market Share Potential: Does your business stand a good chance of taking a good share of the market?
• Market Pricing and Promotional Strategies: Your market analysis should give you an idea of the price point you can expect to charge for your products and services. Researching your target market will also give you ideas of pricing strategies you can implement to break into the market or to enjoy maximum profits.
• Potential Barriers to Entry: One of the biggest benefits of conducting market analysis is that it shows you every potential barrier to entry your business will likely encounter. It is a good idea to discuss potential barriers to entry such as changing technology. It informs readers of your business plan that you understand the market.
• Research on Competitors: You need to know the strengths and weaknesses of your competitors and how you can exploit them for the benefit of your business. Find patterns and trends among your competitors that make them successful, discover what works and what doesn’t, and see what you can do better.

The market analysis section is not just for talking about your target market, industry, and competitors. You also have to explain how your company can fill the hole you have identified in the market.

Here are some questions you can answer that can help you position your product or service in a positive light to your readers.

• Is your product or service of superior quality?
• What additional features do you offer that your competitors do not offer?
• Are you targeting a ‘new’ market?

Basically, your market analysis should include an analysis of what already exists in the market and an explanation of how your company fits into the market.

Competitive Analysis

In the competitive analysis section, y ou have to understand who your direct and indirect competitions are, and how successful they are in the marketplace. It is the section where you assess the strengths and weaknesses of your competitors, the advantage(s) they possess in the market and show the unique features or qualities that make you different from your competitors.

Many businesses do market analysis and competitive analysis together. However, to fully understand what the competitive analysis entails, it is essential to separate it from the market analysis.

Competitive analysis for your business can also include analysis on how to overcome barriers to entry in your target market.

The primary goal of conducting a competitive analysis is to distinguish your business from your competitors. A strong competitive analysis is essential if you want to convince potential funding sources to invest in your business. You have to show potential investors and lenders that your business has what it takes to compete in the marketplace successfully.

Competitive analysis will s how you what the strengths of your competition are and what they are doing to maintain that advantage.

When doing your competitive research, you first have to identify your competitor and then get all the information you can about them. The idea of spending time to identify your competitor and learn everything about them may seem daunting but it is well worth it.

Find answers to the following questions after you have identified who your competitors are.

• What are your successful competitors doing?
• Why is what they are doing working?
• Can your business do it better?
• What are the weaknesses of your successful competitors?
• What are they not doing well?
• Can your business turn its weaknesses into strengths?
• How good is your competitors’ customer service?
• Where do your competitors invest in advertising?
• What sales and pricing strategies are they using?
• What marketing strategies are they using?
• What kind of press coverage do they get?
• What are their customers saying about your competitors (both the positive and negative)?

If your competitors have a website, it is a good idea to visit their websites for more competitors’ research. Check their “About Us” page for more information.

If you are presenting your business plan to investors, you need to clearly distinguish yourself from your competitors. Investors can easily tell when you have not properly researched your competitors.

Take time to think about what unique qualities or features set you apart from your competitors. If you do not have any direct competition offering your product to the market, it does not mean you leave out the competitor analysis section blank. Instead research on other companies that are providing a similar product, or whose product is solving the problem your product solves.

The next step is to create a table listing the top competitors you want to include in your business plan. Ensure you list your business as the last and on the right. What you just created is known as the competitor analysis table.

Direct vs Indirect Competition

You cannot know if your product or service will be a fit for your target market if you have not understood your business and the competitive landscape.

There is no market you want to target where you will not encounter competition, even if your product is innovative. Including competitive analysis in your business plan is essential.

If you are entering an established market, you need to explain how you plan to differentiate your products from the available options in the market. Also, include a list of few companies that you view as your direct competitors The competition you face in an established market is your direct competition.

In situations where you are entering a market with no direct competition, it does not mean there is no competition there. Consider your indirect competition that offers substitutes for the products or services you offer.

For example, if you sell an innovative SaaS product, let us say a project management software , a company offering time management software is your indirect competition.

There is an easy way to find out who your indirect competitors are in the absence of no direct competitors. You simply have to research how your potential customers are solving the problems that your product or service seeks to solve. That is your direct competition.

Factors that Differentiate Your Business from the Competition

There are three main factors that any business can use to differentiate itself from its competition. They are cost leadership, product differentiation, and market segmentation.

1. Cost Leadership

A strategy you can impose to maximize your profits and gain an edge over your competitors. It involves offering lower prices than what the majority of your competitors are offering.

A common practice among businesses looking to enter into a market where there are dominant players is to use free trials or pricing to attract as many customers as possible to their offer.

2. Product Differentiation

Your product or service should have a unique selling proposition (USP) that your competitors do not have or do not stress in their marketing.

Part of the marketing strategy should involve making your products unique and different from your competitors. It does not have to be different from your competitors, it can be the addition to a feature or benefit that your competitors do not currently have.

3. Market Segmentation

As a new business seeking to break into an industry, you will gain more success from focusing on a specific niche or target market, and not the whole industry.

If your competitors are focused on a general need or target market, you can differentiate yourself from them by having a small and hyper-targeted audience. For example, if your competitors are selling men’s clothes in their online stores , you can sell hoodies for men.

4. Define Your Business and Management Structure

The next step in your business plan is your business and management structure. It is the section where you describe the legal structure of your business and the team running it.

Your business is only as good as the management team that runs it, while the management team can only strive when there is a proper business and management structure in place.

If your company is a sole proprietor or a limited liability company (LLC), a general or limited partnership, or a C or an S corporation, state it clearly in this section.

Use an organizational chart to show the management structure in your business. Clearly show who is in charge of what area in your company. It is where you show how each key manager or team leader’s unique experience can contribute immensely to the success of your company. You can also opt to add the resumes and CVs of the key players in your company.

The business and management structure section should show who the owner is, and other owners of the businesses (if the business has other owners). For businesses or companies with multiple owners, include the percent ownership of the various owners and clearly show the extent of each others’ involvement in the company.

Investors want to know who is behind the company and the team running it to determine if it has the right management to achieve its set goals.

Management Team

The management team section is where you show that you have the right team in place to successfully execute the business operations and ideas. Take time to create the management structure for your business. Think about all the important roles and responsibilities that you need managers for to grow your business.

Include brief bios of each key team member and ensure you highlight only the relevant information that is needed. If your team members have background industry experience or have held top positions for other companies and achieved success while filling that role, highlight it in this section.

A common mistake that many startups make is assigning C-level titles such as (CMO and CEO) to everyone on their team. It is unrealistic for a small business to have those titles. While it may look good on paper for the ego of your team members, it can prevent investors from investing in your business.

Instead of building an unrealistic management structure that does not fit your business reality, it is best to allow business titles to grow as the business grows. Starting everyone at the top leaves no room for future change or growth, which is bad for productivity.

Your management team does not have to be complete before you start writing your business plan. You can have a complete business plan even when there are managerial positions that are empty and need filling.

If you have management gaps in your team, simply show the gaps and indicate you are searching for the right candidates for the role(s). Investors do not expect you to have a full management team when you are just starting your business.

Key Questions to Answer When Structuring Your Management Team

• Who are the key leaders?
• What experiences, skills, and educational backgrounds do you expect your key leaders to have?
• Do your key leaders have industry experience?
• What positions will they fill and what duties will they perform in those positions?
• What level of authority do the key leaders have and what are their responsibilities?
• What is the salary for the various management positions that will attract the ideal candidates?

Additional Tips for Writing the Management Structure Section

1. Avoid Adding ‘Ghost’ Names to Your Management Team

There is always that temptation to include a ‘ghost’ name to your management team to attract and influence investors to invest in your business. Although the presence of these celebrity management team members may attract the attention of investors, it can cause your business to lose any credibility if you get found out.

Seasoned investors will investigate further the members of your management team before committing fully to your business If they find out that the celebrity name used does not play any actual role in your business, they will not invest and may write you off as dishonest.

2. Focus on Credentials But Pay Extra Attention to the Roles

Investors want to know the experience that your key team members have to determine if they can successfully reach the company’s growth and financial goals.

While it is an excellent boost for your key management team to have the right credentials, you also want to pay extra attention to the roles they will play in your company.

Organizational Chart

Adding an organizational chart in this section of your business plan is not necessary, you can do it in your business plan’s appendix.

If you are exploring funding options, it is not uncommon to get asked for your organizational chart. The function of an organizational chart goes beyond raising money, you can also use it as a useful planning tool for your business.

An organizational chart can help you identify how best to structure your management team for maximum productivity and point you towards key roles you need to fill in the future.

You can use the organizational chart to show your company’s internal management structure such as the roles and responsibilities of your management team, and relationships that exist between them.

5. Describe Your Product and Service Offering

In your business plan, you have to describe what you sell or the service you plan to offer. It is the next step after defining your business and management structure. The products and services section is where you sell the benefits of your business.

Here you have to explain how your product or service will benefit your customers and describe your product lifecycle. It is also the section where you write down your plans for intellectual property like patent filings and copyrighting.

The research and development that you are undertaking for your product or service need to be explained in detail in this section. However, do not get too technical, sell the general idea and its benefits.

If you have any diagrams or intricate designs of your product or service, do not include them in the products and services section. Instead, leave them for the addendum page. Also, if you are leaving out diagrams or designs for the addendum, ensure you add this phrase “For more detail, visit the addendum Page #.”

Your product and service section in your business plan should include the following:

• A detailed explanation that clearly shows how your product or service works.
• The pricing model for your product or service.
• Your business’ sales and distribution strategy.
• The ideal customers that want your product or service.
• The benefits of your products and services.
• Reason(s) why your product or service is a better alternative to what your competitors are currently offering in the market.
• Plans for filling the orders you receive
• If you have current or pending patents, copyrights, and trademarks for your product or service, you can also discuss them in this section.

What to Focus On When Describing the Benefits, Lifecycle, and Production Process of Your Products or Services

In the products and services section, you have to distill the benefits, lifecycle, and production process of your products and services.

When describing the benefits of your products or services, here are some key factors to focus on.

• Unique features
• Translating the unique features into benefits
• The emotional, psychological, and practical payoffs to attract customers
• Intellectual property rights or any patents

When describing the product life cycle of your products or services, here are some key factors to focus on.

• Upsells, cross-sells, and down-sells
• Time between purchases
• Plans for research and development.

When describing the production process for your products or services, you need to think about the following:

• The creation of new or existing products and services.
• The sources for the raw materials or components you need for production.
• Assembling the products
• Maintaining quality control
• Supply-chain logistics (receiving the raw materials and delivering the finished products)
• The day-to-day management of the production processes, bookkeeping, and inventory.

Tips for Writing the Products or Services Section of Your Business Plan

1. Avoid Technical Descriptions and Industry Buzzwords

The products and services section of your business plan should clearly describe the products and services that your company provides. However, it is not a section to include technical jargons that anyone outside your industry will not understand.

A good practice is to remove highly detailed or technical descriptions in favor of simple terms. Industry buzzwords are not necessary, if there are simpler terms you can use, then use them. If you plan to use your business plan to source funds, making the product or service section so technical will do you no favors.

2. Describe How Your Products or Services Differ from Your Competitors

When potential investors look at your business plan, they want to know how the products and services you are offering differ from that of your competition. Differentiating your products or services from your competition in a way that makes your solution more attractive is critical.

If you are going the innovative path and there is no market currently for your product or service, you need to describe in this section why the market needs your product or service.

For example, overnight delivery was a niche business that only a few companies were participating in. Federal Express (FedEx) had to show in its business plan that there was a large opportunity for that service and they justified why the market needed that service.

3. Long or Short Products or Services Section

Should your products or services section be short? Does the long products or services section attract more investors?

There are no straightforward answers to these questions. Whether your products or services section should be long or relatively short depends on the nature of your business.

If your business is product-focused, then automatically you need to use more space to describe the details of your products. However, if the product your business sells is a commodity item that relies on competitive pricing or other pricing strategies, you do not have to use up so much space to provide significant details about the product.

Likewise, if you are selling a commodity that is available in numerous outlets, then you do not have to spend time on writing a long products or services section.

The key to the success of your business is most likely the effectiveness of your marketing strategies compared to your competitors. Use more space to address that section.

If you are creating a new product or service that the market does not know about, your products or services section can be lengthy. The reason why is because you need to explain everything about the product or service such as the nature of the product, its use case, and values.

A short products or services section for an innovative product or service will not give the readers enough information to properly evaluate your business.

4. Describe Your Relationships with Vendors or Suppliers

Your business will rely on vendors or suppliers to supply raw materials or the components needed to make your products. In your products and services section, describe your relationships with your vendors and suppliers fully.

Avoid the mistake of relying on only one supplier or vendor. If that supplier or vendor fails to supply or goes out of business, you can easily face supply problems and struggle to meet your demands. Plan to set up multiple vendor or supplier relationships for better business stability.

5. Your Primary Goal Is to Convince Your Readers

The primary goal of your business plan is to convince your readers that your business is viable and to create a guide for your business to follow. It applies to the products and services section.

When drafting this section, think like the reader. See your reader as someone who has no idea about your products and services. You are using the products and services section to provide the needed information to help your reader understand your products and services. As a result, you have to be clear and to the point.

While you want to educate your readers about your products or services, you also do not want to bore them with lots of technical details. Show your products and services and not your fancy choice of words.

Your products and services section should provide the answer to the “what” question for your business. You and your management team may run the business, but it is your products and services that are the lifeblood of the business.

Key Questions to Answer When Writing your Products and Services Section

Answering these questions can help you write your products and services section quickly and in a way that will appeal to your readers.

• Are your products existing on the market or are they still in the development stage?
• What is your timeline for adding new products and services to the market?
• What are the positives that make your products and services different from your competitors?
• Do your products and services have any competitive advantage that your competitors’ products and services do not currently have?
• Do your products or services have any competitive disadvantages that you need to overcome to compete with your competitors? If your answer is yes, state how you plan to overcome them,
• How much does it cost to produce your products or services? How much do you plan to sell it for?
• What is the price for your products and services compared to your competitors? Is pricing an issue?
• What are your operating costs and will it be low enough for you to compete with your competitors and still take home a reasonable profit margin?
• What is your plan for acquiring your products? Are you involved in the production of your products or services?
• Are you the manufacturer and produce all the components you need to create your products? Do you assemble your products by using components supplied by other manufacturers? Do you purchase your products directly from suppliers or wholesalers?
• Do you have a steady supply of products that you need to start your business? (If your business is yet to kick-off)
• How do you plan to distribute your products or services to the market?

You can also hint at the marketing or promotion plans you have for your products or services such as how you plan to build awareness or retain customers. The next section is where you can go fully into details about your business’s marketing and sales plan.

6. Show and Explain Your Marketing and Sales Plan

Providing great products and services is wonderful, but it means nothing if you do not have a marketing and sales plan to inform your customers about them. Your marketing and sales plan is critical to the success of your business.

The sales and marketing section is where you show and offer a detailed explanation of your marketing and sales plan and how you plan to execute it. It covers your pricing plan, proposed advertising and promotion activities, activities and partnerships you need to make your business a success, and the benefits of your products and services.

There are several ways you can approach your marketing and sales strategy. Ideally, your marketing and sales strategy has to fit the unique needs of your business.

In this section, you describe how the plans your business has for attracting and retaining customers, and the exact process for making a sale happen. It is essential to thoroughly describe your complete marketing and sales plans because you are still going to reference this section when you are making financial projections for your business.

Outline Your Business’ Unique Selling Proposition (USP)

The sales and marketing section is where you outline your business’s unique selling proposition (USP). When you are developing your unique selling proposition, think about the strongest reasons why people should buy from you over your competition. That reason(s) is most likely a good fit to serve as your unique selling proposition (USP).

Target Market and Target Audience

Plans on how to get your products or services to your target market and how to get your target audience to buy them go into this section. You also highlight the strengths of your business here, particularly what sets them apart from your competition.

Before you start writing your marketing and sales plan, you need to have properly defined your target audience and fleshed out your buyer persona. If you do not first understand the individual you are marketing to, your marketing and sales plan will lack any substance and easily fall.

Creating a Smart Marketing and Sales Plan

Marketing your products and services is an investment that requires you to spend money. Like any other investment, you have to generate a good return on investment (ROI) to justify using that marketing and sales plan. Good marketing and sales plans bring in high sales and profits to your company.

Avoid spending money on unproductive marketing channels. Do your research and find out the best marketing and sales plan that works best for your company.

Your marketing and sales plan can be broken into different parts: your positioning statement, pricing, promotion, packaging, advertising, public relations, content marketing, social media, and strategic alliances.

Your Positioning Statement

Your positioning statement is the first part of your marketing and sales plan. It refers to the way you present your company to your customers.

Are you the premium solution, the low-price solution, or are you the intermediary between the two extremes in the market? What do you offer that your competitors do not that can give you leverage in the market?

Before you start writing your positioning statement, you need to spend some time evaluating the current market conditions. Here are some questions that can help you to evaluate the market

• What are the unique features or benefits that you offer that your competitors lack?
• What are your customers’ primary needs and wants?
• Why should a customer choose you over your competition? How do you plan to differentiate yourself from the competition?
• How does your company’s solution compare with other solutions in the market?

After answering these questions, then you can start writing your positioning statement. Your positioning statement does not have to be in-depth or too long.

All you need to explain with your positioning statement are two focus areas. The first is the position of your company within the competitive landscape. The other focus area is the core value proposition that sets your company apart from other alternatives that your ideal customer might consider.

Here is a simple template you can use to develop a positioning statement.

For [description of target market] who [need of target market], [product or service] [how it meets the need]. Unlike [top competition], it [most essential distinguishing feature].

For example, let’s create the positioning statement for fictional accounting software and QuickBooks alternative , TBooks.

“For small business owners who need accounting services, TBooks is an accounting software that helps small businesses handle their small business bookkeeping basics quickly and easily. Unlike Wave, TBooks gives small businesses access to live sessions with top accountants.”

You can edit this positioning statement sample and fill it with your business details.

After writing your positioning statement, the next step is the pricing of your offerings. The overall positioning strategy you set in your positioning statement will often determine how you price your products or services.

Pricing is a powerful tool that sends a strong message to your customers. Failure to get your pricing strategy right can make or mar your business. If you are targeting a low-income audience, setting a premium price can result in low sales.

You can use pricing to communicate your positioning to your customers. For example, if you are offering a product at a premium price, you are sending a message to your customers that the product belongs to the premium category.

Basic Rules to Follow When Pricing Your Offering

Setting a price for your offering involves more than just putting a price tag on it. Deciding on the right pricing for your offering requires following some basic rules. They include covering your costs, primary and secondary profit center pricing, and matching the market rate.

• Covering Your Costs: The price you set for your products or service should be more than it costs you to produce and deliver them. Every business has the same goal, to make a profit. Depending on the strategy you want to use, there are exceptions to this rule. However, the vast majority of businesses follow this rule.
• Primary and Secondary Profit Center Pricing: When a company sets its price above the cost of production, it is making that product its primary profit center. A company can also decide not to make its initial price its primary profit center by selling below or at even with its production cost. It rather depends on the support product or even maintenance that is associated with the initial purchase to make its profit. The initial price thus became its secondary profit center.
• Matching the Market Rate: A good rule to follow when pricing your products or services is to match your pricing with consumer demand and expectations. If you price your products or services beyond the price your customer perceives as the ideal price range, you may end up with no customers. Pricing your products too low below what your customer perceives as the ideal price range may lead to them undervaluing your offering.

Pricing Strategy

Your pricing strategy influences the price of your offering. There are several pricing strategies available for you to choose from when examining the right pricing strategy for your business. They include cost-plus pricing, market-based pricing, value pricing, and more.

• Cost-plus Pricing: This strategy is one of the simplest and oldest pricing strategies. Here you consider the cost of producing a unit of your product and then add a profit to it to arrive at your market price. It is an effective pricing strategy for manufacturers because it helps them cover their initial costs. Another name for the cost-plus pricing strategy is the markup pricing strategy.
• Market-based Pricing: This pricing strategy analyses the market including competitors’ pricing and then sets a price based on what the market is expecting. With this pricing strategy, you can either set your price at the low-end or high-end of the market.
• Value Pricing: This pricing strategy involves setting a price based on the value you are providing to your customer. When adopting a value-based pricing strategy, you have to set a price that your customers are willing to pay. Service-based businesses such as small business insurance providers , luxury goods sellers, and the fashion industry use this pricing strategy.

After carefully sorting out your positioning statement and pricing, the next item to look at is your promotional strategy. Your promotional strategy explains how you plan on communicating with your customers and prospects.

As a business, you must measure all your costs, including the cost of your promotions. You also want to measure how much sales your promotions bring for your business to determine its usefulness. Promotional strategies or programs that do not lead to profit need to be removed.

There are different types of promotional strategies you can adopt for your business, they include advertising, public relations, and content marketing.

Advertising

Your business plan should include your advertising plan which can be found in the marketing and sales plan section. You need to include an overview of your advertising plans such as the areas you plan to spend money on to advertise your business and offers.

Ensure that you make it clear in this section if your business will be advertising online or using the more traditional offline media, or the combination of both online and offline media. You can also include the advertising medium you want to use to raise awareness about your business and offers.

Some common online advertising mediums you can use include social media ads, landing pages, sales pages, SEO, Pay-Per-Click, emails, Google Ads, and others. Some common traditional and offline advertising mediums include word of mouth, radios, direct mail, televisions, flyers, billboards, posters, and others.

A key component of your advertising strategy is how you plan to measure the effectiveness and success of your advertising campaign. There is no point in sticking with an advertising plan or medium that does not produce results for your business in the long run.

Public Relations

A great way to reach your customers is to get the media to cover your business or product. Publicity, especially good ones, should be a part of your marketing and sales plan. In this section, show your plans for getting prominent reviews of your product from reputable publications and sources.

Your business needs that exposure to grow. If public relations is a crucial part of your promotional strategy, provide details about your public relations plan here.

Content Marketing

Content marketing is a popular promotional strategy used by businesses to inform and attract their customers. It is about teaching and educating your prospects on various topics of interest in your niche, it does not just involve informing them about the benefits and features of the products and services you have,

Businesses publish content usually for free where they provide useful information, tips, and advice so that their target market can be made aware of the importance of their products and services. Content marketing strategies seek to nurture prospects into buyers over time by simply providing value.

Your company can create a blog where it will be publishing content for its target market. You will need to use the best website builder such as Wix and Squarespace and the best web hosting services such as Bluehost, Hostinger, and other Bluehost alternatives to create a functional blog or website.

If content marketing is a crucial part of your promotional strategy (as it should be), detail your plans under promotions.

Including high-quality images of the packaging of your product in your business plan is a lovely idea. You can add the images of the packaging of that product in the marketing and sales plan section. If you are not selling a product, then you do not need to include any worry about the physical packaging of your product.

When organizing the packaging section of your business plan, you can answer the following questions to make maximum use of this section.

• Is your choice of packaging consistent with your positioning strategy?
• What key value proposition does your packaging communicate? (It should reflect the key value proposition of your business)
• How does your packaging compare to that of your competitors?

Social Media

Your 21st-century business needs to have a good social media presence. Not having one is leaving out opportunities for growth and reaching out to your prospect.

You do not have to join the thousands of social media platforms out there. What you need to do is join the ones that your customers are active on and be active there.

Businesses use social media to provide information about their products such as promotions, discounts, the benefits of their products, and content on their blogs.

Social media is also a platform for engaging with your customers and getting feedback about your products or services. Make no mistake, more and more of your prospects are using social media channels to find more information about companies.

You need to consider the social media channels you want to prioritize your business (prioritize the ones your customers are active in) and your branding plans in this section.

Strategic Alliances

If your company plans to work closely with other companies as part of your sales and marketing plan, include it in this section. Prove details about those partnerships in your business plan if you have already established them.

Strategic alliances can be beneficial for all parties involved including your company. Working closely with another company in the form of a partnership can provide access to a different target market segment for your company.

The company you are partnering with may also gain access to your target market or simply offer a new product or service (that of your company) to its customers.

Mutually beneficial partnerships can cover the weaknesses of one company with the strength of another. You should consider strategic alliances with companies that sell complimentary products to yours. For example, if you provide printers, you can partner with a company that produces ink since the customers that buy printers from you will also need inks for printing.

Steps Involved in Creating a Marketing and Sales Plan

1. Focus on Your Target Market

Identify who your customers are, the market you want to target. Then determine the best ways to get your products or services to your potential customers.

2. Evaluate Your Competition

One of the goals of having a marketing plan is to distinguish yourself from your competition. You cannot stand out from them without first knowing them in and out.

You can know your competitors by gathering information about their products, pricing, service, and advertising campaigns.

These questions can help you know your competition.

• What makes your competition successful?
• What are their weaknesses?
• What are customers saying about your competition?

3. Consider Your Brand

Customers' perception of your brand has a strong impact on your sales. Your marketing and sales plan should seek to bolster the image of your brand. Before you start marketing your business, think about the message you want to pass across about your business and your products and services.

4. Focus on Benefits

The majority of your customers do not view your product in terms of features, what they want to know is the benefits and solutions your product offers. Think about the problems your product solves and the benefits it delivers, and use it to create the right sales and marketing message.

Your marketing plan should focus on what you want your customer to get instead of what you provide. Identify those benefits in your marketing and sales plan.

5. Focus on Differentiation

Your marketing and sales plan should look for a unique angle they can take that differentiates your business from the competition, even if the products offered are similar. Some good areas of differentiation you can use are your benefits, pricing, and features.

Key Questions to Answer When Writing Your Marketing and Sales Plan

• What is your company’s budget for sales and marketing campaigns?
• What key metrics will you use to determine if your marketing plans are successful?
• What are your alternatives if your initial marketing efforts do not succeed?
• Who are the sales representatives you need to promote your products or services?
• What are the marketing and sales channels you plan to use? How do you plan to get your products in front of your ideal customers?
• Where will you sell your products?

You may want to include samples of marketing materials you plan to use such as print ads, website descriptions, and social media ads. While it is not compulsory to include these samples, it can help you better communicate your marketing and sales plan and objectives.

The purpose of the marketing and sales section is to answer this question “How will you reach your customers?” If you cannot convincingly provide an answer to this question, you need to rework your marketing and sales section.

7. Clearly Show Your Funding Request

If you are writing your business plan to ask for funding from investors or financial institutions, the funding request section is where you will outline your funding requirements. The funding request section should answer the question ‘How much money will your business need in the near future (3 to 5 years)?’

A good funding request section will clearly outline and explain the amount of funding your business needs over the next five years. You need to know the amount of money your business needs to make an accurate funding request.

Also, when writing your funding request, provide details of how the funds will be used over the period. Specify if you want to use the funds to buy raw materials or machinery, pay salaries, pay for advertisements, and cover specific bills such as rent and electricity.

In addition to explaining what you want to use the funds requested for, you need to clearly state the projected return on investment (ROI) . Investors and creditors want to know if your business can generate profit for them if they put funds into it.

Ensure you do not inflate the figures and stay as realistic as possible. Investors and financial institutions you are seeking funds from will do their research before investing money in your business.

If you are not sure of an exact number to request from, you can use some range of numbers as rough estimates. Add a best-case scenario and a work-case scenario to your funding request. Also, include a description of your strategic future financial plans such as selling your business or paying off debts.

Funding Request: Debt or Equity?

When making your funding request, specify the type of funding you want. Do you want debt or equity? Draw out the terms that will be applicable for the funding, and the length of time the funding request will cover.

Case for Equity

If your new business has not yet started generating profits, you are most likely preparing to sell equity in your business to raise capital at the early stage. Equity here refers to ownership. In this case, you are selling a portion of your company to raise capital.

Although this method of raising capital for your business does not put your business in debt, keep in mind that an equity owner may expect to play a key role in company decisions even if he does not hold a major stake in the company.

Most equity sales for startups are usually private transactions . If you are making a funding request by offering equity in exchange for funding, let the investor know that they will be paid a dividend (a share of the company’s profit). Also, let the investor know the process for selling their equity in your business.

Case for Debt

You may decide not to offer equity in exchange for funds, instead, you make a funding request with the promise to pay back the money borrowed at the agreed time frame.

When making a funding request with an agreement to pay back, note that you will have to repay your creditors both the principal amount borrowed and the interest on it. Financial institutions offer this type of funding for businesses.

Large companies combine both equity and debt in their capital structure. When drafting your business plan, decide if you want to offer both or one over the other.

Before you sell equity in exchange for funding in your business, consider if you are willing to accept not being in total control of your business. Also, before you seek loans in your funding request section, ensure that the terms of repayment are favorable.

You should set a clear timeline in your funding request so that potential investors and creditors can know what you are expecting. Some investors and creditors may agree to your funding request and then delay payment for longer than 30 days, meanwhile, your business needs an immediate cash injection to operate efficiently.

Additional Tips for Writing the Funding Request Section of your Business Plan

The funding request section is not necessary for every business, it is only needed by businesses who plan to use their business plan to secure funding.

If you are adding the funding request section to your business plan, provide an itemized summary of how you plan to use the funds requested. Hiring a lawyer, accountant, or other professionals may be necessary for the proper development of this section.

You should also gather and use financial statements that add credibility and support to your funding requests. Ensure that the financial statements you use should include your projected financial data such as projected cash flows, forecast statements, and expenditure budgets.

If you are an existing business, include all historical financial statements such as cash flow statements, balance sheets and income statements .

Provide monthly and quarterly financial statements for a year. If your business has records that date back beyond the one-year mark, add the yearly statements of those years. These documents are for the appendix section of your business plan.

8. Detail Your Financial Plan, Metrics, and Projections

If you used the funding request section in your business plan, supplement it with a financial plan, metrics, and projections. This section paints a picture of the past performance of your business and then goes ahead to make an informed projection about its future.

The goal of this section is to convince readers that your business is going to be a financial success. It outlines your business plan to generate enough profit to repay the loan (with interest if applicable) and to generate a decent return on investment for investors.

If you have an existing business already in operation, use this section to demonstrate stability through finance. This section should include your cash flow statements, balance sheets, and income statements covering the last three to five years. If your business has some acceptable collateral that you can use to acquire loans, list it in the financial plan, metrics, and projection section.

Apart from current financial statements, this section should also contain a prospective financial outlook that spans the next five years. Include forecasted income statements, cash flow statements, balance sheets, and capital expenditure budget.

If your business is new and is not yet generating profit, use clear and realistic projections to show the potentials of your business.

When drafting this section, research industry norms and the performance of comparable businesses. Your financial projections should cover at least five years. State the logic behind your financial projections. Remember you can always make adjustments to this section as the variables change.

The financial plan, metrics, and projection section create a baseline which your business can either exceed or fail to reach. If your business fails to reach your projections in this section, you need to understand why it failed.

Investors and loan managers spend a lot of time going through the financial plan, metrics, and projection section compared to other parts of the business plan. Ensure you spend time creating credible financial analyses for your business in this section.

Many entrepreneurs find this section daunting to write. You do not need a business degree to create a solid financial forecast for your business. Business finances, especially for startups, are not as complicated as they seem. There are several online tools and templates that make writing this section so much easier.

Use Graphs and Charts

The financial plan, metrics, and projection section is a great place to use graphs and charts to tell the financial story of your business. Charts and images make it easier to communicate your finances.

Accuracy in this section is key, ensure you carefully analyze your past financial statements properly before making financial projects.

Address the Risk Factors and Show Realistic Financial Projections

Keep your financial plan, metrics, and projection realistic. It is okay to be optimistic in your financial projection, however, you have to justify it.

You should also address the various risk factors associated with your business in this section. Investors want to know the potential risks involved, show them. You should also show your plans for mitigating those risks.

What You Should In The Financial Plan, Metrics, and Projection Section of Your Business Plan

The financial plan, metrics, and projection section of your business plan should have monthly sales and revenue forecasts for the first year. It should also include annual projections that cover 3 to 5 years.

A three-year projection is a basic requirement to have in your business plan. However, some investors may request a five-year forecast.

Your business plan should include the following financial statements: sales forecast, personnel plan, income statement, income statement, cash flow statement, balance sheet, and an exit strategy.

1. Sales Forecast

Sales forecast refers to your projections about the number of sales your business is going to record over the next few years. It is typically broken into several rows, with each row assigned to a core product or service that your business is offering.

One common mistake people make in their business plan is to break down the sales forecast section into long details. A sales forecast should forecast the high-level details.

For example, if you are forecasting sales for a payroll software provider, you could break down your forecast into target market segments or subscription categories.

Your sales forecast section should also have a corresponding row for each sales row to cover the direct cost or Cost of Goods Sold (COGS). The objective of these rows is to show the expenses that your business incurs in making and delivering your product or service.

Note that your Cost of Goods Sold (COGS) should only cover those direct costs incurred when making your products. Other indirect expenses such as insurance, salaries, payroll tax, and rent should not be included.

For example, the Cost of Goods Sold (COGS) for a restaurant is the cost of ingredients while for a consulting company it will be the cost of paper and other presentation materials.

2. Personnel Plan

The personnel plan section is where you provide details about the payment plan for your employees. For a small business, you can easily list every position in your company and how much you plan to pay in the personnel plan.

However, for larger businesses, you have to break the personnel plan into functional groups such as sales and marketing.

The personnel plan will also include the cost of an employee beyond salary, commonly referred to as the employee burden. These costs include insurance, payroll taxes , and other essential costs incurred monthly as a result of having employees on your payroll.

3. Income Statement

The income statement section shows if your business is making a profit or taking a loss. Another name for the income statement is the profit and loss (P&L). It takes data from your sales forecast and personnel plan and adds other ongoing expenses you incur while running your business.

Every business plan should have an income statement. It subtracts your business expenses from its earnings to show if your business is generating profit or incurring losses.

The income statement has the following items: sales, Cost of Goods Sold (COGS), gross margin, operating expenses, total operating expenses, operating income , total expenses, and net profit.

• Sales refer to the revenue your business generates from selling its products or services. Other names for sales are income or revenue.
• Cost of Goods Sold (COGS) refers to the total cost of selling your products. Other names for COGS are direct costs or cost of sales. Manufacturing businesses use the Costs of Goods Manufactured (COGM) .
• Gross Margin is the figure you get when you subtract your COGS from your sales. In your income statement, you can express it as a percentage of total sales (Gross margin / Sales = Gross Margin Percent).
• Operating Expenses refer to all the expenses you incur from running your business. It exempts the COGS because it stands alone as a core part of your income statement. You also have to exclude taxes, depreciation, and amortization. Your operating expenses include salaries, marketing expenses, research and development (R&D) expenses, and other expenses.
• Total Operating Expenses refers to the sum of all your operating expenses including those exemptions named above under operating expenses.
• Operating Income refers to earnings before interest, taxes, depreciation, and amortization. It is simply known as the acronym EBITDA (earnings before interest, taxes, depreciation, and amortization). Calculating your operating income is simple, all you need to do is to subtract your COGS and total operating expenses from your sales.
• Total Expenses refer to the sum of your operating expenses and your business’ interest, taxes, depreciation, and amortization.
• Net profit shows whether your business has made a profit or taken a loss during a given timeframe.

4. Cash Flow Statement

The cash flow statement tracks the money you have in the bank at any given point. It is often confused with the income statement or the profit and loss statement. They are both different types of financial statements. The income statement calculates your profits and losses while the cash flow statement shows you how much you have in the bank.

5. Balance Sheet

The balance sheet is a financial statement that provides an overview of the financial health of your business. It contains information about the assets and liabilities of your company, and owner’s or shareholders’ equity.

You can get the net worth of your company by subtracting your company’s liabilities from its assets.

6. Exit Strategy

The exit strategy refers to a probable plan for selling your business either to the public in an IPO or to another company. It is the last thing you include in the financial plan, metrics, and projection section.

You can choose to omit the exit strategy from your business plan if you plan to maintain full ownership of your business and do not plan on seeking angel investment or virtual capitalist (VC) funding.

Investors may want to know what your exit plan is. They invest in your business to get a good return on investment.

Your exit strategy does not have to include long and boring details. Ensure you identify some interested parties who may be interested in buying the company if it becomes a success.

Key Questions to Answer with Your Financial Plan, Metrics, and Projection

Your financial plan, metrics, and projection section helps investors, creditors, or your internal managers to understand what your expenses are, the amount of cash you need, and what it takes to make your company profitable. It also shows what you will be doing with any funding.

You do not need to show actual financial data if you do not have one. Adding forecasts and projections to your financial statements is added proof that your strategy is feasible and shows investors you have planned properly.

Here are some key questions to answer to help you develop this section.

• What is your sales forecast for the next year?
• When will your company achieve a positive cash flow?
• What are the core expenses you need to operate?
• How much money do you need upfront to operate or grow your company?
• How will you use the loans or investments?

9. Add an Appendix to Your Business Plan

Adding an appendix to your business plan is optional. It is a useful place to put any charts, tables, legal notes, definitions, permits, résumés, and other critical information that do not fit into other sections of your business plan.

The appendix section is where you would want to include details of a patent or patent-pending if you have one. You can always add illustrations or images of your products here. It is the last section of your business plan.

When writing your business plan, there are details you cut short or remove to prevent the entire section from becoming too lengthy. There are also details you want to include in the business plan but are not a good fit for any of the previous sections. You can add that additional information to the appendix section.

Businesses also use the appendix section to include supporting documents or other materials specially requested by investors or lenders.

You can include just about any information that supports the assumptions and statements you made in the business plan under the appendix. It is the one place in the business plan where unrelated data and information can coexist amicably.

If your appendix section is lengthy, try organizing it by adding a table of contents at the beginning of the appendix section. It is also advisable to group similar information to make it easier for the reader to access them.

A well-organized appendix section makes it easier to share your information clearly and concisely. Add footnotes throughout the rest of the business plan or make references in the plan to the documents in the appendix.

The appendix section is usually only necessary if you are seeking funding from investors or lenders, or hoping to attract partners.

People reading business plans do not want to spend time going through a heap of backup information, numbers, and charts. Keep these documents or information in the Appendix section in case the reader wants to dig deeper.

Common Items to Include in the Appendix Section of Your Business Plan

The appendix section includes documents that supplement or support the information or claims given in other sections of the business plans. Common items you can include in the appendix section include:

• Additional data about the process of manufacturing or creation
• Additional description of products or services such as product schematics
• Additional financial documents or projections
• Articles of incorporation and status
• Backup for market research or competitive analysis
• Bank statements
• Business registries
• Client testimonials (if your business is already running)
• Copies of insurances
• Credit histories (personal or/and business)
• Deeds and permits
• Equipment leases
• Examples of marketing and advertising collateral
• Industry associations and memberships
• Images of product
• Intellectual property
• Key customer contracts
• Legal documents and other contracts
• Letters of reference
• Links to references
• Market research data
• Organizational charts
• Photographs of potential facilities
• Professional licenses pertaining to your legal structure or type of business
• Purchase orders
• Resumes of the founder(s) and key managers
• State and federal identification numbers or codes
• Trademarks or patents’ registrations

Avoid using the appendix section as a place to dump any document or information you feel like adding. Only add documents or information that you support or increase the credibility of your business plan.

Tips and Strategies for Writing a Convincing Business Plan

To achieve a perfect business plan, you need to consider some key tips and strategies. These tips will raise the efficiency of your business plan above average.

1. Know Your Audience

When writing a business plan, you need to know your audience . Business owners write business plans for different reasons. Your business plan has to be specific. For example, you can write business plans to potential investors, banks, and even fellow board members of the company.

The audience you are writing to determines the structure of the business plan. As a business owner, you have to know your audience. Not everyone will be your audience. Knowing your audience will help you to narrow the scope of your business plan.

Consider what your audience wants to see in your projects, the likely questions they might ask, and what interests them.

• A business plan used to address a company's board members will center on its employment schemes, internal affairs, projects, stakeholders, etc.
• A business plan for financial institutions will talk about the size of your market and the chances for you to pay back any loans you demand.
• A business plan for investors will show proof that you can return the investment capital within a specific time. In addition, it discusses your financial projections, tractions, and market size.

2. Get Inspiration from People

Writing a business plan from scratch as an entrepreneur can be daunting. That is why you need the right inspiration to push you to write one. You can gain inspiration from the successful business plans of other businesses. Look at their business plans, the style they use, the structure of the project, etc.

To make your business plan easier to create, search companies related to your business to get an exact copy of what you need to create an effective business plan. You can also make references while citing examples in your business plans.

When drafting your business plan, get as much help from others as you possibly can. By getting inspiration from people, you can create something better than what they have.

3. Avoid Being Over Optimistic

Many business owners make use of strong adjectives to qualify their content. One of the big mistakes entrepreneurs make when preparing a business plan is promising too much.

The use of superlatives and over-optimistic claims can prepare the audience for more than you can offer. In the end, you disappoint the confidence they have in you.

In most cases, the best option is to be realistic with your claims and statistics. Most of the investors can sense a bit of incompetency from the overuse of superlatives. As a new entrepreneur, do not be tempted to over-promise to get the interests of investors.

The concept of entrepreneurship centers on risks, nothing is certain when you make future analyses. What separates the best is the ability to do careful research and work towards achieving that, not promising more than you can achieve.

To make an excellent first impression as an entrepreneur, replace superlatives with compelling data-driven content. In this way, you are more specific than someone promising a huge ROI from an investment.

4. Keep it Simple and Short

When writing business plans, ensure you keep them simple throughout. Irrespective of the purpose of the business plan, your goal is to convince the audience.

One way to achieve this goal is to make them understand your proposal. Therefore, it would be best if you avoid the use of complex grammar to express yourself. It would be a huge turn-off if the people you want to convince are not familiar with your use of words.

Another thing to note is the length of your business plan. It would be best if you made it as brief as possible.

You hardly see investors or agencies that read through an extremely long document. In that case, if your first few pages can’t convince them, then you have lost it. The more pages you write, the higher the chances of you derailing from the essential contents.

To ensure your business plan has a high conversion rate, you need to dispose of every unnecessary information. For example, if you have a strategy that you are not sure of, it would be best to leave it out of the plan.

5. Make an Outline and Follow Through

A perfect business plan must have touched every part needed to convince the audience. Business owners get easily tempted to concentrate more on their products than on other sections. Doing this can be detrimental to the efficiency of the business plan.

For example, imagine you talking about a product but omitting or providing very little information about the target audience. You will leave your clients confused.

To ensure that your business plan communicates your full business model to readers, you have to input all the necessary information in it. One of the best ways to achieve this is to design a structure and stick to it.

This structure is what guides you throughout the writing. To make your work easier, you can assign an estimated word count or page limit to every section to avoid making it too bulky for easy reading. As a guide, the necessary things your business plan must contain are:

• Table of contents
• Introduction
• Product or service description
• Target audience
• Market size
• Competition analysis
• Financial projections

Some specific businesses can include some other essential sections, but these are the key sections that must be in every business plan.

6. Ask a Professional to Proofread

When writing a business plan, you must tie all loose ends to get a perfect result. When you are done with writing, call a professional to go through the document for you. You are bound to make mistakes, and the way to correct them is to get external help.

You should get a professional in your field who can relate to every section of your business plan. It would be easier for the professional to notice the inner flaws in the document than an editor with no knowledge of your business.

In addition to getting a professional to proofread, get an editor to proofread and edit your document. The editor will help you identify grammatical errors, spelling mistakes, and inappropriate writing styles.

Writing a business plan can be daunting, but you can surmount that obstacle and get the best out of it with these tips.

Business Plan Examples and Templates That’ll Save You Tons of Time

1. hubspot's one-page business plan.

The one-page business plan template by HubSpot is the perfect guide for businesses of any size, irrespective of their business strategy. Although the template is condensed into a page, your final business plan should not be a page long! The template is designed to ask helpful questions that can help you develop your business plan.

Hubspot’s one-page business plan template is divided into nine fields:

• Business opportunity
• Company description
• Industry analysis
• Target market
• Implementation timeline
• Marketing plan
• Financial summary
• Funding required

2. Bplan’s Free Business Plan Template

Bplans' free business plan template is investor-approved. It is a rich template used by prestigious educational institutions such as Babson College and Princeton University to teach entrepreneurs how to create a business plan.

The template has six sections: the executive summary, opportunity, execution, company, financial plan, and appendix. There is a step-by-step guide for writing every little detail in the business plan. Follow the instructions each step of the way and you will create a business plan that impresses investors or lenders easily.

3. HubSpot's Downloadable Business Plan Template

HubSpot’s downloadable business plan template is a more comprehensive option compared to the one-page business template by HubSpot. This free and downloadable business plan template is designed for entrepreneurs.

The template is a comprehensive guide and checklist for business owners just starting their businesses. It tells you everything you need to fill in each section of the business plan and how to do it.

There are nine sections in this business plan template: an executive summary, company and business description, product and services line, market analysis, marketing plan, sales plan, legal notes, financial considerations, and appendix.

4. Business Plan by My Own Business Institute

My Own Business Institute (MOBI) which is a part of Santa Clara University's Center for Innovation and Entrepreneurship offers a free business plan template. You can either copy the free business template from the link provided above or download it as a Word document.

The comprehensive template consists of a whopping 15 sections.

• The Business Profile
• The Vision and the People
• Home-Based Business and Freelance Business Opportunities
• Organization
• Licenses and Permits
• Business Insurance
• Communication Tools
• Acquisitions
• Location and Leasing
• Accounting and Cash Flow
• Opening and Marketing
• Managing Employees
• Expanding and Handling Problems

There are lots of helpful tips on how to fill each section in the free business plan template by MOBI.

5. Score's Business Plan Template for Startups

Score is an American nonprofit organization that helps entrepreneurs build successful companies. This business plan template for startups by Score is available for free download. The business plan template asks a whooping 150 generic questions that help entrepreneurs from different fields to set up the perfect business plan.

The business plan template for startups contains clear instructions and worksheets, all you have to do is answer the questions and fill the worksheets.

There are nine sections in the business plan template: executive summary, company description, products and services, marketing plan, operational plan, management and organization, startup expenses and capitalization, financial plan, and appendices.

The ‘refining the plan’ resource contains instructions that help you modify your business plan to suit your specific needs, industry, and target audience. After you have completed Score’s business plan template, you can work with a SCORE mentor for expert advice in business planning.

6. Minimalist Architecture Business Plan Template by Venngage

The minimalist architecture business plan template is a simple template by Venngage that you can customize to suit your business needs .

There are five sections in the template: an executive summary, statement of problem, approach and methodology, qualifications, and schedule and benchmark. The business plan template has instructions that guide users on what to fill in each section.

7. Small Business Administration Free Business Plan Template

The Small Business Administration (SBA) offers two free business plan templates, filled with practical real-life examples that you can model to create your business plan. Both free business plan templates are written by fictional business owners: Rebecca who owns a consulting firm, and Andrew who owns a toy company.

There are five sections in the two SBA’s free business plan templates.

• Executive Summary
• Company Description
• Service Line
• Marketing and Sales

8. The $100 Startup's One-Page Business Plan

The one-page business plan by the $100 startup is a simple business plan template for entrepreneurs who do not want to create a long and complicated plan . You can include more details in the appendices for funders who want more information beyond what you can put in the one-page business plan.

There are five sections in the one-page business plan such as overview, ka-ching, hustling, success, and obstacles or challenges or open questions. You can answer all the questions using one or two sentences.

9. PandaDoc’s Free Business Plan Template

The free business plan template by PandaDoc is a comprehensive 15-page document that describes the information you should include in every section.

There are 11 sections in PandaDoc’s free business plan template.

• Executive summary
• Business description
• Products and services
• Operations plan
• Management organization
• Financial plan
• Conclusion / Call to action
• Confidentiality statement

You have to sign up for its 14-day free trial to access the template. You will find different business plan templates on PandaDoc once you sign up (including templates for general businesses and specific businesses such as bakeries, startups, restaurants, salons, hotels, and coffee shops)

PandaDoc allows you to customize its business plan templates to fit the needs of your business. After editing the template, you can send it to interested parties and track opens and views through PandaDoc.

10. Invoiceberry Templates for Word, Open Office, Excel, or PPT

InvoiceBerry is a U.K based online invoicing and tracking platform that offers free business plan templates in .docx, .odt, .xlsx, and .pptx formats for freelancers and small businesses.

Before you can download the free business plan template, it will ask you to give it your email address. After you complete the little task, it will send the download link to your inbox for you to download. It also provides a business plan checklist in .xlsx file format that ensures you add the right information to the business plan.

Alternatives to the Traditional Business Plan

A business plan is very important in mapping out how one expects their business to grow over a set number of years, particularly when they need external investment in their business. However, many investors do not have the time to watch you present your business plan. It is a long and boring read.

Luckily, there are three alternatives to the traditional business plan (the Business Model Canvas, Lean Canvas, and Startup Pitch Deck). These alternatives are less laborious and easier and quicker to present to investors.

Business Model Canvas (BMC)

The business model canvas is a business tool used to present all the important components of setting up a business, such as customers, route to market, value proposition, and finance in a single sheet. It provides a very focused blueprint that defines your business initially which you can later expand on if needed.

The sheet is divided mainly into company, industry, and consumer models that are interconnected in how they find problems and proffer solutions.

Segments of the Business Model Canvas

The business model canvas was developed by founder Alexander Osterwalder to answer important business questions. It contains nine segments.

• Key Partners: Who will be occupying important executive positions in your business? What do they bring to the table? Will there be a third party involved with the company?
• Key Activities: What important activities will production entail? What activities will be carried out to ensure the smooth running of the company?
• The Product’s Value Propositions: What does your product do? How will it be different from other products?
• Customer Segments: What demography of consumers are you targeting? What are the habits of these consumers? Who are the MVPs of your target consumers?
• Customer Relationships: How will the team support and work with its customer base? How do you intend to build and maintain trust with the customer?
• Key Resources: What type of personnel and tools will be needed? What size of the budget will they need access to?
• Channels: How do you plan to create awareness of your products? How do you intend to transport your product to the customer?
• Cost Structure: What is the estimated cost of production? How much will distribution cost?
• Revenue Streams: For what value are customers willing to pay? How do they prefer to pay for the product? Are there any external revenues attached apart from the main source? How do the revenue streams contribute to the overall revenue?

Lean Canvas

The lean canvas is a problem-oriented alternative to the standard business model canvas. It was proposed by Ash Maurya, creator of Lean Stack as a development of the business model generation. It uses a more problem-focused approach and it majorly targets entrepreneurs and startup businesses.

Lean Canvas uses the same 9 blocks concept as the business model canvas, however, they have been modified slightly to suit the needs and purpose of a small startup. The key partners, key activities, customer relationships, and key resources are replaced by new segments which are:

• Problem: Simple and straightforward number of problems you have identified, ideally three.
• Solution: The solutions to each problem.
• Unfair Advantage: Something you possess that can't be easily bought or replicated.
• Key Metrics: Important numbers that will tell how your business is doing.

Startup Pitch Deck

While the business model canvas compresses into a factual sheet, startup pitch decks expand flamboyantly.

Pitch decks, through slides, convey your business plan, often through graphs and images used to emphasize estimations and observations in your presentation. Entrepreneurs often use pitch decks to fully convince their target audience of their plans before discussing funding arrangements.

Considering the likelihood of it being used in a small time frame, a good startup pitch deck should ideally contain 20 slides or less to have enough time to answer questions from the audience.

Unlike the standard and lean business model canvases, a pitch deck doesn't have a set template on how to present your business plan but there are still important components to it. These components often mirror those of the business model canvas except that they are in slide form and contain more details.

Using Airbnb (one of the most successful start-ups in recent history) for reference, the important components of a good slide are listed below.

• Cover/Introduction Slide: Here, you should include your company's name and mission statement. Your mission statement should be a very catchy tagline. Also, include personal information and contact details to provide an easy link for potential investors.
• Problem Slide: This slide requires you to create a connection with the audience or the investor that you are pitching. For example in their pitch, Airbnb summarized the most important problems it would solve in three brief points – pricing of hotels, disconnection from city culture, and connection problems for local bookings.
• Solution Slide: This slide includes your core value proposition. List simple and direct solutions to the problems you have mentioned
• Customer Analysis: Here you will provide information on the customers you will be offering your service to. The identity of your customers plays an important part in fundraising as well as the long-run viability of the business.
• Market Validation: Use competitive analysis to show numbers that prove the presence of a market for your product, industry behavior in the present and the long run, as well as the percentage of the market you aim to attract. It shows that you understand your competitors and customers and convinces investors of the opportunities presented in the market.
• Business Model: Your business model is the hook of your presentation. It may vary in complexity but it should generally include a pricing system informed by your market analysis. The goal of the slide is to confirm your business model is easy to implement.
• Marketing Strategy: This slide should summarize a few customer acquisition methods that you plan to use to grow the business.
• Competitive Advantage: What this slide will do is provide information on what will set you apart and make you a more attractive option to customers. It could be the possession of technology that is not widely known in the market.
• Team Slide: Here you will give a brief description of your team. Include your key management personnel here and their specific roles in the company. Include their educational background, job history, and skillsets. Also, talk about their accomplishments in their careers so far to build investors' confidence in members of your team.
• Traction Slide: This validates the company’s business model by showing growth through early sales and support. The slide aims to reduce any lingering fears in potential investors by showing realistic periodic milestones and profit margins. It can include current sales, growth, valuable customers, pre-orders, or data from surveys outlining current consumer interest.
• Funding Slide: This slide is popularly referred to as ‘the ask'. Here you will include important details like how much is needed to get your business off the ground and how the funding will be spent to help the company reach its goals.
• Appendix Slides: Your pitch deck appendix should always be included alongside a standard pitch presentation. It consists of additional slides you could not show in the pitch deck but you need to complement your presentation.

It is important to support your calculations with pictorial renditions. Infographics, such as pie charts or bar graphs, will be more effective in presenting the information than just listing numbers. For example, a six-month graph that shows rising profit margins will easily look more impressive than merely writing it.

Lastly, since a pitch deck is primarily used to secure meetings and you may be sharing your pitch with several investors, it is advisable to keep a separate public version that doesn't include financials. Only disclose the one with projections once you have secured a link with an investor.

Advantages of the Business Model Canvas, Lean Canvas, and Startup Pitch Deck over the Traditional Business Plan

• Time-Saving: Writing a detailed traditional business plan could take weeks or months. On the other hand, all three alternatives can be done in a few days or even one night of brainstorming if you have a comprehensive understanding of your business.
• Easier to Understand: Since the information presented is almost entirely factual, it puts focus on what is most important in running the business. They cut away the excess pages of fillers in a traditional business plan and allow investors to see what is driving the business and what is getting in the way.
• Easy to Update: Businesses typically present their business plans to many potential investors before they secure funding. What this means is that you may regularly have to amend your presentation to update statistics or adjust to audience-specific needs. For a traditional business plan, this could mean rewriting a whole section of your plan. For the three alternatives, updating is much easier because they are not voluminous.
• Guide for a More In-depth Business Plan: All three alternatives have the added benefit of being able to double as a sketch of your business plan if the need to create one arises in the future.

Business Plan FAQ

Business plans are important for any entrepreneur who is looking for a framework to run their company over some time or seeking external support. Although they are essential for new businesses, every company should ideally have a business plan to track their growth from time to time.  They can be used by startups seeking investments or loans to convey their business ideas or an employee to convince his boss of the feasibility of starting a new project. They can also be used by companies seeking to recruit high-profile employee targets into key positions or trying to secure partnerships with other firms.

Business plans often vary depending on your target audience, the scope, and the goals for the plan. Startup plans are the most common among the different types of business plans.  A start-up plan is used by a new business to present all the necessary information to help get the business up and running. They are usually used by entrepreneurs who are seeking funding from investors or bank loans. The established company alternative to a start-up plan is a feasibility plan. A feasibility plan is often used by an established company looking for new business opportunities. They are used to show the upsides of creating a new product for a consumer base. Because the audience is usually company people, it requires less company analysis. The third type of business plan is the lean business plan. A lean business plan is a brief, straight-to-the-point breakdown of your ideas and analysis for your business. It does not contain details of your proposal and can be written on one page. Finally, you have the what-if plan. As it implies, a what-if plan is a preparation for the worst-case scenario. You must always be prepared for the possibility of your original plan being rejected. A good what-if plan will serve as a good plan B to the original.

A good business plan has 10 key components. They include an executive plan, product analysis, desired customer base, company analysis, industry analysis, marketing strategy, sales strategy, financial projection, funding, and appendix. Executive Plan Your business should begin with your executive plan. An executive plan will provide early insight into what you are planning to achieve with your business. It should include your mission statement and highlight some of the important points which you will explain later. Product Analysis The next component of your business plan is your product analysis. A key part of this section is explaining the type of item or service you are going to offer as well as the market problems your product will solve. Desired Consumer Base Your product analysis should be supplemented with a detailed breakdown of your desired consumer base. Investors are always interested in knowing the economic power of your market as well as potential MVP customers. Company Analysis The next component of your business plan is your company analysis. Here, you explain how you want to run your business. It will include your operational strategy, an insight into the workforce needed to keep the company running, and important executive positions. It will also provide a calculation of expected operational costs.  Industry Analysis A good business plan should also contain well laid out industry analysis. It is important to convince potential investors you know the companies you will be competing with, as well as your plans to gain an edge on the competition. Marketing Strategy Your business plan should also include your marketing strategy. This is how you intend to spread awareness of your product. It should include a detailed explanation of the company brand as well as your advertising methods. Sales Strategy Your sales strategy comes after the market strategy. Here you give an overview of your company's pricing strategy and how you aim to maximize profits. You can also explain how your prices will adapt to market behaviors. Financial Projection The financial projection is the next component of your business plan. It explains your company's expected running cost and revenue earned during the tenure of the business plan. Financial projection gives a clear idea of how your company will develop in the future. Funding The next component of your business plan is funding. You have to detail how much external investment you need to get your business idea off the ground here. Appendix The last component of your plan is the appendix. This is where you put licenses, graphs, or key information that does not fit in any of the other components.

The business model canvas is a business management tool used to quickly define your business idea and model. It is often used when investors need you to pitch your business idea during a brief window.

A pitch deck is similar to a business model canvas except that it makes use of slides in its presentation. A pitch is not primarily used to secure funding, rather its main purpose is to entice potential investors by selling a very optimistic outlook on the business.

Business plan competitions help you evaluate the strength of your business plan. By participating in business plan competitions, you are improving your experience. The experience provides you with a degree of validation while practicing important skills. The main motivation for entering into the competitions is often to secure funding by finishing in podium positions. There is also the chance that you may catch the eye of a casual observer outside of the competition. These competitions also provide good networking opportunities. You could meet mentors who will take a keen interest in guiding you in your business journey. You also have the opportunity to meet other entrepreneurs whose ideas can complement yours.

Exlore Further

• 12 Key Elements of a Business Plan (Top Components Explained)
• 13 Sources of Business Finance For Companies & Sole Traders
• 5 Common Types of Business Structures (+ Pros & Cons)
• How to Buy a Business in 8 Steps (+ Due Diligence Checklist)

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Martin loves entrepreneurship and has helped dozens of entrepreneurs by validating the business idea, finding scalable customer acquisition channels, and building a data-driven organization. During his time working in investment banking, tech startups, and industry-leading companies he gained extensive knowledge in using different software tools to optimize business processes.

This insights and his love for researching SaaS products enables him to provide in-depth, fact-based software reviews to enable software buyers make better decisions.

How to Write a Business Plan: Organization Structure

How to write a business plan: organizational structure, what is the organizational structure for a business plan.

The organization structure section should discuss whether your business will be a sole proprietor, limited liability corporation, or corporation, who will run your business, each person’s responsibility, and how your business will expand if needed.  There are numerous benefits to a detailed assessment of the company’s structure.  First, examining the structure of the business will help for tax purposes.  For example, limited liability and corporations are considered excellent for protecting shareholders concerning liabilities.  However, tax-wise, these firms often are double taxed.  The second benefit of a detailed assessment of a company’s structure is to understand how each owner will contribute to the company.  In other words, if there is more than one owner, what are their responsibilities, and how are these responsibilities to be carried out.

Why is the Organizational Structure important? 

There are numerous reasons why the organizational structure is essential for a business plan. In this section, the business owner will lay out how the company will be structured.  For example, this section will include job titles and responsibilities, resumes from owners and management, showing expertise in the industry, and supporting accolades for expertise.  Through discussing job responsibilities and experiences for management, readers will better understand why this type of business structure, and this management team, will be successful in the proposed business.

A second important reason for the organizational structure is that the section introduces business owners.  The owners and management team should not only be introduced in this section, but their experiences in the industry need to be highlighted and thoroughly explained.  In doing this, a sound foundation for management competence will be established.

A final reason for its importance is the job responsibility segment.  Ownership and management need to have a written document showing specific duties for each owner, if applicable, and specific job responsibilities for each position within the company.  By having this document, readers will see how the business will function and better understand the breakup of management responsibilities.

When to write the Organizational Structure?

The organizational structure should be written after the company description.   In the company description, readers will be introduced to the problem that the company is going to solve and how they propose to solve this problem.  This is usually the product or service offered.  The logical next step is to show a business structure that will allow the company to supply that product or service effectively and efficiently.  Thus the need for the organizational section follows immediately behind the company description.

How to write the Organizational Structure?

When I write my organizational structure for a business plan, for the most part, I start the first paragraph by reminding the readers of the company name.  From this, I then introduce how the company will be held in ownership.  For example, will the company be a limited liability corporation?  Sole proprietorship?  Next, I briefly introduce the management team and owners.  Further, I also briefly introduce their experience in the industry.

By following this structure, the first paragraph is an excellent summation of the section. This allows the reader to understand the breadth of the ownership structure without gaining significant details.

Organizational Structure:  Ownership

In the ownership section, I usually start writing the section by introducing the CEO/founder/majority owner.  In this portion, I usually write the segment, almost like a brief biography.  I will discuss the CEO's history in the industry and the reason why they feel that they are best suited to start and run the operation.

Once this is complete, I then follow the same structure with the other management team members and minority stakeholders.  When this is done, the reader should walk away with an excellent understanding of the qualifications of the ownership team and how their skills will complement each other.

Need Help Writing an Organizational Structure for a Business Plan?

Call or Text Paul, Doctoral Candidate, MBA.

321-948-9588

Email: [email protected]

Organizational Structure:  Responsibilities

In the job responsibility section, I usually structure this portion as a bullet-pointed list.  At the top, I put the title such as CEO, project manager, or job title.  Following this, I list the responsibilities and expectations for each position.  Not only does this help show structure and foresight for the company.  But also, this will help management divvy up duties for the business.

Organizational Structure: Resume

The resume section is for senior managers and owners.  By including resumes, supporting documentation is available for claims made related to experience.  For example, if the CEO claims to have 20 years of experience in the industry, then the resume will show where this experience came from.  This adds credibility to previous claims made.

Organizational Structure: Compensation

Compensation is sometimes necessary to include in the organizational structure component.  Investors expect management to be compensated and employees as well.  However, excessive compensation is often an issue with startups and established businesses.  By showing reasonable compensation for each position, not only will a solid understanding of the pay for each position be shown, but restraint for compensation by the management team and ownership may be highlighted as well.

Organizational Structure: Achievements

This final section is almost like a cherry on top of the cake.  By this point, the reader should be well-versed in the experience and expertise of ownership and the management team.  Adding achievements highlights their expertise in their chosen industry.

Organizational Structure Example

Organizational structure.

Legal Structure

ABC Restaurant will be a limited liability corporation.

Management Summary

John Smith, Sr., MBA., is the founder and CEO of ABC Restaurant.  He has started and managed numerous successful small restaurants over the last ten years.  Restaurants started, and managed, including a breakfast cafe, food truck, and 24-hour diner.  For each business, he was responsible for all aspects of the organization, from marketing to strategic planning.

Job Responsibilities

• Create and execute marketing strategies for business growth.
• Align business strategies with the vision statement.
• Negotiating contracts with vendors.
• Ensure legal compliance for the business.
• Continually examine the firm’s external environment for new market opportunities.

General Manager:

• Control inventory to ensure optimal levels are attained.
• Manage day-to-day operations of the restaurant.
• Servers and cooks during high volume times.
• Interview and hire new employees.
• Assist in the onboarding process for new employees.
• Set up all workstations in the kitchen
• Prepare ingredients to use in cooked and non-cooked foods.
• Check food while cooking for appropriate temperatures.
• Ensure great presentation by dressing dishes as trained.
• Keep a sanitized and clean environment in the kitchen area.
• Stock dining area tables with needed items.
• Greet customers when they enter.
• Present dinner menus and help customers with food/beverages selections.
• Take and serve orders quickly and accurately.

Author: Paul Borosky, MBA., Doctoral Candidate, Published Author

Updated: 3/4/2022

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What Is a Business Plan?

Understanding business plans, how to write a business plan, common elements of a business plan, how often should a business plan be updated, the bottom line, business plan: what it is, what's included, and how to write one.

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

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A business plan is a document that details a company's goals and how it intends to achieve them. Business plans can be of benefit to both startups and well-established companies. For startups, a business plan can be essential for winning over potential lenders and investors. Established businesses can find one useful for staying on track and not losing sight of their goals. This article explains what an effective business plan needs to include and how to write one.

Key Takeaways

• A business plan is a document describing a company's business activities and how it plans to achieve its goals.
• Startup companies use business plans to get off the ground and attract outside investors.
• For established companies, a business plan can help keep the executive team focused on and working toward the company's short- and long-term objectives.
• There is no single format that a business plan must follow, but there are certain key elements that most companies will want to include.

Investopedia / Ryan Oakley

Any new business should have a business plan in place prior to beginning operations. In fact, banks and venture capital firms often want to see a business plan before they'll consider making a loan or providing capital to new businesses.

Even if a business isn't looking to raise additional money, a business plan can help it focus on its goals. A 2017 Harvard Business Review article reported that, "Entrepreneurs who write formal plans are 16% more likely to achieve viability than the otherwise identical nonplanning entrepreneurs."

Ideally, a business plan should be reviewed and updated periodically to reflect any goals that have been achieved or that may have changed. An established business that has decided to move in a new direction might create an entirely new business plan for itself.

There are numerous benefits to creating (and sticking to) a well-conceived business plan. These include being able to think through ideas before investing too much money in them and highlighting any potential obstacles to success. A company might also share its business plan with trusted outsiders to get their objective feedback. In addition, a business plan can help keep a company's executive team on the same page about strategic action items and priorities.

Business plans, even among competitors in the same industry, are rarely identical. However, they often have some of the same basic elements, as we describe below.

While it's a good idea to provide as much detail as necessary, it's also important that a business plan be concise enough to hold a reader's attention to the end.

While there are any number of templates that you can use to write a business plan, it's best to try to avoid producing a generic-looking one. Let your plan reflect the unique personality of your business.

Many business plans use some combination of the sections below, with varying levels of detail, depending on the company.

The length of a business plan can vary greatly from business to business. Regardless, it's best to fit the basic information into a 15- to 25-page document. Other crucial elements that take up a lot of space—such as applications for patents—can be referenced in the main document and attached as appendices.

These are some of the most common elements in many business plans:

• Executive summary: This section introduces the company and includes its mission statement along with relevant information about the company's leadership, employees, operations, and locations.
• Products and services: Here, the company should describe the products and services it offers or plans to introduce. That might include details on pricing, product lifespan, and unique benefits to the consumer. Other factors that could go into this section include production and manufacturing processes, any relevant patents the company may have, as well as proprietary technology . Information about research and development (R&D) can also be included here.
• Market analysis: A company needs to have a good handle on the current state of its industry and the existing competition. This section should explain where the company fits in, what types of customers it plans to target, and how easy or difficult it may be to take market share from incumbents.
• Marketing strategy: This section can describe how the company plans to attract and keep customers, including any anticipated advertising and marketing campaigns. It should also describe the distribution channel or channels it will use to get its products or services to consumers.
• Financial plans and projections: Established businesses can include financial statements, balance sheets, and other relevant financial information. New businesses can provide financial targets and estimates for the first few years. Your plan might also include any funding requests you're making.

The best business plans aren't generic ones created from easily accessed templates. A company should aim to entice readers with a plan that demonstrates its uniqueness and potential for success.

2 Types of Business Plans

Business plans can take many forms, but they are sometimes divided into two basic categories: traditional and lean startup. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.

• Traditional business plans : These plans tend to be much longer than lean startup plans and contain considerably more detail. As a result they require more work on the part of the business, but they can also be more persuasive (and reassuring) to potential investors.
• Lean startup business plans : These use an abbreviated structure that highlights key elements. These business plans are short—as short as one page—and provide only the most basic detail. If a company wants to use this kind of plan, it should be prepared to provide more detail if an investor or a lender requests it.

Why Do Business Plans Fail?

A business plan is not a surefire recipe for success. The plan may have been unrealistic in its assumptions and projections to begin with. Markets and the overall economy might change in ways that couldn't have been foreseen. A competitor might introduce a revolutionary new product or service. All of this calls for building some flexibility into your plan, so you can pivot to a new course if needed.

How frequently a business plan needs to be revised will depend on the nature of the business. A well-established business might want to review its plan once a year and make changes if necessary. A new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.

What Does a Lean Startup Business Plan Include?

The lean startup business plan is an option when a company prefers to give a quick explanation of its business. For example, a brand-new company may feel that it doesn't have a lot of information to provide yet.

Sections can include: a value proposition ; the company's major activities and advantages; resources such as staff, intellectual property, and capital; a list of partnerships; customer segments; and revenue sources.

A business plan can be useful to companies of all kinds. But as a company grows and the world around it changes, so too should its business plan. So don't think of your business plan as carved in granite but as a living document designed to evolve with your business.

Harvard Business Review. " Research: Writing a Business Plan Makes Your Startup More Likely to Succeed ."

U.S. Small Business Administration. " Write Your Business Plan ."

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How to Write a Management Plan

Last Updated: September 18, 2023 Fact Checked

This article was co-authored by Madison Boehm . Madison Boehm is a Business Advisor and the Co-Founder of Jaxson Maximus, a men’s salon and custom clothiers based in southern Florida. She specializes in business development, operations, and finance. Additionally, she has experience in the salon, clothing, and retail sectors. Madison holds a BBA in Entrepreneurship and Marketing from The University of Houston. There are 9 references cited in this article, which can be found at the bottom of the page. This article has been fact-checked, ensuring the accuracy of any cited facts and confirming the authority of its sources. This article has been viewed 239,596 times.

A management plan describes how an organization or business is run. Writing a management plan allows you to formalize your management structure and operations. It also ensures that everyone is on the same page and that your goals will be accomplished. You can easily write your own management plan with a few simple steps.

Management Plan Outline and Example

Starting Your Management Plan

• Defining roles also creates accountability by making it clear who's fault it was that something did or did not happen. [3] X Trustworthy Source Kansas University Center for Community Health and Development Community-based research center focused on supporting public health development and education Go to source

• A section detailing management members and their responsibilities and authorities.
• A chart of section detailing interactions between and responsibilities of each level of the organization.
• A section explaining different aspects of your organization being managed and the policies and procedures of that management.
• A schedule for updating, enhancing, and growing management and the management plan. [6] X Research source

Describing Ownership and Management

• Include a copy of board policies, including election policies, term length, responsibility, authority, and conflict resolution. This information should already be stated in your operating agreement or other founding documents.

• List past positions and duties of each member that apply to their current management obligations. Explain how these obligations highlight applicable skills and strengthen the management positions.
• Highlight all relevant educational backgrounds for each of the managers. Explain how their training will benefit the company. Only include the education that is relevant to the positions that they currently hold.
• If you are the only employee in your business, be sure to include your own experience and strengths.

• Accountants.
• Insurance brokers.
• Consultants.

• For example, “Our team, with its diverse array of skills, have a combined forty years of experience in this field. With our coordinated democratic structure, they can work together effectively to produce results. With this team, we are confident that our business will become profitable in two years.”

Writing Out Policies and Procedures

• For example, a policy might be using and selling only green materials and products. The procedures to support that policy might be shopping from approved green vendors or checking the environmental impact of each material or product used.

Revising Your Plan

• When they approve, have all owners sign the plan before you submit it to your investors, bank, or fundraising bodies.

• Make sure there is a way for all management and employees to submit their feedback regarding the plan.
• Then, create a method by which changes to the plan can be approved and instituted. [20] X Trustworthy Source Kansas University Center for Community Health and Development Community-based research center focused on supporting public health development and education Go to source

Expert Q&A

• Many investors will read the management section of your business plan before any other section, including marketing and finances, so you want to make sure that you have the best proposal possible. Thanks Helpful 0 Not Helpful 0

• Do not neglect your management plan in favor of your financial plans. Both are equally important to a business plan. Thanks Helpful 0 Not Helpful 1

You Might Also Like

• ↑ Madison Boehm. Business Advisor, Jaxson Maximus. Expert Interview. 24 August 2021.
• ↑ http://ctb.ku.edu/en/table-of-contents/leadership/effective-manager/management-plan/main
• ↑ https://www.brown.edu/research/conducting-research-brown/preparing-proposal/proposal-development-services/writing-management-plan
• ↑ https://www.thebalance.com/how-to-write-the-management-summary-2951561
• ↑ https://open.lib.umn.edu/humanresourcemanagement/chapter/4-1-the-recruitment-process/
• ↑ https://www.entrepreneur.com/article/241072
• ↑ https://writingcenter.unc.edu/tips-and-tools/editing-and-proofreading/
• ↑ http://www.businessnewsdaily.com/4533-business-plan-outline.html

About This Article

The best way to write a management report is to describe the company’s management structure in 10 to 20 pages. Name the board members and explain the company’s ownership policies. Introduce all management members and present the strengths of each team member. Then, write out workplace policies and procedures. Send the management report to the company’s bank, investors, or fundraising bodies. For more tips from our Financial Reviewer, like how to outline, format, and revise your plan, read on! Did this summary help you? Yes No

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“What Is Organization and Management in the Business Plan?”

How do you write the organization and management section of your business plan?

• Remember that the purpose of a business plan is to sell people on your potential for success!
• Determine the legal structure of your business
• Develop a rough organizational flowchart. Keep in mind that owners/shareholders, directors, and third parties can also be included
• For every individual in your organizational flowchart – specify their name and responsibilities. Most importantly – highlight their qualifications for the role!
• Include official resumes and critical procedures in the appendix
• Circle back and make adjustments to the previous steps as you progress in the writing of your business plan

The organization and management part of your business plan focuses less on the business itself and more on the people behind it. A business is only as good as the people making decisions. Until (if ever), artificial intelligence can run businesses, it’s going to be people pulling the strings behind the curtain. For better or worse.

Also, keep in mind that banks lend money to people, not ideas. Venture capitalists invest in people, not mindless assets. Your business plan might be great. But, it will require one or more humans to execute that plan.

Whoever might be investing in your company will want to know the chain of command. A formal declaration of who employees report to and who the final decision maker is. If these sorts of things aren’t clarified, it can lead to catastrophe.

There are, essentially, two main parts to the organization and management section of the business plan. You’ve probably guessed what they are.

In one part you’ll discuss the business’ organizational structure. For example who will report to who, and what the chain of command looks like.

In the other part, you’ll describe the individuals who will populate those positions. Plus, their qualifications for doing so.

The organization of your business

The reader of your business plan will want to know what the organizational structure is when you are starting your business. They need to know who the key people are in the organization and what their roles will be.

Businesses need smooth running chains of command in order to be successful. And, while your business can consist of one person – there’s a good chance that at some point you’ll need quality people to help you out.

Who’s responsible for what?

Obviously, this will change over time, as your business evolves. The reader of your business plan will want to know the lay of the land when the business launches, however.

Particularly, if you’re asking for money to add additional roles in the future, you’ll want to be crystal clear about who those individuals will report to, what their responsibilities will be, and most importantly, how they’ll add value to the organization.

Generally speaking, small businesses are simpler organizations than larger ones. But, there still needs to be clarity in terms of the flow of work. Some of the critical departments to think about are sales/marketing, manufacturing/distribution, and accounting/administration. Depending on the nature of your business, research and development might be critical too. Who will be responsible for these important tasks?

Don’t be afraid to use graphics here. An illustration of the hierarchy of your business and/or the process flow can help clarify everything you’ve written about. This organizational chart can and should be used in the future – for clarification’s sake, as the business grows.

A free tool like draw.io can be used to make a good looking flowchart.

Procedures?

Beyond the organizational structure and the workflow, you might consider adding some procedures for the routine duties that these roles will handle. In fact, as you write the organization and management section of the business plan, it might dawn on you that you’ve given precious little thought to how day-to-day business will be conducted! This is the perfect opportunity to conceptualize exactly how you’ll take inputs and turn them into outputs.

Procedures demonstrate to the reader that you’ve given thought to the most efficient way to handle these tasks. They also show that you won’t be planning on wasting money on excess manpower. A business without proper procedures is one that’s going to run into trouble with inefficiency and poor customer service.

Since written procedures are detailed documents, it might best to include them in the appendix.

Third parties?

Include any roles that might be filled by third parties. Independent contractors or freelancers, for instance. Even if you anticipate relying upon consultants – that should be addressed in this section as well. Where will these people fit in the organizational chart?

If your business is going to depend on these types of individuals, the reader of your business plan wants to know about it.

More about the third parties you might consider, below.

Legal structure

Finally, the organizational section of your business plan should address the legal structure of the business. Anybody investing in your business is going to want to know whether you’re incorporated as a C or an S corporation. Or, conversely, organized as a general or limited partnership. Maybe the best legal structure for you is something as simple as in LLC or a sole proprietorship. Whatever the case may be, it’s important to convey this information.

In a corporation, the shareholders may or may not be part of the Board of Directors or the management team.

In a partnership, the assumption is that the partners will all have equal control in managing the new business.

With an LLC it can be a situation where the business is managed by the members. Or, it could be that outside managers are hired.

You can see how these sorts of things must be clarified for the reader of your business plan.

The management of your business

If you are the owner of a business, then you will list yourself. If any owners are going to be on the Board of Directors, involved with the business heavily, or on the management team you need to include a “Resume” of their skills and qualifications.

The previous section outlined the roles necessary for your startup to succeed. Now, you want to discuss the people that will fill those roles.

Whatever your role may be, the reader of your business plan will probably understand why you hired yourself. That’s one of the privileges of being a founder.

However, that doesn’t mean that you don’t have to justify why you gave yourself a particular position.

What qualifies you for this role? Hopefully, the fact that your business plan is well-polished helps to convey your qualifications. But, just because you’re a founder doesn’t mean that you can do anything. For instance, if your company will rely heavily on scientific or engineering know-how, then you had better be well-qualified if you wish to fill one of those roles.

Formalized resumes for yourself and the rest of your team can be included in the appendix. However, some of the things that you want to highlight here are:

• Their title
• What decision will they be making?
• Previous positions that they’ve held
• Leadership experience
• Industry experience
• Sales and marketing expertise
• Anything else that will inspire confidence in your company!

Here’s an idea of the individual parties you need to name/address:

Ownership/Shareholders

The number of individuals and depth of information included here will depend, in part, on the legal structure of your business.

If it’s a corporation, you’ll list the shareholders along with the type of stock they’ll own (common or preferred).

If the business is a partnership, your list the partners along with the type of partner they are (general or limited).

For an LLC, you’ll list the members.

And, as you might expect, if your business as a sole proprietorship you will list yourself.

Additionally, if any of the owners are going to be on the Board of Directors, involved with the business heavily, or on the management team you need to include a “resume” of the skills and qualifications they bring to the table.

Board of directors

Not every small business will have a Board of Directors. If your legal structure will be an S or C corporation though, it will be required. Make sure you’re familiar with the laws of the state you live in and the state in which you incorporate in.

If you have a Board of Directors then you want to specify each of the individuals that will comprise the board. As with everyone else you would summarize the skills and qualifications that they’ll bring to the table. Resumes can, again, go in the appendix.

Furthermore, you might detail any other involvement they’ll have with your startup. That is, beyond, attending board meetings.

If your business legal structure is a partnership, LLC, or sole proprietorship you will not have a Board of Directors. It may be, however, that you have a group of trusted advisors who have expressed their willingness to help your startup succeed. If that’s the case, consider naming them here. Or, you can include them with the other third parties below. It’s up to you.

Again, these sorts of things help to sell the potential for the success of your burgeoning business.

I’m sure you know the routine by now. List the names, skills, and qualifications of the upper management team.

Since these are the people that will be making the day-to-day operational decisions in your business, you want to make their accomplishments a focal point. Lenders and investors will be especially interested in how these people can earn them a healthy ROI.

Another thing to consider is that since you’ll likely be the top dog at your start up (and rightfully so) you want to emphasize how the rest of the management staff will compliment you as a manager. Particularly, how their strengths will compensate for your shortcomings. And, how your strengths will compensate for their shortcomings.

Admitting your shortcomings is not always an easy pill to swallow for an entrepreneur. We like to think that we can do it all. Again, keep in mind this is a sales document. Put your ego aside and write a management and organization section of your business plan that will get funding.

Lastly, it is here that you will specify the details of compensation for yourself and the rest of the management team. Compensation includes, of course, things such as salary, benefits, and profit-sharing.

Additionally, if any individuals will be bound by contracts or non-compete agreements, this is the place to itemize those particulars.

Other support roles

• Insurance agent

In addition to the key ownership, directors, and management, you should consider outlining key third-party professionals who will serve in advisory roles. Remember, the whole point of the organization and management section of your business plan is to highlight the individuals who have your back and how they can help your business succeed. Not every key individual is going to be inside the company either.

Your accountant

Accounting is not most people’s strong suit. If that’s the case with you, then a competent professional accountant will be an extremely valuable asset. This individual will help you with business compliance, taxes, and financial operations. Also with financial statement preparation, auditing, and payroll.

All critical tasks.

Your attorney

An attorney is also a crucial part of your advisory team. They can help you choose the appropriate legal structure for your business (with help from your accountant). They provide valuable support with any contracts, intellectual property, regulation, compliance, and governance.

The law is complex and “winging it” in these areas could stop your business in its tracks.

An insurance agent or risk management advisor

Some businesses will rely more upon this than others. However, keep in mind that many of the risks your business will run into what is called “unknown unknowns” (circumstances that you could not foresee).

Having someone in your corner that understands how to identify and mitigate these risks will put investors at ease.

Your banker

Having a good relationship with a local banker who understands your industry will help you achieve your goals.

A small bank may be preferable to a larger bank. Small banks can offer a more intimate relationship which, in turn, would facilitate a more beneficial long-term relationship.

If you have someone in your life who can provide sage advice you may consider adding them to your list of trusted advisors. Maybe you even have more than one?

If this person (these people) is particularly well versed in your industry or in entrepreneurship, then all the better! Knowing that you have someone in your corner who has been in your shoes before will inspire confidence.

An organization and management example

As with all of the other posts written on the topic of business plans, I like to include an example from my own hypothetical startup. It gives me the opportunity to follow along with the subject at hand and to “do” rather than just “say.”

The hypothetical startup is a would-be manufacturer and distributor of an all-natural, topical hair regrowth supplement for men and women.

As I alluded to above, it might dawn on you at this stage that you have some serious thinking to do as far as the operations of your business go. So much time thus far has been spent on market analysis (and rightfully so) that the day-to-day comings and goings have slipped through the cracks. Well, these things can’t get put off forever, so this is a good time to at least get rough drafts created.

With that in mind, here’s my first pass at an organizational flowchart for this hypothetical business:

Below, are some “resumes” for full-time employees and third-party advisors. These are loosely based on real people. But, for the sake of anonymity, facts are obscured.

These “resumes” are, admittedly, a little generic. While I did want to go through the exercise of creating a management and organization section for my hypothetical business plan – I did not necessarily want to commit too much time to the careful crafting of resumes for fictional people. The same goes for the creation of procedures.

Of course, if this were the real deal, I would include more formal resumes (as appropriate) in the appendix.

Management/employees

KB, President

Responsibilities – Providing strong leadership. Establishing short and long-term goals, plans, and strategies. Presiding over the entire workforce (internal and external). Managing finances. Ensuring resources are allocated properly.

Qualifications – Researched and studied the factors critical to business success in his blogs, SpreadsheetsForBusiness.com , and InvestSomeMoney.com . Performed in the capacity as a Financial Analyst and Cost Accountant for a chemical manufacuturer nearly 15 years. Assisted small businesses in problem solving as a SCORE volunteer.

Mrs. B, Administration

Responsibilities – Assist in the day-to-day management of the value chain. Implementing processes and practices across the organization. Improving performance, procuring material/resources, and securing compliance.

Qualifications – 20 years of multitasking and personality management in the education industry. Experience keeping executives and business owners organized and prioritized. Practices an intuitive approach to assistance that rests on empathy, efficiency, and astute problem-solving.

Ms. B, Customer Support

Responsibilities – Leading the charge to reach sales targets. Setting quotas. Evaluating and adjusting performance. Developing processes that drive sales. Managing social media presence.

Qualifications – Major in marketing. 4 years’ experience in a customer-facing role. Experience in setting and meeting sales goals. Proficient in CRM software.

Third-party partners

For third parties, it wouldn’t necessarily be appropriate for me to ask for a formal resume. Most of these professionals will have qualifications made public on their websites or social media – for the purpose of marketing themselves.

John Q. Defender, Attorney

Mr. Defender focuses on commercial litigation. He helps his clients with insurance coverage and claims, including general liability. He serves in both an advisory capacity and represents clients before and after litigation. Additionally, he has experience litigating cases to a verdict, including claims regarding product liability and insurance coverage.

Daryl P. Riskavoider, Insurance Advisory

A 15-year agent with Countrywide Insurance. Mr. Riskavoider has helped dozens of other startup manufacturers identify risks and protect their downside with Countrywide’s diverse array of insurance products. Countrywide Insurance has been in business for 90 years. They focus on small business needs and are one of the largest insurers in the world.

Dan O. Havesomecash, Banker

An experienced loan professional with WeTrust Bank. Mr. Havesomecash has underwritten over $50 million in financing for similar startup manufacturers. WeTrust Bank is a premier local bank with a 100-year history. They provide competitive and flexible financing solutions for regional SMBs and are committed to contributing to the growth of local business.

Other notable partners

I’ll also include a brief synopsis of my contract blender/packager and the temp service I would use to man the distribution facility. Again, the purpose of the business plan generally, (and the organization and management section specifically) is to sell the success of your business. I think that including these partners will help to do that and potentially quell any concerns that readers might have.

In these instances, however, I’m just going to copy + paste info from their respective websites. No need in trying to improve on what they’ve already put a lot of time and effort into.

Camco Chemicals, Contract Blending & Packaging

Camco’s contract blending services are both extensive and broad. With 21 liquid and 5 powder mixers, Camco can produce an impressive 1.25 million pounds of product per eight hour shift. Importantly, Camco possesses unused capacity that can serve your project’s current and future needs while assuring you of the ongoing manufacturing flexibility necessary to deliver the response time that you need to meet your customers’ demands for delivery. https://www.camco-chem.com/contract-blending

Camco is a family owned business that was founded in 1960 and continues to operate under private ownership with several second and third generation family members active in the business’ daily operation. Camco employs approximately 175 associates and operates a thirty-two acre campus situated in an industrial park setting in three adjacent buildings collectively comprising 587,000 square feet of manufacturing, packaging and distribution services. As a contract chemical manufacturer and contract packaging contractor, Camco operates on a five day week schedule with three shifts and blends a broad variety of chemical products that are sold by Camco’s customers in the consumer, industrial, agricultural, transportation, water treatment and food industries, to name just a few. Importantly, Camco does not market any products, so that its customers can be assured that their proprietary and confidential information will remain so. Camco’s overall manufacturing capacity totals nearly 300 million pounds of packaged goods with potentially several hundred million additional pounds for bulk shipments and transloads. The level of available capacity is such that virtually any project can be accommodated. https://www.camco-chem.com/about-camco

Randstad Staffing, Temporary Agency

Companies partner with us to hire better talent faster, save on HR costs and get workforce solutions that make sense for them. If you’re looking to do the same, then there are a lot of reasons to work together. We’re able to reach into our talent network and get the ball rolling for you fast thanks to the relationships we’ve built with professionals in your area. We match candidate skills, personality and working style to your company because when you place candidates in environments where they can thrive, you’re much less likely to make a bad hire. Why do people work with us? It’s because of the ways their business changes with our partnership. When we work together, you won’t have to worry about missing out on the market’s most sought-after candidates because our streamlined process will help you hire faster — but the benefits don’t stop once your new talent has been onboarded. Employee engagement and retention rates will improve with quality talent that fits your workplace — not just the job description, and your business will be set up for long-term success because our experts will provide you with tailored workforce strategies. https://rlc.randstadusa.com/for-business/randstad-learning-center/working-with-us/why-people-work-with-us

Organizational Management – Guiding Success Strategically

Let’s delve into the concept of organizational management, its fundamental principles, and its significance in achieving operational excellence and strategic success.

Published by Orgvue   January 18, 2024

Home > Resources > article > Organizational Management – Guiding Success Strategically

Organizational management is the cornerstone of success for businesses, nonprofit organizations, government entities and even small community groups. It serves as the compass that guides an entity towards its goals, offering a structured approach to resource allocation, decision-making and problem-solving. In a world marked by complexity, change and fierce competition, effective organizational management is not merely an advantage but a necessity. Let’s delve into the concept of organizational management, its fundamental principles, and its significance in achieving operational excellence and strategic success.

What is organizational management?

Organizational management is the practice of planning, coordinating and overseeing the resources, processes and people within an organization to achieve specific objectives. It encompasses a range of functions, including strategic planning, decision-making, leadership, and the allocation of resources, all geared towards optimizing efficiency, productivity, and overall performance. The goal of an organization is accomplished by effectively utilizing its human and material resources, making it an indispensable discipline for achieving sustainable success in any domain.

Why is organizational management important?

• Goal alignment:  Organizational management ensures that every employee, from entry-level workers to top executives, understands and works toward common business objectives. It aligns individual and team goals with the overarching company mission.
• Resource optimization: Effective management of organization helps allocate resources efficiently, whether it’s labor, finances, time, or technology. This prevents wastage and maximizes productivity.
• Enhanced productivity:  A well-structured management system provides a clear framework for work processes, resulting in increased productivity at all levels of the organization.
• Strategic planning : It involves strategic planning, helping the company adapt to changes in the business environment and remain competitive in the long term.
• Decision-making:  It offers a structured approach to decision-making, ensuring that choices align with the organization’s goals and values, whether it’s a frontline employee making a tactical decision or senior leadership making strategic choices.
• Leadership development:  Management practices identify and nurture leadership talent within the organization, helping it grow and succeed. This is important at all levels, from team leaders to executives.
• Quality control:  It implements and monitors quality control measures, ensuring consistency and excellence in products or services.
• Employee engagement:  It promotes a culture of involvement and commitment, ensuring that employees feel valued and engaged in their work, regardless of their position.
• Performance evaluation:  Through performance reviews and key performance indicators (KPIs), management of organization assesses individual and team performance. This information is then used to set expectations and improve results.
• Conflict resolution: Management plays a pivotal role in addressing conflicts and issues that may arise at all levels of the organization, preventing them from escalating and affecting productivity.
• Change management:  Adapting to change is crucial in today’s dynamic business world. Organizational business management helps employees at every level understand, accept, and embrace change, ensuring a smooth transition.
• Communication:  Effective management practices promote open, transparent communication within the organization, facilitating the flow of information between different levels and departments.
• Risk management: Management identifies, assesses, and mitigates risks, ensuring that the organization can handle unexpected challenges while minimizing their impact.
• Innovation and creativity:  Encouraging innovation and creativity is essential for keeping a business competitive. Organizational business management fosters an environment where employees, regardless of their role, can contribute fresh ideas.
• Sustainability and growth: It is essential for the sustainable growth of an organization. It helps in setting benchmarks, tracking progress, and making adjustments to ensure long-term success.
• Financial Stability: Effective management practices enable financial stability by managing budgets, controlling expenses, and optimizing revenue streams, all of which contribute to business goals.
• Customer satisfaction:  Management ensures that employees at all levels focus on meeting customer needs and delivering quality products or services, leading to high customer satisfaction.
• Ethical c ompliance:  It ensures that all employees understand and adhere to ethical standards and legal requirements in their roles, maintaining the company’s reputation and credibility.

The different management styles

Management styles play a significant role in shaping the work environment and the overall success of an organization. Two prominent management styles, autocratic and democratic, stand at opposite ends of the leadership spectrum.

Autocratic management, characterized by centralized decision-making and minimal employee involvement, is often valuable in situations requiring quick decisions and strict control, such as emergencies. However, its overuse can stifle creativity and morale.

On the other hand, democratic management empowers employees by involving them in decision-making, fostering innovation and creating a sense of ownership. While it promotes collaboration and engagement, it may sometimes lead to slower decision-making processes. The importance lies in finding the right balance and adapting these styles to the specific needs of an organization, department, or situation.

Effective organizational business management often blends elements of both styles, using autocratic approaches when urgency is paramount and shifting towards democratic methods to encourage employee participation, ultimately ensuring a dynamic and responsive organizational culture.

Leadership skills

Skills needed in the leadership team for effective organizational management:

Effective m anagement s kills:  It is at the core of organizational success. Leaders need to possess skills in setting clear objectives, creating actionable plans, and efficiently allocating resources. They should be able to oversee and guide teams, ensuring that tasks are completed on time and within budget. Effective management involves not only overseeing the daily operations but also addressing challenges and facilitating growth.

Strategic t hinking:  Strategic thinking is essential for leadership teams to navigate the complexities of today’s business environment. Leaders must have the ability to formulate a long-term vision for the organization, set strategic priorities, and align resources to achieve these goals. Strategic thinkers consider market trends, competition, and emerging opportunities, allowing the organization to adapt and thrive.

Decision- m aking and   p roblem- s olving: Leadership teams need strong decision-making and problem-solving skills. They should be capable of analyzing complex situations, weighing pros and cons, and making sound decisions that align with the organization’s objectives. Effective problem-solving skills help in resolving issues efficiently and preventing them from becoming significant obstacles.

Communication and i nterpersonal s kills:  Clear and effective communication is a cornerstone of leadership. Leaders should be able to convey their ideas, expectations, and vision to both their teams and other stakeholders. Strong interpersonal skills are equally important for building relationships, inspiring trust, and resolving conflicts. Effective communication fosters collaboration and encourages employees to be engaged and motivated.

Adaptability and c hange m anagement: The business landscape is constantly evolving. Leadership teams should be adaptable and open to change. They must have the ability to lead their organizations through transformations, whether it’s adapting to new technologies, market shifts, or industry trends. Being flexible and resilient in the face of change is vital.

Financial a cumen:  Leaders should have a strong understanding of financial principles. This includes budgeting, financial analysis and resource allocation. Financial acumen allows leaders to make informed decisions that optimize the organization’s financial performance and sustainability.

Team b uilding and d evelopment: Leadership teams must be adept at team building and development. They should recruit, train, and mentor talent to create high-performing teams. Effective leaders empower employees, allowing them to grow in their roles and contribute to the organization’s success.

Emotional i ntelligence: Emotional intelligence is crucial for leadership, as it involves understanding and managing one’s emotions and the emotions of others. Leaders with high emotional intelligence can build strong relationships, inspire trust, and effectively manage and motivate their teams.

Innovation and c reativity: Encouraging innovation and creativity is essential for staying competitive. Leadership teams should foster a culture that values new ideas and approaches. They should also be innovative thinkers, exploring novel strategies and solutions to address challenges and capitalize on opportunities.

Ethical leadership:  Ethical leadership is based on principles of integrity, honesty, and ethical decision-making. Leaders should set a moral compass for the organization, promoting values that guide behavior and maintain the organization’s reputation and credibility.

Aligning organizational management with business objectives

Common goals for all organizations:.

Every organization, regardless of size, industry, or mission, shares a common goal. These universal objectives provide a foundation for success and serve as guiding principles for organizational management. Among these shared goals are profitability, growth, customer satisfaction, employee engagement, innovation, and social responsibility. Profitability ensures the organization’s financial sustainability, while growth signifies progress and competitiveness. Customer satisfaction and employee engagement foster a positive environment, which, in turn, leads to innovation and the development of new products, services and processes. Furthermore, embracing social responsibility allows organizations to contribute positively to society, aligning their missions with broader societal goals.

Setting the right goals for your organization:

Choosing the right goals for your organization is a pivotal decision that dictates the direction and success of the business. The process begins with a deep understanding of your organization’s mission, values, and unique position within its industry. Goals should align seamlessly with the organization’s core purpose and be specific, measurable, achievable, relevant, and time-bound (SMART). They must respond to the internal and external environment through rigorous assessments, such as SWOT analysis, to consider the strengths, weaknesses, opportunities, and threats faced by the organization. Additionally, involving key stakeholders, from employees to customers, is essential to obtain valuable input and ensure that the goals are both practical and meaningful. Prioritizing goals helps focus on those that will have the most substantial impact on the organization’s success.

How to align organizational management with business goals:

Aligning organizational management with business goals is a critical step in ensuring that an organization moves in the right direction. Effective communication is the linchpin, as clear and consistent messaging about the objectives must be disseminated throughout the organization, creating a shared sense of purpose. The development of key performance indicators (KPIs) is a fundamental practice to directly measure progress toward business goals. These metrics should be tracked, reported on, and assessed regularly. Resource allocation, including budgets, talent, and technology, must be aligned with the goals to ensure that the organization commits the necessary resources for goal achievement. Leadership commitment to championing these goals and setting an example is instrumental in motivating employees. Continuous evaluation and adjustment, supported by feedback mechanisms capturing insights from employees and stakeholders, ensure that goals remain relevant and achievable. Incentive structures and recognition programs can be implemented to reward and acknowledge employees who contribute to goal achievement, fostering motivation and a sense of ownership within the organization. Through these strategies, organizations can systematically progress towards their objectives, fostering growth, profitability, and sustainability.

Organizational management and development

Building a leadership team.

An effective leadership team is the cornerstone of successful organizational management and development. Building this team involves selecting individuals who possess the right skill sets, expertise, and vision to lead the organization toward its objectives.

Leadership teams should comprise diverse talents and experiences to offer a well-rounded perspective on decision-making and strategy. Additionally, the team should be capable of collaborating seamlessly and motivating employees at all levels, creating a culture of engagement, trust, and accountability. A strong leadership team not only sets the organization on the right path but also fosters an environment where development initiatives are embraced and promoted.

Developing the leadership team to meet management objectives

Developing the leadership team is a continuous process that aligns the management style required to achieve organizational objectives. This development involves training, coaching, and mentorship to ensure that leaders possess the skills and knowledge necessary for effective decision-making, strategic planning, and resource allocation.

Leaders must be adaptable to the organization’s changing needs, whether it requires an autocratic approach in times of crisis or a more democratic style during periods of innovation and employee development. By developing the leadership team in tandem with organizational management objectives, the organization can create a dynamic, responsive leadership structure capable of guiding the organization through the challenges and opportunities of an ever-evolving business landscape.

Organizational management examples

Organizational management is a multifaceted concept that finds application in various sectors. Examples of effective organizational management include streamlining operations in a manufacturing company to reduce production costs while maintaining product quality, implementing a customer relationship management (CRM) system in a sales-driven organization to improve customer interactions, and establishing transparent communication channels within a non-profit to ensure that every stakeholder is informed and engaged. Additionally, in a healthcare setting, efficient organizational management might involve optimizing patient flow to reduce wait times and enhance the quality of care provided. These examples underscore the importance of organizational management in achieving operational excellence, fostering innovation, and achieving strategic goals across diverse industries.

What happens to a business without an organizational management plan?

Operating a business without a dedicated organizational management plan can lead to a host of detrimental consequences. Without a structured approach to resource allocation, goal-setting, and employee guidance, the business may experience chaos, inefficiency, and disarray. Key functions like decision-making, leadership, and problem-solving become erratic and haphazard, leading to missed opportunities and increased risks. Employee morale can plummet, as a lack of clear direction and communication fosters confusion and disengagement. Moreover, without a plan for adaptability and change management, the business may struggle to respond effectively to evolving market conditions and challenges, ultimately jeopardizing its sustainability and competitiveness. In essence, the absence of an organizational management plan can hinder a business’s ability to achieve its objectives, leading to operational inconsistencies, reduced profitability, and a less-than-optimal work environment.

Organizational management stands as the keystone to an organization’s success, underpinning its ability to navigate the complexities of today’s business world. It encompasses the strategic planning, effective resource allocation, and sound decision-making that guide a company toward its goals. Beyond these fundamental practices, organizational management fosters a culture of innovation, adaptability, and accountability, ensuring that businesses not only survive but thrive in an ever-evolving landscape. It is the steady hand that ensures that people, processes, and strategies align seamlessly, creating an environment where efficiency, productivity, and the pursuit of excellence become the norm. In essence, organizational management is the compass that steers an organization toward its vision, making it an indispensable discipline for long-term success and prosperity.

What is the difference between organizational management and leadership

Organizational management primarily focuses on the efficient coordination of resources, processes, and day-to-day operations along with organizational design  to achieve specific objectives. Leadership, on the other hand, emphasizes the guidance, inspiration, and vision-setting necessary to motivate and influence individuals and teams, fostering a culture of engagement and adaptability while pursuing long-term goals.

How does change management fit into organizational management?

Change management is an integral component of organizational management as it deals with planning, implementing, and guiding transitions within the organization. It ensures that organizational management processes effectively adapt to changes, whether they involve shifts in strategy, technology, or culture and provides a structured approach to mitigate resistance and maximize the chances of successful change implementation.

What is the role of Human Resources within organizational management?

Human Resources (HR) plays a crucial role within organizational management by overseeing the recruitment, training, development, and retention of talent essential for the organization’s success. HR ensures that the workforce aligns with the organization’s goals, maintains compliance with employment regulations and fosters a positive work environment that contributes to overall operational excellence.

Organizational Design

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What is Business Management?

Author: University of North Dakota May 24, 2024

Business management is a key driver that helps companies achieve their goals by coordinating efforts and smoothing out the process.

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It's a crucial force that's always at work, though you might not always see it—think of it as the oil that keeps the engine of a business running smoothly.

Imagine a place where every decision is carefully considered, tasks are organized efficiently and everyone is pulling in the same direction. This is what effective business management looks like. It's all about good planning, smart organizing and strong leadership that together push a business toward success. 

Keep reading to discover more about business management, starting with the basic question, "What is business management?" and looking into how it shapes the future of companies.

Business management involves coordinating organizational activities to achieve its objectives and goals. This is done through functions such as planning, organizing, directing and controlling various aspects of operations, including finance, marketing and human resources.

Business management is distinct from business administration in that while business administration focuses on the day-to-day operations and administrative tasks within an organization, business management takes a broader view, encompassing strategic planning, leadership and decision-making processes that drive the organization forward.

The Importance of Business Management

Business management is crucial in determining an organization's success and sustainability. One of the most critical areas where effective management shines is retaining employees. Research shows that a staggering 57% of employees have left one or more companies due to poor management. Therefore, good management habits are essential for fostering a workplace culture that encourages long-term employee engagement and retention.

Additionally, effective business management significantly impacts productivity within an organization. The quality of leadership and management practices directly correlates with employee productivity levels . A supportive and inspiring leadership style motivates employees to perform at their best throughout the workday, driving higher productivity levels. 

Conversely, ineffective management practices or a toxic company culture can lead to communication breakdowns, demotivation and ultimately hindered productivity. Therefore, strong management practices are essential for optimizing employee performance and maximizing overall productivity.

Lastly, effective business management is crucial for bolstering an organization's capacity to weather challenging circumstances, such as economic recessions. During times of crisis, competent management becomes even more critical in navigating uncertainties and guiding the organization toward resilience and recovery. 

A well-equipped management team can make strategic decisions, implement cost-saving measures and adapt swiftly to changing market conditions, safeguarding the organization's stability and ensuring its long-term survival. 

Core Functions of Business Management

Effective business management encompasses several core functions essential for achieving organizational goals and driving success. Each function helps guide the organization's operations and activities toward desired outcomes and ensures overall efficiency and effectiveness.

Planning and Strategy

Firstly, planning and strategy form the foundation of effective business management. This function involves setting clear objectives and goals for the organization and developing comprehensive plans to achieve them. Strategic planning entails analyzing market trends, assessing internal capabilities and identifying opportunities for growth and innovation. 

By carefully crafting strategies and action plans, businesses can navigate uncertainties, anticipate challenges and position themselves for long-term success.

Organizing and Structuring

Organizing and structuring involve designing the organizational framework and allocating resources to facilitate the execution of plans and strategies. This function encompasses establishing reporting relationships, defining roles and responsibilities as well as creating workflows to ensure seamless employee coordination and collaboration. 

Effective organizational structure fosters clarity, efficiency and accountability within the organization, enabling teams to work cohesively toward common objectives.

Leading and Motivating

Next, leading and motivating is about inspiring and empowering employees to perform at their best and achieve organizational goals. Effective leaders set a compelling vision, communicate clear expectations and provide guidance and support to their teams. They foster a positive work culture that values teamwork, innovation and continuous improvement, thereby motivating employees to contribute their talents and efforts to the organization's success.

Controlling and Evaluating Performance

Lastly, controlling and evaluating performance involves monitoring progress, measuring outcomes and making adjustments as needed to ensure that goals are being met. This function includes establishing performance metrics, conducting regular reviews and implementing corrective actions to address any deviations from the plan. 

By maintaining oversight and accountability, businesses can identify areas for improvement, capitalize on strengths and drive continuous growth and development.

Specialized Areas of Business Management

Business management has various specialized areas encompassing multiple functions, from managing human resources and finances to overseeing marketing initiatives and optimizing operational processes. While each area has its unique focus and responsibilities, they all contribute to the organization's overall efficiency, productivity and profitability.

Human Resource Management

Human resource management (HRM) is a specialized area of business management that revolves around recruiting, developing and managing an organization's workforce. It encompasses various aspects such as total compensation, hiring processes, employee safety and wellness.

Contrary to popular belief, HRM is not solely the HR department's or individual's responsibility; rather, it is a collective effort involving all department managers who recognize the importance of effective HR practices in enabling employees to contribute effectively to the organization's overall goals and direction. In modern HRM approaches, emphasis is placed on utilizing employee programs to foster a positive impact on both staff members and the broader business.

Financial Management

Financial management encompasses a broad spectrum of financial activities, including budget planning, cash flow management and oversight of financial procedures. This facet of business management involves planning, directing and coordinating various activities such as accounting, investing, banking, insurance and securities management. 

Key elements of financial management include financial planning, financial control and financial decision-making, focusing on achieving a healthy balance between profit and risk to ensure long-term profitability. 

Financial management also entails short-term financial management, known as "working capital management," which includes cash management, inventory management and debtor management, all aimed at optimizing financial resources and maintaining profitability.

Marketing Management

Marketing management is a specialized area of business management that focuses on the practical application of marketing techniques and the strategic management of marketing resources and activities. It encompasses various aspects such as company analysis, collaborator analysis, competitor analysis, customer analysis, brand management, marketing strategy and pricing. 

Effective marketing management involves leveraging a company's resources to expand its customer base, enhance customer satisfaction and increase the company's perceived value through strategic branding and marketing initiatives tailored to meet business objectives.

Operations Management

Operations management (OM) is a specialized area of business management concerned with optimizing business practices to achieve maximum efficiency within an organization. It involves efficiently administrating processes to convert materials and labor into goods and services, thereby maximizing profits.

Operations management encompasses various strategic issues, such as determining the sizes of manufacturing plants, project management methods and information technology network structures as well as operational tasks like inventory management, quality control, materials handling and maintenance policies.

By managing resources and processes effectively, operations managers strive to balance costs with revenue to achieve optimal net operating profit and drive organizational success.

Essential Skills for Business Managers

To excel as a business manager, you'll need a diverse set of essential skills, including:

• Financial management skills
• Project management skills
• Team management skills
• Decision-making skills
• Leadership skills
• Communication skills
• Problem-solving skills
• Strategic thinking abilities
• Analytical skills
• Adaptability and flexibility

Studying Business Management

Careers in business management typically begin with obtaining a bachelor of business management degree . Such undergraduate programs provide a foundational understanding of various business principles and practices, including finance, marketing, human resources and operations management.

Beyond a bachelor's degree, individuals interested in advancing their careers in business management can pursue graduate degrees such as a Master of Business Administration (MBA) or Master of Management. These advanced degrees offer opportunities to explore specialized areas of business management and provide students with advanced knowledge, strategic thinking abilities and leadership skills essential for managerial roles in diverse industries.

Career Opportunities in Business Management

One of the key benefits of earning a business management degree is the vast array of career opportunities it opens up. Graduates with a background in business management are sought after by various industries and organizations, offering diverse career paths and advancement opportunities. Some of the potential career opportunities in business management include:

• Business analyst
• Marketing manager
• Human resources manager
• Operations manager
• Project manager
• Sales manager
• Supply chain manager
• Financial analyst
• Management consultant
• Entrepreneur or business owner

The Bottom Line

All in all, the role of a competent business manager is indispensable for the success of any organization. To excel in this field, acquiring the requisite education and training is paramount. Therefore, consider joining us at UND, where our programs empower aspiring managers with the skills and knowledge crucial for navigating the dynamic business landscape. Together, we can transform ambition into achievement. 

What do business managers do? ( Open this section)

Business managers oversee the operations of an organization, including planning, directing and coordinating various activities to achieve company goals and objectives. They are responsible for making strategic decisions, managing resources and ensuring efficient functioning across departments.

What are the four main business management strategies? ( Open this section)

The four main types of business strategies include organizational (corporate) strategy, business (competitive) strategy, functional strategy and operating strategy.

Which management salary is best? ( Open this section)

The best management salary varies depending on industry, location, experience and level of responsibility. However, chief executive officers (CEOs) are among the highest-paying management roles and they often command substantial salaries due to their leadership and strategic responsibilities.

What are the three types of business managers? ( Open this section)

The three types of business managers typically include top, middle and first-line managers. Top-level managers, such as CEOs, are responsible for setting strategic goals and direction. Middle-level managers, like department heads or regional managers, implement these strategies. First-line managers, such as supervisors or team leaders, oversee day-to-day operations and ensure tasks are carried out effectively.

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A Guide to Small Business Management

Running a small business can sometimes feel like an adventure—full of twists and turns, unexpected challenges, and (with hard work and a bit of luck) big rewards. But often small business owners and entrepreneurs will start their journey with expertise and passion for their niche, only to feel overwhelmed by the management aspects of business operations.

Every decision you make for your business counts, and every action can shape the trajectory of your growth for years to come. That’s why knowing how to manage a small business is crucial for sustainable growth and long-term success.

What is small business management?

Small business management is the term that encompasses every facet of running a small business—from marketing and sales to customer support, product development, finance, IT, and beyond. For many small business owners, this can sometimes feel like spinning plates…while juggling flaming torches…while walking a tightrope!

Okay, small business management may not be quite so dramatic, but small business owners do have to wear a lot of hats to pull off the behind-the-scenes magic that keeps the wheels turning and the lights on.

Why is small business management important?

Without effective management practices, even the most innovative ideas can fail. From balancing the books to providing stellar customer support, effective management ensures that your business runs like a well-oiled machine, even when faced with unforeseen challenges.

The most successful entrepreneurs and business owners approach small business management with a growth mindset. That means embracing continuous learning, evolution, adaptation, and viewing challenges as opportunities for growth.

Top 4 most important skills for managing a small business

Small business management is all about being open to learning and knowing where to focus your attention. Here are the top four skills and small business management tips that every business owner should know.

1. Time Management

The business world is fast-paced! That means time is usually your most precious resource. Effective time management is all about setting clear priorities, creating schedules you can stick to, and minimizing distractions to maximize productivity. Utilize time-blocking techniques and regularly review and adjust your schedule to focus on high-value activities.

2. Transparent Communication

Good communication is the backbone of any organization. When employees and customers know they expect clear, reliable, and consistent communication, they feel valued and engaged, which leads to increased trust and, ultimately, better business outcomes.

3. Clear Prioritization

With countless tasks vying for your attention, identifying what’s most important and focusing your energy and resources accordingly ensures that you’re always working on the tasks that will have the greatest impact on your business’s success. Notice certain things always being pushed down to the bottom of the list? It might be time to consider outsourcing some of those tasks.

4. Attention to detail

Even the smallest details can make a big difference. From ensuring accuracy in financial records to delivering a flawless customer experience, paying attention to detail demonstrates professionalism, builds trust, and sets you apart from the competition.

Tips from the pros for managing a small business

Any Google search about small business management will give you about a million articles and videos with different opinions about how to make your business successful. The truth is, you know your business best, so take advice from YouTube “experts” and AI-generated lists with a grain of salt.

The most successful business owners know that there aren’t any secret tricks to business success, but will tell you there are a few key approaches to running a small business that will lay a foundation for growth.

1. Create a Clear Business Plan

Start by crafting a comprehensive business plan that outlines your goals, target market, and competitive landscape. Understanding where your business fits within the market and how you can differentiate yourself from competitors is key.

2. Dedicated Business Financial Scope

Establishing clear boundaries between personal and business finances not only ensures financial clarity but also helps determine your funding requirements accurately. This distinction is necessary for managing cash flow, securing loans, and maintaining financial stability.

3. Hire the Right People

A business is only as strong as its employees. Invest time and effort in recruiting team members who align with your company culture, possess the necessary skills, and demonstrate a commitment to your vision. Remember, treat your employees well and give them the tools to succeed, and they will become your best advocates.

4. Use the Right Tools

Leveraging technology and tools tailored to small businesses can streamline operations and boost productivity. Whether it's project management software, accounting platforms, or communication tools , choosing the right tools can simplify tasks, improve efficiency, and give you some breathing room!

5. Invest in Marketing

Think of marketing as the face and personality of your business. How do you want your customers to feel when they interact with your brand? How can you show off your business in a way that connects and aligns with your customers? Once you answer those questions, you can develop a comprehensive marketing strategy that will yield a return on your investment. Choose the channels that make sense for your business and customer base, but make sure to include some variety. That means both offline and online marketing, including social media, email, SEO, and advertising.

Tools to manage your business

Running a small business efficiently requires the right tools to keep operations running smoothly. Here are some essential tools to consider integrating into your business:

Communication Platform

When you’re running a small business, you may not have the resources to invest in more traditional business phone plans that require special hardware and big monthly fees.

Instead, using a virtual phone system  like Grasshopper can help you maintain a professional presence using tools you already have—your cell phone and computer! Think of Grasshopper as a comprehensive business phone system you carry in your pocket with everything you need to stay connected to your business.

With features like voicemail transcriptions , auto-texting , call forwarding , virtual faxing , VoIP/Wi-Fi  calling, and more, you can stay connected and respond promptly to customers any time, any place. Grasshopper comes with your own toll-free , vanity , or local number that is attached to the cell phone you already own, so you get the appearance and experience of a separate business phone, with the convenience of your own smartphone.

CRM (Customer Relationship Management)

Your customers are what keep your business running, which means managing those customer relationships is a vital part of running your business. A CRM system helps you organize customer data, track interactions, and nurture leads effectively. By centralizing customer information and automating processes, you can improve customer satisfaction and drive business growth.

Financial Tracking and Planning

Invest in financial tracking and planning software to monitor cash flow, track expenses, and create budgets. By gaining insights into your business’s financial health, you can make informed decisions and ensure ongoing financial stability.

Project Management

Effective time management is crucial for small business owners who are juggling multiple tasks and projects. Implementing project management software helps you centralize project information, streamline workflows, prioritize tasks, and allocate resources effectively.

How Grasshopper helps

Every small business is different, which means every small business will have different roadblocks and needs. Grasshopper may not be able to solve every challenge that you face as a small business owner, but it can help you simplify and streamline your communication needs, all in one easy-to-use, affordable package.

Grasshopper was created with small business owners in mind. That means it’s intuitive, versatile, and affordable and you’ll have access to customizable features that make sense for your business.

Plus, we know that running a small business isn’t just a nine-to-five gig, which is why Grasshopper also provides around-the-clock 24/7 support. Whether you have a question about setting up your account or need assistance with a technical issue, our dedicated support team is always just a call or click away .

Learn more about Grasshopper and get started with a free 7-day trial today.

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How capital expenditure management can drive performance

One of the quickest and most effective ways for organizations to preserve cash is to reexamine their capital investments. The past two years have offered a fascinating look into how different sectors have weathered the COVID-19 storm: from the necessarily capital expenditure–starved airport industry to the cresting wave of public-sector investments in renewable infrastructure and anticipation of the next mining supercycle. Indeed, companies that reduce spending on capital projects can both quickly release significant cash and increase ROIC, the most important metric of financial value creation (Exhibit 1).

This strategy is even more vital in competitive markets, where ROIC is perilously close to cost of capital. In our experience, organizations that focus on actions across the whole project life cycle, the capital project portfolio, and the necessary foundational enablers can reduce project costs and timelines by up to 30 percent to increase ROIC by 2 to 4 percent. Yet managing capital projects is complex, and many organizations struggle to extract cost savings. In addition, ill-considered cuts to key projects in a portfolio may actually jeopardize future operating performance and outcomes. This dynamic reinforces the age-old challenge for executives as they carefully allocate marginal dollars toward value creation.

Companies can improve their odds of success by focusing on areas of the project life cycle— capital strategy and portfolio optimization , project development and value improvement, and project delivery and construction—while investing in foundational enablers.

Cracking the code on capital expenditure management

Despite the importance of capital expenditure management in executing business strategy, preserving cash, and maximizing ROIC, most companies struggle in this area for two primary reasons. First, capital expenditure is often not a core business; instead, organizations focus on operating performance, where they have extensive institutional knowledge. When it comes to capital projects, executives rely on a select few people with experience in capital delivery. Second, capital performance is typically a black box. Executives find it difficult to understand and predict the performance of individual projects and the capital project portfolio as a whole.

Across industries, we see companies struggle to deliver projects on time and on schedule (Exhibit 2). In fact, cost and schedule overruns compared with original estimates frequently exceed 50 percent. Notably, these occur in both the public and private sectors.

The COVID-19 pandemic has accelerated and magnified these challenges. Governments are increasingly viewing infrastructure spending as a tool for economic stimulus, which amplifies the cyclical nature of capital expenditure deployments. At the same time, some organizations have had to make drastic cutbacks in capital projects because of difficult economic conditions. The reliance on just a few experienced people when travel restrictions necessitated a remote-operating model further increased the complexity. As a result, only a few organizations have been able to maintain a through-cycle perspective.

In addition, current inflation could put an end to the historically low interest rates that companies are enjoying for financing their projects. As the cost of capital goes up, discipline in managing large projects will become increasingly important.

Improving capital expenditure management

In our experience, the organizational drivers that impede capital expenditure management affect all stages of a project life cycle, from portfolio management to project execution and commissioning. Best-in-class capital development and delivery require companies to outperform in three main areas, supported by several foundational enablers (Exhibit 3).

Recipes for capturing value

Companies can transform the life cycle of a capital expenditure project by focusing on three areas: capital strategy and portfolio optimization, project development and value improvement, and project delivery and construction. While the savings potential applies to each area on a stand-alone basis, their impact has some overlap. In our experience, companies that deploy these best practices are able to save 15 to 30 percent of a project’s cost.

Capital strategy and portfolio optimization

The greatest opportunity to influence a project’s outcome comes at its start. Too often, organizations commit to projects without a proper understanding of business needs, incurring significant expense to deliver an outcome misaligned with the overall strategy. Indeed, a failure to adequately recognize, price, and manage the inherent risks of project delivery is a recurring issue in the industry. Organizations can address this challenge by following a systematic three-step approach:

Assess the current state of capital projects and portfolio. It’s essential to identify strengths, areas of improvement, and the value at stake. To do so, organizations must build a transparent and rigorously tested baseline and capital budget, which should provide a clear understanding of the overall capital expenditure budget for the coming years as well as accurate cost and time forecasts for an organization’s portfolio of capital projects.

Ensure capital allocation is linked to overall company strategy. This step involves reviewing sources and uses of cash and ensuring allocated capital is linked to strategy. Companies must set an enterprise-wide strategy , assess the current portfolio against the relevant market with forward-looking assessments and cash flow simulation, and review sources and uses of cash to determine the amount of capital available. Particular focus should be given to environmental, social, and governance (ESG) considerations—by both proactively managing risks and capturing the full upside opportunity of new projects—because sustainability is becoming a real source of shareholder value (Exhibit 4). With this knowledge, organizations can identify internal and external opportunities to strengthen their portfolio based on affordability and strategic objectives.

Optimize the capital portfolio to increase company-wide ROIC. Executives should distinguish between projects that are existing or committed, planned and necessary (for legal, regulatory, or strategic requirements), and discretionary. They can do so by challenging a project’s justification, classifications, benefit estimates, and assumptions to ensure they are realistic. This analysis helps companies to define and calibrate their portfolios by prioritizing projects based on KPIs and discussing critical projects not in the portfolio. Executives can then verify that the portfolio is aligned with the business strategy, risk profile, and funding constraints.

For example, a commercial vehicle manufacturer recently undertook a rigorous review of its project portfolio. After establishing a detailed baseline covering several hundred planned projects in one data set, the manufacturer classified the projects into two categories: must-have and discretionary. It also considered strategic realignment in light of a shift to e-mobility and the implications on investments in internal-combustion-engine vehicles. Last, it scrutinized individual maintenance projects to reduce their scope. Overall, the manufacturer uncovered opportunities to decrease its capital expenditure budget by as much as 20 percent. This strict review process became part of its annual routine.

Project development and value improvement

While value-engineering exercises are common, we find that 5 to 15 percent of additional value is typically left on the table. Too often, organizations focus on technical systems and incremental improvements. Instead, executives should consider the full life cycle cost across several areas:

Sourcing the right projects with the right partners. Companies must ensure they are sourcing the right projects by aligning on prioritization criteria and identifying the sectors to play in based on their strategy. Once these selections are made, organizations can use benchmarking and advanced-analytics tools to accelerate project timelines and improve planning. Building the right consortium of contractors and partners at the outset and establishing governance and reporting can have a huge impact. Best-in-class teams secure the optimal financing, which can include public and private sources, by assessing the economic, legal, and operational implications for each option.

A critical success factor is a strong tendering office, which focuses on choosing better projects. It can increase the likelihood of winning through better partnerships and customer insights and enhance the profitability of bids with creative solutions for reducing cost and risk. Best-in-class tendering offices identify projects aligned with the company’s strategy, have a clear understanding of success factors, develop effective partnerships across the value chain, and implement a risk-adjusted approach to pricing.

Achieve the full potential of the preconstruction project value. Companies can take a range of actions to strengthen capital effectiveness. For example, they should consider the project holistically, including technical systems, management systems, and mindsets and behaviors. To ensure they create value across all stages of the project life cycle, organizations should design contract and procurement interventions early in the project. An emphasis on existing ideas and proven solutions can help companies avoid getting bogged down in developing new solutions. For instance, a minimum-technical-solution approach can be used to identify the highest-value projects by challenging technical requirements once macro-elements are confirmed.

Companies should also seek to formalize dedicated systems and processes to support decision making and combat bias. We have identified five types of biases to which organizations should pay close attention (Exhibit 5). For instance, interest biases should be addressed by increasing transparency in decision making and aligning on explicit decision criteria before assessing the project. Stability biases can also be harmful. We have seen it too many times: companies have a number of underperforming projects that just won’t die and that take up valuable and already limited available resources. Organizations should invest in quickly determining when to halt projects—and actually stop them.

Setting up a system to take action in a nonbiased way is a crucial element of best-in-class portfolio optimization. Changing the burden of proof can also help. One energy company counterbalanced the natural desire of executives to hang on to underperforming assets with a systematic process for continually upgrading the company’s portfolio. Every year, the CEO asked the corporate-planning team to identify 3 to 5 percent of the company’s assets that could be divested. The divisions could retain any assets placed in this group but only if they could demonstrate a compelling turnaround program for them. The burden of proof was on the business units to prove that an asset should be retained, rather than just assuming it should.

An effective governance system ensures that all ideas generated from project value improvements are subject to robust tracking and follow-up. Further, the adoption of innovative digital and technological solutions can enhance standardization, modularization, transparency, and efficiency. A power company recently explored options to phase out coal-powered energy using a project value improvement methodology and a minimum technical solution. The process helped to articulate options to maximize ROI and minimize greenhouse-gas emissions. An analysis of each option, using an idea bank of more than 2,000 detailed ideas, let the company find solutions to reduce investment on features with little value added, reallocate spending to more efficient technologies, and better adjust capacity configurations with business needs. Ultimately, the company reduced capital costs by 30 percent while increasing CO 2 abatement by the same amount.

Designing the right project organization. An open, collaborative, and result-focused environment enabled by stringent performance management processes is critical for success, regardless of the contractual arrangement between owners and contractors. Improving capital project practices is possible only if companies measure those practices and understand where they stand compared with their peers. The organization should be designed with a five-year capital portfolio in mind and built by developing structures for project archetypes and modeling the resources required to deliver the capital plan. A rigorous stage-gate process of formal reviews should also be implemented to verify the quality of projects moving forward. Too many projects are rushed through phases with no formal review of their deliverables, leading to a highly risky execution phase, which usually results in delays and cost overruns.

As successful organizations demonstrate, addressing organizational health in project teams is as important as performance initiatives. McKinsey research has found that the healthiest organizations generate three times higher returns than companies in the bottom quartile and more than 60 percent higher returns compared with companies in the middle two quartiles. 1 Scott Keller and Bill Schaninger, Beyond Performance 2.0: A Proven Approach to Leading Large-Scale Change , second edition, Hoboken, NJ: Wiley, 2019.

Project delivery and construction

Since the root causes of poor performance—project complexity, data quality, execution capabilities, and incentives and mindsets—can be difficult to identify and act on, organizations can benefit from taking the following actions across project delivery and construction dimensions.

Optimize the project execution plan. Organizations should embrace principles of operations science to develop an optimized configuration for the production system, as well as set a competitive and realistic baseline for the project. This execution plan identifies the execution options that could be deployed on the project and key decisions that need to be made. Companies should also break the execution plan into its microproduction systems and visualize the complicated schedule. Approaching capital projects as systems allows companies to apply operations science across process design, capacity, inventory, and variability.

Contract, claims, and change orders management. While claims are quite common on capital projects, proactive management can keep them under control and allow owners to retain significant value. Focusing on claims avoidance when drafting terms and conditions can head off many claims before they arise. In addition, partnering with contractors creates a more collaborative environment, making them less inclined to pursue an aggressive claims strategy. To manage change orders on a project, companies should address their contract management capability, project execution change management, and project closeout negotiation support. A European chemical company planning to build greenfield infrastructure in a new Asian geography recently employed this approach. It reduced risk on the project by bringing together bottom-up, integrated planning and performance management with targeted lean-construction interventions. By doing so, the company reduced the project’s duration by a year, achieved on-time delivery, and stayed within its €1 billion budget.

Enablers of the capital transformation

These three value capture areas must be supported by a capable organization with the right tools and processes—what we call the “transformational chassis.” To establish this infrastructure, organizations should focus on several activities.

Performance management

The best organizations institute a performance management system to implement a cascading set of project review meetings focused on assessing the progress of value-creation initiatives. Building on a foundation of quality data, the right performance conversations must take place at all levels of the organization.

Companies should also be prepared to reexamine their stage-gate governance system to shift from an assurance mindset (often drowning in bureaucracy and needless reporting) to an investor mindset. Critical value-enabling activities should be defined at each stage of the project life cycle, supported by a playbook of best practices for execution and implemented by a project review board. While governance processes exist, they often involve reporting without decision making or are not focused on the right outcomes—for example, ensuring that the investment decision and thesis remain valid through a project’s life. Quite often, companies provide incentives for project managers to execute an outdated project plan rather than deliver against the organization’s needs and goals.

Creating project transparency is also critical. Companies should establish a digital nerve center—or control tower—that collects field-level data to establish a single source of truth and implement predictive analytics. Equally important, companies must address capability building to ensure that the team has a solid understanding of the baseline and embraces data-based decision making.

Companies should stand up delivery teams that integrate owner and contractor groups across disciplines and institute a consistent and effective project management rhythm that can identify risks and opportunities over a project’s duration. Once delivery teams prioritize the biggest opportunities, dedicated capacity should be allocated to solve a project’s most challenging problems. Finally, companies should build and deploy comprehensive programs that improve culture and workforce capabilities throughout the organization, including the front line.

Capital analytics

Many organizations struggle to get a clear view of how projects are performing, which limits the possibility for timely interventions, decision making, and resource planning. By digitalizing the performance management of construction projects using timely and transparent project data, companies can track value capture and leading indicators while making data available across the enterprise. Using a single source of truth can reduce delivery risk, increase responsiveness, and enable a more proactive approach to the identification of issues and the capture of opportunities. The most advanced projects build automated, real-time control towers that consolidate information across systems, engineering disciplines, project sites, contractors, and broader stakeholders. The ability to integrate data sets speeds decision making, unlocks further insights, and promotes collaborative problem solving between the company that owns the capital project and the engineering, procurement, and construction company.

Ways of working

In many cases, executives are unwilling to engage in comprehensive capital reviews because they lack a sufficient understanding of capital management processes, and project managers can be afraid to expose this lack of proficiency. Agile practices can facilitate rapid and effective decision making by bringing together cross-functional project teams. Under this approach, organizations establish daily stand-ups, weekly showcases, and fortnightly sprints to help eliminate silos and maintain a focus on top priorities. Agility must be supported by an organizational structure, well-developed team capabilities, and an investment mindset. Organizations should also build skills and establish a culture of cooperation to optimize their capital investments.

We do recognize that getting capital expenditure management right feels like a lot to do well. And although many of these tasks are somehow done by a slew of companies, pockets of organizational excellence can be undermined instantly (and sometimes existentially) by one big project that goes wrong or a strategic misfire that pushes an organization from being a leader to a laggard in the investment cycle. In some ways, capital expenditure management leaders face similar challenges to those in other functions that have already undergone major productivity improvements: often these challenges are not technical problems but instead relate to how people work together toward a common goal.

Yet we believe organizations have a significant opportunity to fundamentally improve project outcomes by rethinking traditional approaches to project delivery. Sustainable improvements can be achieved by resizing the project portfolio, optimizing the cash flows for individual projects, and improving and reducing individual project delivery risk.

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Companies are 'unbossing' the workplace, and millennial managers are getting axed

• Companies are cutting middle-management roles, and millennials are likely to be most affected.
• Work culture has changed, and some companies see middle managers as obsolete.
• It could mean that junior staff won't receive the mentorship to climb the ladder.

Companies are increasingly ditching middle-management positions, and it could be millennials who find their jobs are most at risk.

The great "unbossing" has been brought on by several factors, including cost cutting, Gen Z's distaste for management , remote working, and increased pressure on performance.

The repercussions may be that as future generations enter the workforce, they'll receive less mentorship and feel more stress coming from above.

But it's not just junior employees that could be worse off.

Lara Milward, a neuroleadership coach — which involves harnessing neuroscientific findings to improve how managers operate — with expertise in how workplace culture is changing, told Business Insider it's the 30-somethings who are buying houses, starting to have children, and juggling "career progression and family life" who may find their jobs suddenly axed.

"It could well be that that's the generation that takes this hit," she said.

Millennial middle managers are at risk

Joe Galvin, the chief research officer of the executive-coaching organization Vistage, told BI the unbossing trend had come about because of the normalization of working from home, advances in tech and artificial intelligence, and generational shifts.

"In the analog era, going back to, let's say, the '80s, you had to communicate manually to be able to align your workforce," he said. "Today, technology has made that all possible. And the behavior change that we saw during the pandemic was an accelerant to that."

In 2021, Steven Baert, then the chief people and organization officer of Novartis, told Gallup that traditional leadership was "becoming redundant." He said the company's goal was to have a workforce that's motivated and encouraged to be effective rather than told what to do.

It's now rarer to see the traditional version of a boss who walks around an office and checks in on what all their employees are doing.

"That boss' job has changed tremendously," Galvin said. "How you manage relationships in a more digital environment is much more difficult."

While Galvin said the intent of reducing middle management was to streamline communication between employees and senior executives, the impact could be unfairly balanced.

Middle-management positions accounted for almost one-third of layoffs in 2023, an analysis for Bloomberg found — an increase from 20% in 2018.

The analysis, by Live Data Technologies , also found that manager-level or higher roles made up almost 50% of all layoffs in 2023, a jump of 57.6% compared with five years ago.

Amid cost cutting, layoffs, and more demanding performance reviews, confidence levels of middle managers have dropped significantly, research from Glassdoor found.

It just so happens that a lot of middle managers are millennials.

Between ages 28 and 43, millennials are often in their first management positions or on their way to climbing to more senior roles.

They were also hit the hardest during the "Big Firing" of 2022 , making up 94% of laid-off workers, according to data from Revelio Labs and Layoffs.fyi.

"Since millennials make up a large portion of middle management, they, along with some Gen X, are most likely to be affected by this trend," Chris Lovell, a careers expert at SoFi Technologies and the founder of Careers by Chris, told BI.

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"These are also the generations that were most likely taught to follow a traditional career path: Go to school, earn a degree, and climb the corporate ladder," Lovell said.

Work-life balance has changed

Ironically, millennials are "less interested in corporate bureaucracies or hierarchies," Lovell said, which could be part of why middle-management roles are being cut.

Data suggests that both millennials and Gen Zers are turning away from management positions , with a lack of trust in senior leadership, a perceived limited financial reward, and a greater focus on a work-life balance and time off.

Many middle managers are also burned out , with their teams being downsized and an increased workload.

Gen Zers could also be shifting the culture of the workforce, putting more emphasis on their boundaries, their mental health, and their desire for more autonomy.

"I think this collides with economies and the way that the world is going, that companies are cutting costs," Milward said.

"If we're thinking about a world of diversity, inclusivity, and including new generations, they are trying to move towards a more flat structure and less of the old-school parent-child sort of relationship," Milward added.

However, Joel Wolfe, the founder and president of the customer-service agency HiredSupport, told BI he believed this attitude from younger generations may be backfiring.

There's pressure on managers to constantly do better than they did the previous quarter, but millennials aren't necessarily performing at that high level. Millennial managers, Wolfe said, can be "difficult to work with."

"They have fixed schedules and aren't flexible, which is something difficult to adapt to, especially when you are working with different time zones," he said.

Millennials and Gen Zers are increasingly opting out of working overtime and going above and beyond for promotions, instead favoring more time off and leaving work at the door when they go home.

Wolfe said this may make them seem inflexible and thus vulnerable when layoffs happen.

"I prefer employees working when they have some tasks to do," he said. "I don't want them to sit in front of the screen and wait for the clock to strike 5 p.m."

The impact on zoomers

Shoshanna Davis, the founder of Fairy Job Mother and a consultant who helps young people with their careers, told BI she's not convinced unbossing was a direct response to how younger generations perceive the world of work.

But it's likely to disproportionately affect Gen Zers in their first or second jobs.

"They are new to the world of work, and they do really need managers to help them find the ropes," Davis said. "Ultimately, eliminating this kind of middle-management position means less guidance, less coaching, and less mentoring, which I feel like is still desperately needed in a post-COVID world."

Zoomers are already unenthused by management. They are the generation that coined the term " lazy-girl jobs " and seem to strongly believe in the benefits of " quiet quitting ."

Will fewer management positions be replaced by higher salaries? Will career progression stagnate for Gen Zers if they have no millennial managers to look up to? What does this mean for the generations after them? Davis isn't sure.

"If it's just truly a way to cut costs, and there's going to be no replacements, then what incentive is there for people to perform at work?" Davis said.

She added: "I don't really see how that's going to pan out."

Correction: May 22, 2024 — An earlier version of this story misstated Steven Baert's current employment and position. He currently works at GE Vernova, not Novartis. His position at Novartis in 2021 was chief people and organization officer, not CEO.

Watch: Nearly 50,000 tech workers have been laid off — but there's a hack to avoid layoffs

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