There are a lot of places you can go wrong in a business plan.
But the last place you want your business plan to go off the rails is in the management team section. Investors rely on the management team section for an accurate assessment of your company's management assets – a key consideration in the investment decision.
If business plan writing is on your agenda, here are several common management team section mistakes you can't afford to make:
- Credentials vs. relevant credentials. Right out of the gate, management team sections often make the mistake of exhaustively listing everyone's credentials rather than highlighting the credentials that are relevant to the company's goals and business strategy. The result is a hodge-podge of resume terminology that obscures your management team's most valuable strengths.
- No clear leadership structure. Successful companies have clear leadership structures. Investors are aware of the fact that many startups are timid about establishing lines of authority, so your management section better contain an organizational chart with a single person at the top and crystal clear lines of accountability.
- Leadership gaps. If your management section contains significant leadership gaps, you're not ready to approach investors yet. Go back and fill the gaps with management hires, board development, or contracted advisors so you can present a more coherent management team section to investors.
- No future management plan. In addition to discussing your company's current management team, the management team section of your business plan should include a discussion of your management team's potential – a future management team plan that describes possible improvements or expansions to your existing management assets.
- Poor placement of management team section within the business plan. When you bury the management team section deep within your business plan, you're telling investors that you are ashamed of your company's management resources. From an investor's perspective, it's a big red flag. Feature your management team section prominently within the business plan, drawing attention to your most important management strengths.