Management matters . . . especially when it comes to your business plan.
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The way you document your management team in your business plan can make a big difference with investors. Here's what you need to know . . . .
The management team section of a business plan assures investors that your company has the people and resources it needs to successfully achieve its goals. Over the years, investors have learned that even well-crafted business plans are worthless if the companies lack the people resources to execute them. So at a minimum, your business plan should include a brief bio for each of the company's key leaders. But to be really effective, your business plan needs to contain a more comprehensive snapshot of your company's management resources.
Your company's business structure substantially impacts the way it is managed. For example, in a sole proprietorship, the owner usually has a monopoly on decision-making while in a corporation, decision-making responsibilities rest with a board of directors. The management team section of the business plan should not only describe your company's organizational structure, but also define the ownership shares of the business' key stakeholders.
Management Team Overview
The people who are responsible for major management functions like sales, marketing, administration, and production are your management team. Although it's not unheard of for one person to wear more than one hat, the management section of your business plan should identify the people who are responsible for each of the company's major management areas. You may want to consider using an organizational chart to delineate each person's function and then include resumes in the appendix. Other items that are commonly found in this part of the management section are employment contracts, profit-sharing plans, non-compete agreements, and other information that could directly affect the company's management functions.
External Management Resources
As a business owner, you know that you're going to have to rely on external management resources to achieve your company's goals. Investors know it, too, and they want to make sure you are already connected with the best people in the industry – not the first name you find in the yellow pages. Instead of simply saying you will use outside attorneys, accountants, bankers, IT consultants, or business consultants, provide a list of the firms who have already agreed to perform each of these functions. Your goal is not only to persuade investors that you have covered all your bases, but to assure them that you have highly-qualified people working on behalf of your business. In other words, make an effort to recruit recognizable and reputable
An advisory board is a small group of business and/or industry professionals that offer insight and advice to the company's internal management team. The inclusion of an advisory board can go a long way toward legitimizing your business plan and mitigating investors' fears. It also gives you the opportunity to impress investors by including the names of highly-respected business professionals on your management team, even if it is only in an advisory capacity. In some cases, investors themselves may be willing to recommend additional advisory board members.