This is the 7th post in our “Writing a Business Plan” series.
Your product is done. Your marketing is done, and now you’ve got to write about you, your partners, and your business. This isn’t the time to be bashful or self-deprecating – it’s your time to shine. Use this section to show that you have the experience and skills to make this business profitable and successful.
This section will help you organize your management team and solidify your roles and responsibilities. For small and startup companies, it’s important to realize that your actual job is “everything,” but that doesn’t look good in a business plan. You’ll get an overall sense of your team, their experience, and their strengths and weaknesses. You can use this information for the life of the company, and it will be helpful for the initial day-to-day operations.
You’ll also have a full list of your advisors, mentors, and useful contacts. Since you’ve talked with them beforehand about being part of your company, it’s a good reminder for them.
What To Include
If you didn’t include a detailed list of corporate owners, you should start this section with a complete list of equity owners, a summary of the “cap table,” and any other information about the corporate structure that may be relevant to an investor. Putting this all in one section lets the investors know that you are aware of all the external forces on your business. I usually save all the nitty-gritty ownership financials for the financials section, but you should definitely include the summary. You should also include any legal matters or pending legal issues that may show up in the near future. Full disclosure is always a good policy.
If your team is more than three people, you should include an “Org Chart.” This applies to both the organization and the operations. You can include titles on the chart, and possibly color coded boxes depending on which business area the person works (marketing, manufacturing, sales, etc.), but you don’t want to include much else. The details are for the “Management Profiles” section. Each key employee should be included, and they should be one page each. Don’t be coy or modest. Highlight successes while mentioning failures in a positive light. If you have more than four or five key employees, you can add them to an appendix, but I wouldn’t recommend adding everyone in the company.
Operationally, you’ll need to include the structure of the company and how they will accomplish their goals of making your company profitable. Sometimes the “Operating Plan” is a full section, but for the investor audience, I find it just takes up a lot of space. It will be important for running the business, but it’s not something the investor may find particularly useful. So, include the highlights of your operations: production, manufacturing, inventory, distribution, and executive operations. If it’s too short, the reader may ask for a more detailed operation plan. If that’s the case, then you’ll get to write one of those in addition to your full business plan.
What The Reader Wants
The investors reading this section will want to know three things. First, is the company solid and not over-extended? Does it have too many micro-investors? Does it have any big players already? How has it been funded so far? And, are there any outstanding legal problems?
Second, they’ll want to make sure your team can execute the plan. Do you and your partners have the experience to pull off a success. Are you willing to learn and accept help? Have you learned from your mistakes, and can you handle the rough and tough times that will surely be headed your way.
And lastly, they want to know how the company will be run. Does the overall production and distribution makes sense for the markets and industries they described earlier? Does the corporate structure feel right, or does it have giant holes?
Coming up next: Financials
Information on TVC’s Call4Plans HERE