Business plan enterprise structure management personnel
Previous Steps of Starting Your Own Business Guide
Now we find ourselves in a completely different part of business planning - management and organizational structure of the business.
Don't neglect the organizational plan when writing your business plan
Management is a really important element of any business. As a business goes through different stages of the life cycle, so will the need for business management grow, and this is directly related to the efficiency of the business. If your business is in the process of initiation and planning, and if you plan to work in your business alone, you probably think that there is no need to do the Organizational Plan section of the business plan. But I recommend doing this with the aim of further planning personnel management in your business, because it is difficult to do business alone.
Also, by working on this section as part of the planning process, you will do a good job preparing for financial planning.
What should the “organizational plan in the business plan” section contain?
Again, in the business plan, the section begins with a chapter summary. It will be at the beginning, but you do it, as always, after completing the entire chapter.
An organizational chart is a hierarchy of people in an organization. It will show who is responsible for what, who performs the tasks, who controls the implementation, who regulates communication between employees, etc. It is important to understand that this is a serious section, because you are planning the basis of what should meet the requirements for a long time time. You cannot change the hierarchy and structure of the organization every month, which, for example, is permissible with some other sections of the business plan.
The organizational chart should be presented in the form of an organization chart or graph (so-called "organograms"). There is a free online application for organogram creation - Gliffy. You just need to register and you will be able to use the application. You can also use Microsoft Office Word, which has the ability to enter a chart in an organizational chart that can be customized to suit your needs. The figure shows a diagram of the organizational structure of MS Word 2021.
It is desirable that the business plan include an "organogram", but if this is not possible, then you can describe the organizational structure in text.
Organizational chart example
Among all sections of the business plan:
- Cover Page
- Confidentiality Memorandum
- Executive Summary
- Investment Plan
- Marketing plan
- Production plan
- Organizational plan
- Financial plan
- Risk analysis
it is the organizational plan that describes the project staff, initiators, their shares in project management, qualifications and remuneration of project managers, as well as staff motivation.
If you are writing a business plan to receive investments for the development of an already operating enterprise, you will need to prove to potential partners that its organizational structure is as effective as possible. If you are just planning to open a company, production or retail outlet, you will need to describe in detail how you are going to ensure the operation of the new business.
All information related to the management of the enterprise should be presented in a section called "Organizational plan". Moreover, it is this point of the business plan that will prepare the ground for writing the financial section of the project.
Business Plan Organizational Plan Structure
First of all, in this section it is necessary to justify the choice of the form of activity. Indicate whether you are an individual - individual entrepreneur, or the founder of an organization - LLC or JSC. In the latter case, it is imperative to list the governing bodies and their powers, the composition of the founders and their rights and obligations. After that, it is necessary to describe the organizational structure of the enterprise.
Organizational structure is the composition, system of relationships and functions between the various departments of the enterprise, each of which is responsible for its own area of activity and is part of the hierarchical system of the organization.
Despite the differences, the following main sections can be distinguished in any business plan.
This is a general idea of the business, which makes it possible to understand what the company wants to achieve, what its potential is, how much money the project will require and what profit it will bring. The executive summary summarizes the forecasts and plans substantiated and calculated in the following sections. It is safe to say that a business plan will not be read in full if the resume does not interest potential investors or partners. It is necessary to very clearly state the mission (the formulated global goal of the enterprise, based on the need to meet the needs of consumers) and the goals of the enterprise (the projected results of its activities).
Development of the structural diagram of the project in the form of enlarged business processes. It is implemented in the form of a visual block diagram of commodity, financial, information flows, describing the conditions of supply, production and sales of products.
As a result, the initiator of the project must visualize the project as accurately as possible and understand how the project will be organized in the business environment and geographically (it is especially important for calculating the logistics of supplies of raw materials, equipment, products).
Development of an investment plan is one of the most important parts of the project. As a result, the initiator of the project should imagine as accurately as possible what he should do, in what time frame, at what cost. Planning is carried out by building a Gantt chart (a work schedule indicating the start-end dates, those responsible for the stages, the cost of the stages, resources, equipment depreciation, the relationship of the stages). The investment plan is intended to create a model for the implementation of the project in time (from the start of work to the launch of the project into operation - operating activities) and the optimal distribution of investment resources.
The operational plan of the project is understood as the activity for the production of products (services). As a result, the project initiator must imagine as accurately as possible the organization of the production of certain products (services).
In general, the project should include the following sections:
- Description of the range of products or services of the enterprise (name, purpose, unit of measure, planned start of sales)
- Energy resources, materials and components for the production of these products or services. (name, unit cost, unit costs, possible procurement schemes).
- Overhead costs for the production and sale of products or services (principle of formation, name, amount of expenses per month or percentage of)
- Personnel plan (personnel structure, number, official salaries, bonus system)
- Production plan (piecework salary, semi-finished products, specific costs, production schedule)
- Sales plan (price of products or services, monthly sales, possible sales patterns)
- Tax environment (list of tax payments, rates, frequency of payments, special payments)