Business plan section organizational chart
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.
There are several types of organizational structures, namely linear, functional, linear-functional, etc. However, whatever the type of structure, your task is to emphasize that it is as efficient as possible, namely:
- Allows to establish interaction between all departments and employees;
- Creates favorable conditions for the manufacture of high-quality products or services;
- Promotes the development of the enterprise , its goods and services.
As a rule, the authors of a business plan depict the organizational system as clearly as possible, using a diagram or organogram. To create the latter, you will need to download a special application, while a diagram can be created in a regular Microsoft Word document. If for some reason you cannot represent the system graphically, you can describe the structure of your enterprise in text.
Previous Steps of the Guide to Starting Your Own Business
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 can 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.