Introduction to the Management Section of a Business Plan

Management & Staffing of Your Business Plan

The world of business is in an eager state of transition. With new developments in technology and access to global markets, companies must be willing to adapt in order to remain competitive and capitalize on new opportunities. Many businesses are being restructured, often eliminating middle-management to increase efficiency. Organizations are also modifying their attitudes and approach to business. Some are experimenting with new styles of management and the use of teams to increase productivity. No matter what changes are occurring in business, one thing remains constant: the need for human resources.

Employees are the foundation of your business. They have the potential to make it a prosperous success, or miserable failure. Regardless of whether you own a small business employing two people, or manage a large company employing two hundred people, it is essential to hire the best person for the job. This is especially important in service industries and small enterprises, where your only link to customers is your staff. The manner in which they treat customers will determine the reputation of your business. At one time or another, you have probably vowed never to shop at a particular business ever again, due to the poor service you received. Friendly, helpful employees lead to customer satisfaction, which means returning customers. The ability of employees to reach their full potential relies on your ability to lead and manage them properly. The accomplishments of a good staff are limited, without a good leader.

The reality faced by small business owners is that approximately 80% of all business start-ups fail within their first five years of operation. According to many studies, the high failure rate is largely due to improper operating procedures and poor management structure. A potential investor will examine your business plan to ensure you have a proper management and human resource structure. Under the management & staffing section of the business plan, your objective is to prove to investors that your "team" is capable of achieving all goals and strategies.

Although your business plan must have undeniable commercial worth and feasibility, investors realize that the success of any business is determined by the aptitude, attitude and ability of the entrepreneur. For this reason, potential backers place a great deal of importance on the entrepreneur's personal background and qualifications. To confidently view you as a good investment, they must first believe in your competence to own and operate a business.

This section can be a very effective means for creating a positive image and demonstrating your capabilities as an entrepreneur. Consistency and honesty, in your presentation, is crucial for gaining the confidence of potential investors and establishing your credibility.

When writing this section, remember that people don't invest into small businesses, rather they invest in small business owners. The content should be considered extremely crucial as it explains a great deal about you and the key people within your business, and hence the ability of your team to carry out the tasks of the business as required.

You should emphasize positive aspects and, if possible, omit those having a negative impact. However, it is important to never lie or fabricate details in your business plan. Discovery of such untruths, could prove detrimental to your business career and personal credibility.

The Management and Staffing section of a business plan usually consists of three parts.  These include;

    Part 1  -  provides details on your management team;
    Part 2  -  discusses outside supporters and/or strategic alliances;
    Part 3  -  details your staffing requirements

Lets look at each Part separately, beginning with The Management Team.  To aid in our discussion and to assist you in developing this section of your business plan, J&B Incorporated will be used as a model.  Three (3) complete examples are also provided at the end of this reading.



The individuals who read business plans are certainly aware of the failure rate of small business ventures. For many of them, they have invested into several of these in the past and now tend to be more cautious. Specifically, they are conscious that one of the main reasons for small business success or demise lies in the abilities of the management team, outside supporters, and staff members. Therefore, when writing this section of the business plan be sure to keep the following items in minds;

  • Convince the reader that the owners are credit worthy & trust worthy;
  • Demonstrate the management team has the aptitude, attitude and ability to operate the business successfully.
  • Show that the management team, all outside supporters and each staff member provide a solid balance to the business venture.

One final note to remember:  Investors invest into small business owners and not into small businesses. Therefore, it is imperative to establish credibility and position yourself as a low risk.



J&B Incorporated
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