Plan Managing

Have you ever seen a coach explaining a game plan, or mapping out a strategy, during a competitive sporting event. Envision the coach standing in front of the team, chalk in hand, and a series of Xs and Os on the blackboard. For your business plan, you are the coach and captain of the team, explaining to investors or management on the sidelines how your players are going to win the game. Not only must you explain how you will win, but also why this group players has the skills necessary to beat the competition.

The management section of your plan describes the capabilities and talent that your team "brings to the table" to execute your business strategies. If you cannot document that your team has the management skills necessary to be competitive in the marketplace, investors will be unlikely to put any money in your business. Further, if you believe that you can do it "all" with little or no support in the key areas of marketing, operations, finance and human resources, then you will be in for a big surprise after you open your doors for business. The competition will "crush" you, in order to take advantage of any opportunity that you identified in your business plan and are bringing to market.

Your management team is responsible for the operational and financial performance of your company. Through their direction, your employees will perform well or poorly. To eliminate as much risk as possible for poor performance, ensure that your management team has the experience and incentive necessary to motivate their employees.

One way that you and your team can influence the work environment at your company is through the organizational structure. The structure is important because it can often determine how successfully products are brought to market and managed through their life cycle. Your organization chart displays functional responsibilities and chain of command. Problems that occur lower in the organization, may eventually move up and become your responsibility to resolve.

This section of your plan explains how your team, yourself included, will be able to run the business successfully by identifying the responsibilities, strengths, and weaknesses of your key players. You will have to explain how you are going to fill any skill deficiencies and correct apparent team weaknesses. For skill deficiencies, you will either have to get the experience yourself or hire someone from outside the company.

Assume that you have developed a new product and want to bring it to market. If your skills are grounded in research and development, or technical operations, then you will need to hire a sales professional to sell your product. It is not realistic for you to assume that after many years in the lab, you can turn yourself into a great salesperson. On the other hand, "if you were born to sell," then you will need to obtain financing and operational skills from other individuals.

Investors will want to know about your background and that of the management team in detail. Questions that you must answer include:

Once your business grows beyond a few employees, you will no longer have the opportunity to interact with all of your customers and suppliers. This work will gradually be parceled out to your management team, and then to your employees. How your employees handle these "front-line" relationships will be based largely on the work environment and incentives that you establish.

Your organization structure will establish reporting relationships within your company and outline the roles and responsibilities for all employees.

It is important for you to document the salaries, bonuses, and stock options for your management team. Salary treatment should not be too extravagant, as the payoff will come later on after the business is a success. Neither should it be too paltry, since investors will not believe you. As supporting documentation, you should include a salary history for each member of your management team.

If you are applying for a loan, or looking for venture capital, investors will want to know how much of your own money is at risk. The thought process is that you will be extremely motivated to make this business a success, if you have a lot to lose. On the other hand, if you are not taking much of a financial risk, investors might feel that you might give up on their investment at the first sign of trouble.

For yourself, you should prepare a set of personal financial statements that show your income requirements to cover your (at home) expenses, and a statement of net worth.

In addition to your organization chart, you will have to rely on some outside resources for your business. Normally, these would include a lawyer, banker, accountant, and insurance broker. List them in your plan, including names and addresses, and the support that they will provide. For instance, if your accountant will prepare a set of yearly financial statements, or if your lawyer will help you to incorporate, list these duties in your business plan.

There are many other resources that you can utilize to run your business. Companies that need help with hiring, often engage the services of a recruiting firm or consultant. Computer businesses tend to hire contractors to help them with large programming projects. Manufacturers can engage part-time workers to help with spikes in production. College and university students can be used to conduct market research. Be creative in developing your resource plan, and recognize that all of the functions must be performed to some degree, and if you can't identify someone else to do the work, then you will be doing it yourself.

This part of the management plan identifies everyone below the management team. Unless you are starting a professional services firm, these individuals will determine the strength or weakness of your organization. In this section you will have to identify how you are going to recruit, select, train and pay your employees. For a business that is just beginning, recruiting and selection of good people is critical to the success of the business.

Provide answers to the following questions about the employees you are planning to hire:

A sample description of personnel

By the December 31, 1997, Sales Training Group had 15 full-time employees, 6 of which were training professionals, 3 of which were sales representatives, and 3 of which were administrative staff. Sales Training Group believes that its continued success depends on recruiting, retaining and motivating professionals at all levels in the company. Sales Training Group seeks to hire personnel with prior training or sales experience, with strong project management and communications skills. Most recruiting is conducted by an outside firm, with final hiring decisions made by the management team.

Sales Training Group provides training for new and existing employees, to ensure that they are familiar with the latest trends in technology and are able to communicate clearly at all levels in a client's organization. Training covers computer and hardware topics that are relevant to a direct selling organization, presentation skills, and project and time management skills.

Sales Training Group attracts and motivates its employees by offering competitive compensation and benefit packages. All professionals are eligible for performance based bonuses and yearly salary reviews. Sales Training Group has been able to retain 75% of its employees for the past three years.

Look at the sample description of personnel for Sales Training Group. Note that the company identifies the number of employees by function, and the skills that they need to have. It also explains the training that its own employees must undergo, and briefly touches on the salary and benefits offered by the company.