Management Plan in a Business Plan
What is a management plan in a business plan? As a small business owner, you know you face an uphill battle.4 min read
What is a management plan in a business plan? As a small business owner, you know you face an uphill battle. About 80 percent of new ventures fail within their first five years. Why? Most of the time it's due to flawed operating procedures or a less-than-optimal management structure.
What Is a Management Plan?
The management plan is all about employees and operations.
- Employees are one of the most important parts of any new venture. Good employees can make your life much easier, while bad employees can distract you and be a detriment to your success.
- Operational structure can be the difference between a successful venture and a failure.
When you're putting together a business plan, the operations and management section will describe how your business will operate on a day-to-day basis. It will cover all the essentials:
- Your company's physical location
- Other important processes
This section is an easy way to answer basic questions about your business without overwhelming readers.
Carefully crafting a professional and thorough business plan is an important step in forming a new venture. It will keep you on track and clearly define strategy and goals. However, business plans are only as good as the people behind them.
A venture's biggest asset is the entrepreneur. Investors won't make a move until they know they have complete confidence in an entrepreneur. Does he or she have the right experience? Is he or she willing to put in the work? These are just two of the questions Investors will have to answer before working with a new entrepreneur.
The management section of your business plan is an excellent space to highlight the members of your management team. Tell your readers and potential investors who will be managing your company, where they come from, how they will help your venture, and anything else that will signal your venture's future success. Be sure to cast the best light on your management team. Your investors need to know that this team is capable of anything.
There are usually three parts to a good Management and Staffing portion of a business plan:
- Management team details
- Key supporters and alliances, such as an advisory board
- Staffing and employment requirements
A few things to remember as you work on this section of your business plan:
- Your readers are usually potential investors. They need to know you and your management team are trustworthy and deserving of their investment.
- Investors need to know that you and your team can do the job; they need to get a feel for your attitudes and your abilities.
- Showing your team has a wide variety of skills and experiences will give you an advantage when presenting your business plan.
- It's all about the people. Business plans are great for answering key questions about the new venture, but at the end of the day, investors are looking to partner with hard-working, trustworthy people.
Now let's talk about operations. The operations section of the business plan describes several key characteristics of your business. For example, if your business has a physical, "brick and mortar" location, take time in this portion of the business plan to describe the area around your business. Tell your investors why your location is optimal for your business.
Make a note of your standard operating hours. Answer questions like,
- When will you open every day?
- When will you close?
- Will you be open during holidays?
- If so, which ones?
This is also a great section to list out your daily operation details, the different products or services you will provide, your standard operating procedures, customer service, and so on.
Take time in the Inventory section of your operations plan to list out potential suppliers, vendors, or contractors with whom you have agreements. Your partners, even the third-party ones, reflect upon you, so make sure to sing their praises. Put some thought into an inventory plan. Remember, too much inventory means you're likely wasting valuable resources that could be deployed elsewhere. On the other hand, too little inventory means you could be losing out on potential customers.
Once again, your management team plays a crucial role in your operations plan. Tell your investors exactly who they are, how they are uniquely qualified, and how their responsibilities will be divided with operations.
The management and operations sections of your business plan will demonstrate to your investors that you have the right team and the right strategy to be successful in a competitive industry.
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