When creating a business plan, the ‘management section’ gives details of your management team, staff, resources, and firm ownership structure. This part should not only list the members of your management team, but also explain how each person’s skill set can benefit your bottom line. In this essay, we will go over how to best organize and showcase your management team.

Teamwork is the ability to collaborate toward a common goal. The ability to channel individual accomplishments towards organizational goals. It is the fuel that enables ordinary individuals to achieve unusual results.

A company management plan can help you develop an efficient workforce and formalize your business procedures. This enables organizations to streamline strategies for achieving their objectives.

The significance of the management section of a business plan

The management section allows you to:

1. Persuade your investors (banks and government organizations) to provide loans and grants for your business plan.

2. Demonstrate that your management staff are able to execute your proposal, and if not, assist in hiring the best match for a role.

3. Explain how your advisors can assist your team flourish.

What Should Be Included in the Management Section of a Business Plan?

The management component of a company plan serves to formalize and structure the management team technique and is comprised of

• The Management Team
• The Management Team Gaps
• The Management Structure

Let us examine them in depth.

1. Management Team

An organization’s management team can be separated into two parts: internal and external.

• The Internal Management Team

A business team comprises multiple departments. The most popular departments include marketing, sales, information technology, customer service, operations, finance, and human resources.

These departments may or may not be needed. It solely depends on the kind and operation of your firm. For example, a dental facility may not need a sales department for each sale.

The entire management staff is divided into compartments based on their respective responsibilities. This informs business owners and investors on the roles, benefits, ESOPs (if applicable), profit sharing (for sales), work contracts, NDAs (Non-Disclosure Agreements), and Non-Competition Agreements of the entire team.

• The External Management Team

The external management team typically consists of Advisory Board Members and Professional Services.

Advisory board members contribute by:

• Establishing trust, demonstrating outcomes.
• Increasing investment and consumer confidence.

This helps to attract talented employees to the organization. Credible advisory board members demonstrate a strong commitment to the company’s progress. As a result, it is critical to demonstrate their experience and expertise in the business management strategy. Members of the advisory board can provide essential counsel to internal team members who may be in need of it.

If your company has not or will not receive VC funding, you may not need board members on your team.

Board members often meet occasionally or monthly to provide strategic direction in place of stock options in your company. This helps to recruit the greatest advisors and encourages them to invest in your firm.

For example, founders and business owners seeking to raise funds on Shark Tank, a business television series, are looking for advisory members who will invest money and provide assistance on the next steps.

On the other hand, Professional Service assists by

• Giving highly skilled advice and sharing information.
• Business owners make important strategic management decisions.

Such services allow firms to use skills that would be difficult to develop and acquire in a short period of time.

• Accounting 
• Banking
• Legal & IT Consultants
• Marketing coaches and consultants.

After providing a brief summary of an organization’s Management Team, let’s look at what to include in Management Team Gaps.

2. Management Team Gaps

The management team gap is a critical component of the management section. Firstly, it helps to document if your management team currently has gaps or missing competencies. Initially, your squad may lack a few required talents. The gaps in the management team will help you become aware of them and work to solve them.

As a business owner, you must identify which positions are vacant and who should fill those positions or assume responsibility.

For example, if you require a VP of Sales, plainly state so in the section.

Also, set down the job description and major responsibilities that will be undertaken.

For example, you might note that the post required ten years of sales experience. The applicant must have prior experience leading a sales team, closing new clients, collaborating with the marketing team, and having relevant startup experience.

Be as specific as possible. This will allow you to create a checklist for interviewing the ideal individual while also instilling investor confidence in your managerial abilities.

Here are a few crucial positions you should include in your management team:

• Founder and/or CEO
• Chief Technological Officer (CTO)
• Chief marketing officer (CMO)
• Chief Operating Officer (COO)
• The Chief Financial Officer (CFO)
• Chief HR Officer (CHRO)
• Head of Product Management (PM)
• Vice President of Sales, 
• Vice President of Marketing, UX Designer
• Digital Marketing Manager
•  Business Development Manager,
• Customer Service Manager
• Customer Success Manager
• Sales Managers/Sales Staff,
• HR Manager
• Advisory Board Members.

Let’s go into the fine gritty of management structures.

3. Management Structure

The management structure determines how a company organizes its management hierarchy. A hierarchy helps to identify all team members’ roles, positions, power, and responsibilities.

The management structure is also determined by the type of firm ownership. Business ownership might be sole proprietorship, partnership, or just an LLC.

Human Resources

Your human resource requirements should be the final item addressed in the management part of your company strategy. The key to writing about human resources is being specific. Simply writing, “We’ll need more people once we get up and running,” is insufficient. Follow this list.

• Determine how many staff your company will require at each level and how much they will cost.
• Describe precisely how your company’s human resource requirements may be satisfied. Will it be ideal to have staff, or should you use contract workers or freelancers? Do you require full-time or part-time employees, or a combination of the two?
• Outline your personnel criteria, including a description of the exact talents that your employees must have.
• Calculate your labor costs. Determine how many staff you’ll need and how many consumers each employee can serve. For example, if it takes one employee to serve 150 customers and you expect 1,500 consumers in your first year, your company will require ten staff.
• Determine how much each employee will be paid, then total the compensation costs for all employees.
• Add to this the cost of Workers’ Compensation Insurance (which is required by most organizations) and any other employee benefits, such as company-sponsored medical and dental insurance.
• After you’ve stated the items above, explain how you plan to hire and train the employees your company requires. Your explanation of staff recruiting should include whether or not there is enough local labor available, as well as how you plan to attract workers.

Even if you intend to start your firm as a sole proprietorship, you should include a section on possible human resource demands to indicate that you have considered the staffing needs of your organization as it grows.

Business plans are about the future, including the possible obstacles and accomplishments that lie ahead. It is worthwhile to visualize and document the specifics of your business so that the materials and network that will support your vision may begin to take shape.