The most obvious part about the Management Team section is that it provides an overview of your founders and key employees. Yet in the beginning, that might be just one person. You can increase your plan’s credibility by establishing a supporting cast of key mentors and advisors, and including them in this section.
Business Plan Outline for Management Team Should Include:
• Founders and Key Employees
• Board Members
• Professional Advisors
• Hiring Plan
Venture capitalists will often say, “We don’t invest in ideas, we invest in people.” Their rationale is that over time the idea will have to evolve. The right team will develop the idea into a winner. But the wrong team can ruin even what was initially an outstanding idea. The question to be answered by this section is, “What experience and achievements in this team’s past demonstrate that they will succeed in this new business?”
Founders and Key Employees. Begin your Management Team section with a description of the individual who will be the CEO or senior person in charge of running the company. Typically this is the founder, or one of the founders. In some cases, an early-stage company will already have hired a non-founding CEO or president to run the company. In any case, lead with the individual who will lead the company.
You can include the resumes of your key management team members as appendices in your business plan and refer to them in this section. But use this section to highlight the relevant experience and accomplishments your team brings to the table.
For each individual you list, include their relevant experience, transferable skills, and key accomplishments with a special emphasis on factors that will contribute to your business’ success. Avoid making readers “connect the dots” on their own. Rather, make the connection for them. For example:
“In Mr. President’s previous role as General Manager of LikeMine Company, he expanded into new markets and tripled the size of the business in three years. This experience is ideal for MyCo as we move beyond a single market to expand into neighboring regions.”
In the business plan, it’s helpful to convey a pattern of accomplishments, such as, “At her last company, Ms. Johnson was named Sales Representative of the Year in 2005-2006, was promoted to VP of Sales in 2007, and once again promoted to COO in 2008.”
Leave out admirable, but “sideline” accolades such as, “Ms. Johnson is a two-time winner of the La Jolla Triathlon.” Unless an accolade relates to the success of your business, you’re better off mentioning it in the biography (included as an appendix), or leaving it out altogether.
Board Members. There are two types of boards: a board of directors and a board of advisors. A board of directors can have specific legal responsibility and authority. For that reason, some individuals are reluctant to join a board of directors. A board of advisors generally has fewer or no formal responsibilities, but can be just as beneficial to the company through the guidance it provides. It’s never too early, and your business is never too small to have a board.
If you do not already have a board of directors, consider putting together a board of advisors. Chances are you have mentors and people with relevant experience who are giving you input on your business idea. Perhaps one of them is even a customer or potential customer. Consider asking these people to agree to be on your board of advisors, a group that would meet perhaps quarterly to hear updates on does your business and offer input. With their consent, you can list members of your board of advisors in your business plan.
For each board member (whether directors or advisors), listing name, current or most recent position, and company is sufficient. If members have special experience that pertains strongly to your business, naturally you would want to include that information as well.
Having a board of directors or board of advisors tells lenders and investors that you value the input of outside thinking and that you have the skills to build relationships with people who can help your business succeed. That bodes well for the future success of your business!
Professional Advisors. If you have worked with an attorney to establish your business, an accountant to help prepare your financial forecasts, or an advertising or PR firm to help prepare some promotional materials—include these organizations in your business plan’s management section under the heading, “Professional Advisors.” Bankers and investors are often well connected to area professional service providers. Simply knowing that you are working with recognized names in the business community can boost your credibility. It also tells the reader that you’re being advised by professionals. Be sure to let your advisors know in advance that you’ve listed them in your business plan, since oftentimes they’ll get a phone call asking for their impressions of the business.
In this section, just include the type of services provided, the name of the firm, and your primary contact.
ProBono Law Firm
Jerry Mander, Partner
Hiring Plan. At the early stages of your company, you might be missing some key people on your management team—this is normal and acceptable. Usually this has a lot to do with why you are seeking funding. If you haven’t yet hired all your key people, you can address this in your business plan in two ways.
First, if you have lined up some individuals who will come on board when you bring in your funding, you might choose to identify them in your business plan. If this information is not ready to be disclosed, you can allude to it in generalized terms without divulging the person’s name or current company. “We have identified an individual with 10 years of experience in a similar company, to fill the Director of Marketing role. Pending the timing of our funding, we would expect this person to join our team.”
Next, address any gaps in your management team that need to be filled. Identify key hires that remain and the order in which you expect to fill the positions. This shows that you’re thinking ahead and shields you from any criticism about holes in your current team.