sample of organizational structure in business plan

7 Organizational Structure Types (With Examples)

Updated: Jul 31, 2023, 6:24am

Table of Contents

What is an organizational structure, 4 common types of organizational structures, 3 alternative organizational structures, how to choose the best organizational structure, frequently asked questions (faqs).

Every company needs an organizational structure—whether they realize it or not. The organizational structure is how the company delegates roles, responsibilities, job functions, accountability and decision-making authority. The organizational structure often shows the “chain of command” and how information moves within the company. Having an organizational structure that aligns with your company’s goals and objectives is crucial. This article describes the various types of organizational structures, the benefits of creating one for your business and specific elements that should be included.

Employees want to understand their job responsibilities, whom they report to, what decisions they can and should make and how they interact with other people and teams within the company. An organizational structure creates this framework. Organizational structures can be centralized or decentralized, hierarchical or circular, flat or vertical.

Centralized vs. Decentralized

Many companies use the traditional model of a centralized organizational structure. With centralized leadership, there is a transparent chain of command and each role has well-defined responsibilities.

Conversely, with a decentralized organizational structure, teams have more autonomy to make decisions and there may be cross-collaboration between groups. Decentralized leadership can help companies remain agile and adapt to changing needs.

Hierarchical vs. Circular

A hierarchical organization structure is the pyramid-shaped organization chart many people are used to seeing. There is one role at the top of the pyramid and the chain of command moves down, with each level decreasing in responsibilities and authority.

On the other hand, a circular organization chart looks like concentric circles with company leadership in the center circle. Instead of information flowing down to the next “level,” information flows out to the next ring of management.

Vertical vs. Flat

A vertical organizational chart has a clear chain of command with a small group of leaders at the top—or in the center, in the case of a circular structure—and each subsequent tier has less authority and responsibility. As discussed below, functional, product-based, market-based and geographical organizational structures are vertical structures.

With a flat organization structure, a person may report to more than one person and there may be cross-department responsibilities and decision-making authority. The matrix organizational structure described below is an example of a flat structure.

Benefits of Creating an Organizational Structure

There are many benefits to creating an organizational structure that aligns with the company’s operations, goals and objectives. Clearly disseminating this information to employees:

• Provides accountability
• Clarifies expectations
• Documents criteria for promotion
• Designates decision-making authority
• Creates efficiency
• Fosters collaboration

Essential Elements of Clear Organizational Structure

Regardless of the special type of organizational structure you choose, it should have the following components:

• Chain of command
• Roles and responsibilities
• Scope of control
• Decision-making authority
• Departments or teams within the organization

Functional/Role-Based Structure

A functional—or role-based—structure is one of the most common organizational structures. This structure has centralized leadership and the vertical, hierarchical structure has clearly defined roles, job functions, chains of command and decision-making authority. A functional structure facilitates specialization, scalability and accountability. It also establishes clear expectations and has a well-defined chain of command. However, this structure runs the risk of being too confining and it can impede employee growth. It also has the potential for a lack of cross-department communication and collaboration.

Product- or Market-Based Structure

Along with the functional structure, the product- or market-based structure is hierarchical, vertical and centralized. However, instead of being structured around typical roles and job functions, it is structured around the company’s products or markets. This kind of structure can benefit companies that have several product lines or markets, but it can be challenging to scale. It can also foster inefficiency if product or market teams have similar functions, and without good communication across teams, companies run the risk of incompatibility among various product/market teams.

Geographical Structure

The geographical structure is a good option for companies with a broad geographic footprint in an industry where it is essential to be close to their customers and suppliers. The geographical structure enables the company to create bespoke organizational structures that align with the location’s culture, language and professional systems. From a broad perspective, it appears very similar to the product-based structure above.

Process-Based Structure

Similar to the functional structure, the process-based structure is structured in a way that follows a product’s or service’s life cycle. For instance, the structure can be broken down into R&D, product creation, order fulfillment, billing and customer services. This structure can foster efficiency, teamwork and specialization, but it can also create barriers between the teams if communication isn’t prioritized.

Matrix Structure

With a matrix organizational structure, there are multiple reporting obligations. For instance, a marketing specialist may have reporting obligations within the marketing and product teams. A matrix structure offers flexibility, enables shared resources and fosters collaboration within the company. However, the organizational structure can be complex, so it can cause confusion about accountability and communication, especially among new employees.

Circular Structure

Similar to the functional and product-based structure, a circular structure is also centralized and hierarchical, but instead of responsibility and decision-making authority flowing down vertically, responsibility and decision-making authority flow out from the center. A circular structure can promote communication and collaboration but can also be confusing, especially for new employees, because there is no clear chain of command.

Organic Structure

Unlike vertical structures, this structure facilitates communication between and among all staff. It is the most complex, but it can also be the most productive. Although it can be challenging to know who has ultimate decision-making authority, it can also foster a positive company culture because employees don’t feel like they have “superiors.” This structure can also be more cost-efficient because it reduces the need for middle managers.

There is no one “right” organizational structure. When deciding which structure will work best for your company, consider the following:

• Current roles and teams within the company. How are job functions currently organized? Does it foster communication and productivity? Does it impede or encourage employee growth?
• Your strategic plan. What are your company’s goals for the short-term and long-term?
• Feedback from employees, leadership and other stakeholders. What do those within your company say about how the company is structured? What feedback do you have from other stakeholders, such as customers and suppliers?
• Alignment. What structure will best support your strategic plans and address any feedback received?

What is the most common organizational structure?

A functional organizational structure is one of the most common organizational structures. If you are still determining what kind of structure to use, this organizational structure can be an excellent place to start.

What is the difference between an organizational structure and an organizational chart?

An organizational chart is a graphic that depicts the organizational structure. The chart may include job titles or it can be personalized to include names and photos.

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How to Write a Business Plan: Organization Structure

How to write a business plan: organizational structure, what is the organizational structure for a business plan.

The organization structure section should discuss whether your business will be a sole proprietor, limited liability corporation, or corporation, who will run your business, each person’s responsibility, and how your business will expand if needed.  There are numerous benefits to a detailed assessment of the company’s structure.  First, examining the structure of the business will help for tax purposes.  For example, limited liability and corporations are considered excellent for protecting shareholders concerning liabilities.  However, tax-wise, these firms often are double taxed.  The second benefit of a detailed assessment of a company’s structure is to understand how each owner will contribute to the company.  In other words, if there is more than one owner, what are their responsibilities, and how are these responsibilities to be carried out.

Why is the Organizational Structure important? 

There are numerous reasons why the organizational structure is essential for a business plan. In this section, the business owner will lay out how the company will be structured.  For example, this section will include job titles and responsibilities, resumes from owners and management, showing expertise in the industry, and supporting accolades for expertise.  Through discussing job responsibilities and experiences for management, readers will better understand why this type of business structure, and this management team, will be successful in the proposed business.

A second important reason for the organizational structure is that the section introduces business owners.  The owners and management team should not only be introduced in this section, but their experiences in the industry need to be highlighted and thoroughly explained.  In doing this, a sound foundation for management competence will be established.

A final reason for its importance is the job responsibility segment.  Ownership and management need to have a written document showing specific duties for each owner, if applicable, and specific job responsibilities for each position within the company.  By having this document, readers will see how the business will function and better understand the breakup of management responsibilities.

When to write the Organizational Structure?

The organizational structure should be written after the company description.   In the company description, readers will be introduced to the problem that the company is going to solve and how they propose to solve this problem.  This is usually the product or service offered.  The logical next step is to show a business structure that will allow the company to supply that product or service effectively and efficiently.  Thus the need for the organizational section follows immediately behind the company description.

How to write the Organizational Structure?

When I write my organizational structure for a business plan, for the most part, I start the first paragraph by reminding the readers of the company name.  From this, I then introduce how the company will be held in ownership.  For example, will the company be a limited liability corporation?  Sole proprietorship?  Next, I briefly introduce the management team and owners.  Further, I also briefly introduce their experience in the industry.

By following this structure, the first paragraph is an excellent summation of the section. This allows the reader to understand the breadth of the ownership structure without gaining significant details.

Organizational Structure:  Ownership

In the ownership section, I usually start writing the section by introducing the CEO/founder/majority owner.  In this portion, I usually write the segment, almost like a brief biography.  I will discuss the CEO's history in the industry and the reason why they feel that they are best suited to start and run the operation.

Once this is complete, I then follow the same structure with the other management team members and minority stakeholders.  When this is done, the reader should walk away with an excellent understanding of the qualifications of the ownership team and how their skills will complement each other.

Need Help Writing an Organizational Structure for a Business Plan?

Call or Text Paul, Doctoral Candidate, MBA.

321-948-9588

Email: [email protected]

Organizational Structure:  Responsibilities

In the job responsibility section, I usually structure this portion as a bullet-pointed list.  At the top, I put the title such as CEO, project manager, or job title.  Following this, I list the responsibilities and expectations for each position.  Not only does this help show structure and foresight for the company.  But also, this will help management divvy up duties for the business.

Organizational Structure: Resume

The resume section is for senior managers and owners.  By including resumes, supporting documentation is available for claims made related to experience.  For example, if the CEO claims to have 20 years of experience in the industry, then the resume will show where this experience came from.  This adds credibility to previous claims made.

Organizational Structure: Compensation

Compensation is sometimes necessary to include in the organizational structure component.  Investors expect management to be compensated and employees as well.  However, excessive compensation is often an issue with startups and established businesses.  By showing reasonable compensation for each position, not only will a solid understanding of the pay for each position be shown, but restraint for compensation by the management team and ownership may be highlighted as well.

Organizational Structure: Achievements

This final section is almost like a cherry on top of the cake.  By this point, the reader should be well-versed in the experience and expertise of ownership and the management team.  Adding achievements highlights their expertise in their chosen industry.

Organizational Structure Example

Organizational structure.

Legal Structure

ABC Restaurant will be a limited liability corporation.

Management Summary

John Smith, Sr., MBA., is the founder and CEO of ABC Restaurant.  He has started and managed numerous successful small restaurants over the last ten years.  Restaurants started, and managed, including a breakfast cafe, food truck, and 24-hour diner.  For each business, he was responsible for all aspects of the organization, from marketing to strategic planning.

Job Responsibilities

• Create and execute marketing strategies for business growth.
• Align business strategies with the vision statement.
• Negotiating contracts with vendors.
• Ensure legal compliance for the business.
• Continually examine the firm’s external environment for new market opportunities.

General Manager:

• Control inventory to ensure optimal levels are attained.
• Manage day-to-day operations of the restaurant.
• Servers and cooks during high volume times.
• Interview and hire new employees.
• Assist in the onboarding process for new employees.
• Set up all workstations in the kitchen
• Prepare ingredients to use in cooked and non-cooked foods.
• Check food while cooking for appropriate temperatures.
• Ensure great presentation by dressing dishes as trained.
• Keep a sanitized and clean environment in the kitchen area.
• Stock dining area tables with needed items.
• Greet customers when they enter.
• Present dinner menus and help customers with food/beverages selections.
• Take and serve orders quickly and accurately.

Author: Paul Borosky, MBA., Doctoral Candidate, Published Author

Updated: 3/4/2022

Business Plan Section 3: Organization and Management

This section explains how your business runs and who’s on your team. Learn how to present the information in this section of your business plan.

This section of your business plan, Organization and Management, is where you’ll explain exactly how you’re set up to make your ideas happen, plus you’ll introduce the players on your team.

As always, remember your audience. If this is a plan for your internal use, you can be a little more general than if you’ll be presenting it to a potential lender or investor. No matter what its purpose, you’ll want to break the organization and management section into two segments: one describing the way you’ve set up the company to run (its organizational structure), and the other introducing the people involved (its management).

Business Organization

Having a solid plan for how your business will run is a key component of its smooth and successful operation. Of course, you need to surround yourself with good people, but you have to set things up to enable them to work well with each other and on their own.

It’s important to define the positions in the company, which job is responsible for what, and to whom everyone will report. Over time, the structure may grow and change and you can certainly keep tweaking it as you go along, but you need to have an initial plan.

If you’re applying for funding to start a business or expand one, you may not even have employees to fit all the roles in the organization. However, you can still list them in your plan for how the company will ideally operate once you have the ability to do so.

Obviously, for small businesses, the organization will be far more streamlined and less complicated than it is for larger ones, but your business plan still needs to demonstrate an understanding of how you’ll handle the workflow. At the very least, you’ll need to touch on sales and marketing, administration, and the production and distribution of your product or the execution of your service.

For larger companies, an organizational plan with well-thought-out procedures is even more important. This is the best way to make sure you’re not wasting time duplicating efforts or dealing with internal confusion about responsibilities. A smooth-running operation runs far more efficiently and cost-effectively than one flying by the seat of its pants, and this section of your business plan will be another indication that you know what you’re doing. A large company is also likely to need additional operational categories such as human resources and possibly research and development.

One way to explain your organizational structure in the business plan is graphically. A simple diagram or flowchart can easily demonstrate levels of management and the positions within them, clearly illustrating who reports to whom, and how different divisions of the company (such as sales and marketing) relate to each other.

Here is where you can also talk about the other levels of employees in your company. Your lower-level staff will carry out the day-to-day work, so it’s important to recognize the types of people you’ll need, how many, what their qualifications should be, where you’ll find them, and what they’ll cost.

If the business will use outside consultants, freelancers, or independent contractors, mention it here as well. And talk about positions you’d want to add in the future if you’re successful enough to expand.

Business Management

Now that we understand the structure of your business, we need to meet the people who’ll be running it. Who does what, and why are they onboard? This section is important even for a single practitioner or sole proprietorship, as it will introduce you and your qualifications to the readers of your plan.

Start at the top with the legal structure and ownership of the business. If you are incorporated, say so, and detail whether you are a C or S corporation. If you haven’t yet incorporated, make sure to discuss this with your attorney and tax advisor to figure out which way to go. Whether you’re in a partnership or are a sole owner, this is where to mention it.

List the names of the owners of the business, what percent of the company each of them owns, the form of ownership (common or preferred stock, general or limited partner), and what kind of involvement they’ll have with day-to-day operations; for example, if they’re an active or silent partner.

Here’s where you’ll list the names and profiles of your management team, along with what their responsibilities are. Especially if you’re looking for funding, make sure to highlight the proven track record of these key employees. Lenders and investors will be keenly interested in their previous successes, particularly in how they relate to this current venture.

Include each person’s name and position, along with a short description of what the individual’s main duties will be. Detail his or her education, and any unique skills or experience, especially if they’re relevant to the job at hand. Mention previous employment and any industry awards or recognition related to it, along with involvement with charities or other non-profit organizations.

Think of this section as a resume-in-a-nutshell, recapping the highlights and achievements of the people you’ve chosen to surround yourself with. Actual detailed resumes for you and your management team should go in the plan’s appendix, and you can cross-reference them here. You want your readers to feel like your top staff complements you and supplements your own particular skill set. You also want readers to understand why these people are so qualified to help make your business a success.

This section will spell out the compensation for management team members, such as salary, benefits, and any profit-sharing you might be offering. If any of the team will be under contract or bound by non-compete agreements, you would mention that here, as well.

If your company will have a Board of Directors, its members also need to be listed in the business plan. Introduce each person by name and the position they’ll hold on the board. Talk about how each might be involved with the business (in addition to board meetings.

Similar to what you did for your management team, give each member’s background information, including education, experience, special skills, etc., along with any contributions they may already have had to the success of the business. Include the full resumes for your board members in the appendix.

Alternately, if you don’t have a Board of Directors, include information about an Advisory Board you’ve put together, or a panel of experts you’ve convened to help you along the way. Having either of these, by the way, is something your company might want to consider whether or not you’re putting together the organization and management section or your business plan.

NEXT ARTICLE > Business Plan Section 4: Products and Services

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Business Plan Organization and Management: How to Write Guide .

Sep 17, 2023 | Business Consulting , Business Plan , Organization and Management , Organizational Development , Strategy

Writing the Business Plan Organization and Management Section

It provides critical information for those looking for evidence that your staff has the necessary experience, skills, and pedigree to realize the objectives detailed in the rest of your business plan.

What Is the Organization and Management Section in a Business Plan?

The organization and management section of your business plan should provide details about your business structure and team. This section typically comes after the executive summary. However, some people have it further in the document after the market analysis section.

This section generally is separated into two parts. The first concerns the organization as a whole. It gives readers an overview of the company structure, which is an excellent opportunity for the reader to lift the roof off your office and peer into its inner workings. For your legal design, you may set up as a limited liability company (LLC) or nonprofit/ charity or form a partnership. It’s crucial to include this section. However, suppose you’re starting a home business or have an already operating business where you’re the only person involved. In that case, you can skip this section or show the company registration details from either the company’s house or the awarding .gov.

The second part focuses specifically on your management team and introduces readers to each member — your chance to impress them with the many accomplishments pinned to your organization’s management team.

This section may seem less important than some of the other parts of your business plan, but the truth is that your people are your business. If they’re highly competent and accomplished, the implication is that so is your business.

Of course, if you’re a sole proprietor with no management structure or any employees, this section is unnecessary other than to talk about yourself and your achievements.

The section on organization and management should outline the hierarchy, individual roles, and corresponding responsibilities. It should also highlight each person’s strengths and qualifications for their positions.

Business Plan Organization Section

The organizational section of your business plan outlines the hierarchy of individuals involved in your business, typically in a chart format. This section identifies the President or CEO, CFO, Director of Marketing, and other roles for partnerships or multi-member LLCs. If you’re a single-person home business, this section is straightforward as you are the only person on the chart.

Although this section primarily focuses on owner members, you can include outsourced workers or virtual assistants if you plan to hire them. For example, you may have a freelance web admin, marketing assistant, or copywriter. You may even have a virtual assistant who coordinates with your other freelancers. While these individuals are not owners, they hold significant responsibilities in your business.

There are various business structures, such as sole proprietorships, partnerships, LLCs, and corporations.

Detail the Legal Structure within the Business Plan Organization and Management Section

Here is an indicative list of business structures. It would help if you talked to your accountant and legal advisors to determine which legal form is the best for your business proposition.

Sole Proprietorship

When embarking on a business venture, it’s essential to consider the various structures available. A sole proprietorship is a structure whereby the business is not regarded as separate from its owner’s finances. The owner retains complete control and responsibility for the company. However, they are unable to sell stocks or bring in new owners. The business becomes a sole proprietorship if not registered under any other structure.

Partnership

When forming a partnership, it can either be a limited partnership (LP) or a limited liability partnership (LLP). One partner assumes most liability in a limited partnership (LP). In contrast, the other partners have limited liability and control over the business. Alternatively, in a limited liability partnership (LLP), all partners have limited liability from debts and actions of other partners, and there is no general partner.

Limited Liability Company

A limited company (LTD) or limited liability company (LLC) is a mixture of business structures that mixes aspects of partnerships and corporations. It offers limited personal liability to the owner and passes profits through to their tax returns.

Corporation

There are various types of corporate structures. A C-corporation enables the issuance of stock shares, pays corporate taxes instead of personal returns, and provides the highest level of personal protection from business activities. On the other hand, nonprofit corporations are similar to C corporations. However, they do not aim to make profits and are exempt from state or federal income taxes.

More information on company legal structures is available on UK.Gov and USA.SBA websites.

Describe Your Company’s Organizational Structure

This first step illustrates the positions in your organization’s employee hierarchy and how they all relate to each other.

This is usually done graphically as a guide, using an organizational chart, or “org chart” for short. People use a Microsoft tool, i.e., PowerPoint or Excel, to help.

Organization Charts typically follow a top-down hierarchy, starting with your CEO/ Managing Director in the top box at the top of the page. Lines extend down from that person’s name to boxes containing the terms of the CEO’s direct reports.

We have included an example organizational chart below for guidelines only.

Identify your business organization structure and list your team members’ strengths and skills.

Those managers then have lines extending to those who report to them, and so on, down to your lowest staff positions.

This section will give your readers a quick understanding of your management and governance structure, the size of your organization, and your lines of control and communication.

Describe your Team in your Business Plan Organization and Management Section

In your business plan’s Organization and Management section, please provide a detailed description of your team. Y ou will discuss the company’s management team, starting with the owners.

This section highlights who is involved in the running of your business and who are the support professionals. It also includes the roles and responsibilities of managers.

Suppose the company structure is a multi-owner arrangement or some other multi-owner arrangement. In that case, you’ll want to include information for every member and their percentage of ownership and ongoing involvement in the company.

It’s important to discuss how ownership interests are split, their responsibilities, what they did before securing their current position, and how they came to be involved with the company.

Here, it would help if you talked about some of your critical team members. These people are directly responsible for large portions of your business operations.

Owner/Manager/Members

Within your business o rganization and management section, y ou should introduce the team and talk about their experience, qualifications, previous companies and achievements, role in the company, and any special skills they bring with them. Please provide the following details for each owner, manager, or member of the business within your business plan:

• Percentage of ownership (if applicable)
• Level of involvement (active or silent partner)
• Type of ownership (e.g., stock options, general partner)
• Position in the company (CEO, CFO, etc.)
• Responsibilities and Duties
• Educational background
• Relevant experience and skills
• Previous employment history
• Skills that will benefit the business
• Awards or recognition received
• Compensation structure
• How each individual’s skills and experience will complement and contribute to the business’s success

Perhaps they’re an entrepreneur, business coach, exclusive advisor, or industry specialist to help you grow.

This is an ideal opportunity for companies with an Executive Board of Directors, Governance Structure, or Advisory Board to introduce them to your readers.

Executive Board

Having a board of directors is essential for your management team. Without one, you may be missing out on crucial information. This section includes details similar to those found in the ownership and management team sub-section, such as the names, areas of expertise, positions (if applicable), and involvement with the company of each board member.

Strategic Advisors

Suppose you’re looking for funding for your business or to fill a gap in your knowledge, or you may not have the funds to hire an executive board. In that case, you must inform potential partners and investors that you have a team of professionals assisting you. This includes lawyers, accountants, and any freelancers or contractors you may be working with. When listing these individuals, include their name, title, educational background, certifications, services they provide to your business, and their relationship with you (i.e., hourly rates, projects, retainer, as-needed, regular). Additionally, highlight their skills and experience that make them an asset to your team you need

Does anything else make them stand out as quality professionals (awards, past working with credible brands)?

Spotlight on the Wider Team Structure

Now, you’ve showcased the management team in its entirety. You can provide brief bios for hiring team needs or secondary members and talk at length about how the team’s combined skills complement each other and how they amplify the team’s effectiveness.

It’s also important to point out any gaps in the knowledge your team is currently suffering. Your readers will likely be savvy enough to pick up on existing holes.

Therefore, you’ll want to get ahead of these criticisms and demonstrate that you’re already aware of the positions and complementary skill sets your management team still requires and how you plan to address the knowledge gaps with future hires.

Do you need help writing your business plan o rganization and management section ? 

Every successful business plan should include the organization and management section, helping you communicate your legal structure and team.

Writing a business plan can seem overwhelming, especially when starting a small, one-person business. However, it can be a reasonably simple task. This section of the plan should be updated if there are any changes to the organization structure or team members, such as additional training, awards, or other resume changes that benefit the business.

Creating your comprehensive business plan takes planning, research, time, and a herculean effort. If, at any point, the work becomes too much to handle, we can step in to assist.

Do you want an expert “second opinion” before creating your business plan or financial forecasts? Let’s talk !

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How to Write a Business Plan: Step-by-Step Guide + Examples

Noah Parsons

24 min. read

Updated May 7, 2024

Writing a business plan doesn’t have to be complicated. 

In this step-by-step guide, you’ll learn how to write a business plan that’s detailed enough to impress bankers and potential investors, while giving you the tools to start, run, and grow a successful business.

• The basics of business planning

If you’re reading this guide, then you already know why you need a business plan . 

You understand that planning helps you: 

• Raise money
• Grow strategically
• Keep your business on the right track 

As you start to write your plan, it’s useful to zoom out and remember what a business plan is .

At its core, a business plan is an overview of the products and services you sell, and the customers that you sell to. It explains your business strategy: how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

Most business plans also include financial forecasts for the future. These set sales goals, budget for expenses, and predict profits and cash flow. 

A good business plan is much more than just a document that you write once and forget about. It’s also a guide that helps you outline and achieve your goals. 

After completing your plan, you can use it as a management tool to track your progress toward your goals. Updating and adjusting your forecasts and budgets as you go is one of the most important steps you can take to run a healthier, smarter business. 

We’ll dive into how to use your plan later in this article.

There are many different types of plans , but we’ll go over the most common type here, which includes everything you need for an investor-ready plan. However, if you’re just starting out and are looking for something simpler—I recommend starting with a one-page business plan . It’s faster and easier to create. 

It’s also the perfect place to start if you’re just figuring out your idea, or need a simple strategic plan to use inside your business.

Dig deeper : How to write a one-page business plan

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• What to include in your business plan

Executive summary

The executive summary is an overview of your business and your plans. It comes first in your plan and is ideally just one to two pages. Most people write it last because it’s a summary of the complete business plan.

Ideally, the executive summary can act as a stand-alone document that covers the highlights of your detailed plan. 

In fact, it’s common for investors to ask only for the executive summary when evaluating your business. If they like what they see in the executive summary, they’ll often follow up with a request for a complete plan, a pitch presentation , or more in-depth financial forecasts .

Your executive summary should include:

• A summary of the problem you are solving
• A description of your product or service
• An overview of your target market
• A brief description of your team
• A summary of your financials
• Your funding requirements (if you are raising money)

Dig Deeper: How to write an effective executive summary

Products and services description

This is where you describe exactly what you’re selling, and how it solves a problem for your target market. The best way to organize this part of your plan is to start by describing the problem that exists for your customers. After that, you can describe how you plan to solve that problem with your product or service. 

This is usually called a problem and solution statement .

To truly showcase the value of your products and services, you need to craft a compelling narrative around your offerings. How will your product or service transform your customers’ lives or jobs? A strong narrative will draw in your readers.

This is also the part of the business plan to discuss any competitive advantages you may have, like specific intellectual property or patents that protect your product. If you have any initial sales, contracts, or other evidence that your product or service is likely to sell, include that information as well. It will show that your idea has traction , which can help convince readers that your plan has a high chance of success.

Market analysis

Your target market is a description of the type of people that you plan to sell to. You might even have multiple target markets, depending on your business. 

A market analysis is the part of your plan where you bring together all of the information you know about your target market. Basically, it’s a thorough description of who your customers are and why they need what you’re selling. You’ll also include information about the growth of your market and your industry .

Try to be as specific as possible when you describe your market. 

Include information such as age, income level, and location—these are what’s called “demographics.” If you can, also describe your market’s interests and habits as they relate to your business—these are “psychographics.” 

Related: Target market examples

Essentially, you want to include any knowledge you have about your customers that is relevant to how your product or service is right for them. With a solid target market, it will be easier to create a sales and marketing plan that will reach your customers. That’s because you know who they are, what they like to do, and the best ways to reach them.

Next, provide any additional information you have about your market. 

What is the size of your market ? Is the market growing or shrinking? Ideally, you’ll want to demonstrate that your market is growing over time, and also explain how your business is positioned to take advantage of any expected changes in your industry.

Dig Deeper: Learn how to write a market analysis

Competitive analysis

Part of defining your business opportunity is determining what your competitive advantage is. To do this effectively, you need to know as much about your competitors as your target customers. 

Every business has some form of competition. If you don’t think you have competitors, then explore what alternatives there are in the market for your product or service. 

For example: In the early years of cars, their main competition was horses. For social media, the early competition was reading books, watching TV, and talking on the phone.

A good competitive analysis fully lays out the competitive landscape and then explains how your business is different. Maybe your products are better made, or cheaper, or your customer service is superior. Maybe your competitive advantage is your location – a wide variety of factors can ultimately give you an advantage.

Dig Deeper: How to write a competitive analysis for your business plan

Marketing and sales plan

The marketing and sales plan covers how you will position your product or service in the market, the marketing channels and messaging you will use, and your sales tactics. 

The best place to start with a marketing plan is with a positioning statement . 

This explains how your business fits into the overall market, and how you will explain the advantages of your product or service to customers. You’ll use the information from your competitive analysis to help you with your positioning. 

For example: You might position your company as the premium, most expensive but the highest quality option in the market. Or your positioning might focus on being locally owned and that shoppers support the local economy by buying your products.

Once you understand your positioning, you’ll bring this together with the information about your target market to create your marketing strategy . 

This is how you plan to communicate your message to potential customers. Depending on who your customers are and how they purchase products like yours, you might use many different strategies, from social media advertising to creating a podcast. Your marketing plan is all about how your customers discover who you are and why they should consider your products and services. 

While your marketing plan is about reaching your customers—your sales plan will describe the actual sales process once a customer has decided that they’re interested in what you have to offer. 

If your business requires salespeople and a long sales process, describe that in this section. If your customers can “self-serve” and just make purchases quickly on your website, describe that process. 

A good sales plan picks up where your marketing plan leaves off. The marketing plan brings customers in the door and the sales plan is how you close the deal.

Together, these specific plans paint a picture of how you will connect with your target audience, and how you will turn them into paying customers.

Dig deeper: What to include in your sales and marketing plan

Business operations

The operations section describes the necessary requirements for your business to run smoothly. It’s where you talk about how your business works and what day-to-day operations look like. 

Depending on how your business is structured, your operations plan may include elements of the business like:

• Supply chain management
• Manufacturing processes
• Equipment and technology
• Distribution

Some businesses distribute their products and reach their customers through large retailers like Amazon.com, Walmart, Target, and grocery store chains. 

These businesses should review how this part of their business works. The plan should discuss the logistics and costs of getting products onto store shelves and any potential hurdles the business may have to overcome.

If your business is much simpler than this, that’s OK. This section of your business plan can be either extremely short or more detailed, depending on the type of business you are building.

For businesses selling services, such as physical therapy or online software, you can use this section to describe the technology you’ll leverage, what goes into your service, and who you will partner with to deliver your services.

Dig Deeper: Learn how to write the operations chapter of your plan

Key milestones and metrics

Although it’s not required to complete your business plan, mapping out key business milestones and the metrics can be incredibly useful for measuring your success.

Good milestones clearly lay out the parameters of the task and set expectations for their execution. You’ll want to include:

• A description of each task
• The proposed due date
• Who is responsible for each task

If you have a budget, you can include projected costs to hit each milestone. You don’t need extensive project planning in this section—just list key milestones you want to hit and when you plan to hit them. This is your overall business roadmap. 

Possible milestones might be:

• Website launch date
• Store or office opening date
• First significant sales
• Break even date
• Business licenses and approvals

You should also discuss the key numbers you will track to determine your success. Some common metrics worth tracking include:

• Conversion rates
• Customer acquisition costs
• Profit per customer
• Repeat purchases

It’s perfectly fine to start with just a few metrics and grow the number you are tracking over time. You also may find that some metrics simply aren’t relevant to your business and can narrow down what you’re tracking.

Dig Deeper: How to use milestones in your business plan

Organization and management team

Investors don’t just look for great ideas—they want to find great teams. Use this chapter to describe your current team and who you need to hire . You should also provide a quick overview of your location and history if you’re already up and running.

Briefly highlight the relevant experiences of each key team member in the company. It’s important to make the case for why yours is the right team to turn an idea into a reality. 

Do they have the right industry experience and background? Have members of the team had entrepreneurial successes before? 

If you still need to hire key team members, that’s OK. Just note those gaps in this section.

Your company overview should also include a summary of your company’s current business structure . The most common business structures include:

• Sole proprietor
• Partnership

Be sure to provide an overview of how the business is owned as well. Does each business partner own an equal portion of the business? How is ownership divided? 

Potential lenders and investors will want to know the structure of the business before they will consider a loan or investment.

Dig Deeper: How to write about your company structure and team

Financial plan

Last, but certainly not least, is your financial plan chapter. 

Entrepreneurs often find this section the most daunting. But, business financials for most startups are less complicated than you think, and a business degree is certainly not required to build a solid financial forecast. 

A typical financial forecast in a business plan includes the following:

• Sales forecast : An estimate of the sales expected over a given period. You’ll break down your forecast into the key revenue streams that you expect to have.
• Expense budget : Your planned spending such as personnel costs , marketing expenses, and taxes.
• Profit & Loss : Brings together your sales and expenses and helps you calculate planned profits.
• Cash Flow : Shows how cash moves into and out of your business. It can predict how much cash you’ll have on hand at any given point in the future.
• Balance Sheet : A list of the assets, liabilities, and equity in your company. In short, it provides an overview of the financial health of your business. 

A strong business plan will include a description of assumptions about the future, and potential risks that could impact the financial plan. Including those will be especially important if you’re writing a business plan to pursue a loan or other investment.

Dig Deeper: How to create financial forecasts and budgets

This is the place for additional data, charts, or other information that supports your plan.

Including an appendix can significantly enhance the credibility of your plan by showing readers that you’ve thoroughly considered the details of your business idea, and are backing your ideas up with solid data.

Just remember that the information in the appendix is meant to be supplementary. Your business plan should stand on its own, even if the reader skips this section.

Dig Deeper : What to include in your business plan appendix

Optional: Business plan cover page

Adding a business plan cover page can make your plan, and by extension your business, seem more professional in the eyes of potential investors, lenders, and partners. It serves as the introduction to your document and provides necessary contact information for stakeholders to reference.

Your cover page should be simple and include:

• Company logo
• Business name
• Value proposition (optional)
• Business plan title
• Completion and/or update date
• Address and contact information
• Confidentiality statement

Just remember, the cover page is optional. If you decide to include it, keep it very simple and only spend a short amount of time putting it together.

Dig Deeper: How to create a business plan cover page

How to use AI to help write your business plan

Generative AI tools such as ChatGPT can speed up the business plan writing process and help you think through concepts like market segmentation and competition. These tools are especially useful for taking ideas that you provide and converting them into polished text for your business plan.

The best way to use AI for your business plan is to leverage it as a collaborator , not a replacement for human creative thinking and ingenuity. 

AI can come up with lots of ideas and act as a brainstorming partner. It’s up to you to filter through those ideas and figure out which ones are realistic enough to resonate with your customers. 

There are pros and cons of using AI to help with your business plan . So, spend some time understanding how it can be most helpful before just outsourcing the job to AI.

Learn more: 10 AI prompts you need to write a business plan

• Writing tips and strategies

To help streamline the business plan writing process, here are a few tips and key questions to answer to make sure you get the most out of your plan and avoid common mistakes .  

Determine why you are writing a business plan

Knowing why you are writing a business plan will determine your approach to your planning project. 

For example: If you are writing a business plan for yourself, or just to use inside your own business , you can probably skip the section about your team and organizational structure. 

If you’re raising money, you’ll want to spend more time explaining why you’re looking to raise the funds and exactly how you will use them.

Regardless of how you intend to use your business plan , think about why you are writing and what you’re trying to get out of the process before you begin.

Keep things concise

Probably the most important tip is to keep your business plan short and simple. There are no prizes for long business plans . The longer your plan is, the less likely people are to read it. 

So focus on trimming things down to the essentials your readers need to know. Skip the extended, wordy descriptions and instead focus on creating a plan that is easy to read —using bullets and short sentences whenever possible.

Have someone review your business plan

Writing a business plan in a vacuum is never a good idea. Sometimes it’s helpful to zoom out and check if your plan makes sense to someone else. You also want to make sure that it’s easy to read and understand.

Don’t wait until your plan is “done” to get a second look. Start sharing your plan early, and find out from readers what questions your plan leaves unanswered. This early review cycle will help you spot shortcomings in your plan and address them quickly, rather than finding out about them right before you present your plan to a lender or investor.

If you need a more detailed review, you may want to explore hiring a professional plan writer to thoroughly examine it.

Use a free business plan template and business plan examples to get started

Knowing what information to include in a business plan is sometimes not quite enough. If you’re struggling to get started or need additional guidance, it may be worth using a business plan template. 

There are plenty of great options available (we’ve rounded up our 8 favorites to streamline your search).

But, if you’re looking for a free downloadable business plan template , you can get one right now; download the template used by more than 1 million businesses. 

Or, if you just want to see what a completed business plan looks like, check out our library of over 550 free business plan examples . 

We even have a growing list of industry business planning guides with tips for what to focus on depending on your business type.

Common pitfalls and how to avoid them

It’s easy to make mistakes when you’re writing your business plan. Some entrepreneurs get sucked into the writing and research process, and don’t focus enough on actually getting their business started. 

Here are a few common mistakes and how to avoid them:

Not talking to your customers : This is one of the most common mistakes. It’s easy to assume that your product or service is something that people want. Before you invest too much in your business and too much in the planning process, make sure you talk to your prospective customers and have a good understanding of their needs.

• Overly optimistic sales and profit forecasts: By nature, entrepreneurs are optimistic about the future. But it’s good to temper that optimism a little when you’re planning, and make sure your forecasts are grounded in reality. 
• Spending too much time planning: Yes, planning is crucial. But you also need to get out and talk to customers, build prototypes of your product and figure out if there’s a market for your idea. Make sure to balance planning with building.
• Not revising the plan: Planning is useful, but nothing ever goes exactly as planned. As you learn more about what’s working and what’s not—revise your plan, your budgets, and your revenue forecast. Doing so will provide a more realistic picture of where your business is going, and what your financial needs will be moving forward.
• Not using the plan to manage your business: A good business plan is a management tool. Don’t just write it and put it on the shelf to collect dust – use it to track your progress and help you reach your goals.
• Presenting your business plan

The planning process forces you to think through every aspect of your business and answer questions that you may not have thought of. That’s the real benefit of writing a business plan – the knowledge you gain about your business that you may not have been able to discover otherwise.

With all of this knowledge, you’re well prepared to convert your business plan into a pitch presentation to present your ideas. 

A pitch presentation is a summary of your plan, just hitting the highlights and key points. It’s the best way to present your business plan to investors and team members.

Dig Deeper: Learn what key slides should be included in your pitch deck

Use your business plan to manage your business

One of the biggest benefits of planning is that it gives you a tool to manage your business better. With a revenue forecast, expense budget, and projected cash flow, you know your targets and where you are headed.

And yet, nothing ever goes exactly as planned – it’s the nature of business.

That’s where using your plan as a management tool comes in. The key to leveraging it for your business is to review it periodically and compare your forecasts and projections to your actual results.

Start by setting up a regular time to review the plan – a monthly review is a good starting point. During this review, answer questions like:

• Did you meet your sales goals?
• Is spending following your budget?
• Has anything gone differently than what you expected?

Now that you see whether you’re meeting your goals or are off track, you can make adjustments and set new targets. 

Maybe you’re exceeding your sales goals and should set new, more aggressive goals. In that case, maybe you should also explore more spending or hiring more employees. 

Or maybe expenses are rising faster than you projected. If that’s the case, you would need to look at where you can cut costs.

A plan, and a method for comparing your plan to your actual results , is the tool you need to steer your business toward success.

Learn More: How to run a regular plan review

Free business plan templates and examples

Kickstart your business plan writing with one of our free business plan templates or recommended tools.

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How to write a business plan FAQ

What is a business plan?

A document that describes your business , the products and services you sell, and the customers that you sell to. It explains your business strategy, how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

What are the benefits of a business plan?

A business plan helps you understand where you want to go with your business and what it will take to get there. It reduces your overall risk, helps you uncover your business’s potential, attracts investors, and identifies areas for growth.

Having a business plan ultimately makes you more confident as a business owner and more likely to succeed for a longer period of time.

What are the 7 steps of a business plan?

The seven steps to writing a business plan include:

• Write a brief executive summary
• Describe your products and services.
• Conduct market research and compile data into a cohesive market analysis.
• Describe your marketing and sales strategy.
• Outline your organizational structure and management team.
• Develop financial projections for sales, revenue, and cash flow.
• Add any additional documents to your appendix.

What are the 5 most common business plan mistakes?

There are plenty of mistakes that can be made when writing a business plan. However, these are the 5 most common that you should do your best to avoid:

• 1. Not taking the planning process seriously.
• Having unrealistic financial projections or incomplete financial information.
• Inconsistent information or simple mistakes.
• Failing to establish a sound business model.
• Not having a defined purpose for your business plan.

What questions should be answered in a business plan?

Writing a business plan is all about asking yourself questions about your business and being able to answer them through the planning process. You’ll likely be asking dozens and dozens of questions for each section of your plan.

However, these are the key questions you should ask and answer with your business plan:

• How will your business make money?
• Is there a need for your product or service?
• Who are your customers?
• How are you different from the competition?
• How will you reach your customers?
• How will you measure success?

How long should a business plan be?

The length of your business plan fully depends on what you intend to do with it. From the SBA and traditional lender point of view, a business plan needs to be whatever length necessary to fully explain your business. This means that you prove the viability of your business, show that you understand the market, and have a detailed strategy in place.

If you intend to use your business plan for internal management purposes, you don’t necessarily need a full 25-50 page business plan. Instead, you can start with a one-page plan to get all of the necessary information in place.

What are the different types of business plans?

While all business plans cover similar categories, the style and function fully depend on how you intend to use your plan. Here are a few common business plan types worth considering.

Traditional business plan: The tried-and-true traditional business plan is a formal document meant to be used when applying for funding or pitching to investors. This type of business plan follows the outline above and can be anywhere from 10-50 pages depending on the amount of detail included, the complexity of your business, and what you include in your appendix.

Business model canvas: The business model canvas is a one-page template designed to demystify the business planning process. It removes the need for a traditional, copy-heavy business plan, in favor of a single-page outline that can help you and outside parties better explore your business idea.

One-page business plan: This format is a simplified version of the traditional plan that focuses on the core aspects of your business. You’ll typically stick with bullet points and single sentences. It’s most useful for those exploring ideas, needing to validate their business model, or who need an internal plan to help them run and manage their business.

Lean Plan: The Lean Plan is less of a specific document type and more of a methodology. It takes the simplicity and styling of the one-page business plan and turns it into a process for you to continuously plan, test, review, refine, and take action based on performance. It’s faster, keeps your plan concise, and ensures that your plan is always up-to-date.

What’s the difference between a business plan and a strategic plan?

A business plan covers the “who” and “what” of your business. It explains what your business is doing right now and how it functions. The strategic plan explores long-term goals and explains “how” the business will get there. It encourages you to look more intently toward the future and how you will achieve your vision.

However, when approached correctly, your business plan can actually function as a strategic plan as well. If kept lean, you can define your business, outline strategic steps, and track ongoing operations all with a single plan.

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

Table of Contents

• Use AI to help write your plan
• Common planning mistakes
• Manage with your business plan
• Templates and examples

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5 Best Organizational Structure Examples (For Any Business)

Organizational Structure: do you even need to formalize it when you have a relatively small business? The answer to that question is a straightforward “Yes.” Your Organizational Structure not only captures who is responsible for what but also the reporting and communications lines that tie everything together. To give you a better idea on the “why” we’re going to go through 5 of the most popular organizational structures & explain how each works.

Bear this in mind, though. If organizational structure is not clear, there are consequences for your business. Here are some of the things that can go wrong if your organizational structure is fuzzy:

• Something isn’t going to happen because everyone thinks someone else is responsible.
• It’ll get duplicated because everyone thinks it’s part of their job.
• People are going to get mad and frustrated because they don’t know what to do or are treading on each other’s toes.
• Information fails to flow via the most efficient channel or reach the right people.
• The business can’t do a single thing without referring to top management who then slowly go crazy because of the workload.

If you’re nodding your head because some of these things are already happening in your business, you’re nearly ready to begin working on your formal structure. Use these organizational structure examples to choose the one that works best for your business.

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Line Organizational Structure

This is the most traditional of the organizational structures that businesses use. There’s an executive at the top of the heap, people responsible for each area (the director tier is for bigger businesses), and teams of people who do the work in each department.

The advantage of this type of organizational structure lies in its simplicity. The disadvantage lies in its rigidity and the length of time needed for information to flow through the organization. Everyone just gets on with the allocated task.

If you look at the lines in the diagram, you’ll see that each tier only takes instructions from, and communicates with, its immediate superior. There’s no collaboration going on here. As the saying goes, “One hand doesn’t know what the other is doing.” Since there’s no horizontal communication going on, the “big boss” has to coordinate everything.

Having said that, this type of organizational structure could work for businesses who work according to a rigid routine, collaborate informally, and don’t employ many people.

Functional Organizational Structure

As you can see, this structure is very similar to the traditional line structure, but there are far more lines of communication. In this organizational structure example, we can see that although both directors have people over whom they have direct authority, they can also send information to managers they don’t directly control. The same is true of the managers’ relationship with teams.

The purchasing department may want the financial manager to pay an authorized supplier. No problem. The team member goes straight to the financial manager. A team leader in production needs help from the HR manager, or HR wants to task the production team leader with something. There’s a direct line of communication open.

Communication is vital to the successful implementation of this organizational structure example.

Line and Staff Organizational Structure

To understand this structure, we first need to understand what “staff” means in this context. Staff members are advisors. They provide technical information, advice, and opinions. They may be able to authorize certain activities, and they might compile reports that help with decision-making.

This type of organizational structure works best for companies in specialist fields. It’s typical of businesses who need experts in knowledge areas like engineering, sciences, law, or insurance.

Project-Based Structure

If your business engages in projects that differ from client to client and from project brief to project brief, being able to assemble the right team for the job is helpful.

This organizational structure example changes all the time. The director appoints a leader for every project and makes people who have the necessary expertise part of the team. When the project finishes, team leaders and managers are assigned to new projects.

You’ll choose this type of organizational structure if your business takes on projects that require teams of specialized employees and lots of collaboration. The big advantage is that you can always choose the best team for any particular project. Mix and match teams as necessary.

The drawbacks? Teams must adapt to a new set of colleagues, and sometimes a new manager, every time they tackle a new task. The manager has to be an all-rounder, controlling all the traditional management functions of finance, marketing, HR, operations, and so on. One way around this is to have a functional structure that serves all the project leaders in the project-based structure.

Matrix Structure

This hybrid organizational structure example tries to combine a functional organizational structure with a matrix-based one. In this instance, the business is also project-based, but the team follows a functional structure.

Each team leader is assigned a representative or team from each traditional functional area that would apply to the project and its team.  This functional team member reports to the project leader as well as the functional manager in his or her area of specialization. That’s right; there are two “bosses.” It can work, but it can also present challenges .

The functional manager’s job is to see that employees and activities align with the company’s policies and standards. The team leader’s job is making sure that the team completes the project as planned.

Organizational Structure Examples: Final Thoughts

Each organizational structure has its pros and cons. The trick is to find a form of organizational structure in which your business gets the most benefit from the pros and suffers least from the cons.

There are side-issues to consider too. For example, with the more traditional, pyramid-shaped structures, will your organization have a “flatter” pyramid or a taller, pointier one? Again, the answers depend on your business’s needs and activities.

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Organizational Structure for Companies With Examples and Benefits

Ariel Courage is an experienced editor, researcher, and former fact-checker. She has performed editing and fact-checking work for several leading finance publications, including The Motley Fool and Passport to Wall Street.

Investopedia / Julie Bang

What Is an Organizational Structure?

An organizational structure is a system that outlines how certain activities are directed in order to achieve the goals of an organization. These activities can include rules, roles, and responsibilities.

The organizational structure also determines how information flows between levels within the company. For example, in a centralized structure, decisions flow from the top down, while in a decentralized structure, decision-making power is distributed among various levels of the organization. Having an organizational structure in place allows companies to remain efficient and focused.

Key Takeaways

• An organizational structure outlines how certain activities are directed to achieve the goals of an organization.
• Successful organizational structures define each employee's job and how it fits within the overall system.
• A centralized structure has a defined chain of command, while decentralized structures give almost every employee receiving a high level of personal agency.
• Types of organizational structures include functional, divisional, flatarchy, and matrix structures.
• Senior leaders should consider a variety of factors before deciding which type of organization is best for their business, including the business goals, industry, and culture of the company.

Understanding an Organizational Structure

Businesses of all shapes and sizes use organizational structures heavily. They define a specific hierarchy within an organization. A successful organizational structure defines each employee's job and how it fits within the overall system. Put simply, the organizational structure lays out who does what so the company can meet its objectives.

This structuring provides a company with a visual representation of how it is shaped and how it can best move forward in achieving its goals. Organizational structures are normally illustrated in some sort of chart or diagram like a pyramid, where the most powerful members of the organization sit at the top, while those with the least amount of power are at the bottom.

Not having a formal structure in place may prove difficult for certain organizations. For instance, employees may have difficulty knowing to whom they should report. That can lead to uncertainty as to who is responsible for what in the organization.

Having a structure in place can help with efficiency and provide clarity for everyone at every level. That also means each and every department can be more productive, as they are likely to be more focused on energy and time.

Centralized vs. Decentralized Organizational Structures

An organizational structure is either centralized or decentralized. Traditionally, organizations have been structured with centralized leadership and a defined chain of command. The military is an organization famous for its highly centralized structure, with a long and specific hierarchy of superiors and subordinates. In a centralized organizational system, there are very clear responsibilities for each role, with subordinate roles defaulting to the guidance of their superiors.

There has been a rise in decentralized organizations, as is the case with many technology startups . This allows companies to remain fast, agile, and adaptable, with almost every employee receiving a high level of personal agency. For example, Johnson & Johnson is a company that's known for its decentralized structure.

As a large company with over 200 business units and brands that function in sometimes very different industries, each operates autonomously. Even in decentralized companies, there are still usually built-in hierarchies (such as the chief operating officer operating at a higher level than an entry-level associate). However, teams are empowered to make their own decisions and come to the best conclusion without necessarily getting "approval" from up top.

Types of Organizational Structures

Functional structure.

Four types of common organizational structures are implemented in the real world. The first and most common is a functional structure. This is also referred to as a bureaucratic organizational structure and breaks up a company based on the specialization of its workforce. Most small-to-medium-sized businesses implement a functional structure. Dividing the firm into departments consisting of marketing, sales, and operations is the act of using a bureaucratic organizational structure.

Divisional or Multidivisional Structure

The second type is common among large companies with many business units. Called the divisional or multidivisional (M-Form) structure, a company that uses this method structures its leadership team based on the products, projects, or subsidiaries they operate. A good example of this structure is Johnson & Johnson. With thousands of products and lines of business, the company structures itself so each business unit operates as its own company with its own president.

Divisions may also be designated geographically in addition to specialization. For instance, a global corporation may have a North American Division and a European Division.

Similar to divisional or functional structures, team-based organizations segregate into close-knit teams of employees that serve particular goals and functions, but where each team is a unit that contains both leaders and workers.

Flat (Flatarchy) Structure

Flatarchy, also known as a horizontal structure, is relatively newer, and is used among many startups. As the name alludes, it flattens the hierarchy and chain of command and gives its employees a lot of autonomy. Companies that use this type of structure have a high speed of implementation.

Matrix Structure

Firms can also have a matrix structure. It is also the most confusing and the least used. This structure matrixes employees across different superiors, divisions, or departments. An employee working for a matrixed company, for example, may have duties in both sales and customer service .

Circular Structure

Circular structures are hierarchical, but they are said to be circular as it places higher-level employees and managers at the center of the organization with concentric rings expanding outward, which contain lower-level employees and staff. This way of organizing is intended to encourage open communication and collaboration among the different ranks.

Network Structure

The network structure organizes contractors and third-party vendors to carry out certain key functions. It features a relatively small headquarters with geographically-dispersed satellite offices, along with key functions outsourced to other firms and consultants.

Benefits of Organizational Structures

Putting an organizational structure in place can be very beneficial to a company. The structure not only defines a company's hierarchy but also allows the firm to lay out the pay structure for its employees. By putting the organizational structure in place, the firm can decide salary grades and ranges for each position.

The structure also makes operations more efficient and much more effective. By separating employees and functions into different departments, the company can perform different operations at once seamlessly.

In addition, a very clear organizational structure informs employees on how best to get their jobs done. For example, in a hierarchical organization, employees will have to work harder at buying favor or courting those with decision-making power. In a decentralized organization, employees must take on more initiative and bring creative problem solving to the table. This can also help set expectations for how employees can track their own growth within a company and emphasize a certain set of skills—as well as for potential employees to gauge if such a company would be a good fit with their own interests and work styles.

What Are Some Types of Organizational Structures?

The four types of organizational structures are functional, multi-divisional, flat, and matrix structures. Others include circular, team-based, and network structures.

What Are the Key Elements of an Organizational Structure?

Key elements of an organizational structure include how certain activities are directed in order to achieve the goals of an organization, such as rules, roles, responsibilities, and how information flows between levels within the company.

What Is an Organizational Structure Example?

An example of an organizational structure is a decentralized structure, which gives individuals and teams high degrees of autonomy without needing a core team to regularly approve business decisions. A good example of this decentralized structure is Johnson & Johnson. With thousands of products and lines of business, the company structures itself so each business unit operates as its own company with its own president.

What Is an Organizational Structure Chart?

Organizational structures are normally illustrated in some sort of chart or diagram like a pyramid, where the most powerful members of the organization sit at the top, while those with the least amount of power are at the bottom.

What Is the Best Organizational Structure?

There is no one best organizational structure, as it depends on the nature of the company and the industry it operates in.

The Bottom Line

There are entire fields of study based on how to optimize and best structure organizations to be the most effective and productive. Senior leaders should consider a variety of factors before deciding which type of organization is best for their business , including the business goals, industry, and culture of the company.

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Organizational Structures: But which to use?

Centralized, decentralized, linear, horizontal, traditional, matrix… there are several  organizational structure examples , and each one is better suited to a particular business type and process model .

In this post, we’ll analyze and exemplify 5 of them, so you can understand their advantages and disadvantages, and choose which one to employ in your organization.

See also: Market Acknowledged Organizational Change Management Models

Organizational structure examples

Among the types of organizational structures, 3 of them stand out, with the first one presenting 3 subtypes.

We’ll discuss their characteristics and exemplify some business areas that best fit these different organizational structure styles.

1- Line, functional and line-and-staff structures

Organizational structure example – line.

The traditional line structure is organized in such a way that a president or CEO (Chief Executive Officer) is at the top. Then there are the directors or VPs (Vice-Presidents) of specific areas, followed by managers, and so on, until the operational personnel. This structure can be seen below:

It’s a very rigid structure, with little information exchange, typical of bureaucratic companies in which there is little collaboration.

Nowadays it’s unusual, but in the past it was practiced in military, religious, and even academic organizations. In this way, one area doesn’t interfere with the work of another, and the staff only obeys the ‘orders’ of the immediate superior.

Organizational structure example – Functional

The functional organizational structure derives from the line structure; the difference is that employees in an area need to report to all the directors .

For instance, an employee from the finance department may be called upon by the HR (Human Resource) manager to handle a matter related to this area. The IT (Information Technology) manager may do the same, and so forth.

It’s a way to avoid centralization and excessive specialization in tasks in your area.

Here’s what this hierarchy looks like:

Today this is the most used structure in many companies and organizations, but this doesn’t mean it’s the best one.

Everything will depend on the relationship between managers and, especially, on the appropriate use of IT to aid in internal communication .

This organizational structure example is suitable for small companies, such as manufacturing, hotels, medium-sized car repair shops, medical clinics, or other types of business where informal structures allow functional control over employees without generating conflicts between managers.

Organizational structure example – Line-and-staff

It’s similar to the line structure, except that in this case  the staff advises, gives opinion, makes reports, authorizes and supports the organization .

Organizational structure examples of this type include insurance companies, engineering firms, law firms, regulatory agencies, etc. In other words, organizations that need isolated technical advice to assist employees who handle or manage the day-to-day operations on the front line.

2- Project-based structure

Highly dynamic and creative companies – such as software developers, architecture firms, special industrial equipment installation projects and event organization companies – typically use this structure. It’s characterized by a series of specialized employees, ready to compose a work team as needed.

In each project, these collaborators report to a different leader . Once they complete the project, a manager assigns them a new project and leader.

3- Matrix structures

This structure is widely used both by companies that are constantly launching new products and marketing campaigns , for example, and by companies that have project-based structures, but also believe that functional supervision is necessary and important.

An example of a business area that would benefit from this type of organizational hierarchy is consultancy for ERP Software installation.

Each project must occur independently. However, it’s important to have a senior manager of each department (finance, operations, HR, marketing, etc.) to check if everything is in accordance with the company’s policies and level of services.

Check out:  The 10 Pitfalls of Email Usage to Track Tasks

Knowing the best organizational structure example for your company is crucial, as well as modeling and automating your processes.

41 Comments . Leave new

greate presentation thank you

You are welcome!

Wow! This is beyond helpful! You’re an angel for this!

Hi Faris, thank you for your comments.

Thanks a lots

You are welcome.

Thank you for the simplification.

You’re welcome!

Thank you very much!

You’re welcome!

Do you have an example of a firm using a functional organizational structure, please ? Thank you 🙂

Thanks for sharing. I want to know if u have something on employee benefits?

Unfortunately we don’t have this kind of content here on our blog.

Can you give examples of companies that Follow Line organization, line and staff, functional and committee organization?

I need help on a management structure of a business owned by two people. where there is no employees. (entrepreneurial sector)

you are welcome.

Very interesting for us to learn from

its an are good example of business structure

Wow, I like the presentation. It has helped me on my assignment.?

Very informative Thank you .

Thank you . It was very helpful

More than helpful thank you so much!!!

Please help me create a one man organisation

I hope this message finds you well. I am a young entrepreneur and looking at getting a pty ltd structure management and I am conflicted, Please help

Thank you. It is very informative & helpful.

What is the type of organizational structure in HKTV Mall? What analysis should I need to explain become clearly, tks a lot?

What are the differences among 5 types of organization?

I like this

Thank you so much this has helped me so much in my studies!!

awesome . kindly give more examples like these on topics of management like on different perspectives of management etc

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How to create an organizational chart (with free examples)

An organizational chart outlines how your company functions in real time. This diagram shows the reporting relationships between job titles and the roles in your organization. We’ll explain the different types of organizational charts and provide free templates for you to customize your own.

You’re having a family dinner when your grandma pulls out the family tree. She uncrinkles the piece of paper and traces her name down the line. As she searches, her finger lands on a name. “See! There he is, right next to your cousin Charles!” She points to the name of your third cousin, proving that this name matches that of a famous poet. 

In this guide, we’ll explain how to make an org chart, the different types of organizational charts, and provide free templates so you can customize and build your own.

How to make an organizational chart

An organizational chart is a way to visualize your company’s structure. To create an org chart, you’ll need to gather team member information and decide how you’d like to build the chart. 

As you consider the reporting relationships in your organization, you can plan your chart from top to bottom. 

1. Define scope

You can treat your organizational chart like any other new project you work on. Defining the scope of your org chart can help ensure it clearly represents your team structure . The scope will determine the overall purpose of your organizational chart.

Consider these questions to get started:

Will your org chart act as a resource for team members to know who’s who within the company? 

Will you share your organizational chart with external stakeholders or partners? 

Will you need multiple charts for different levels of the company? 

Asking these questions from the start can help you gather the right information and map out your chart.

2. Gather information

Gathering information is the most important step of making an organizational chart because without the right information, you won’t be able to proceed.  You can gather information by surveying individual team members through email or working with your HR department. 

You’ll need up-to-date information about the people in your company, including employee names and their latest job titles. You’ll also need to understand reporting relationships throughout your company, such as the hierarchy between managers and direct reports. Consider gathering headshots of your team for added personalization.

3. Decide how to build your chart

Deciding how to build your organizational chart is crucial because different tools can make the process easier. Drawing out your org chart by hand isn’t time efficient and will make your results hard to share, so consider harnessing the power of a tool for this process. 

Using an editable PDF can save you time because the template is pre-built with placeholders. You can then easily share the PDF with the rest of your company. 

4. Plan for updates

After creating your org chart, use a team calendar to plan for regular updates. After all, it’s likely that your company structure and team dynamics will change often. 

People switch in and out of positions, new employees are hired, and reporting relationships change. With a digital org chart, it’s easy to update the structure and redistribute it to team members.

Organizational chart templates

Creating an organizational chart can be easier when building from an org chart template. Most companies follow similar structures, whether it’s a top-down structure or a matrix structure. 

You can use the org chart examples below as jumping-off points. To create your custom org chart, determine which organizational type best represents your company structure. Then, update the template to fit your unique team needs.

Types of organizational charts

There are four common org chart types. Each one of these charts uses a different chart design and represents a different way that a company might function. Since an organizational chart is basically a hierarchy chart—a visual translation of your company’s internal structure—the chart type you use should mirror your organization’s reporting relationships and decision-making procedures.  

1. Functional top-down

A functional top-down org chart is the most common structure, with the company functioning as a hierarchy. At the top of this organizational structure there is one team member, who usually has the title of president or CEO. 

Branching off from that team member are the leaders who are next in charge, like the company vice presidents. The organizational hierarchy extends further into departments and eventually branches into teams. 

2. Matrix organizational chart

The matrix organization is a more complex structure than the traditional top-down design. If your company uses this reporting structure, team members report to multiple managers. 

While employees likely have a primary manager they report to for their department, they may also report to a project manager . These secondary project managers also have department managers they report to, which makes the matrix org chart look rectangular instead of tree-like. 

3. Divisional structure

A divisional organizational structure is a high-level version of the traditional hierarchical structure. Divisional structures make sense for companies that have departments working independently from one another. 

For example, companies with separate product lines may work in divisional structures because each product line has separate IT, marketing, and sales departments.

4. Flat organizational chart

The flat organizational chart is unique because it shows few or no levels of management. This type of organizational structure may be present in a small business or a modern business that’s experimenting with no chain of command. 

With this type of organizational structure, the company promotes wide-spread team member self-management and decision-making. 

How to use an org chart

You can benefit your company by using an organizational structure because it provides a visual representation of different departments and job titles in action. This chart can help team members understand how to collaborate with one another and feel confident in their role and responsibilities. 

Visualize reporting relationships

As a manager, you may use an org chart to show work responsibilities and reporting relationships to new team members. When onboarding new hires, the org chart helps team members get to know their fellow teammates and what they do. It also helps new team members remember who’s who within the company. 

Manage growth and change

Organizational charts can also help the leadership team stay organized and manage growth or change within the company. For example, if a department head notices that one team has become larger than other teams, they can shift or hire new team members to create balance.

See where everyone fits

An org chart creates clarity by showing everyone in the company where they fit in the organizational structure. If a new member joins the team, they can glance at the organizational chart and understand that they have five other members on their team, two assistants below them, and a project manager above them. They can also see that their project manager reports to a department manager.

Improve communication

Having an established organizational structure for your company can improve communication because it makes reporting relationships clear. Without an organizational chart in place, team members may not know who to go to when they have questions. The org chart makes it clear who leads what, so team members can feel empowered to ask questions and collaborate with others.  

Create visual directory

An org chart is essentially a visual directory of your organization. You can  update the chart when team members get promoted or when they leave. Keeping a visual directory up to date keeps everyone informed of who’s working at the company and what their current position is.

Limitations of using an org chart

While organizational charts can increase communication among teams, there are limitations of using them. Knowing these limitations can help you find solutions to any potential issues before they occur.

Can get outdated quickly

Org charts can get outdated quickly as companies restructure and shift team roles. Team members must be mindful and keep the org chart updated with current company structure and staff names. 

Solution: Assign someone to regularly update and redistribute your organizational chart in order to maintain this valuable resource.

Only shows formal relationships

The organizational chart is a one-dimensional document, so it doesn’t offer much explanation beyond the reporting structure it provides. While it’s useful in visualizing the basic company structure, it only shows formal relationships. Many companies function and thrive on various informal reporting relationships that wouldn’t show up on a traditional org chart. 

Solution: Use an org chart as a jumping off point, but keep in mind there may be other working relationships that the org chart doesn’t capture.

Doesn’t display management style

While the org chart shows managers and the team members that report to them, it won’t show what each manager is like. For example, the org chart may show that one manager has two team members and another manager has five team members. Assumptions may be made that the manager with more team members is a stronger leader, but the org chart won’t show that the manager with less team members has a more hands-on management style . 

Solution: Use your org chart as a first point of reference, but be mindful that face to face contact is the best way to understand reporting relationships among internal teams.

Can be difficult to update

Not only can printable org chart worksheets or drawn-out organization charts become outdated quickly, they can also be difficult to update. After all, if your chart is created in a static tool, you’ll have to start from scratch every time your organization’s structure changes.

Solution: Instead of creating your chart in a fixed workspace, opt for a dynamic tool. Platforms like Microsoft Word, PowerPoint, and Excel are easily updated. Or, take it one step further with org chart software or a project management tool that uses integrations and apps to connect your team to data visualizers that map out workflows, like LucidChart and Miro .

Streamline your organizational structure with a chart

While there are limitations to organizational charts, these charts offer a helpful way to understand your company structure. It can also improve communication with upper management by clarifying roles and responsibilities. To build an organizational chart for your company, use our free editable PDFs and customize them as you see fit. 

Need help streamlining teamwork? Find out how Asana helps teams communicate effectively. 

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How to Write Management Team Section in a Business Plan

Free Ultimate Guide On Writing A Business Plan

• May 1, 2024

A business is as efficient as its team and its management. Therefore, it becomes important for business owners to build a structured management team that achieves the objectives and goals set by the organization.

Andrew Carnegie, an American steel magnate, beautifully summarized it –

“Teamwork is the ability to work together toward a common vision. The ability to direct individual accomplishments toward organizational objectives.”

A business management plan helps build an efficient team and formalizes business operations. This helps businesses streamline strategies to achieve their goals.

So, if you are a business owner who is looking to formalize their business structure and write the management team section in their business plans, this guide is for you.

Here’s a sneak peek into what you’ll learn:

Sounds good? Let’s dive in.

What is the Management Section of a Business Plan?

The management section of a business plan is an in-depth description of a business’s team, its structure, and the owners of a business.

The section discusses ‌who is on the management team—internal and external, their skill sets, experiences, and how meaningfully they would contribute to an organization’s mission statement and goals.

Now that we have defined what the management section of a business plan is, let’s understand why it is so important.

Importance of a Business Plan Management Section

The management section helps you to

• Showcase leadership: The management team section helps you showcase how qualified and experienced team you have.
• Clarify team roles: It outlines who does what in your team, ensuring everyone knows their key performance areas and works together towards the same goals.
• Attract investors: Present your team in the best possible way, as it is one of the key factors in making the final investment decision.

What to include in the Management Section of a Business Plan?

Now that you know why exactly a management section in the business plan is necessary, let’s move ahead with what to include in it:

1. The Management Team

An organization’s entire management team can be divided into parts — the internal team and the external team. Let us see those in detail:

The Internal Management Team

A business team consists of several departments. The most common departments are—marketing, sales, IT, customer service, operations, finance, and HR.

These departments depend on the nature and functioning of your business. For example, a dental clinic may not require a sales department per se.

The entire management team is distinguished according to their responsibility. This helps the business owners and investors be aware of the roles, benefits, ESOPs (if applicable), profit sharing (for sales), work contracts, NDAs (Non-Disclosure Agreements), and Non-Competition Agreements of the entire team.

It is recommended that business owners collect and document the following information about their team:

• Educational Background
• Work Experience
• Accomplishments

For example, your present VP of Marketing helped their previous company grow its bottom line from $3 million to $10 million over 18 months.

The External Management Team

The external management team is usually composed of—advisory board members and professional services.

Advisory board members help by:

• Bringing their industry expertise, experience, and knowledge to the table.
• Offering strategic advice and helping the business develop long-term goals with future considerations in mind.
• Having a lot more contacts than any other individual can help businesses grow.

Credible advisory board members show great commitment to a company’s growth. Therefore, it becomes important to mention their experience and specialization in the business management plan.

The advisory board members can help give valuable advice that internal team members need or lack.

Usually, board members meet quarterly or monthly to provide strategic guidance in place of stock options in your company. This helps attract the best advisors and motivates them to invest in your business.

On the other hand, professional service helps by

• Offering highly specialized advice and sharing knowledge.
• Helping through the implementation process of strategies.

Such services help businesses leverage skills that would be difficult to build and acquire over a short period.

Examples of such professional services are:

• IT Consultants
• Business coaches and consultants

After a brief overview of the management team, let’s move forward.

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2. The Management Team Gaps

The management team gap is an important part of the management section. Primarily because it helps document if your management team currently has gaps or missing skills.

Your team may lack a few required skills while starting. The management team gaps help you to be aware and make efforts to close this gap.

As a business owner, you must document what positions are missing and who ought to fill those positions or take responsibility.

For example, if you need a VP of Sales, clearly document this in the section.

Also, write down the job description and key responsibilities to be undertaken. For example—you might mention that the role requires 10 years of experience in the sales domain. The applicant must have experience handling a sales team, closing new accounts, and working in tandem with the marketing team.

Be as detailed as possible. This will help you build a checklist while interviewing the right candidate and also win investor confidence in your managerial skills.

Here are a few key positions you would want to include in your management team business plan:

• Founder and/or CEO
• Chief Technical Officer (CTO)
• Chief Marketing Officer (CMO)
• Head of Product Management (PM)
• VP of Sales
• VP of Marketing
• Business Development Manager
• Customer Service Manager
• Sales Managers/Sales Staff
• Human Resources Manager
• Advisory Board Members

3. The Management Structure

The management structure defines how a business organizes its management hierarchy. A hierarchy helps determine all team members’ roles, positions, power, and responsibilities.

The management structure also depends upon the type of business ownership. Business ownership can be—a sole proprietorship, partnership, or LLC.

Following is a sample management structure of an organization.

Now that we understand what details we need to document in business management plans, let’s have a look at the example.

Example of a Management Section Plan

[management section of a hotel], [management team], internal team members.

Name: Charles Fargo Role: Owner Responsibility: Formulating key strategies, defining budgets, and building a business plan Experience: 35 years of owning multiple hotels in Las Vegas Educational Background: B.Sc in Hospitality Management from South Dakota State University.

Name: Michael Clark Role: General Manager Responsibility: Overall hotel operations – guest interactions, revenue management, brand ambassador of the hotel, customer satisfaction, and experience, leadership to all departments Experience: 25 years working with several technology hotels as the general manager. Educational Background: MBA from Wharton School

Name: George Trump Role: Department Manager Responsibility: Manage employees, smooth coordination amongst employees, plan daily affairs of the department, strategize, prepare reports, and deal with complaints and suggestions. Lead team members to function as a team Experience: 15 years working as a department manager Educational Background: BSc in Hotel Management from Texas University

Note: There can be multiple Department Managers depending on the nature of your business. In the case of hotels, departments can include – housekeeping, logistics, security, food, and banquets.

Name: Donald Clooney Role: Marketing and Sales Manager Responsibility: Increase occupancy and generate revenue. Position the hotel as an option for leisure activities, relaxation, and holidays. Experience: 11 years working as the marketing and sales manager for hotels Educational Background: MBA in Tourism and Hospitality from Midway University

Name: Oprah Williams Role: Human Resources Manager Responsibility: Recruit and train hotel staff, maintain smooth onboarding process for new recruits, train, counsel, and coach staff, resolve conflicts, and conduct performance reviews Experience: 9 years working as human resources manager for hotels Educational Background: MBA in Human Resources Management from California University

External Team Members

Advisory Board Member

#1 Richard Branson Responsibility: Strategic advisory for sustainable growth and expansion Experience: Founder of Virgin Group

Professional Services

#1 Digital Marketing Agency – Neil Patel – Help market and sell our product using digital mediums – blog, website, YouTube, and social media.

[Management Structure]

There is a gap in one key position in our startup.

#1 Chief Finance Officer (CFO) Responsibilities: Finance, Accounting, Tracking Profit and Loss, and overseeing FP&A (Financial Planning and Analysis)

So, that’s it for today! Now that you know how to write a management team section, make sure you write the best one by mentioning all the necessary details.

If you are still confused about writing the management team sections, then you can visit various sample business plans to know more. You can even use smart business planning software to smooth your business planning process.

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Frequently Asked Questions

What tone should i use when writing the management team section.

When writing about your management team in your business plan, use a tone that’s confident, professional, and positive. This shows investors that your team is experienced, qualified, and able to lead your company to success.

Who should be included in the management team's business plan?

In the management team of a business plan, you should include all the key members of the company:

• Top management
• Founder/CEO
• VP of sales

Do I need to include personal information about team members?

In a business plan, it’s not necessary to include personal information about team members unless it directly relates to their role in the business. The focus should be on professional qualifications, experience, and skills that are relevant to their position.

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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How To Write the Management Section of a Business Plan

Susan Ward wrote about small businesses for The Balance for 18 years. She has run an IT consulting firm and designed and presented courses on how to promote small businesses.

Ownership Structure

Internal management team, external management resources, human resources, frequently asked questions (faqs).

When developing a business plan , the 'management section' describes your management team, staff, resources, and how your business ownership is structured. This section should not only describe who's on your management team but how each person's skill set will contribute to your bottom line. In this article, we will detail exactly how to compose and best highlight your management team.

Key Takeaways

• The management section of a business plan helps show how your management team and company are structured.
• The first section shows the ownership structure, which might be a sole proprietorship, partnership, or corporation.
• The internal management section shows the department heads, including sales, marketing, administration, and production.
• The external management resources help back up your internal management and include an advisory board and consultants.
• The human resources section contains staffing requirements—part-time or full-time—skills needed for employees and the costs.

This section outlines the legal structure of your business. It may only be a single sentence if your business is a sole proprietorship. If your business is a partnership or a corporation, it can be longer. You want to be sure you explain who holds what percentage of ownership in the company.

The internal management section should describe the business management categories relevant to your business, identify who will have responsibility for each category, and then include a short profile highlighting each person's skills.

The primary business categories of sales, marketing , administration, and production usually work for many small businesses. If your business has employees, you will also need a human resources section. You may also find that your company needs additional management categories to fit your unique circumstances.

It's not necessary to have a different person in charge of each category; some key management people often fill more than one role. Identify the key managers in your business and explain what functions and experience each team member will serve. You may wish to present this as an organizational chart in your business plan, although the list format is also appropriate.

Along with this section, you should include the complete resumés of each management team member (including your own). Follow this with an explanation of how each member will be compensated and their benefits package, and describe any profit-sharing plans that may apply.

If there are any contracts that relate directly to your management team members, such as work contracts or non-competition agreements, you should include them in an Appendix to your business plan.

While external management resources are often overlooked when writing a business plan , using these resources effectively can make the difference between the success or failure of your managers. Think of these external resources as your internal management team's backup. They give your business credibility and an additional pool of expertise.

Advisory Board

An Advisory Board can increase consumer and investor confidence, attract talented employees by showing a commitment to company growth and bring a diversity of contributions. If you choose to have an Advisory Board , list all the board members in this section, and include a bio and all relevant specializations. If you choose your board members carefully, the group can compensate for the niche forms of expertise that your internal managers lack.

When selecting your board members, look for people who are genuinely interested in seeing your business do well and have the patience and time to provide sound advice.

Recently retired executives or managers, other successful entrepreneurs, and/or vendors would be good choices for an Advisory Board.

Professional Services

Professional Services should also be highlighted in the external management resources section. Describe all the external professional advisors that your business will use, such as accountants, bankers, lawyers, IT consultants, business consultants, and/or business coaches. These professionals provide a web of advice and support outside your internal management team that can be invaluable in making management decisions and your new business a success .

The last point you should address in the management section of your business plan is your human resources needs. The trick to writing about human resources is to be specific. To simply write, "We'll need more people once we get up and running," isn't sufficient. Follow this list:

• Detail how many employees your business will need at each stage and what they will cost.
• Describe exactly how your business's human resources needs can be met. Will it be best to have employees, or should you operate with contract workers or freelancers ? Do you need full-time or part-time staff or a mix of both?
• Outline your staffing requirements, including a description of the specific skills that the people working for you will need to possess.
• Calculate your labor costs. Decide the number of employees you will need and how many customers each employee can serve. For example, if it takes one employee to serve 150 customers, and you forecast 1,500 customers in your first year, your business will need 10 employees.
• Determine how much each employee will receive and total the salary cost for all your employees.
• Add to this the cost of  Workers' Compensation Insurance  (mandatory for most businesses) and the cost of any other employee benefits, such as company-sponsored medical and dental plans.

After you've listed the points above, describe how you will find the staff your business needs and how you will train them. Your description of staff recruitment should explain whether or not sufficient local labor is available and how you will recruit staff.

When you're writing about staff training, you'll want to include as many specifics as possible. What specific training will your staff undergo? What ongoing training opportunities will you provide your employees?

Even if the plan for your business is to start as a sole proprietorship, you should include a section on potential human resources demands as a way to demonstrate that you've thought about the staffing your business may require as it grows.

Business plans are about the future and the hypothetical challenges and successes that await. It's worth visualizing and documenting the details of your business so that the materials and network around your dream can begin to take shape.

What is the management section of a business plan?

The 'management section' describes your management team, staff, resources, and how your business ownership is structured.

What are the 5 sections of a business plan?

A business plan provides a road map showing your company's goals and how you'll achieve them. The five sections of a business plan are as follows:

• The  market analysis  outlines the demand for your product or service.
• The  competitive analysis  section shows your competition's strengths and weaknesses and your strategy for gaining market share.
• The management plan outlines your ownership structure, the management team, and staffing requirements.
• The  operating plan  details your business location and the facilities, equipment, and supplies needed to operate.
• The  financial plan  shows the map to financial success and the sources of funding, such as bank loans or investors.

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Top 10 Organizational Plan Templates with Samples and Examples

Taranjeet Singh

Organizational plans are the foundation upon which companies build their strategies, set their objectives, and chart their course toward success. Did you know organizations with well-defined plans are 50% more likely to achieve their goals and objectives? It's no secret that a well-structured plan can be the key to success in business and management.

The Importance of Organizational Plans

Organizational plans are the blueprints that guide an organization toward its goals and aspirations. These plans outline the structure, roles, and responsibilities of individuals within the organization, ensuring that everyone is on the same page.

Fast-track your success to the next level with our coaching action plan templates .

These actionable plans provide a clear direction for the company, helping to prioritize tasks and allocate resources efficiently. In essence, organizational plans are the roadmaps that lead businesses to their desired destinations.

Organizational Plan Templates from SlideTeam: Your Solution

Creating a plan from scratch can be demanding, especially when dealing with complex structures or tight timelines. But the question is, how can you create an effective plan that aligns your team and maximizes your chances of success?

The answer is Organizational Plan Templates from SlideTeam.

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These PowerPoint templates offer a comprehensive and visually appealing framework for developing organizational plans.

Moreover, these templates are designed to be flexible, allowing you to customize them to suit your requirements. They provide the structure and the guidance, but you have the creative freedom to make them your own.

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In the fast-paced business world, time is of the essence, and with our powerpoint templates , you can save valuable hours and focus on your business. You can focus on what truly matters – strategizing, communicating your vision, and guiding your team towards success.

In this blog, we will explore how SlideTeam's templates work and provide practical tips for leveraging these templates to maximize the efficiency and clarity of your organizational planning. Let’s begin!

Template 1: Organizational Planning PowerPoint Deck

With over 35 information-packed slides, this PowerPoint deck supports your decision-making and improves your company's performance. Explore vital aspects of your organization's current situation with dedicated slides that showcase key performance indicators (KPIs), including attraction KPIs, value KPIs, retention KPIs, and engagement KPIs. Assess your organization's readiness for development using a handy checklist, and gain a clear understanding of the organizational development framework, encompassing the "why," "what," and "how" of growth. Additionally, the deck provides insights into the selection of management styles, highlighting their features and their impact on your organization's success rate. Identify areas for improvement with a specialized slide on management skills training, outlining employees' needs, goals, and estimated training costs. Download our PowerPoint deck and take your strategic development to the next level.

Download Now!

Template 2: Strategic Organizational Plan for Leadership Development PowerPoint Theme

This powerful one-page presentation delivers all the essential information for effective leadership development. It is structured to help you outline leadership goals, strategies, Key Performance Indicators (KPIs), and target dates with utmost clarity and conciseness. Download this PowerPoint theme today to streamline your leadership development efforts and drive success.

Template 3: Approach And Activities to Restructure Organizational Plan PowerPoint Layout

This PowerPoint presentation is divided into three critical sections, each offering strategic insights and actionable steps.

The first section, "Operational and Commercial Due Diligence," provides a detailed overview of assessing your organization's current state and identifies key areas that require attention.

The second section, "First 100 Days - Successfully Takeover Control," is a roadmap for the initial restructuring phase, ensuring a seamless transition of power.

The third section, "Restructuring + Interim Management," delves into the core activities required to implement structural changes efficiently.

Download our PowerPoint Set to make informed decisions to restructure your organization effectively.

Template 4: Organizational Planning Process for Virtual Terrorism PowerPoint Preset (to avoid it)

This presentation unfolds a strategic roadmap in four concise steps. Step 1 involves an overall analysis of your work culture's vulnerabilities and threats related to virtual terrorism. Step 2 delves into establishing a robust cybersecurity framework, a cornerstone for your defense. Step 3 helps you identify and define the specific programs required to enhance your cybersecurity measures. Finally, Step 4 guides you in documenting and formalizing your cybersecurity program, ensuring its continuity and accountability. Download the C yber Security PPT PowerPoint Deck to fortify your defenses.

Template 5: Strategic Perspective for Effective Organizational Planning PowerPoint Template

This presentation offers a unique approach, presenting a three-pronged strategy to navigate the intricate world of strategic planning. Hindsight, the first perspective, empowers you to meticulously analyze the past and determine its impact on your organization.

Insight, the second perspective, delves deep into discovering organizational problems. Identify their root causes, enabling you to address issues at their core rather than merely addressing surface-level symptoms.

Foresight, the final perspective, equips you to construct a forward-thinking strategy to alleviate the impact of identified problems. By taking a proactive approach, you can make sure that your organization remains resilient and agile in the face of future challenges.

Download this PPT Slide and transform your organizational planning into a strategic powerhouse.

Template 6: Manual Steps for Strategic Organizational Planning PowerPoint Layout

This PowerPoint Layout is the definitive resource for professionals seeking a strategic edge in organizational planning. It offers a concise and compelling roadmap comprising eight essential manual steps to guide you through the strategic planning process.

Each step is designed to provide a proper understanding of the strategic planning journey, ensuring that your organization moves forward with clarity and precision. This template equips you with the knowledge and tools required for effective decision-making, aligning your team's efforts towards common objectives.

With its clear and concise content, this slide is your trusted companion for strategic organizational planning.

Download this invaluable resource now and steer your organization towards a prosperous future.

Template 7: 6 Stage Cycle of Organizational Planning Process PowerPoint Preset

This PPT presentation highlights the six critical stages of the planning process, offering a structured approach to help your organization reach its goals.

Starting with the crucial initial step of setting clear objectives, this template guides you through gathering relevant data, followed by a meticulous information analysis. Once data has been thoroughly examined, the presentation assists in creating a well-structured plan, ensuring your strategy aligns perfectly with your objectives.

The implementation phase is detailed, providing valuable insights into effectively putting your plan into action. Finally, the monitoring stage is presented to help you track and evaluate your plan's progress, ensuring adjustments can be made as needed.

Download it now to equip your team with a clear and concise roadmap to success.

Template 8: 5 Elements for Organizational Planning and Objectives PowerPoint Template

This PowerPoint presentation is designed to streamline your organizational planning and objectives by highlighting five critical elements: Plan, Objectives, Innovation, Monitoring, and Investment. With a concise slide, it provides a straightforward and highly usable resource for conveying key concepts to your team or stakeholders. It simplifies complex ideas and helps you convey the essence of your strategic vision. Download the template and empower your presentations with clarity, simplicity, and impact.

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Template 9: Multiple Organizational Projects Plan Report PowerPoint Layout

This PowerPoint presentation is an invaluable tool for presenting and tracking multiple projects within your organization.

Our template provides a clear, concise, and data-driven overview of your projects, including project details such as tasks, status, owner, assigned team members, anticipated start and end dates, actual end dates, estimated costs, and actual costs. With this comprehensive report, you can easily monitor the progress of your projects, ensuring that they stay on track and within budget.

Download PowerPoint template and take control of your projects like never before.

Template 10: One Pager IT Company Strategic Organizational Plan in Entrepreneurship PowerPoint Presentation

This dynamic and informative presentation offers an overview of your IT company's strategic roadmap, designed to propel your business to new heights.

In this presentation, you will find a thorough company overview showcasing your mission, values, and competitive advantage, allowing your audience to understand your organization's core principles. Dive into your organization-wide strategies, which outline the path to success.

The strategic organizational goals section breaks down your financial, customer, international/operational, people, and learning objectives, guiding your team towards clear, actionable targets. Additionally, our presentation includes an easily navigable organizational chart, providing insight into your company's structure and hierarchy.

Download this template to bring your strategic vision to life.

In exploring Organizational Plan Templates from SlideTeam, we've seen how these powerful tools can elevate your business planning. With their ready-made structure and visual appeal, these templates simplify crafting robust organizational plans, allowing you to focus on the essence of your strategy. By implementing these templates, your organization gains a more precise direction, smoother communication, and better resource allocation. Embrace the future with a well-defined roadmap, and watch your organization thrive.

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Organizational Plan in Entrepreneurship: Meaning and Types

What is an organizational plan.

Organizational Planning includes establishing the business’s legal ownership, formal structure, and operational duties. It involves selecting the suitable legal structure, whether sole proprietorship, partnership, or corporation, influencing taxation, liability, and ownership aspects. Furthermore, it describes the formal structure by defining roles, responsibilities, and interactions among members. Additionally, organizational planning outlines the informal organization or culture, including attitudes, behaviors, and communication styles within the business.

Key Takeaways: The organizational plan is a mandatory component of a business blueprint, defining ownership structure and operational procedures. The organizational plan provides a strategic roadmap for sustainable growth and success, regardless of the business type or legal structure. Distinct types of organizational plans include manufacturing, wholesale, retail, and service, each tailored to specific business models. Legal structures like Sole Proprietorship, Partnership, Joint Hindu Family, and Corporation offer distinct advantages and challenges.

Table of Content

Types of Organizational Plans

1. manufacturing organizational plan, 2. wholesale organizational plan, 3. retail organizational plan, 4. service organizational plan, types of organization based on legality, 1. sole proprietorship, 2. partnership, 3. joint hindu family, 4. cooperative society, 5. corporation.

a. Production of Tangible Goods : Manufacturing organizations focus on producing tangible goods such as consumer products, industrial equipment, or raw materials. The focus lies on optimizing production processes to ensure efficiency and quality.

b. Key Components: Within the organizational structure, departments like production, engineering, procurement, and quality assurance play key roles. Each department contributes to the smooth operation of the manufacturing process, from sourcing raw materials to delivering finished products.

For instance, a clothing manufacturer may design, produce, and distribute its branded apparel. It will involve various stages, including fabric sourcing, garment production, quality control, and distribution logistics .

a. Procurement and Resale: Wholesale operations involve purchasing products in bulk from manufacturers or suppliers for resale to retailers or other businesses. The focus is on procuring goods at competitive prices and distributing them efficiently.

b. Organizational Structure: The organizational structure typically includes departments such as procurement, logistics, warehousing, and sales . Each department plays a crucial role in managing inventory, fulfilling orders, and maintaining customer relationships.

For instance, A wholesale distributor of electronic components purchases products in bulk from manufacturers and resells them to distinct electronics retailers and repair shops. It involves managing inventory levels, coordinating shipments, and maintaining relationships with suppliers and customers.

a. Direct Sales to End Consumers: Retail firms directly sells products or services to end consumers for personal or household use. The focus on providing a convenient and satisfying shopping experience for customers .

b. Organizational Components: Key components of the organizational structure include store operations, customer service, merchandising, and marketing departments. These departments work together to attract customers, manage inventory, and ensure customer satisfaction.

For instance, A clothing retail store sells directly to individual customers through its physical locations and online platform. The store focuses on offering a wide range of products, providing excellent customer service, and creating an inviting atmosphere for shoppers.

a. Provision of Intangible Services: Service-oriented businesses provide intangible services such as professional expertise, consulting, or personal services. The focus is on delivering high-quality services that meet the needs of clients.

b. Organizational Structure : Departments like client management, service delivery, quality assurance, and business development are common in the organizational structure of service businesses. Each department plays a vital role in delivering exceptional service to clients.

For instance, A management consulting firm provides strategic advisory services to corporate clients. The firm’s organizational structure includes departments for client management, service delivery, and business development. Consultants work closely with clients to understand their needs, develop tailored solutions, and ensure successful outcomes.

A sole proprietorship is a business owned and operated by a single individual who is personally responsible for all aspects of the firm. It is the simplest form of business entity, where the owner assumes full control over decision-making and management.

• Characteristics: In a sole proprietorship, the business and the owner are considered the same legal entity, implying that the owner is personally liable for all business debts and obligations. This structure shall be characterized by its simplicity in establishment, as there are minimal legal formalities involved. Additionally, the sole proprietor retains all profits generated by the business, providing a direct incentive for entrepreneurial efforts.
• Legal Structure: Legally, there is no distinction between the owner and the business in a sole proprietorship. It means that the owner bears unlimited personal liability, exposing personal assets to business risks. Consequently, creditors can pursue the owner’s assets to satisfy business debts or legal claims.
• Advantages : Sole Proprietorship offers direct control and autonomy to the owner, allowing for quick decision-making and agility in responding to market changes. Furthermore, there are minimal regulatory requirements and administrative burdens associated with this structure, making it attractive to small business owners and startups.
• Disadvantages: The primary cons of a sole proprietorship is unlimited personal liability, which exposes the owner’s assets to business risks. Moreover, sole proprietors may face challenges in accessing capital or securing financing, as lenders may perceive higher risk due to the lack of formal structure and limited liability protection. Additionally, there may be difficulties in ensuring business continuity in the event of illness, incapacity, or death of the owner.

For instance, a local bakery owned and managed by a single individual. Here, the owner is responsible for all aspects of the business, including baking, sales, marketing, and customer service. The bakery operates under the proprietor’s name, and all profits generated belong solely to the owner.

A partnership refers to a business structure owned and managed by two or more individuals who share profits, losses, and responsibilities. Partnerships are formed through mutual agreements between the partners , outlining their respective roles, contributions, and rights within the business.

• Characteristics: Partnerships are characterized by shared decision-making, where partners collaborate on strategic initiatives and operational matters. Each partner contributes capital, skills, or resources to the business, and profits are distributed among partners based on the terms of the partnership agreement . Partnerships foster collaboration and synergy among partners, leveraging diverse skill sets and expertise.
• Legal Structure: Partnerships can take various forms, including general partnerships, limited partnerships, or limited liability partnerships , each with distinct legal implications. In a general partnership, all partners have equal rights and responsibilities, while limited partnerships involve both general partners with unlimited liability and limited partners with liability limited to their investment. Limited liability partnerships offer liability protection to all partners, similar to corporations.
• Advantages : Partnerships offer shared responsibilities, allowing partners to leverage each other’s strengths and expertise. They also provide access to a broader pool of resources and capital, facilitating business growth and expansion. Additionally, partnerships benefit from flexible management structures and simplified regulatory requirements compared to corporations.
• Disadvantages: Despite the benefits, partnerships may face challenges such as shared profits and joint liability for business debts and obligations. Conflicts among partners, differences in management styles , and disagreements over business decisions can hinder productivity and strain relationships. Moreover, partnerships require careful planning and clear communication to ensure alignment of goals and expectations among partners.

For instance, a law firm with multiple partners sharing ownership and management responsibilities exemplifies a partnership structure. In this scenario, lawyers join forces to provide legal services, share overhead costs, and distribute profits based on their respective contributions and performances.

A Joint Hindu Family (JHF) is a traditional Indian business structure where family members collectively manage the business under the Hindu Succession Act. It will be governed by cultural and religious customs, focusing on family values, hierarchy, and lineage.

• Characteristics: In a Joint Hindu Family, business decisions are influenced by familial relationships, traditions, and customs. The eldest male member, known as the Karta , holds authority over business affairs, with other family members serving as coparceners . The structure reflects patriarchal norms, with family cohesion and lineage preservation as primary objectives.
• Legal Structure: Under the Hindu Succession Act, the JHF operates as a unified entity, with collective ownership and management by family members. While the Karta assumes leadership and decision-making responsibilities, other family members have rights to ancestral property and share in business profits and losses.
• Advantages : JHFs benefit from pooling family resources, shared responsibilities, and continuity within the family lineage. They construct a sense of unity and belonging among family members, promoting mutual support and cooperation. Additionally, JHFs offer stability and security, as business ownership remains within the family for generations.
• Disadvantages: Challenges in JHFs may arise due to potential conflicts among family members, differences in opinion, and disputes over inheritance or business management. Limited individual decision-making and complexities in succession planning can impede business growth and innovation. Moreover, changes in family dynamics or external factors may disrupt business operations and jeopardize long-term sustainability.

For instance, a family-owned jewelry business managed by the Joint Hindu Family structure exemplifies this traditional setup. In this scenario, family members collectively oversee business operations, preserve ancestral wealth, and uphold cultural traditions. The karta leads the family business, making strategic decisions in alignment with family values and goals.

A cooperative society is a business owned and operated by a group of individuals working together for mutual benefit. Cooperatives are formed to meet the common needs and aspirations of their members, who share ownership, control, and benefits.

• Characteristics: Cooperatives are characterized by their democratic management structure, where members have equal voting rights and participate in decision-making processes. They prioritize the collective welfare of members over individual profits, fostering a sense of community, solidarity, and shared responsibility.
• Legal Structure: Cooperatives are governed by cooperative laws, which focus on democratic control, shared benefits, and member participation. Members contribute capital to the cooperative and elect a board of directors to oversee its operations. Cooperatives operate based on principles such as voluntary membership, democratic governance, and member education.
• Advantages : Cooperatives offer several advantages, including collective bargaining power, shared resources, and focus on member welfare. By pooling resources and expertise, cooperatives can achieve economies of scale, negotiate favorable terms with suppliers, and provide services that benefit the entire community.
• Disadvantages: However, cooperatives may face challenges such as slow decision-making processes, limited access to capital, and difficulties in member cooperation. Disputes over resource allocation, leadership, and governance may arise, affecting the cooperative’s effectiveness and sustainability.

For instance, a farmer’s cooperative collectively managing agricultural production and marketing exemplifies a cooperative society. Farmers join forces to improve market access, reduce costs, and strengthen their bargaining power, thereby enhancing their economic well-being and community resilience.

A corporation is a legal entity separate from its owners, with shareholders, directors, and officers. Corporations are formed through a formal process of registration with the government, which grants them legal rights and obligations distinct from those of their shareholders .

• Characteristics: Corporations are characterized by their limited liability for shareholders, perpetual existence, and centralized management structure. Shareholders invest capital in the corporation in exchange for ownership shares, which entitle them to a portion of profits and voting rights in corporate decisions.
• Legal Structure: Corporations are governed by corporate laws, which define their structure, rights, and obligations. Shareholders elect a board of directors to oversee the corporation’s affairs and appoint officers to manage day-to-day operations. Corporations issue shares of stock, which represent ownership interests and can be bought, sold, or traded on stock exchanges.
• Advantages : Corporations offer several advantages, including limited liability for shareholders, access to capital markets, and professional management. By separating ownership and management, corporations can attract investors, raise funds for expansion, and recruit skilled professionals to lead the organization.
• Disadvantages: Despite their advantages, corporations also face challenges such as complex legal requirements, double taxation, and potential conflicts between shareholders and management. Compliance with regulatory standards, shareholder activism, and ethical considerations may also pose challenges to corporate governance .

For instance, a multinational corporation like Infosys or Tata Group operating with shareholders, a board of directors, and professional management illustrates a corporation. Shareholders invest capital in the corporation, elect directors to represent their interests, and entrust officers to manage the corporation’s operations and strategic direction.

The organizational plan is vital for any business, offering a strategic framework for ownership structure and operations. Tailored to distinct business types, from manufacturing to retail and services, it assigns roles and responsibilities to ensure efficiency and goal attainment. Whether it’s a sole proprietorship, partnership, Joint Hindu Family, or corporation, each legal structure brings its advantages and challenges, shaping the business’s dynamics. Overall, the organizational plan provides a cohesive roadmap for sustainable growth and success.

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