Management Team
Imagine this scenario: You are a private investor searching for that next exciting investment opportunity. A business plan lands on your desk, right next to the sixteen others you have received recently and are in the process of reviewing. Half of the plans present solid business concepts. Some of the plans seem to offer exceptional long-term growth possibilities. But in your opinion, only two of the plans present management teams capable of turning ideas into reality. As you consider your investment options, you eventually eliminate all the business plans except for those with the strong management teams.

Why? Products, marketing strategies, and operations are important, but it is the experience, knowledge, and ability of the management team that makes a business thrive. Many lenders, venture capitalists, and private investors stress that given the choice between a first-rate product with a second rate management team, and a mediocre product with a top-notch management team, they would prefer the latter. To some investors, the management team is THE critical investment factor. Bottom line - investors invest in people, not business plans, so make sure your management team is up to par

Naturally, each business is different and requires a management team that matches the particular circumstance. Your industry, niche, and the loftiness of your goals lead investors to assumptions and expectations about the quality of management that you require. The experience and depth of your managers must meet or exceed these investor expectations, or must clearly explain how you intend to fill these positions in the future.

Two basic themes that readers of your business plan will look for throughout your entire management section include:

Team
Investors normally expect to see a minimum of three to six experienced executives on your management team (start-ups have some variations, see below.) When investors and venture capitalists state the importance of a top-notch management team, the word "team" should not be underestimated. They normally view one-person operations as limited in terms of time, experience, and core business skills necessary to launch and grow a serious business.

Balance
Although investors are looking for a group, they are not looking for a group of clones. They seek balance and a collection of skills that meet the needs for your particular venture. A diverse team increases the chance that each business function (marketing, sales, operations, finance, manufacturing, engineering, etc.) is tended to by an expert with experience. Avoid the tendency to staff your management team with people just like yourself. It might feel nice to work with friends, family, and others that share your background, but investors see a management team unprepared for the inevitable challenges that lie ahead.

But what if you are a startup company and you don't have a team? Early-stage management teams are often limited to a lead entrepreneur or a small group of company founders. If this is the reality for your business, don't try to avoid it or claim that staff employees are actually "management". Instead, focus on the strengths of your current management team and outline specific (and realistic) plans for adding officers in the future.

OK, so let's assume that you have a balanced team, or plans to build one as you grow. In your business plan, only include those individuals in the management section with the greatest effect on sales, operations, net profit, and business development. Every employee is important, but this is not a section to outline the skills, hobbies, or backgrounds of your entire staff. Consider restricting your management section to individuals that fall into the following categories: founders, top decision makers, CEO, CFO, CIO, plant manager, lead engineer, marketing or sales director, and R&D manager.

How should your management section be organized and presented in your business plan? Generally, BizPlanIt divides this section into four parts: Specific Team Members, Board of Directors, Board of Advisors, and Consultants. Let's explore each of the four sections and explain how to grab the attention of investors in your management section.

Specific Team Members
Don't just drop a resume under each officer's name and assume you have completed your management section. Instead, construct a narrative description for each team member, clarifying his or her backgrounds and intended contributions. Include a reference in your management section to the completed resumes located in the appendix. The length of each narrative will differ, but try and keep each to a reasonable length (normally under a half page). Briefly address the following topics for each manager with a focus on achievements, success, and results.

Position
Outline specific titles, duties, and responsibilities for each individual. Clarify what each manager does, what area of business development they focus on, and how they fit into the organization as a whole.

Experience
List past positions and responsibilities that directly relate to the current position. Outline the companies you worked for, the duties, the successes, the experience gained, and how these skills transfer to your current position. Industry experience is looked at favorably by investors as they size up your management team. Some investors consider industry experience an absolute must, but if you lack direct industry experience, build on related and successful experiences from other fields. Describe your abilities and experiences in previous management positions. The number of years you were in management roles? The number of people you supervised? For how long? The goal here is to present a track record that predicts future success.

Successes
Planning, managing, and organizing any business, even outside your current industry, demonstrates the ability to achieve results. If lenders and investors are familiar with your prior record of success, they are more likely to believe that you can repeat that success in your current venture. You may even wish to present past business failures, if you can demonstrate what you learned from the experience and how you will conduct yourself differently in the future. Some investors may actually view past business failures as "battle scars" and an indication of experience, persistence, and an understanding that first time entrepreneurs may lack.

Education
Keep educational descriptions brief unless they directly relate to your ability to succeed in a particular position (or if managers are recent graduates with little or no business experience). The older and more experienced you are, the less value an investor is likely to place on your educational credentials.

Key Strengths
What personal and business qualities do you possess that make you well suited for this position? What traits, abilities, personal characteristics, or experiences have you developed that can lead to success in this position? This might include industry expertise, the ability to motivate others, marketing competence, or interpersonal skills. Experience outside the business arena may also be relevant, such as club membership, civic involvement, or group leadership that can be directed towards your current position.

Board of Directors
The board of directors can play an important role in the success of your business. In smaller companies and start-ups, the board of directors may be limited to the individuals running the company. In this case, they perform little more than the legal requirements needed to maintain corporate status. However, as a company grows and the stakes rise, outside members such as investors, advisors, and strategic partners are normally added to the board to guide the company successfully into the future.

o protect their investment, investors will often request a seat on your board. This provides the investor some control over management, influence on the direction of the company, and an ability to protect their investment. But it's not all about control, many times outside board members contribute significant business and industry expertise that should not be underestimated. Experienced board members provide a level of credibility that investor's desire in a start-up or early-stage company.

The board of directors portion of your management section is fairly simple to prepare after you identify the specific members. Briefly list the names, backgrounds, and contributions that will be made by each board member.

Board of Advisors
While the board of directors is more legal in nature, the board of advisors is more functional. Your board of advisors should consist of individuals with valuable industry expertise and insight. Without the legal constraints required of your board of directors, these advisors are assembled to help and consult with you on your business.

Many small companies and start-ups assemble their board of advisors as a mere formality - don't make that mistake. A solid and experienced board of advisors goes a long way toward establishing credibility in the eyes of investors. Include advisors with past success in ventures similar to yours, or advisors with backgrounds you lack on your current management team.

As with the board of directors, the board of advisors is simple to present after you identify the individuals to include. Briefly list the names, backgrounds and contributions to be made by each person. Again, the members you attract to your board of advisors tell an investor a lot about the quality of your business.

Professional Consultants
The last part of your management section should include a brief mention of the outside consultants you will work with as your company grows. A typical list of consultants would include accountants, attorneys, bankers, insurance agents, and experts such as technology advisors, web developers, and payroll specialists, for example.

Outside consultants provide expertise that a company lacks during its earlier years. If carefully selected, consultants provide your business an additional level of credibility and enhance your image in the eyes of your reader.

Briefly describe the services each consultant provides your company, and their qualifications as experts. The earlier you start to build relationships with consultants the more beneficial they become your company as you grow.

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