Management summary section is placed after the company overview section of a business plan. In certain cases, we find this section after the market analysis section. You can include it to your business plan based on your requirements, which means either way you can include it.
This section describes;
what is the structure of your business?
who is involved in the management hierarchy?
how the business is managed?
In other words, the management summary section summarizes information about your business structure and the team.
What to include in Management Summary Section of a business plan
You should include important information in summarized form under the management summary section of your business plan. Here are the paragraphs to be included under this section;
- Business Structure
- Management Team
- Management team gaps
- Other personnel
These paragraphs will answer following most important questions of your business;
- How your business is structured or how are you going to structure your business, if not yet started?
- Who are in your management team, what role they play and how their experience can help you to achieve your objective?
You can write your management summary section under the following paragraphs.
In business structure, you need to include the legal structure of the entity.
Is it a sole proprietorship business or partnership or LLP/LLC or a corporation?
Legal structure is the most important thing as investors will be taking their investment decision based on it.
For instance in India, investors are taking interest in start-ups if it’s a private limited company. Remember, if you want outside investments, then do not start as a one-person company as you can not get more than one investor into it.
In this paragraph, you need to include who all are behind the entity to oversee its daily affair to achieve the goal.
If yours is a company, then include details of your board of directors and key management. You’re should include following details of your key management;
- Educational qualification
- Awards and recognition
Including an organisational chart for visual representation is better. You can divide based on how the company functions: production, sales and marketing, accounts, human resource, general and administrative.
Management team gaps
This is the most important section, people generally forget to include. This paragraph of your business plan will include what type of personnel you should hire in future and how are they going to contribute to the success of your company?
You should also include the timeline within which you are planning to get key managers into your company and their position.
Apart from your management team, you definitely take help of certain external personnel such as consultant, mentors, attorneys, accountants and advisory board.
You need to include details of these other personnel playing a vital role in your success.
At the end you can include estimation of personnel cost for 5 years to give a better picture of the company.
Tips for writing an effective management summary section of a business plan
Here are 5 tips that can help you in writing management summary section to give the reader a better picture if your requirements;
- Describe how each key personnel is linked to the business objective.
- Relate experience of management personnel to overall success of the company.
- Don’t put the entire CV of the Board of directors or any other key personnel. Include only the most important information relevant for the purpose.
- Include personnel cost details for at least 5 years and relate it to company’s sales and profit.
- Include organisation charts.