Management Summary

Management Summary

Many investors base their entire investment decision on the management team behind a venture. Investors expect a well-rounded team of professionals with experience in every function critical to the business. Your management summary should clearly demonstrate who each person is, why they are on your team, and what they will actually do.

Managing a business requires more than just the desire to be your own boss. It demands dedication, persistence, the ability to make decisions and the ability to manage both employees and finances. Your management plan, along with your marketing and financial management plans, sets the foundation for and facilitates the success of your business.

Like plants and equipment, people are resources-they are the most valuable asset a business has. You will soon discover that employees and staff will play an important role in the total operation of your business. Consequently, it's imperative that you know what skills you possess and those you lack since you will have to hire personnel to supply the skills that you lack. Additionally, it is imperative that you know how to manage and treat your employees. Make them a part of the team. Keep them informed of, and get their feedback regarding, changes. Employees oftentimes have excellent ideas that can lead to new market areas, innovations to existing products or services or new product lines or services which can improve your overall competitiveness.

Management Plan

Your management plan should answer questions such as:

  • How does your background/business experience help you in this business?

  • What are your weaknesses and how can you compensate for them?

  • Who will be on the management team?

  • What are their strengths/weaknesses?

  • What are their duties?

  • Are these duties clearly defined?

  • If a franchise, what type of assistance can you expect from the franchisor?

  • Will this assistance be ongoing?

  • What are your current personnel needs?

  • What are your plans for hiring and training personnel?

  • What salaries, benefits, vacations, holidays will you offer? If a franchise, are these issues covered in the management package the franchisor will provide?

  • What benefits, if any, can you afford at this point?

If a franchise, the operating procedures, manuals and materials devised by the franchisor should be included in this section of the business plan. Study these documents carefully when writing your business plan, and be sure to incorporate this material. The franchisor should assist you with managing your franchise. Take advantage of their expertise and develop a management plan that will ensure the success for your franchise and satisfy the needs and expectations of employees, as well as the franchisor.

Try and limit your management team to 3 to 5 people - and to those individuals involved in the day to day operations that have the greatest impact on the future success of your business. Everyone else is considered either an employee, or if not involved in day to day operations should be included as a member of the Board of Advisors, Board of Directors or consultants. A discussion of your employees should be included in the operations section.

What is the proposed organization chart of the company (who does what)? Include a brief job description for each position. Provide brief management biographies of the key personnel (include their ages and backgrounds in this type of business). State the compensation package (salary, bonus, profit sharing, etc.) for each member of management.

The basic components of the management section include:

Construct a narrative description for each team member, clarifying his or her background and intended contribution. This should include:

  • Title of this position

  • Duties and responsibilities of this position - what will they be doing, which functions will they be overseeing, who do they supervise, who do they report to, etc.

  • Previous industry and related experience -should be those that relate directly to this new position. Who have they worked for, what were they doing, for how long did they do it, etc.

  • Previous Successes – what did they accomplish, what successful teams or projects did they spearhead, did they grow a company or a division, were they responsible for a turnaround or some new breakthrough idea.

  • Education – keep educational descriptions brief

Briefly describe who is on your Board and what role they play within your company. Briefly list the names, backgrounds, and contributions that will be made by each board member.

Your board of advisors should consist of individuals with valuable industry expertise and insight, and they help and consult with you on your business. A solid and experienced board of advisors goes a long way towards building credibility in the eyes of investors. Briefly list the names, backgrounds, and contributions that will be made by each of your board members.

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.

Explain the background of the founder(s) of the company at some length. However, limit this background information to under half a page. Stick to the facts on all your management team bios, making it evident why each person is experienced, why they hold their position, and the benefits they provide your company.

One last note: Always keep in mind that given the choice between an excellent business concept with second-rate managers and a mediocre business concept with top-notch managers, investors prefer the latter.

Managing Talent

Management Tips

The following are several common mistakes that decrease the effectiveness of your management plan:

  • Depending on unqualified friends or family in key management positions.

  • Assuming that previous success in other industries applies to your current industry.

  • Presenting a "one-man-team" management philosophy. Investors know it's difficult to wear every hat and successfully run and grow a company.

  • Attempting to attract top managers without sharing ownership.

  • Lacking non-compete agreements for critical management staff.

Failing to attract and assemble a knowledgeable board of advisors.

Imagine 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 START-UP 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.

Management Organization

How should your management section be organized and presented in your business plan? Generally, you should divide 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.

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.

Managing Your Business

A key objective is to survive the crucial early years and make your business grow to meet your ambitions and expectations.

  • Growing pains

  • How much progress have you made?

  • Is your business well established?

  • How strong is your business base?

  • Are you in a position to consider growth?

Surviving start up

  • What are the most common causes of business failure in the first stages of a business?

  • How can these be avoided?

Business direction and strategy

  • Do you really know what your business is good at?

  • Do you have a good idea of where you want to be in three years’ time?

  • Do you know if you’re doing well enough to get there?

Customers and markets

  • Do you know who your customers are?

  • Do you know why your customers buy from you?

  • Do you know where new business will come from?
  • Can you sell?

Money Matters

  • Introduction to terms and useful measures

  • Do you know the difference between cash and profit?

  • Do you keep the right type of information systems?

  • Is your pricing policy right?

  • Is your business making a profit?

  • How well do you control your debts?

Managing your resources

  • How well do you manage your time?

  • How efficiently do you use your equipment?

  • Do you carry the right level of stock?

  • How well do you manage the production of your business?

  • Do you know how your business affects the environment?

Managing your business relationships

  • Do you know who influences your business?

  • Do you provide them with information?

  • Do they know enough about your business?

  • Are they on your side?

Where to next?

  • Is your business strong enough to consider growth?

  • How fast should you grow?

  • How should growth be financed?

Can you manage?

There is a cycle to many small businesses which is almost a guaranteed sequence. The business starts, your family helps out, you use a few self-employed people and you come to the conclusion that you need a full-time employee, or maybe two.

At first your new employee becomes your saviour. Everything goes along swimmingly and then you notice that “fings ain’t wot they used to be” Your employee(s) don’t quite do it like you. Things happen and you do not even know who managed those things. Customers and suppliers start developing relationships with your company which are not what you wanted, your employee(s) work hard but their desks are piling up and you are being sucked back in.

And you make the decision that a lot of owners make, you go back to being small.

Except now your overheads are no longer small, some of the contracts need re-working, some of the administration needs reviewing and going back to your roots is not quite as easy as you thought.

Running your own business can be undermined by one-key element: your ability to manage.

Having the product, resource and cash to start a business is but a side-show compared to your ability to get the best from those around you, and of course yourself.

Understanding why you need staff is vital. Earning money without doing anything personally is a key to growth. All businesses are finite if they remain a one-man band.

The other beauty of staff is that they can do the stuff that you do not want to do. Don’t employ people to do the stuff you like doing, get them to do the stuff that you do not.

The small business owner does not usually want to be a manager, but be a successful entrepreneur. Therefore rather than allocate jobs on the basis of what is best for the company, the experienced salesmen, the great administrator or any other skilled individual, start by employing the person who will do the stuff that you do not want to do.

Make a list of everything your company needs to do, and then mark the things that you do not want to do. There is your first job specification. So what if the job spec does not meet the expected specifications. So what if it cannot be defined as a sales role, or a production role or administration.

Who cares?

It is only your business.

Buying management training

Want to get focused? Need help getting motivated? Looking for help dealing with difficult employees? These are typical issues faced in management training. They can't do miracles, but they often have valuable tips and information for business leaders building small companies.

There are two basic types of training: general and industry-specific. General courses offer help that can aid managers in all sorts of matters. They deal in such topics as delegating authority, improving human resources and managing conflict. Industry-specific training is geared toward subjects facing specific fields, such as insurance, broadcasting or real estate.

A traditional form of training is the seminar form, where one goes to hear a speaker lecture on a certain subject. The time frame can be from an hour to several days. Often these are motivational and intended to boost the morale of those in attendance.

In many cases, a multimedia approach may be helpful. It offers more flexibility and convenience than using a live trainer. Media-based training uses prerecorded seminars on audiotapes videos and the like. Computer-based training uses CD-ROMs, software or web sites that move training to the desktop.

Management training ranges from the mundane to the exotic. It can include videos, seminars and, more fashionably, such ventures as weekend whitewater rafting trips that test one’s problem-solving skills.

Different companies offer vastly different things under the umbrella of "management training." What helps one manager might not help another. When selecting a training course, figure out what specific things you want to learn and find something to meet your needs.

Questions To Ask:

  • How can this help me run my business? What specific problems have your programs solved for other managers? Have these lessons been tried in real-world situations? In my industry?

  • How much management experience do you expect from those who take this training? How much experience do the trainers have?

  • What happens if the training turns out not to address my issues? What if I have additional questions? What if I want to take the training over?

Cost Factors

  • Boot camps: Some trainers offer courses in building management skills in people who don’t have leadership backgrounds. People who are rising in a company, especially those with highly technical backgrounds, may benefit from this.

  • Customization: Often training can be matched to you or your company’s industry, size, management style or goals. They often can target specific topics like reorganization, growth and other issues.

  • Individual vs. organization training: Training can be for one person or a whole group of people. If just one person is being trained, the seminar might be held at another location. If this involves a team, a trainer might come out to your offices.

Buyer Beware

  • Best fit: Figure out specifically what kind of training you want. Do you need ways to help employees work as a team? Do you want to build customer loyalty? Do you need help defining your vision for the company’s future? Training of any sort is an investment, so find something that gives you the best return.

  • Jargon: The business world is full of buzzwords and slogans collected over the years. Try to find training that does more than rehash what you already know.

  • Pie-in-the-sky: No trainer has all the answers – or can promise them. Unless your company has some glaring problems, no program will produce amazing results overnight.


Assessment: Estimating the extent of a certain problem, skill, or value within a company.

Conflict resolution: The ability to manage competing interests and goals among people.

Continuing education: Courses offered usually by a college to help people learn new skills or improve their professional competence.

Communication skills: How to talk effectively.

Cross-cultural: The ability to deal with people who have different customs, backgrounds and worldviews.

Facilitation: Encouraging a group of people to make a decision.

Project management: The ability to direct, plan and control work toward a particular goal from start to finish.

Strategy: Consultants use this term in this instance to refer to the critical decisions mangers make that set a company’s future course.

Stress management: Methods for dealing with workplace tensions, including crises, anger, tension, negativity and burnout.

Team building: The practice of motivating a group of people to work together for a common goal.

Time management: How someone prioritizes tasks, reduces distractions and schedules events on one’s calendar.

Evaluating Your Management Performance





1. We operate with a complete and up-to-date business plan that includes:



One- and three-year projections




A capital budget




2. We operate with an annual marketing plan that includes:



Precise sales and profit goals and timetables




Strategies and tactics for the next three years




Budgets, Forecasts, and Benchmarks




A tentative sales plan




The demographics of our target markets




A thoughtful definition of the markets we serve




A definition of the needs/wants our products and services fill




An analysis of the growth potential of our markets




A competitive analysis




A definition of our “Unique Selling Proposition”




Projections for other products or services that could be developed




Timetables for research and development




3. We use monthly budgets and statements that include:



Thorough and up-to-date records




Cash flow budget




Profit and Loss (Income) Statement




Balance sheet




Deviation analysis




Ratio analysis




Standard cost comparisons




Cash reconciliation




4. We have developed an information base that allows us to:



Keep track of new developments in the industry




Obtain and study key trade information




Understand what “state of the art” means in this business




Provide customers with the best available information pertaining to our products and services




Keep all our employees adequately informed




5. The business is properly capitalized since:



Capitalization is based on worst-case planning




We have emergency funds (or access to them)




We have discussed this with our commercial banker




6. I understand the value of the business because I’ve made use of:



Professional appraisers




Present value methods to evaluate terms




Professional tax planning counsel




Accurate, timely financial information




7. We strive to improve production, quality, and operations by:



Keeping the plant in top condition




Maintaining safe conditions




Establishing high standards




Standing behind our products and services




Not tolerating shoddy performance




Working for consistency




Using our company’s “look” as a statement to our markets




8. Personnel decisions are based on humane, carefully considered policies that include:



Checklists to make sure objectives are clear




Communication, to make sure objectives are understood




Written job descriptions




Regular progress and performance evaluations




Fair hiring practices




Fair wage scales




9. As for my own personal/managerial skills, I work hard to:



Develop my problem-solving abilities




Always stay calm




Be objective




Avoid investments in my own ego




Listen to my employees




Plan changes in our course to minimize negative effects




Make decisions promptly




Always get the facts behind problems




Accept my own limitations




Delegate tasks that can be done more efficiently by someone else




Analyze all available options




Develop my reading/study habits




Improve my skills




Consider and evaluate risks




Be positive with customers, employees, associates



A strong Business Plan may not guarantee success; but it could certainly prevent failure!

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Business Plans Index
Before You Start
Starting A Business
The Right Business Name
The Basics Of Business Planning
Writing A Business Plan
Start-up Business Plan
Quick Business Plan
Business Plan Outline
Business Plan Sections
Business Plan Template
Executive Summary
The Mission Statement
Company Summary
Products and Services
Marketing Plan
Marketing Strategy
Marketing Summary
Market Research
Competitive Analysis
Competitive Strategy
Management Summary
Managing Your People
Operational Plan
Start-up Expenses
Sales Forecast
Profit And Loss
Balance Sheet
Cash Flow
Business Loan
SBA Loans
Franchising Your Business
Exit Strategy


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