Internal Factors

Management Team

Businesses do not run themselves, and businesses often need others for guidance and input. This section is necessary to help the entrepreneur develop strategic plan of talent to engage in starting and growing the business. SCORE offers the following advice for this section: Ask yourself who will manage the business on a day-to-day basis? What experience does that person bring to the business? What special or distinctive competencies? Is there a plan for continuation of the business if this person is lost or incapacitated? If you’ll have more than 10 employees, create an organizational chart showing the management hierarchy and who is responsible for key functions. Include position descriptions for key employees. If you are seeking loans or investors, include resumes of owners and key employees.

List the following for Professional and Advisory Support:

  • Board of directors
  • Management advisory board
  • Attorney
  • Accountant
  • Insurance agent
  • Banker
  • Consultant(s)
  • Mentors and key advisors

Operations

This section of the business plan asks for an explanation of the daily operations of the business, its location, equipment, people, processes, and surrounding environment. This section allows the entrepreneur the opportunity to plan and work out areas of the business that will have a large impact on the vitality of the business. Consider the following start-up concerns:

  • Location: What qualities do you need in a location? Describe the type of location you’ll have. You will also want to note how much space (square feet) you will need and what type of building (office, warehouse, etc.)
  • Access: Is it important that your location be convenient to transportation or to suppliers? Do you need easy walk-in access? What are your requirements for parking and proximity to freeway, airports, railroads, and shipping centers?
  • Cost: Estimate your occupation expenses, including rent, but also including maintenance, utilities, insurance, and initial remodeling costs to make the space suit your needs. These numbers will become part of your financial plan.
  • Legal: Businesses have a wide variety of legal needs, which varies amongst the different types of businesses. Businesses also need to be aware of legal parameters that may restrict their businesses. Areas that businesses need to be aware of in regards to the legal environment include licensing and bonding requirements, permits, workplace regulations, employee manuals, industry regulations, zoning and building code requirements and intellectual property protection. Legal council may be needed with the following: incorporation papers, contracts, employee manuals, nondisclosure agreements, patents and more.
  • Personnel: What are the current and future personnel needs for the company? What would an organizational chart look like? Will job descriptions be created and what sort of talent will be needed for the company. How will the company manage compensation and fringe benefits?
  • Production: If you are manufacturing a product, can you provide a flow chart of how the product will proceed through the manufacturing process? What sorts of machines are needed for production? What are the production techniques and costs? How will quality control be maintained? How will the company engage in new product development?
  • Inventory: What kind of inventory will be kept? Where will pre-production and post-production inventory be stored? What is the projected rate of inventory turnaround? Is seasonal inventory needed? What lead time does the vendor need in replenishing inventory?
  • Supplies: Who are your suppliers? What are their payment/credit terms? What do they supply? Do the suppliers have references or a record of performance?
  • Credit Policies: Will the business sell on credit? If so, what kind of credit will be offered and at what terms?

Additional Resources

Read Keeping your Business Legal on Arkansas SourceLink

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