The importance of the management plan

May 13, 2009

The management plan is a statement of who the management team are and what their relevant skills are and has two main functions.

Firstly, internal: by stating the management of the business, who they are, what they will do within the company and their skills it will be possible to list the management skills required to run the business, outline which skills the management team do possess, and more importantly identify any skill deficiencies. By identifying deficiencies it makes it easier to arrange either training or hands-on experience to redress the balance.

Secondly, external: for someone reading the plan or assessing your business it will enable them to see that all the skills necessary to run the business are present, and that you have identified shortcomings and implemented a plan to correct them. A note worthy of point is that bank managers and grant assessors look at the promoters ability to fulfill the objectives laid down as well as the realism of the objectives themselves.

For many small businesses and in particular for sole traders, one person fulfils the entire management function. In this case a copy of the managers curriculum vitae will compose the first part of this section. However, this should not exclude you from identifying deficiencies in your own skill base and then correcting them. One very good reason for writing a business plan in advance of starting a business is that you can identify training requirements. If you do not have all the skills necessary then you may have two options. First, bring someone with the relevant skills into the business as an employee, contractor or consultant. This has a relatively small up-front cost but you are likely to incur this cost on an ongoing basis. Second, identify skill deficiencies in yourself or other members of the team and arrange training. This may have a high up-front cost but, once trained, there will a much lower ongoing cost. Please remember that if you are unemployed prior to start up then you can avail of training run by public or local development organisations. So make sure that you avail of all the training opportunities you can. Remember that once you become self employed it will become more difficult to find time to train and commercial training is expensive.

However, remember that the management section is the part of the business plan where you get to highlight your skills, ambitions and energy. In a face-to-face meeting you would be able to communicate enthusiasm, energy and commitment. For a person reading a business plan who has not met you, this is the section where you get to make these points and most people, regrettably, do not use this opportunity to stand out. This is one of the three things a professional is likely to read initially to assess the business and it is important.

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