Making sense of organization plans: who does the work, who decides, what the team cannot do

Two questions sit underneath this section: who does the work, and who decides. Most drafts answer neither. They list impressive people and an aspirational chart, and the reader is left guessing which of them will be answering the phone in March.

Done properly, this is a staffing and control document. It tells a reader how the business is run today, what it costs to run it, and what breaks if one person leaves.

What to take away

The chart is for the business you will have

Draw the organization at the size the plan actually funds, not the size you hope for in year three. If three of the boxes are you, put your name in all three. A one-person business with a chart showing a marketing director and an operations manager tells a reader that the payroll line in the projections is wrong.

Where roles are shared or outsourced, show that. Bookkeeping done by an outside firm, dispatch handled by the owner's partner in the evenings, and a seasonal crew hired for four months are all normal arrangements and all belong on the chart with a note.

If the plan funds growth, draw two charts: now and after the money is spent. The second must match hires with dates and salaries in the financial model and the volume the market section said you can win.

Two charts and a hiring schedule fill half a page and cut most questions this section raises. Give every future box a start date and a cost, and drop any box the payroll cannot support.

Bios that do work

A management biography in a business plan is not a resume. It exists to answer one question: what has this person already done that makes it plausible they can do the specific job in the box?

Four to six sentences per person. Put the full resumes in the appendix if you want them there.

The hours line matters more than founders expect. A reviewer reading about a full-time role held by someone with another full-time job will discount the whole team section. Say it plainly, and say who covers the rest of the hours.

Hours belong next to every name

Everyone in a team section looks full time unless the plan says otherwise. Give hours for every person, including your own. If a founder holds another job, or works only in the evenings, say that and give the date it changes. Then say who covers the hours nobody is paid for.

A reader who learns later that a role is half covered discounts the whole section. Payroll is a rate multiplied by time, so hours left vague make the costs built on them unreliable.

Pay rates that hold up

A rate typed in because it looked affordable can fail on two counts. The first is what the role can lawfully be paid where the work is done.

The federal minimum wage is $7.25 an hour and has been since 2009. Many states and cities set a higher floor, and some occupations carry their own rules. Check the rate for your location as well as a typical range for the job.

The second count is overtime. Federal rules set a salary threshold and duties tests for exempt status, and states can raise the bar or narrow the exemptions. That threshold has changed more than once in the past decade and has been challenged in court, so check the current figure rather than a remembered one.

Get both from your state labor office or an employment lawyer before the model is built. Correcting a rate afterwards changes payroll cost for the whole period it applies to, not just from that point on.

Say what the team cannot do

The strongest paragraph in most team sections admits a gap. A founder writes: "none of us has run a kitchen at this volume, so the first hire is an experienced kitchen manager, budgeted from month one at a published rate for the occupation and area."

That tells the reader the founder understands the risk and has priced it.

The weak version pretends the gap does not exist. Reviewers find it anyway, because a team with no weaknesses has never existed, and the omission makes the rest of the section look edited rather than honest.

For each gap: name it, say how it is covered in the meantime, say when it gets filled properly, and make sure that hire appears in the payroll schedule.

Ownership is not the same as control

This section should state who owns the business, in the same percentages as the company description, and, separately, who can decide things. They come apart more often than people expect.

Write down which decisions need which approvals: spending above a threshold you set, hiring, taking on debt, signing a lease, and changing what the business does.

Admitting a new owner and distributing profits need approval. Then say where that is written down. If the answer is "we agreed verbally," it is not written down, and the plan just found a real problem.

Deadlock deserves its own line. An even split with no mechanism to break a tie is the most common structural fault in small partnerships, and it usually surfaces during the first serious disagreement, which is also the worst possible moment.

Anything involving an operating agreement, a buy-sell agreement, or a shareholder agreement is a matter for a lawyer who has read your documents. Name the arrangement in the plan; do not draft it there.

Employees, contractors, and the question you should not answer yourself

Every plan that uses contract labor has to say so, because it changes payroll costs, insurance, and risk.

Federal and state tests decide whether a worker is a contractor or an employee, including the one the Department of Labor applies.

Those tests differ by state and work type, and neither contract wording nor the parties' preference settles it.

Ask an accountant or employment lawyer before the model is built, because reclassification changes labor cost materially and retroactively.

What belongs in the plan is the plain statement: these roles are employees, these are contracted, this is the arrangement, and it has been reviewed by a named professional. Then the numbers in the model can be trusted.

Compensation, including yours

The owner's pay is the line most often missing from a small business plan, and its absence is noticed immediately. A plan showing a profit only because nobody paid the founder is showing a hobby's economics, and it fails the consistency test in the fundamentals guide as well.

For each role, state the pay (salary, hourly, commission, or draw) and what employment costs sit on top. Employer taxes, workers' compensation, benefits, and paid time off are real costs with rates that depend on your state and industry classification.

Get the current rates from your payroll provider or insurer rather than estimates. Then carry the loaded figure into the model.

Where you have no quote of your own, published wage data for the occupation and the area is a defensible starting point. Put the wage in at the rate the work could be hired at.

If founders are deferring pay, write the deferral as a plan with an end date, not as a permanent condition. The model should show the business affording the wage by that date. Reviewers want to know when the business starts paying the people it depends on, and whether it can.

The people who are not on the payroll

Accountant, lawyer, insurance broker, banker, bookkeeper, and any technical specialist the work requires. Name them, or say you are still choosing. This short list does more for credibility than another paragraph about the founding team, because it shows the business has the ordinary support functions covered.

Advisors and board members are worth listing only with what they actually do and how often. "Meets quarterly and reviews the accounts" is information. A logo wall of names who agreed to be mentioned is not, and an experienced reader can tell the difference.

Key-person risk

Ask the uncomfortable question in writing: if the person who does the thing the business is built on stops, what happens for the next ninety days?

The answer is usually a mix of documentation, cross-training, an emergency contact who can access the accounts, and insurance. Lenders sometimes require key-person coverage; ask yours whether they will, because it is a cost line and a delay if it comes up late.

Small businesses concentrate risk in one or two people. That is not a flaw to hide. It is a fact to plan around, and a plan that names it and shows the mitigation reads as competent.

What reviewers actually look for

A lender is looking for who signs, who guarantees, whether the operator has done this work before, and whether the payroll in the model matches the people in the chart.

An investor is looking for whether the team can execute the specific plan in front of them, having formed a first impression from the summary page. They also ask whether the founders are compensated enough not to leave, and whether the equity split leaves the business able to hire and to raise again.

A landlord, a franchisor, or a licensing authority is looking for whether a qualified person is in the required role.

All are checking one thing in common: does this section agree with the payroll schedule in the financial model? Reconcile the two before you send it.

Head count, start dates, and pay rates should match line for line. The roles named here should be the same ones costed in the financial projections and doing the work in the operations plan.

Documents that sit behind this section

Formation documents, the operating or shareholder agreement, any buy-sell arrangement, employment agreements, contractor agreements, the current payroll register if the business is trading, licenses held by named individuals, and the insurance schedule. You do not attach all of them, but you should be able to produce any of them the day after you send the plan.

Common questions

I am the only person in the business. Do I need this section?

Yes, and it will be short. State the roles you personally cover, which of them you are weakest at, what you outsource, what you would hire first and at what revenue level, and who could keep the business running for a month if you could not.

Should I include a job description for every role?

No. One line of accountability per box on the chart. Full descriptions belong in the appendix or in your own operating file.

How do I handle a family member who works in the business?

The same as anyone else: role, hours, pay, and whether they are an owner. Unpaid family labor is common and it makes the cost structure look better than it is. If the business would have to pay someone to do that work at scale, say what that would cost.

What if the team changes between writing and submitting?

Update it and re-date the section. A plan with a chart that no longer matches reality is worse than one with an admitted vacancy.