Besides your internal management team, those reading your business plan will be extremely interested in knowing how you plan to use External Management Resources.
While External Management Resources are often overlooked when writing a business plan, (and running a business), using External Management Resources effectively can make the difference between management success and failure.
Think of External Management Resources as your internal management team's backup. They give your business management plan credibility and an additional pool of expertise. There are two main sources of External Management Resources you should utilize and describe in this section of the business plan; Professional Services and an Advisory Board.
In the Professional Services section of your business plan's Management Plan, list and describe all those external professional advisors that your business will use, such as accountants, bankers, lawyers, IT consultants, business consultants, and/or business coaches. These professionals provide a "web" of advice and support outside your internal management team that can be invaluable in making management decisions.
Additionally, it's a smart move to set up an Advisory Board for your business as soon as possible. An Advisory Board is like a management think tank; the members of your Advisory Board will provide you with additional advice to run your business profitably and well. If you choose your board members carefully, they can also provide expertise that your internal management team lacks.
When selecting people to serve on your Advisory Board, you obviously want people who have a genuine interest in seeing your business do well and have the experience and expertise to provide good advice. Recently retired executives or managers, other successful entrepreneurs, and/or vendors would be good choices. You will not want to include anyone on your Advisory Board who may have a conflict of interest, such as lawyers, accountants, customers (or a direct competitor). An Advisory Board of just two or three people can be a powerful management tool for a small business.
When you're writing your business plan, you'll want to describe who is on your Advisory Board, listing their names, titles, experience and expertise and explaining how each member will contribute to helping you run a profitable business.
If you're writing a business plan in preparation for starting a business, and don't yet have an Advisory Board, be sure to include this section anyhow, describing your plans for setting up an Advisory Board and describing the types of people you will approach to serve on your Board.
Having an Advisory Board, or planning to have one, shows those reading your business plan that you have the foresight to seek advice and make your management team as strong as possible - an important consideration when most businesses fail because of mismanagement of one type or another.
The last issue you need to address in the management plan section of your business plan is your business' human resources needs. Information on how to do this is on the next page...
