Introducing Your Management Team
Ask seasoned investors what they think is the key to converting a solid business plan into a successful venture, and they will tell you: the people running it. Indeed, many investors say that the management summary is one of the first sections of a business plan they read. After all, it’s the leadership team that makes a business work as a finely formed, dynamic unit. That team includes not only the men and women who start and run the venture, but also the outside parties who provide important services or resources for it, such as lawyers, accountants, and suppliers, in addition to any people who serve as advisors or directors. If your audience is internal—the upper management of your division, for example—this section is an opportunity to show how your proposed team will work together to take on new responsibilities.
Without the right team, no business idea will move from concept to reality. Your goal in the management summary section, therefore, is to extol the virtues of this team while providing answers to these three questions: What do they know? Whom do they know? And finally: How well are they known?
Highlighting qualifications
Your management team’s résumés will be included in the attachments portion of your business plan, so use the biographical section to call out select aspects of their professional paths that are related to your venture:
• Where have your team members worked? How much experience do they have? Who are their contacts in your target or related industries? What work have they done that relates directly to this proposed business?
• What have they accomplished? Where did they go to school? What are their achievements? Do they have a proven track record? What knowledge, skills, and special abilities do they bring to the business?
• What is their reputation in the business community? Are they known for their integrity? Do they have a reputation for being hardworking or especially dedicated to their work?
• Are they realistic about the business’s chances for success? Are they capable of recognizing risks and responding to problems that arise? Do they have the courage to make the hard decisions that inevitably have to be made? Who on the team is a visionary? Who will offer words of caution?
• How committed are they to this venture? What motivates them? What do they hope to achieve? What benefits do they wish to gain? For ventures within an established organization, indicate whether the members of the team are there by choice or because they’ve been assigned to the project. If they’ve been assigned, what tools will the team use to motivate them to see the project through successfully?
Presenting the team as a unit
Use this section to describe how each of the team members will work to form an effective unit, which will in turn result in a successful and profitable business. This is your opportunity to demonstrate that your team is the right one to manage risks and capitalize on potential opportunities.
• Affirm the team’s strengths. Describe how the skills, knowledge, and experience of the individual members balance the team as a whole. Note what each member will bring to the table (legal expertise, great vendor relationships).
• Acknowledge and address the team’s perceived weaknesses. Investors and other backers want to see a team that has a history of overcoming internal conflicts and external problems to meet a goal. An untested team is generally considered a riskier proposition than a group that has worked together in the past. If management gaps exist, such as technical skills or marketing experience, explain how you’ll address those weaknesses. If no team members have strong financial backgrounds, for example, clarify that you’ve enlisted the services of an accounting firm.
• Describe the team’s management philosophy. Develop a set of guidelines to help steer each member’s behavior and decision making. A clear statement of management philosophy is an expression of company values and provides an example of the team’s cohesiveness. Think about your team’s guiding principles and leader ship style. Reflect on how you make decisions, set goals and expectations, and measure quality. Consider how you believe customers and employees should be treated.
SAMPLE MANAGEMENT SUMMARY
Partners: The management team comprises Ping Huang, the founder, and two other top leaders: Anjali Banerjee and Mercedes Meceda.
Huang, founder and CEO of TechEx, has relevant personal and professional experience. A Chinese national, she immigrated to the United States when she was 18 to study mathematics at UCLA. In college, she was active and maintained a healthy weight. After graduation, however, she started working in jobs that required significant travel. She couldn’t get to the gym and often found herself eating off the room service menu at chain hotels. In one year, she gained 30 pounds. She tried a myriad of diet and exercise plans; nothing worked, mainly because the plans were either inconvenient or not suited to her needs. Finally, she contacted a cognitive behavioral expert and started working remotely with a trainer and a dietician. She saw immediate results. She thought: “If only I could find a way to scale these services.” She arrived at MIT Sloan determined to make her business a reality because she knows all too well there is no current product that meets this intense need for busy women. At Sloan, she met Anjali Banerjee and Mercedes Meceda, and together they began plotting TechEx.
Huang has spent the bulk of her career in the online start-up world and is considered the consummate ideas person. After UCLA, she worked at an online beauty company, Glamazon.com, which gave users customized product tips based on their skin tone, coloring, and facial dimensions. She then worked as an operations manager at an online nutrition company, Nutello, which she helped sell to Soapytime.com for $10 million. She serves as CEO, overseeing the day-today operations at TechEx.
Banerjee is a native Brit. A Harvard graduate, she worked at Morgan Goldman investment bank where she specialized in mezzanine finance. She gained international experience with that firm by working in Dublin for several years as well as from a brief stint in Paris. A pragmatic leader who’s driven by numbers, Banerjee is TechEx’s CFO. A vegan whose passions include marathon running and mountain biking, she is also actively involved in Women on Wall Street, a group for women in finance, and is on the board of trustees at The Kiddo’s Lunch Place, a Boston nonprofit that helps children from low-income homes learn about healthy food choices.
Meceda, who majored in computer science at Stanford, is a former Dain consultant and has worked extensively in the health management field. She has a deep understanding of health problems associated with obesity, including hypertension, heart disease, and diabetes, and has devoted her career to helping others adopt healthier lifestyles. A former yoga instructor, she also maintains a popular blog—Frequent-FlyerHealth—that’s geared toward helping professional women who travel a lot for work stay healthy away from home by compiling lists of healthy restaurants, gyms, and spas by city, and offering short videos of yoga workouts that require minimal equipment and can be done in a hotel room. Her blog has more than 28,000 readers and she maintains a large Twitter following. Meceda—who is known in the industry as the ultimate taskmaster—is also secretary of the California Technology Together Board, a networking group for young people in the technology industry. She serves as CTO of TechEx.
Team experience: In addition to their prior professional work, the team members have had experience working together on a large project. The women, who met as MBA students at MIT Sloan, comprised the management team of Sloan’s Entrepreneurial Ventures Club, the school’s biggest student-run organization. During their time at the helm, the group established a For Women Only business plan competition that involved hundreds of female students from more than a dozen top business schools. Huang, Banerjee, and Meceda secured $200,000 in sponsorship funding from several Boston-based companies, including the Loyalty fund management group and the Life Is Sweet retailer. Today their competition is the largest women-only business plan contest in the world.
Other resources: The company works with a dietician, a psychologist who specializes in weight loss issues, and several personal trainers on a freelance basis. On legal issues, the management team works closely with Berke & Kondell, P.A., a commercial law firm located in Boston. The organizational structure of the company will be very flat in the beginning, with each of the team members responsible for her own work and management.
Skills concerns: At this point, the biggest gap in management skills is marketing and sales. The team plans to remedy this by contracting with low-cost consultants and experts. Meceda has friends who have recently left Dain to launch their own firm focused on start-ups and who have expressed interest in working with TechEx for a significantly reduced fee as they start their own business. In addition, Jim Jacobs, a UCLA professor who served on the board of directors of Calorie Counters, is a family friend of Huang. He has offered to help the management team develop its marketing strategy at no cost. As the company grows, the team expects to take on an additional partner who specializes in marketing and sales.