ISP Business Plan-Operating & Organizational Plans - cont.

Organizational Plan
The Organizational Plan gives your reader an insight into who is behind the company and whether or not you know your strengths and weaknesses. You can have the best Marketing Plan and Operations Plan, but if you cannot execute the plans, you're dead in the water.

Venture capitalists and banks make many decisions based on the people who are running the company, as those people can often make or break the company. Everyone has strengths and weaknesses, so the key is not to know everything, but to be able to bring in others whose strengths complement for your weaknesses.

Many companies have gone under because of egos: not being able to hire people who are smarter then the owner or manager. You should be upfront and honest with both yourself and your readers and explain how you plan on succeeding by bringing others in.

The Organizational Plan contains five sections:

• Organizational Plan Summary
• Situational Review
• Management Philosophy
• Key-Personnel Assessments
• Compensation and Incentives

The Organizational Plan Summary and Situational Review sections provide an overall high-level view of the Organizational Plan. Within the Situational Review, you should reference an organizational chart in the Appendix.

The Management Philosophy section is your chance to explain your way of doing business, your ethics, and how you plan to interact with each other and your customers. Readers will use this segment to form a judgment as to whether you are capable of executing the plan. Your history—whether you have had successes or failures—is an important element. If you have a history of failures, stress what you learned from each failure.

For example:
"QEI.net's management philosophy stems from Mr. Doe's personal commitment to helping both employees and customers alike. This philosophy is best expressed in a quote by noted sales trainer and speaker Zig Ziglar. He states 'You can have everything in life you want if you just help enough other people get what they want.'

"This philosophy of helping others carries through all areas of the company. In helping end-users, and the company's employees, QEI.net will be able to retain both end-users and quality employees. Retaining quality employees will be one of the hardest challenges for management as the employment market for skilled people with Internet experience is fiercely competitive."

The Key-Personnel Assessments put you and your other key personnel under the spotlight. You should explain your strengths and weaknesses and how your key personnel fill in your weaknesses. Also, if you are missing key personnel, state what you need and how you are looking for them. Sometimes your bankers or investors may be able to help you find the people you are looking for. In addition, if you have outside board members label them in this section and use them to fill any weak spots you may have.

The Compensation and Incentives section is where you explain how much you and your employees are paid. Investors will look for exorbitant salaries or benefits, and will point them out. Investors and banks are looking to see if you have made sacrifices and/or have invested your own time and money in the business. The reason is simple. If you have not put your money or time into it, why should they? Also, if you have brought in an outside Board of Directors you should state it here.

For example:
"At the date of this writing, QEI.net has no outside members of the Board of Directors. Mr. Doe has however, discussed seats on the board with a local venture capitalist and a local financial consultant. Both individuals would bring much expertise and, possibly, opportunities for financing needed for expansion into additional states and growth of QEI.net. An annual stipend of $5,000 per individual has been discussed as possible compensation for their services."

In the end, the Operational and Organizational plans will truly show your grasp of running your ISP. Readers of your business plan will use these sections, specifically the Operating Plan to determine what type of person you truly are and what you are capable of. After all, when a Venture Capitalist is looking at your business plan and thinking about investing in your company, ultimately, what they're really doing is investing in you. You need to show that you are worth investing in and that you are a sound business operator.

Next week we'll discuss the Financial Plan section of your business plan and how the numbers work.

*All quotes come from the HowToSell.net's Sample Business Plan, which is available for $50 at: http://www.howtosell.net/html/bplan.html

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Read Building an ISP Business Plan Part 1, Part 2, Part 3