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How to Create a Small Business Organizational Chart in 4 Easy Steps

Elizabeth Kellogg

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money .

Whether you're just starting out or have been in business for a while, creating and maintaining a business organizational chart can be an extremely helpful way to illustrate how your company operates and can also be used to show how you're going to grow and change in the future.

What is a small business organizational chart? A business organizational chart, sometimes also referred to as a "business org chart," is a visual representation of the structure of your business—it outlines the role of each employee and clarifies who reports to whom within your company. In many cases, developing and updating this chart will fall under the purview of your small business HR department, but if you don't currently have a separate human resources branch (or even if you do) it's worth understanding how these tables work and how to create one.

In this guide, therefore, we'll explain exactly how to create a business organization chart in four simple steps—discussing the various types of diagrams you can choose from, as well as the different goals you should consider when making an org chart for your company.

organizational chart of a business plan

How to create a business organizational chart

Although looking at business organizational chart examples can be overwhelming, creating one of these diagrams for your company can be broken down into four easy steps. By taking this process one step at a time, you'll be able to decide which type of chart is best for your business and ultimately, develop a table (like many other operational documents you have) that can be utilized throughout the lifecycle of your business. With this in mind, let's get started:

Step 1: Decide how to structure your business organizational chart.

The first step in creating an org chart for your business is deciding what type of chart you want to use. Generally, there are four popular designs to consider and you'll want to choose the one that best suits your business's needs.

Hierarchical business organizational chart

To begin, a hierarchical diagram starts at the top of the business and works its way down the chain of command (as you can see below). A vertical line between individuals indicates that the employee above directly supervises the employee below. Hierarchies also show lateral relationships, where two people are on equal footing within the business framework, but may still collaborate or share responsibilities—these charts use horizontal lines to connect lateral workers. The business organization chart here shows how the company is structured starting with the CEO and progressing through the rest of the company.

Overall, most small businesses use a hierarchical organizational chart because it’s the simplest option. This being said, you can use this type of business org chart even if you only have a few names to fill in—as your business grows, it's easy to add new employees.

Functional business organizational chart

Next, you might consider a functional business organizational chart if your company is large enough to divide employees into departments. This type of diagram shows the head of each department and all the individuals who report to them. A functional chart is not entirely distinct from a hierarchical chart, but it does have a slightly different emphasis based on the different departments.

You can use this same information in all small business organization charts:

Name of employee (leave blank if the position is open)

Department (sales, marketing, accounting, operations, etc.)

Position or job title (sales representative, supervisor, account manager)

Description of duties (a brief phrase or two should be sufficient)

Location (if you have more than one office)

Contact information (physical address, phone number or extension, business cell phone number, work email address)

Photo (to recognize each other with ease)

As you can see, although the functional small business org chart is fairly similar to the hierarchical option, this diagram can be useful for distinguishing departments, giving a larger insight into how your company functions in this specific way.

Matrix business organizational chart

The third option, called a matrix or cross-functional business organizational chart, is useful if workers report to multiple supervisors. Like hierarchical graphs, matrix org charts illustrate the immediate supervisory relationships between employees, but they also show the project manager, team, or department to which an employee reports. Solid lines once again indicate that an individual is the primary manager of the person below them. Dotted lines demonstrate a less direct, but nonetheless important, reporting connection.

As this org chart from the Project Management Institute shows, the matrix small business organizational chart is often used by companies with project managers that work across different teams. Similarly, you may find that product, research, and engineering-based companies are more likely to utilize this type of diagram to illustrate their business structure.

Circle business organizational chart

Finally, the last option to consider is the circle business org chart. The circle diagram has become increasingly popular, especially among startup small businesses that wish to discard traditional business hierarchies. The idea behind these graphs is that all teams—and the employees that comprise them—play an equally important role in the company.

Once again, although this example shows dummy text, you can see how you would complete the chart based on your business's information. Each department makes up a spoke in the wheel and the employees within are listed in each section. As we discussed above, you would fill in essential information for each employee—name, job title, brief description, contact information, etc.

Ultimately, this first step may take time—you'll want to consider your business as it exists now and how you want it to grow—that way, you can determine which of these four org chart options will work best for illustrating your company structure.

Step 2: Collect employee information and categorize the data.

Now, once you’ve decided on the type of business organizational chart you’ll use, the rest of your chart development is fairly straightforward.

For your next step, therefore, you'll want to write a list of all the employees at your company and include the pertinent information about them that we mentioned above.

If you selected a hierarchical chart, you'll place each individual in their proper order on the list. The business owner occupies the first tier, anyone who reports directly to them belongs on the second tier, and the chart progresses from there. If you chose a functional or circle chart, you'll organize your list by each department, as shown in the examples we explained above. Finally, if you opted for a matrix small business org chart, you'll want to be sure to make note of all supervisory relationships.

Step 3: Decide how you'll complete your business org chart.

After you've gathered all of the information you need for your employees and categorized it based on the chart type you've selected, you'll want to determine how you're going to complete your chart. As you saw in our examples above, there are images and small business org chart templates you can download and edit using a software program like Adobe Photoshop.

On the other hand, you might choose to create your business organizational chart in a simple, reliable program you might already own, like Microsoft Office (Excel, Outlook, PowerPoint, or Word) or Google Sheets. You also have the option to purchase a template from a provider like SmartDraw or Lucidchart. To make the most out of your investment, however, you might consider purchasing an HR or payroll software that includes this functionality (among other features). As an example, Gusto's all-inclusive platform allows you to create an org chart within their system, as well as manage your essential payroll and HR tasks.

Although technically , you could diagram your small business org chart by hand, if you use an online template or software, you can modify your graph with ease as your business expands and staff changes.

Step 4: Fill in your business organizational chart and file it securely.

Finally, once you've chosen how you're going to complete your org chart, you'll be ready to actually fill it in.

With the data you've compiled, you'll fill in each box or branch of the chart that you’ve picked. Once again, if your diagram is hierarchical, you'll start with the owner or CEO of the business at the top. Then, you'll create a box below the owner for each person who is an immediate report, and draw a solid vertical line down from the proprietor to each of these supervisees. You'll continue this process for each layer in the company chain of command, and move down the corporate ladder until you’ve placed every employee on the chart.

If your graph is a functional design, you'll fill in the primary boxes with the information for the head of each department and the remainder with the information for every individual they directly manage. You'll follow the same procedure with a matrix chart—with this chart, however, don't forget to include secondary managers to the side of each department, and make dotted lines (or some other distinction) between boxes to represent those additional supervisory relationships.

Last, with a circle chart, you'll add the information employees and duties of each department to the corresponding pie slice, and your diagram is complete.

Once you've completed your small business org chart, you'll want to be sure you save it in a secure location—if you're not utilizing an HR software or another program that allows you to save it within that system. You'll want to keep your organizational chart on hand to update as your business grows and changes.

Along these lines, it's also helpful to store a copy of your org chart on a shared company server, drive, or employee portal so that everyone in your company can see it (but not change it)—this way, everyone in your organization can understand how the company is structured and refer back to the chart as needed.

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Small business organizational chart templates

If you're not ready to invest in a software platform to build your diagram, you may be interested in exploring different small business organizational chart templates. As we mentioned, there are well-known solutions, like Microsoft Office, that offer org chart templates that you can download and use for your business. Let's look at a few examples:

Microsoft Office : Within the templates section of the Office website, you can find various, free business org chart templates that you can download for free and customize within PowerPoint, Word, or Excel. For a simple hierarchical chart option, you might start with this "Minimal organization chart."

24Slides : Among other business template options, 24Slides offers free small business org chart templates that you can copy and edit within Google Slides. They also offer these templates in different types including the classic hierarchical chart, as well as the circle chart.

Canva: Image editing and graphics platform Canva allows you to design and customize your own business organizational chart (for free, you just need to sign up for an account) using their system.

Vizzlo : Although Vizzlo does offer paid plans, with their free version, you can access over 100 different chart types, including small business org templates. Plus, you have the option to edit your template within Vizzlo, or create your chart direct in PowerPoint or Google Slides using a Vizzlo integration.

Of course, these are only a few options—there are numerous additional templates and examples you can find by searching and browsing online.

The benefits of a business org chart

As we've shown through our four-step guide, creating a business organizational chart can be a fairly straightforward and simple process. However, if you're just starting out, or don't have a dedicated employee or department to work on developing this graph, you may be wondering if you really need an org chart. Ultimately, the decision is up to you—but, to this end, it's worth highlighting some of the benefits of one of these diagrams and why they can be so useful for your small business.

Clarify management structure

If you're just starting your business the process necessary to construct a business organizational chart forces you to officially distribute tasks and flesh out the roles of each individual and the purpose of each department in your enterprise. This avoids confusion later, as your business grows. Of course, you can always restructure your business organizational chart down the road—however, if you outline the expectations for each position early on, you’re already a step ahead in the entrepreneurial process.

On the other hand, if your company is more established, a business org chart helps both new and existing employees to understand where they fit within the company’s framework, which clarifies any questions regarding the chain of command. This transparency saves time and increases efficiency, as workers can consult your organizational chart and determine exactly who to speak with when faced with a given issue. Plus, if your business organizational chart is well-structured, your employees will already know not just the name of the proper individual to consult, but also what position they hold and what responsibilities they oversee.

Increase operating efficiency

Another benefit of creating and maintaining a small business org chart is that by doing so, you can examine your company’s current structure and unearth potential ways to improve it. Are certain employees responsible for too many tasks, and others too few? Is there unnecessary overlap between individual workers? Are there any duties that fall through the cracks? Should you reorganize in order to meet those needs, hire additional workers, or possibly even outsource these assignments? You may find that you can better utilize the workers you already have, and thereby increase productivity.

A business organizational chart can also improve cross-functional communication throughout your business, which leads to more effective project management. It’s easier to accomplish tasks that involve multiple workers or teams when the reporting structure is clear, and everyone knows who to talk to about what.

Demonstrate current success

Even if you think that your business wouldn’t benefit from an organization chart, you may find that potential lenders want to see one when you're applying for financing. Similar to a business plan, banks, institutions like the SBA, and potential investors want assurance that you’ve carefully considered the structure of your business, as such preparation is often an indicator of future success.

As financial professionals, they’ll also want to ensure that the business organizational method you’ve chosen is one that they believe is likely to prosper—so that you can pay back your potential business loan on time.

Facilitate future planning

Finally, a small business organizational chart can help you prepare for the evolution and expansion of your business. In this vein, we'd recommend that you create two versions of your organization chart: one that reflects your current company structure and one that shows your growth objectives. You might even consider additional charts that indicate how you might reorganize should unexpected changes occur, like reductions in funding or the sudden departure of a key employee.

Your second business organizational chart, of course, will have a lot of blank spaces—room for all the positions you’d like to fill in the future as implement your business growth strategies. In this way, you can use your chart to find possible holes that exist in your current staffing, and you’ll have a built-in roadmap for future hiring.

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The bottom line

At the end of the day, taking the time to plan and create a business org chart can be extremely beneficial for your small business—now and in the future. Whether you develop this diagram yourself, or work with your team to do so, you can follow our four simple steps to complete the process relatively quickly and easily.

Plus, if you already utilize a payroll or HR software, you can check to see if your platform already includes an org chart builder. If it doesn't, you might decide to use one of the templates we've discussed here. On the other hand, if you don't have an HR or payroll software, you might consider exploring some of the top options out there—Gusto, Zenefits, etc.—as any of these solutions will not only allow you to create a small business org chart, but will also help you efficiently and effectively an important part of your day-to-day operations.

This article originally appeared on JustBusiness, a subsidiary of NerdWallet.

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How to create an organizational chart (with free examples)

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An organizational chart outlines how your company functions in real time. This diagram shows the reporting relationships between job titles and the roles in your organization. We’ll explain the different types of organizational charts and provide free templates for you to customize your own.

You’re having a family dinner when your grandma pulls out the family tree. She uncrinkles the piece of paper and traces her name down the line. As she searches, her finger lands on a name. “See! There he is, right next to your cousin Charles!” She points to the name of your third cousin, proving that this name matches that of a famous poet. 

In this guide, we’ll explain how to make an org chart, the different types of organizational charts, and provide free templates so you can customize and build your own.

How to make an organizational chart

An organizational chart is a way to visualize your company’s structure. To create an org chart, you’ll need to gather team member information and decide how you’d like to build the chart. 

As you consider the reporting relationships in your organization, you can plan your chart from top to bottom. 

Organizational chart example

1. Define scope

You can treat your organizational chart like any other new project you work on. Defining the scope of your org chart can help ensure it clearly represents your team structure . The scope will determine the overall purpose of your organizational chart.

Consider these questions to get started:

Will your org chart act as a resource for team members to know who’s who within the company? 

Will you share your organizational chart with external stakeholders or partners? 

Will you need multiple charts for different levels of the company? 

Asking these questions from the start can help you gather the right information and map out your chart.

2. Gather information

Gathering information is the most important step of making an organizational chart because without the right information, you won’t be able to proceed.  You can gather information by surveying individual team members through email or working with your HR department. 

You’ll need up-to-date information about the people in your company, including employee names and their latest job titles. You’ll also need to understand reporting relationships throughout your company, such as the hierarchy between managers and direct reports. Consider gathering headshots of your team for added personalization.

3. Decide how to build your chart

Deciding how to build your organizational chart is crucial because different tools can make the process easier. Drawing out your org chart by hand isn’t time efficient and will make your results hard to share, so consider harnessing the power of a tool for this process. 

Using an editable PDF can save you time because the template is pre-built with placeholders. You can then easily share the PDF with the rest of your company. 

4. Plan for updates

After creating your org chart, use a team calendar to plan for regular updates. After all, it’s likely that your company structure and team dynamics will change often. 

People switch in and out of positions, new employees are hired, and reporting relationships change. With a digital org chart, it’s easy to update the structure and redistribute it to team members.

Organizational chart templates

Creating an organizational chart can be easier when building from an org chart template. Most companies follow similar structures, whether it’s a top-down structure or a matrix structure. 

You can use the org chart examples below as jumping-off points. To create your custom org chart, determine which organizational type best represents your company structure. Then, update the template to fit your unique team needs.

Types of organizational charts

There are four common org chart types. Each one of these charts uses a different chart design and represents a different way that a company might function. Since an organizational chart is basically a hierarchy chart—a visual translation of your company’s internal structure—the chart type you use should mirror your organization’s reporting relationships and decision-making procedures.  

Types of organizational charts

1. Functional top-down

A functional top-down org chart is the most common structure, with the company functioning as a hierarchy. At the top of this organizational structure there is one team member, who usually has the title of president or CEO. 

Branching off from that team member are the leaders who are next in charge, like the company vice presidents. The organizational hierarchy extends further into departments and eventually branches into teams. 

2. Matrix organizational chart

The matrix organization is a more complex structure than the traditional top-down design. If your company uses this reporting structure, team members report to multiple managers. 

While employees likely have a primary manager they report to for their department, they may also report to a project manager . These secondary project managers also have department managers they report to, which makes the matrix org chart look rectangular instead of tree-like. 

3. Divisional structure

A divisional organizational structure is a high-level version of the traditional hierarchical structure. Divisional structures make sense for companies that have departments working independently from one another. 

For example, companies with separate product lines may work in divisional structures because each product line has separate IT, marketing, and sales departments.

4. Flat organizational chart

The flat organizational chart is unique because it shows few or no levels of management. This type of organizational structure may be present in a small business or a modern business that’s experimenting with no chain of command. 

With this type of organizational structure, the company promotes wide-spread team member self-management and decision-making. 

How to use an org chart

You can benefit your company by using an organizational structure because it provides a visual representation of different departments and job titles in action. This chart can help team members understand how to collaborate with one another and feel confident in their role and responsibilities. 

Visualize reporting relationships

As a manager, you may use an org chart to show work responsibilities and reporting relationships to new team members. When onboarding new hires, the org chart helps team members get to know their fellow teammates and what they do. It also helps new team members remember who’s who within the company. 

Manage growth and change

Organizational charts can also help the leadership team stay organized and manage growth or change within the company. For example, if a department head notices that one team has become larger than other teams, they can shift or hire new team members to create balance.

See where everyone fits

An org chart creates clarity by showing everyone in the company where they fit in the organizational structure. If a new member joins the team, they can glance at the organizational chart and understand that they have five other members on their team, two assistants below them, and a project manager above them. They can also see that their project manager reports to a department manager.

Improve communication

Having an established organizational structure for your company can improve communication because it makes reporting relationships clear. Without an organizational chart in place, team members may not know who to go to when they have questions. The org chart makes it clear who leads what, so team members can feel empowered to ask questions and collaborate with others.  

Create visual directory

An org chart is essentially a visual directory of your organization. You can  update the chart when team members get promoted or when they leave. Keeping a visual directory up to date keeps everyone informed of who’s working at the company and what their current position is.

Limitations of using an org chart

While organizational charts can increase communication among teams, there are limitations of using them. Knowing these limitations can help you find solutions to any potential issues before they occur.

Can get outdated quickly

Org charts can get outdated quickly as companies restructure and shift team roles. Team members must be mindful and keep the org chart updated with current company structure and staff names. 

Solution: Assign someone to regularly update and redistribute your organizational chart in order to maintain this valuable resource.

Only shows formal relationships

The organizational chart is a one-dimensional document, so it doesn’t offer much explanation beyond the reporting structure it provides. While it’s useful in visualizing the basic company structure, it only shows formal relationships. Many companies function and thrive on various informal reporting relationships that wouldn’t show up on a traditional org chart. 

Solution: Use an org chart as a jumping off point, but keep in mind there may be other working relationships that the org chart doesn’t capture.

Doesn’t display management style

While the org chart shows managers and the team members that report to them, it won’t show what each manager is like. For example, the org chart may show that one manager has two team members and another manager has five team members. Assumptions may be made that the manager with more team members is a stronger leader, but the org chart won’t show that the manager with less team members has a more hands-on management style . 

Solution: Use your org chart as a first point of reference, but be mindful that face to face contact is the best way to understand reporting relationships among internal teams.

Can be difficult to update

Not only can printable org chart worksheets or drawn-out organization charts become outdated quickly, they can also be difficult to update. After all, if your chart is created in a static tool, you’ll have to start from scratch every time your organization’s structure changes.

Solution: Instead of creating your chart in a fixed workspace, opt for a dynamic tool. Platforms like Microsoft Word, PowerPoint, and Excel are easily updated. Or, take it one step further with org chart software or a project management tool that uses integrations and apps to connect your team to data visualizers that map out workflows, like LucidChart and Miro .

Streamline your organizational structure with a chart

While there are limitations to organizational charts, these charts offer a helpful way to understand your company structure. It can also improve communication with upper management by clarifying roles and responsibilities. To build an organizational chart for your company, use our free editable PDFs and customize them as you see fit. 

Need help streamlining teamwork? Find out how Asana helps teams communicate effectively. 

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Writing the Organization and Management Section of Your Business Plan

What is the organization and management section in a business plan.

  • What to Put in the Organization and Management Section

Organization

The management team, helpful tips to write this section, frequently asked questions (faqs).

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Every business plan needs an organization and management section. This document will help you convey your vision for how your business will be structured. Here's how to write a good one.

Key Takeaways

  • This section of your business plan details your corporate structure.
  • It should explain the hierarchy of management, including details about the owners, the board of directors, and any professional partners.
  • The point of this section is to clarify who will be in charge of each aspect of your business, as well as how those individuals will help the business succeed.

The organization and management section of your business plan should summarize information about your business structure and team. It usually comes after the market analysis section in a business plan . It's especially important to include this section if you have a partnership or a multi-member limited liability company (LLC). However, if you're starting a home business or are  writing  a business plan for one that's already operating, and you're the only person involved, then you don't need to include this section.

What To Put in the Organization and Management Section

You can separate the two terms to better understand how to write this section of the business plan.

The "organization" in this section refers to how your business is structured and the people involved. "Management" refers to the responsibilities different managers have and what those individuals bring to the company.

In the opening of the section, you want to give a summary of your management team, including size, composition, and a bit about each member's experience.

For example, you might write something like "Our management team of five has more than 20 years of experience in the industry."

The organization section sets up the hierarchy of the people involved in your business. It's often set up in a chart form. If you have a partnership or multi-member LLC, this is where you indicate who is president or CEO, the CFO, director of marketing, and any other roles you have in your business. If you're a single-person home business, this becomes easy as you're the only one on the chart.

Technically, this part of the plan is about owner members, but if you plan to outsource work or hire a virtual assistant, you can include them here, as well. For example, you might have a freelance webmaster, marketing assistant, and copywriter. You might even have a virtual assistant whose job it is to work with your other freelancers. These people aren't owners but have significant duties in your business.

Some common types of business structures include sole proprietorships, partnerships, LLCs, and corporations.

Sole Proprietorship

This type of business isn't a separate entity. Instead, business assets and liabilities are entwined with your personal finances. You're the sole person in charge, and you won't be allowed to sell stock or bring in new owners. If you don't register as any other kind of business, you'll automatically be considered a sole proprietorship.

Partnership

Partnerships can be either limited (LP) or limited liability (LLP). LPs have one general partner who takes on the bulk of the liability for the company, while all other partner owners have limited liability (and limited control over the business). LLPs are like an LP without a general partner; all partners have limited liability from debts as well as the actions of other partners.

Limited Liability Company

A limited liability company (LLC) combines elements of partnership and corporate structures. Your personal liability is limited, and profits are passed through to your personal returns.

Corporation

There are many variations of corporate structure that an organization might choose. These include C corps, which allow companies to issue stock shares, pay corporate taxes (rather than passing profits through to personal returns), and offer the highest level of personal protection from business activities. There are also nonprofit corporations, which are similar to C corps, but they don't seek profits and don't pay state or federal income taxes.

This section highlights what you and the others involved in the running of your business bring to the table. This not only includes owners and managers but also your board of directors (if you have one) and support professionals. Start by indicating your business structure, and then list the team members.

Owner/Manager/Members

Provide the following information on each owner/manager/member:

  • Percentage of ownership (LLC, corporation, etc.)
  • Extent of involvement (active or silent partner)
  • Type of ownership (stock options, general partner, etc.)
  • Position in the business (CEO, CFO, etc.)
  • Duties and responsibilities
  • Educational background
  • Experience or skills that are relevant to the business and the duties
  • Past employment
  • Skills will benefit the business
  • Awards and recognition
  • Compensation (how paid)
  • How each person's skills and experience will complement you and each other

Board of Directors

A board of directors is another part of your management team. If you don't have a board of directors, you don't need this information. This section provides much of the same information as in the ownership and management team sub-section. 

  • Position (if there are positions)
  • Involvement with the company

Even a one-person business could benefit from a small group of other business owners providing feedback, support, and accountability as an advisory board. 

Support Professionals

Especially if you're seeking funding, let potential investors know you're on the ball with a lawyer, accountant, and other professionals that are involved in your business. This is the place to list any freelancers or contractors you're using. Like the other sections, you'll want to include:

  • Background information such as education or certificates
  • Services provided to your business
  • Relationship information (retainer, as-needed, regular, etc.)
  • Skills and experience making them ideal for the work you need
  • Anything else that makes them stand out as quality professionals (awards, etc.)

Writing a business plan seems like an overwhelming activity, especially if you're starting a small, one-person business. But writing a business plan can be fairly simple.

Like other parts of the business plan, this is a section you'll want to update if you have team member changes, or if you and your team members receive any additional training, awards, or other resume changes that benefit the business.

Because it highlights the skills and experience you and your team offer, it can be a great resource to refer to when seeking publicity and marketing opportunities. You can refer to it when creating your media kit or pitching for publicity.

Why are organization and management important to a business plan?

The point of this section is to clarify who's in charge of what. This document can clarify these roles for yourself, as well as investors and employees.

What should you cover in the organization and management section of a business plan?

The organization and management section should explain the chain of command , roles, and responsibilities. It should also explain a bit about what makes each person particularly well-suited to take charge of their area of the business.

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How to Create an Organizational Chart for Your Small Business

By Becky Simon | April 5, 2022

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Creating an organizational chart can help a small business organize and plan for growth. We’ve simplified the process with a step-by-step how-to guide, example org charts, and expert tips.

Included on this page, you’ll learn why your small business needs an organizational chart,  how to create a simple organizational chart from a template, and how company culture plays a part in the shape of your chart.

What Is a Small Business Organizational Chart?

A small business organizational chart is a structured visual display of the people who fill the roles in a company and their working relationship with one another. It is a straightforward graphic that shows who reports to whom.

Aseem Kishore

Aseem Kishore, the CEO of Help Desk Geek , outlines some of the benefits of creating an organizational chart. “Organizational charts are gaining huge popularity — and rightly so, because they have many advantages. The most fundamental advantage of an organizational chart is the fact that the reporting line and chain of command become clear. [Organizational charts] also help in noting job vacancies and overall headcount.”

Members of the C-suite and directors typically create the organizational chart but lower-level managers should also provide input. To make a chart more visually appealing, consider consulting with a designer once you have finalized the basic structure of your chart. 

Visit our guide to learn more about organizational charts, including how to create one from scratch in Microsoft Excel .

Why a Small Business Needs an Organizational Chart

With an organizational chart, small businesses can more easily outline the roles and reporting structure of their employees. By outlining the organizational structure, companies can help provide a roadmap for growth, as well as improved visibility and communication.

Some of the biggest advantages of having an organizational chart for small businesses include the following:

  • Improve Visibility: By making your business more transparent, you’ll increase trust and communication among employees and departments. An organizational chart can foster visibility by making reporting information available to all members of the organization. “For smaller businesses, the basic aim is to clarify each other's positions in order to avoid office politics,” says Kishore. He suggests creating a simple chart and sharing it with all employees.
  • Reinforce Company Culture: Your organizational chart can help establish and provide insight into your company’s culture. A chart that outlines a long, tall hierarchical structure may represent a company that has a lot of room for advancement in set roles, while a short, wide structure may represent a company that encourages employees to try many things and be less specialized.

David Reid

  • Improve Onboarding: Having an organizational chart available for new hires can help them familiarize themselves with the people they will be working with.

Stella Monteiro

  • Encourage Accountability: An organizational chart lays out exactly who reports to whom and who is responsible for various people and projects. Having one can help ensure that managers are not overburdened and that no one gets lost in the shuffle. “For leadership, a well-designed organizational chart makes it easy to view headcount allocation per department, front versus back ratio, and other important metrics,” says Monteiro.

Types of Small Business Organizational Charts

There are many types of organizational charts, but most small businesses will choose one of three: flat, hierarchical, or matrix. We’ve outlined the distinctions among the display types below:

Hierarchical Organizational Chart

  • Matrix: Matrix-style charts are most useful for companies that work on multiple projects at once, or with teams that are not always discrete from one another. The matrix style divides employees by department, but also by project, to visually display what everyone is working on at a given time. This chart will likely need to be updated more often than the others as projects reach completion and tasks change.

How to Create a Small Business Organizational Chart

Creating a small business organizational chart is a simple process. First, organize the names and titles of the people in your organization. Then, determine who reports to whom and create a chart. Add design elements to personalize your chart, then share it with your organization.

organizational chart of a business plan

  • Create Your Chart: Start at the top with your CEO and work down from there by adding the CEO’s direct reports, then their direct reports. It is generally easier to approach your chart row by row, adding all the employees in one tier across the company, before adding the employees that report to each of them. Keep it simple at this stage, and stick to names and titles. Don’t worry about adding visual flair at this point — just ensure that your data is accurate.
  • Proofread and Make Changes: Share your draft chart with others to verify its accuracy and make any needed changes. Compare your chart against your employee roster to ensure that titles are up to date and that all names are spelled correctly.
  • Add Design Elements: Add employee headshots and company branding, and change the colors of departments or tiers. Standardize your spacing and shapes. A basic chart requires very little design, but if you plan to share your organizational chart widely, you may consider consulting with a designer for this step. For design inspiration, check out our roundup of free organizational chart templates for Microsoft Word .
  • Share and Store: Share your completed organizational chart with your employees, and store it in an easily accessible place. Update your organizational chart on a regular basis to maintain accuracy.

How to Make a Simple Organizational Chart for a Small Business Using a Template

You can create an organizational chart very simply, using our downloadable Excel templates . Use the templates as a simple, pre-made base that you can add to and customize to suit your organization. 

We’ll walk you through step by step on how to create an organizational chart from a template below.

1. Download Your Organizational Chart Template

Hierarchical Organizational Chart Template

Download Hierarchical Organizational Chart Template — Microsoft Excel

This template provides a simple base hierarchy that you can build upon to create your own organizational chart. Copy and paste the name bubbles, connecting lines, and photo placeholders to create your layout, and then add photos and customize the look. Hierarchical organizational charts are widely used by small businesses and are the easiest to revise and build on as your business grows.

Once you have downloaded your template, open it in Microsoft Excel.

Pro Tip: Make sure to click Enable Editing at the top of the spreadsheet. Doing so will allow you to make changes to the document.

Org Chart Enable Editing

2. Enter Your Company Information

  • Click on the Company field and enter the name of your company. 
  • In the Compiled By field, enter your name. 
  • Enter the date in the Date Completed field.

Org Chart Compiled By

3. Draft Your Layout

Determine how many employees you need to include and where they fall within your chart. Start at the top and determine how many employees are at each level; then, complete each successive level. Make a list of names and who they report to.

Pro Tip: Sketch your layout on a piece of paper to use for reference when creating your chart in the template.

4. Add Employee Entries to the Chart as Needed

Org Chart Add Blank Icons

  • Click and drag the newly pasted icon to the exact spot you would like to place it. Repeat the copy-and-paste process on the image placeholder icon.

Org Chart Top Level

5. Enter Your Employee Information

  • Click on the top-most bubble (which is colored blue-gray by default) in the template and enter the name of the highest-ranking employee in your company, as well as their title. 

Org Chart Filled

6. Review and Revise

Send your first draft to colleagues to review, and make any needed changes. Verify that names and titles are spelled correctly and that lines of report are correct.

7. Add Employee Photos

Once your layout is complete and the employee information has been entered into your chart, change the placeholder images to pictures of your employees. 

Org Chart Change Picture

  • Repeat these steps for every employee on your chart.

8. Customize Your Chart

  • To customize the look of your chart, click on an icon in your chart. 
  • With an icon selected, click on the Shape Format tab .

Org Chart Shape Format

From this tab, you can change the shapes and colors of your employee entries.

Org Chart Shape Format Tab

Pro Tip: You can also access these tools by right-clicking an icon and clicking Format Shape from the drop-down menu.

  • To change the shape of an icon, locate the Insert Shape tab, click Edit Shape , then highlight Change Shape . 
  • Choose from a variety of shapes in the following drop-down menu.

Org Chart Change Shape

  • To change the color scheme of an icon, locate the Shape Styles tab. 
  • Change the background color of a shape by selecting a color from the Shape Fill drop-down menu, or change the color of an outline by clicking Shape Outline . 
  • You can add various edge effects to a shape from the Shape Effects menu, or select a pre-made theme by browsing with the arrow buttons. 

Org Chart Shape Color

Pro Tip: Maintain visual cohesion by ensuring that employee icons on the same level are the same color and shape as one another.

9. Save and Share Your Chart

Save your organizational chart in an accessible drive, and share it with your team. Revisit and revise your chart on a regular basis to ensure that it is accurate and up to date.

Small Business Org Chart Sample Template

Hierarchical Organizational Chart Template Example

Download Hierarchical Organizational Chart Template Example — Microsoft Excel

This template is an example of a simple organizational chart for a small business. It is prefilled with the names and job titles of three tiers of employee hierarchy but can be easily customized to suit your needs. Add or subtract employees, change the reporting lines, and enter job titles to create an organizational chart for your own small business.

Tips for Creating an Organizational Chart for a Small Business

An organizational chart for a small business can take many forms. We’ve rounded up some tips, from incorporating headshots and other design elements to considering multiple versions of a chart, and expanded on them below:

  • Use Employee Headshots: If you are using your organizational chart to aid in onboarding new employees, including headshots is a great way to help familiarize them with the people they will be working with. It is unlikely they will be able to meet everyone on their first day, and it can be very helpful to put a face to a name.
  • Use Cohesive Design Elements: An organizational chart can be as simple as titles connected by lines, but paying attention to spacing and adding cohesive color and shapes can both make a chart easier to read and more memorable. Consider using a template or working with a designer to create a chart that is easy to parse and nice to look at.
  • Use Available Software: An organizational chart is easy to make in Microsoft Word , Microsoft Excel, or Google Sheets. You can also use flowchart creators like Lucidchart to make simple charts, as well as more powerful image creation and editing tools like Adobe Photoshop to make more complicated graphics. All of these tools offer their own advantages, so use the ones you are most familiar with for best results.
  • Create an Initial Chart Without Names: When creating an organizational chart for your company for the first time, consider leaving out names. Start by listing out all of the roles and responsibilities that are needed to do business. When you add names, it will be easier to see the gaps and easier to plan to fill them. “By removing names from the equation, we can concentrate on structuring our organization rather than particular people,” explains Reid.
  • Multiple Versions: You may find it useful to create different versions of your chart for different use cases. A chart for onboarding new hires may have photos, for example, where an internal reference chart for C-levels may not need them. “You might also consider a chart with current positions and one with open positions, as both will function as a tool for decision-making and growth,” suggests Monteiro.
  • Keep Things Concise: In general, keep your chart as simple as is needed. As your business grows and your chart expands, you might consider displaying whole teams as a single entry on your chart, rather than listing the names of everyone on those teams. “My organizational chart is in the form of a single-page PDF file. I believe having multiple pages makes it more complicated, so I always aim to fit everything on one page. When modifications are needed, I make them on a separate file and convert it into a new PDF to retain records over time,” says Anevski.

What Is the Best Organizational Structure for a Small Business?

The best organizational structure for a small business is typically a hierarchical form that reflects the needs and current reality of the company. Organizational structures vary widely based on the company size, the industry, and the changing nature of projects.

Smaller businesses have fewer employees, which can mean that people fill multiple roles. If you find that your employees wear many hats without rigidly defined roles, you might try a flatter structure. If your positions and roles are well-defined and unchanging, a traditional top-down hierarchy may be best. 

If your company works on multiple projects at the same time, with multiple teams, a matrix might be best to display that reality. Some small businesses may find that the top of their hierarchy remains unchanging while their teams change based on the project. A project-based structure can provide some flexibility for small businesses that may have less specialized teams. “A project-based structure has worked best for our small business. Our industry culture supports this structure as most of us operate using smaller workflows. The project-based system helps add to the resource pool and makes it more diverse. It also helps in allocating resources and finishing deadlines with increased clarity,” says Gamez. 

The shape of your structure may grow wider or longer, depending on how many rungs of accountability your business has and how often they work together. “My small business has always used a functional organizational structure, but no matter what you do, employees should be organized according to their skillset and corresponding function in the company,” suggests Anevski.

The Role a Work Culture Plays in Creating an Organizational Chart for a Small Business

Your chart can reinforce and reflect your culture in many ways. A smaller business should try to encourage interdepartmental cooperation and problem-solving rather than strict role-based work because this can promote better visibility, increased accountability, and better company-wide problem-solving.

“Culture has a profound effect on organizational structure. If a company's culture is open and very lean, that would reflect in its structure, which would not be very tall, rather wide — with cross-functional teams included. However, if the company has longer reporting lines, the structure will be longer as well,” explains Kishore. A company that is stricter in its approach to roles and rigidity will produce a taller, narrower chart. Either way, a chart that reflects the reality of the company will result in better trust and cooperation between employees who know what they are responsible for and whom they report to.

“My company culture focuses on teamwork,” says Anevski. “With the functional structure, each separate department is managed independently, helping different teams feel self-determined. The structure also allows employees to focus on their specific roles while encouraging growth and specialization.” 

Meanwhile, Reid his experience working in the culture of a taller chart. “We utilize the standard hierarchical model for our organization. The culture helps shape the structure by enforcing some measures. For example, government regulations require us to have specific procedures to be compliant. This compliance model requires structural changes to be incorporated. The structural requirements for incorporating formal communication differ from more informal communication,” he says.

Examples of Small Business Organization Charts

An organizational chart can take many forms, especially for small businesses. We’ve provided some examples of the kinds of charts you might expect to find in different small business situations below.

  • Tech Startup: This organizational chart represents a very small tech startup with a very small staff. Most employees report directly to the CEO, who takes care of most unlisted tasks and oversees the general management of the company. It is likely that every employee on this chart is regularly delegated tasks outside of their strict job description.

​​What to Do After You Create a Small Business Organizational Chart

Once your organizational chart has been created, don’t let it languish. Revisit and revise your chart regularly, utilize it when onboarding employees or introducing your business to people, and share it with employees so that they can stay informed.

  • Regularly Revisit and Revise: As your business grows, it is important to revise your organizational chart to reflect those changes. Set a schedule to revisit your chart a few times a year and make updates as needed. “As a business owner, you should expect that your small business won’t stay small forever. As it grows and hires more employees, your organizational chart will need to be modified. Always be prepared to add more people to your chart. For any small business, the chart will start out small and grow over time,” says Anevski.
  • Utilize It Often: Consult your chart when considering hiring new employees or creating new teams. Your organizational chart can be a great tool to introduce your business to new employees and clients, as well as identify gaps in your command chain.
  • Make It Available to Employees: When your chart is available to employees, you make it easier for them to contact the right people and answer questions. “We give the organizational chart to each of our employees. If someone ever needs information, they can follow the chain of command or go directly to the appropriate department, ” explains Reid.
  • Plan Individual Employee Growth: Your organizational chart can be a great tool to track and plot employee growth. “We use it to assist organizations in preparing their career proposition for employees, developing their job architecture, and workforce planning. It is a powerful tool for HR to partner with the company leadership,” Monteiro shares.
  • Create and Change Teams: Your organizational chart can help put together teams for new projects. Use it to see what people have done in the past and where they might be needed for future projects. “We use our organizational chart to delegate resources based on the nature of the project, skills required, and deadline dates. Since all resources are plotted as project-based, if the same skills are needed, a project shares and swaps resources. It has helped us become more agile and dynamic with our decision-making capabilities,” says Gamez.

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How to Write a Business Plan: Organization Structure

How to write a business plan: organizational structure, what is the organizational structure for a business plan.

The organization structure section should discuss whether your business will be a sole proprietor, limited liability corporation, or corporation, who will run your business, each person’s responsibility, and how your business will expand if needed.  There are numerous benefits to a detailed assessment of the company’s structure.  First, examining the structure of the business will help for tax purposes.  For example, limited liability and corporations are considered excellent for protecting shareholders concerning liabilities.  However, tax-wise, these firms often are double taxed.  The second benefit of a detailed assessment of a company’s structure is to understand how each owner will contribute to the company.  In other words, if there is more than one owner, what are their responsibilities, and how are these responsibilities to be carried out.

Why is the Organizational Structure important? 

There are numerous reasons why the organizational structure is essential for a business plan. In this section, the business owner will lay out how the company will be structured.  For example, this section will include job titles and responsibilities, resumes from owners and management, showing expertise in the industry, and supporting accolades for expertise.  Through discussing job responsibilities and experiences for management, readers will better understand why this type of business structure, and this management team, will be successful in the proposed business.

A second important reason for the organizational structure is that the section introduces business owners.  The owners and management team should not only be introduced in this section, but their experiences in the industry need to be highlighted and thoroughly explained.  In doing this, a sound foundation for management competence will be established.

A final reason for its importance is the job responsibility segment.  Ownership and management need to have a written document showing specific duties for each owner, if applicable, and specific job responsibilities for each position within the company.  By having this document, readers will see how the business will function and better understand the breakup of management responsibilities.

When to write the Organizational Structure?

The organizational structure should be written after the company description.   In the company description, readers will be introduced to the problem that the company is going to solve and how they propose to solve this problem.  This is usually the product or service offered.  The logical next step is to show a business structure that will allow the company to supply that product or service effectively and efficiently.  Thus the need for the organizational section follows immediately behind the company description.

How to write the Organizational Structure?

When I write my organizational structure for a business plan, for the most part, I start the first paragraph by reminding the readers of the company name.  From this, I then introduce how the company will be held in ownership.  For example, will the company be a limited liability corporation?  Sole proprietorship?  Next, I briefly introduce the management team and owners.  Further, I also briefly introduce their experience in the industry.

By following this structure, the first paragraph is an excellent summation of the section. This allows the reader to understand the breadth of the ownership structure without gaining significant details.

Organizational Structure:  Ownership

In the ownership section, I usually start writing the section by introducing the CEO/founder/majority owner.  In this portion, I usually write the segment, almost like a brief biography.  I will discuss the CEO's history in the industry and the reason why they feel that they are best suited to start and run the operation.

Once this is complete, I then follow the same structure with the other management team members and minority stakeholders.  When this is done, the reader should walk away with an excellent understanding of the qualifications of the ownership team and how their skills will complement each other.

Need Help Writing an Organizational Structure for a Business Plan?

Call or Text Paul, Doctoral Candidate, MBA.

321-948-9588

Email: [email protected]

Organizational Structure:  Responsibilities

In the job responsibility section, I usually structure this portion as a bullet-pointed list.  At the top, I put the title such as CEO, project manager, or job title.  Following this, I list the responsibilities and expectations for each position.  Not only does this help show structure and foresight for the company.  But also, this will help management divvy up duties for the business.

Organizational Structure: Resume

The resume section is for senior managers and owners.  By including resumes, supporting documentation is available for claims made related to experience.  For example, if the CEO claims to have 20 years of experience in the industry, then the resume will show where this experience came from.  This adds credibility to previous claims made.

Organizational Structure: Compensation

Compensation is sometimes necessary to include in the organizational structure component.  Investors expect management to be compensated and employees as well.  However, excessive compensation is often an issue with startups and established businesses.  By showing reasonable compensation for each position, not only will a solid understanding of the pay for each position be shown, but restraint for compensation by the management team and ownership may be highlighted as well.

Organizational Structure: Achievements

This final section is almost like a cherry on top of the cake.  By this point, the reader should be well-versed in the experience and expertise of ownership and the management team.  Adding achievements highlights their expertise in their chosen industry.

Organizational Structure Example

Organizational structure.

Legal Structure

ABC Restaurant will be a limited liability corporation.

Management Summary

John Smith, Sr., MBA., is the founder and CEO of ABC Restaurant.  He has started and managed numerous successful small restaurants over the last ten years.  Restaurants started, and managed, including a breakfast cafe, food truck, and 24-hour diner.  For each business, he was responsible for all aspects of the organization, from marketing to strategic planning.

Job Responsibilities

  • Create and execute marketing strategies for business growth.
  • Align business strategies with the vision statement.
  • Negotiating contracts with vendors.
  • Ensure legal compliance for the business.
  • Continually examine the firm’s external environment for new market opportunities.

General Manager:

  • Control inventory to ensure optimal levels are attained.
  • Manage day-to-day operations of the restaurant.
  • Servers and cooks during high volume times.
  • Interview and hire new employees.
  • Assist in the onboarding process for new employees.
  • Set up all workstations in the kitchen
  • Prepare ingredients to use in cooked and non-cooked foods.
  • Check food while cooking for appropriate temperatures.
  • Ensure great presentation by dressing dishes as trained.
  • Keep a sanitized and clean environment in the kitchen area.
  • Stock dining area tables with needed items.
  • Greet customers when they enter.
  • Present dinner menus and help customers with food/beverages selections.
  • Take and serve orders quickly and accurately.

Author: Paul Borosky, MBA., Doctoral Candidate, Published Author

Updated: 3/4/2022

Noirwolf

Business Plan Organization and Management: How to Write Guide .

Sep 17, 2023 | Business Consulting , Business Plan , Organization and Management , Organizational Development , Strategy

Every successful business plan should include a section on organization and management. This section will help you communicate your vision for your business's structure. Here's a guide on how to write an effective section.

Writing the Business Plan Organization and Management Section

It provides critical information for those looking for evidence that your staff has the necessary experience, skills, and pedigree to realize the objectives detailed in the rest of your business plan.

What Is the Organization and Management Section in a Business Plan?

The organization and management section of your business plan should provide details about your business structure and team. This section typically comes after the executive summary. However, some people have it further in the document after the market analysis section.

This section generally is separated into two parts. The first concerns the organization as a whole. It gives readers an overview of the company structure, which is an excellent opportunity for the reader to lift the roof off your office and peer into its inner workings. For your legal design, you may set up as a limited liability company (LLC) or nonprofit/ charity or form a partnership. It’s crucial to include this section. However, suppose you’re starting a home business or have an already operating business where you’re the only person involved. In that case, you can skip this section or show the company registration details from either the company’s house or the awarding .gov.

The second part focuses specifically on your management team and introduces readers to each member — your chance to impress them with the many accomplishments pinned to your organization’s management team.

This section may seem less important than some of the other parts of your business plan, but the truth is that your people are your business. If they’re highly competent and accomplished, the implication is that so is your business.

Of course, if you’re a sole proprietor with no management structure or any employees, this section is unnecessary other than to talk about yourself and your achievements.

Every successful business plan should include a section on organization and management. This section will help you communicate your vision for your business's structure. Here's a guide on how to write an effective section.

The section on organization and management should outline the hierarchy, individual roles, and corresponding responsibilities. It should also highlight each person’s strengths and qualifications for their positions.

Business Plan Organization Section

The organizational section of your business plan outlines the hierarchy of individuals involved in your business, typically in a chart format. This section identifies the President or CEO, CFO, Director of Marketing, and other roles for partnerships or multi-member LLCs. If you’re a single-person home business, this section is straightforward as you are the only person on the chart.

Although this section primarily focuses on owner members, you can include outsourced workers or virtual assistants if you plan to hire them. For example, you may have a freelance web admin, marketing assistant, or copywriter. You may even have a virtual assistant who coordinates with your other freelancers. While these individuals are not owners, they hold significant responsibilities in your business.

There are various business structures, such as sole proprietorships, partnerships, LLCs, and corporations.

Detail the Legal Structure within the Business Plan Organization and Management Section

Here is an indicative list of business structures. It would help if you talked to your accountant and legal advisors to determine which legal form is the best for your business proposition.

Sole Proprietorship

When embarking on a business venture, it’s essential to consider the various structures available. A sole proprietorship is a structure whereby the business is not regarded as separate from its owner’s finances. The owner retains complete control and responsibility for the company. However, they are unable to sell stocks or bring in new owners. The business becomes a sole proprietorship if not registered under any other structure.

Partnership

When forming a partnership, it can either be a limited partnership (LP) or a limited liability partnership (LLP). One partner assumes most liability in a limited partnership (LP). In contrast, the other partners have limited liability and control over the business. Alternatively, in a limited liability partnership (LLP), all partners have limited liability from debts and actions of other partners, and there is no general partner.

Limited Liability Company

A limited company (LTD) or limited liability company (LLC) is a mixture of business structures that mixes aspects of partnerships and corporations. It offers limited personal liability to the owner and passes profits through to their tax returns.

Corporation

There are various types of corporate structures. A C-corporation enables the issuance of stock shares, pays corporate taxes instead of personal returns, and provides the highest level of personal protection from business activities. On the other hand, nonprofit corporations are similar to C corporations. However, they do not aim to make profits and are exempt from state or federal income taxes.

More information on company legal structures is available on UK.Gov and USA.SBA websites.

Describe Your Company’s Organizational Structure

This first step illustrates the positions in your organization’s employee hierarchy and how they all relate to each other.

This is usually done graphically as a guide, using an organizational chart, or “org chart” for short. People use a Microsoft tool, i.e., PowerPoint or Excel, to help.

Organization Charts typically follow a top-down hierarchy, starting with your CEO/ Managing Director in the top box at the top of the page. Lines extend down from that person’s name to boxes containing the terms of the CEO’s direct reports.

We have included an example organizational chart below for guidelines only.

Showing an organizational structure for a business

Identify your business organization structure and list your team members’ strengths and skills.

Those managers then have lines extending to those who report to them, and so on, down to your lowest staff positions.

This section will give your readers a quick understanding of your management and governance structure, the size of your organization, and your lines of control and communication.

Describe your Team in your Business Plan Organization and Management Section

In your business plan’s Organization and Management section, please provide a detailed description of your team. Y ou will discuss the company’s management team, starting with the owners.

This section highlights who is involved in the running of your business and who are the support professionals. It also includes the roles and responsibilities of managers.

Suppose the company structure is a multi-owner arrangement or some other multi-owner arrangement. In that case, you’ll want to include information for every member and their percentage of ownership and ongoing involvement in the company.

It’s important to discuss how ownership interests are split, their responsibilities, what they did before securing their current position, and how they came to be involved with the company.

Here, it would help if you talked about some of your critical team members. These people are directly responsible for large portions of your business operations.

Owner/Manager/Members

Within your business o rganization and management section, y ou should introduce the team and talk about their experience, qualifications, previous companies and achievements, role in the company, and any special skills they bring with them. Please provide the following details for each owner, manager, or member of the business within your business plan:

  • Percentage of ownership (if applicable)
  • Level of involvement (active or silent partner)
  • Type of ownership (e.g., stock options, general partner)
  • Position in the company (CEO, CFO, etc.)
  • Responsibilities and Duties
  • Educational background
  • Relevant experience and skills
  • Previous employment history
  • Skills that will benefit the business
  • Awards or recognition received
  • Compensation structure
  • How each individual’s skills and experience will complement and contribute to the business’s success

Perhaps they’re an entrepreneur, business coach, exclusive advisor, or industry specialist to help you grow.

This is an ideal opportunity for companies with an Executive Board of Directors, Governance Structure, or Advisory Board to introduce them to your readers.

Executive Board

Having a board of directors is essential for your management team. Without one, you may be missing out on crucial information. This section includes details similar to those found in the ownership and management team sub-section, such as the names, areas of expertise, positions (if applicable), and involvement with the company of each board member.

Strategic Advisors

Suppose you’re looking for funding for your business or to fill a gap in your knowledge, or you may not have the funds to hire an executive board. In that case, you must inform potential partners and investors that you have a team of professionals assisting you. This includes lawyers, accountants, and any freelancers or contractors you may be working with. When listing these individuals, include their name, title, educational background, certifications, services they provide to your business, and their relationship with you (i.e., hourly rates, projects, retainer, as-needed, regular). Additionally, highlight their skills and experience that make them an asset to your team you need

Does anything else make them stand out as quality professionals (awards, past working with credible brands)?

Spotlight on the Wider Team Structure

Now, you’ve showcased the management team in its entirety. You can provide brief bios for hiring team needs or secondary members and talk at length about how the team’s combined skills complement each other and how they amplify the team’s effectiveness.

It’s also important to point out any gaps in the knowledge your team is currently suffering. Your readers will likely be savvy enough to pick up on existing holes.

Therefore, you’ll want to get ahead of these criticisms and demonstrate that you’re already aware of the positions and complementary skill sets your management team still requires and how you plan to address the knowledge gaps with future hires.

Do you need help writing your business plan o rganization and management section ? 

Every successful business plan should include the organization and management section, helping you communicate your legal structure and team.

Writing a business plan can seem overwhelming, especially when starting a small, one-person business. However, it can be a reasonably simple task. This section of the plan should be updated if there are any changes to the organization structure or team members, such as additional training, awards, or other resume changes that benefit the business.

Creating your comprehensive business plan takes planning, research, time, and a herculean effort. If, at any point, the work becomes too much to handle, we can step in to assist.

Do you want an expert “second opinion” before creating your business plan or financial forecasts? Let’s talk !

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What is the Change Management Process?

What is the Change Management Process?

Feb 2, 2024

Change is the only constant in today’s fast-paced world, and organizations must adapt to stay ahead. Fortunately, change management provides a structured and coordinated approach that enables businesses to move from their current state to a future desirable state. To deliver business value, organizations introduce change through projects, programs, and portfolios. However, introducing change is just the beginning! The real challenge is to embed the change and make it a new normal state for the organization. This calls for implementing the main principles of change management, which we will discuss in this article. Get ready to transform your organization and achieve your desired outcomes by mastering the art of change management!

Starting a Business in the UK: Step-by-Step Guide

Starting a Business in the UK: Step-by-Step Guide

Jan 23, 2024

Starting a successful business requires researching the market, analyzing competitors, developing a business plan, choosing a suitable name, registering with Companies House, securing funding, establishing a solid brand, creating operational functions, and expanding operations as the business grows. Approaching each step thoughtfully and diligently is crucial to establishing a successful enterprise. Our helpful guide provides a comprehensive checklist to aid you in starting a successful business. Following these key steps can increase your chances of success and achieving your goals.

Business Transformation Guide

Business Transformation Guide

Jan 5, 2024

Implementing business transformation involves changing operations, processes, or systems to align with the company’s strategy and vision. This change management approach may result in realignments, shifts, or fundamental alterations. Several factors may prompt a business to consider transforming, including market shifts, low profits, the emergence of new technologies, or mergers and acquisitions. The transformation process may require changes across the entire organization, for example, when integrating two companies after a merger or acquisition. Alternatively, changing specific HR, IT, Finance, or Supply Chain functions may involve changing. For instance, IT leaders may advocate for a new ERP system. In contrast, functional leaders may outsource back-office finance operations and human resource management to improve efficiency and realize operational cost savings.

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How to make the best org chart for your business

No matter where you work, knowing who does what and where they fit in can help everybody do their jobs better. An organizational chart gives everyone a quick glance into how the business is structured, whether it’s an established office, a startup, a manufacturing plant or something else. 

What’s an organizational chart? 

Chances are, you’ve seen one before. Organizational charts, also called org charts or organograms, feature boxes, shapes or photos that represent people and positions. They can also include contact information, page links, icons and illustrations.

org chart example

When connected with lines, those boxes form a chart that depicts the internal structure of an organization. It shows who reports to whom, where divisions lie and how departments are connected.  

What is the purpose of an organizational chart? 

Org charts can help new hires or volunteers get to know a company quickly by assisting them in putting names and faces to roles and responsibilities. Even long-time staffers, HR departments and business owners can benefit from having an organizational chart at their fingertips.

Here’s what they do: 

  • Show the internal structure and hierarchies 
  • Help employees figure out who to report and who to contact if problems occur 
  • Assist in clarifying roles and responsibilities  
  • Make it easy to keep employee contact info in one convenient place 
  • Help management see how many employees are in each department and how to allocate staff and other resources best 
  • Give staff insight into promotion channels 

One organogram can’t do everything. Let’s take a look at the types of org charts companies use most. 

What are the four types of organizational structures? 

The type of org chart you use will depend on your audience, your organization and what you want to convey. You may need just one sample of chart for your entire company or a few for several different audiences or divisions.  

While each type of organizational chart can be modified and edited, most companies use org charts that fall into one of these four categories:  

1. Functional top-down hierarchy 

Perfect for showing a traditional business structure, the hierarchy chart starts with the C-Suite at the top, then it’s broken into departments or divisions. Within each division, you’ll list senior management, middle managers, senior staffers, mid-level personnel and junior staff members. In the end, the hierarchy chart looks like a pyramid with every department rolling up to the CEO. 

NOTE : Hierarchical org charts are generally easy to understand. But when there are multiple layers in the chain of command, knowing who to connect with and when can seem difficult, especially if there’s a problem or if someone has a new idea.   

2. Divisional organizational chart 

This form is a safe choice if your company is organized along product lines or geographic regions. If they’re independent of one another, a divisional org chart is also an excellent way to reflect that clearly. Like an organizational hierarchy chart, the divisional chart starts with a president or CEO, but instead of a division into departments with shared resources, it’s divided into lines of business (LOBs). The chart covers each LOB’s departments, like HR, accounting, legal and marketing and the people or positions within those departments.  

NOTE : Because organizations like this often have redundant departments within each division, a divisional structure can result in staff bloat and unnecessary overhead expenses. 

3. Matrix organizational chart 

This type of organogram usually applies to companies with teams or team members who have more than one manager. For instance, at a newspaper, a reporter may cover a local news beat as well as a financial beat, which means they would have two managers. Or a graphic designer at an energy provider may report to the head of graphic design. But because he or she works on projects for the renewable energy division, then the designer may also communicate up to someone on that team.  

NOTE : When team members work across departments, organizations can usually find more creative ways to solve problems. This creates a more cooperative environment. However, when teams or team members have more than one supervisor, it can increase confusion and conflicts.  

4. Flat organizational chart 

Used almost exclusively by small businesses, flat or “horizontal” org charts usually have two levels: administrative officials and workers. Within the chart, solid lines show the principal chain of command, and dotted lines show secondary lines of authority. On paper, companies with a flat org structure may look similar to a small fire department, with a chief, three captains and several firefighters who work under the captains. Or it might be a supervisor or department head with a handful of employees who are his or her direct reports. 

NOTE : In a flat structure, supervisors and their teams often have close relationships and share in decision making. Employees usually have more responsibility and more autonomy than in other organizational structures. This means that that building trust is critical—and teamwork is, too. But because the matrix is so compact, if there are conflicts between employees, they can be more pronounced due to the simple fact that the team is so small.  

Building org charts with software 

Org chart software makes building new organograms and revising old ones simple. Let’s take a look at how to create an org chart online using some of the most popular software options available. 

Org charts in PowerPoint  

PowerPoint  may have been designed as a presentation tool, but you can also use it to develop org charts. To get started: 

  • Open a new PowerPoint document 
  • Go to the Insert tab and click SmartArt 
  • Navigate to the Hierarchy group and select the org chart template you need 
  • Click into the shapes to add text 
  • Add more shapes (or people) as needed 

Once everyone is accounted for, you can start reorganizing your org chart in PowerPoint. Just go back to the SmartArt Tools Design tab and using the Promote/Demote buttons to move shapes vertically. Use the Move Up/Move Down buttons to move your shapes horizontally.  

Org charts in Word  

It may not be a traditional way to create org charts, but  Microsoft Word  can help design basic diagrams that show how your organization functions. To create an org chart in Word, all you need to do is: 

  • Go to the Insert tab and click SmartArt.  
  • Go to the Hierarchy group and choose the org chart template you want to use. 
  • Next, you’ll see a menu with shapes that represent people. Just enter text to represent each person in your chart. 
  • If you need to add shapes to your org chart template, click the SmartArt Tools Design tab, then click Add Shape. 
  • To order someone in your org chart, click their name in the Text Dialog box. Press Tab to move them up or Shift + Tab to move them down. Or, you can manage your hierarchies in the SmartArt Design tab. 

You can adjust your colors, fonts and sizes, via the SmartArt Tools Design and Format tabs.  

Org charts in Visio from Excel 

Visio  is a visual, drag-and-drop canvas tool that allows people to create org charts, and it also has the power to connect with data in existing  Excel  files or Active Directories to help you  automatically create org charts . But when you combine the two, you can create eye-catching org charts for companies of any size. To get going, open Visio and click the Organization Chart Wizard, then: 

  • Click “Information that’s already stored in a file or database” 
  • Answer questions when prompted 
  • Import pictures or images if you’d like 
  • Click finish 

Along with importing information to your org chart from Excel, you can also add info directly into the Organization Chart Wizard. 

More org chart tips  

Even with org chart software, organograms can quickly become a blur of shapes and words. But with a little design work, they can capture people’s attention the proper way. So, when finessing your chart try to: 

  • Right size it . If your chart is too large, it will be overwhelming. If you need to create three charts rather than one, do it. This way, your audience can get an overview of the organizational structure, then take a deeper dive into departments or divisions when they’re ready. Just make sure that everything leads back to your organization’s highest level.  
  • Use shapes and colors consistently . By using the same shape for supervisors, another shape for mid-level staff and yet another for junior employees, you can help people understand your chart better. Use one color for each division in your company, as well. 
  • Add pertinent information . Be sure to add details about your staff, like contact information, location, clients or specialties. This way if someone’s looking for help, they can tell who does what and where. 
  • Show assistants with a sidebar below the manager . This formatting style can help denote the assistant role while still clearly showing the manager’s direct reports. And it can also help people know who to contact if you need to reach the manager. 
  • Pay attention to spacing . Keep boxes equidistant from each other. Your chart will be easier to read and have a more professional appearance. 

Once your chart is complete, have someone who knows the organization well (and someone who doesn’t) take a look. This way, you can make sure that it’s not only correct but clear and informative for those at every level. You can learn more about creating org charts with  software and templates  with this step-by-step  guide.  

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Blog Beginner Guides

Creating an Organizational Chart for a Small Business

By Letícia Fonseca , Jun 09, 2023

Creating an Organizational Chart for a Small Business

No matter the size of your business, whether you’re starting out or already established, creating an organizational chart for small business planning is a necessary exercise.

There are numerous reporting relationships to visualize, especially when you have more than one manager in your small business.

Making an organizational chart can feel challenging, but this guide will make it easier to design an organizational chart that reflects many types of corporate structure.

Or you can customize a Venngage organizational chart template to create a chart that reflects your management structure in just a few minutes.

Click to jump ahead:

What is an organizational chart.

  • Organizational charts for small businesses examples

What is the purpose of organizational charts for a small business?

How to make an organizational chart for a small business, faqs about organizational charts.

An organizational chart, or an org chart, provides a visual representation of an organization’s internal structure. It outlines relationships between departments and employees, establishes the chain of command in an organization, and defines the role of each staff member.

You can see how this hierarchical organizational chart example structures the employees of a company.

Corporate Organizational Chart Template

The most common structure has small business owners, or the chief executive officer, listed on the top.

Other C-suite executives or the vice president are listed below them. Department managers and team leaders are below them, followed by employees.

An org chart helps you navigate your company and can be included in onboarding documents for new employees to familiarize themselves with the organizational structure.

You can make the organizational chart your own by adding your branding to the diagram.

Venngage’s  My Brand Kit  feature imports your brand identity from your website so you can apply it to your designs.

Organizational chart for small businesses examples

There are two basic types of organizational charts for a small business:

  • flat organizational structure
  • hierarchical organizational structures

Flat organizational structure

A flat org chart or horizontal organizational structure is composed of limited or no middle management between lower-level employees and upper management, like in this  organizational chart example .

Company Management Organizational Chart Template

This type of organizational chart is common for small businesses and startups in their initial years of operation.

As this structure does away with several levels of management, it enables employees to quickly and independently make choices.

The decision-making power for the business is shared among employees on the same level, and they are held accountable for their decisions.

Hierarchical Organizational Structure

A hierarchical structure or top-down chart is shaped like a pyramid.

It is a traditional reporting structure adopted by most companies.

Hierarchy charts look like this:

Corporate Healthcare Organizational Chart Template

A single person or a group is seated at the top, followed by managers in the middle and the rank-and-file employees at the bottom.

The organizational chart is divided into different departments with each employee reporting directly to a supervisor. This is most commonly used by large organizations and government units.

Create the right type of organization chart for your business with Venngage’s real-time collaboration feature. With a  Venngage business account, you can add team members, and share comments and feedback simultaneously.

An organizational chart offers a number of advantages to small businesses. 

We share the biggest benefits of creating org charts below.

An organizational chart improves communication across teams

When a small business starts growing, people’s new job titles can become confusing.

When merging with larger organizations with several teams and departments, in this example, it becomes crucial that the structure is tracked.

Tech Flow Chart Template

Understanding the hierarchy in the workplace is essential, so you know who your immediate supervisor is and whom to approach in case some issues arise.

A matrix organizational chart makes it easier to see which employees are involved in a project, and who the project manager or executive is. This improves efficiency across the entire organization.

Organizational charts enable easy onboarding for new employees

For new hires to find their way around the office can be quite challenging.

But presenting your organizational structure, like the template below, will facilitate the  onboarding process  and orient the employee to the chain of command.

Hospital Organizational Chart

Organizational charts can also help guide new hires through the specific functions and work responsibilities of coworkers.

The diagram serves as a cheat sheet, showing them the person to whom they should go for what information.

Organizational charts boost employee productivity

A matrix organizational structure expedites processes in the workplace as it shows the roles and responsibilities of each employee.

This helps reduce the time spent looking for the right people for the right task.

This organizational chart template also includes assistant managers so employees don’t need to go to the top managers for simple problems.

Organizational Chart for Small Business

Instead of wasting time searching for information that would otherwise be found in an org chart, the employee becomes productive and efficient.

The organizational chart also prevents overlapping and duplication of work as it identifies positions and tasks assigned to each individual.

These details in org charts also help forge relationships among other employees.

An organization chart facilitates business growth

Employers can also get a clear view of the organizational structure, like in the template below.

They will know where an employee is positioned and the tasks they undertake. This makes it easier for the employer to determine which part of their organization needs improvement.

Company Structure Flow Chart Template

By taking a step back, owners can see which department is in need of additional manpower and which is overstaffed.

An org chart helps executives organize their workforce and ensure that managers have enough workforce to achieve company goals and objectives.

Create your small business’ organizational chart by following these simple steps.

Step 1: Determine the structure you want your business to follow

The first thing to do when making an org chart is to determine the corporate structure it will follow.

Choose the one that best suits your business needs from the two types of organizational structure discussed above: the flat org structure or the hierarchical organizational chart.

Step 2: Choose an org chart software

Creating an org chart might come as a challenge to some. But there are numerous free or paid tools online that can help. One of the best solutions is Venngage’s organizational chart maker.

We have plenty of professional smart org chart templates that can be easily edited with just a few clicks. Our library of visuals includes 40,0000+ icons as well as over 4 million high-quality free stock images. 

Step 3: Fill out the organizational chart template with your information

With the necessary data you have compiled, you can start filling out the chart templates from Venngage’s online org chart maker.

Collaborate with your team in real-time with a  Venngage business account . And once you’re done, you can download the chart as a high-quality PNG or PDF.

How can you create a small business organizational chart with Venngage?

Sign up for a free Venngage account using your email, Google, or Facebook profile.

Choose one of Venngage’s wide array of organizational chart templates for small businesses. To add information, titles, and visuals to your org chart, use Venngage’s drag-and-drop smart editor.

Then customize your org chart easily. Add or remove nodes in your org chart by clicking on the ‘+’ or ‘-‘ buttons. When you change the text or images, the nodes automatically resize to fit the content. Then you can download your organizational chart as a PNG or PDF file. Or share your design directly with your team through a private link.

What is a good organizational structure?

An organizational structure is deemed good when it helps a business reach its objectives. It should also be designed to aid individual employees’ growth. Additionally, org charts should reduce conflicts between individuals and team members, and remove duplication and overlapping of work.

Make your org chart for your small business today

Streamlining communication and driving efficiency has never been easier than with the help of organizational charts. It is an effective management tool that can help improve team performance for planning purposes. Org charts also act as a visual personnel directory.

To help you organize your teams and ultimately lead them to success, use the organizational chart examples that we’ve shared in this post. These Venngage templates will help your company’s overall performance in the long run.

Business Plan Section 3: Organization and Management

This section explains how your business runs and who’s on your team. Learn how to present the information in this section of your business plan.

Organization and Management

This section of your business plan, Organization and Management, is where you’ll explain exactly how you’re set up to make your ideas happen, plus you’ll introduce the players on your team.

As always, remember your audience. If this is a plan for your internal use, you can be a little more general than if you’ll be presenting it to a potential lender or investor. No matter what its purpose, you’ll want to break the organization and management section into two segments: one describing the way you’ve set up the company to run (its organizational structure), and the other introducing the people involved (its management).

Business Organization

Having a solid plan for how your business will run is a key component of its smooth and successful operation. Of course, you need to surround yourself with good people, but you have to set things up to enable them to work well with each other and on their own.

It’s important to define the positions in the company, which job is responsible for what, and to whom everyone will report. Over time, the structure may grow and change and you can certainly keep tweaking it as you go along, but you need to have an initial plan.

If you’re applying for funding to start a business or expand one, you may not even have employees to fit all the roles in the organization. However, you can still list them in your plan for how the company will ideally operate once you have the ability to do so.

Obviously, for small businesses, the organization will be far more streamlined and less complicated than it is for larger ones, but your business plan still needs to demonstrate an understanding of how you’ll handle the workflow. At the very least, you’ll need to touch on sales and marketing, administration, and the production and distribution of your product or the execution of your service.

For larger companies, an organizational plan with well-thought-out procedures is even more important. This is the best way to make sure you’re not wasting time duplicating efforts or dealing with internal confusion about responsibilities. A smooth-running operation runs far more efficiently and cost-effectively than one flying by the seat of its pants, and this section of your business plan will be another indication that you know what you’re doing. A large company is also likely to need additional operational categories such as human resources and possibly research and development.

One way to explain your organizational structure in the business plan is graphically. A simple diagram or flowchart can easily demonstrate levels of management and the positions within them, clearly illustrating who reports to whom, and how different divisions of the company (such as sales and marketing) relate to each other.

Here is where you can also talk about the other levels of employees in your company. Your lower-level staff will carry out the day-to-day work, so it’s important to recognize the types of people you’ll need, how many, what their qualifications should be, where you’ll find them, and what they’ll cost.

If the business will use outside consultants, freelancers, or independent contractors, mention it here as well. And talk about positions you’d want to add in the future if you’re successful enough to expand.

Business Management

Now that we understand the structure of your business, we need to meet the people who’ll be running it. Who does what, and why are they onboard? This section is important even for a single practitioner or sole proprietorship, as it will introduce you and your qualifications to the readers of your plan.

Start at the top with the legal structure and ownership of the business. If you are incorporated, say so, and detail whether you are a C or S corporation. If you haven’t yet incorporated, make sure to discuss this with your attorney and tax advisor to figure out which way to go. Whether you’re in a partnership or are a sole owner, this is where to mention it.

List the names of the owners of the business, what percent of the company each of them owns, the form of ownership (common or preferred stock, general or limited partner), and what kind of involvement they’ll have with day-to-day operations; for example, if they’re an active or silent partner.

Here’s where you’ll list the names and profiles of your management team, along with what their responsibilities are. Especially if you’re looking for funding, make sure to highlight the proven track record of these key employees. Lenders and investors will be keenly interested in their previous successes, particularly in how they relate to this current venture.

Include each person’s name and position, along with a short description of what the individual’s main duties will be. Detail his or her education, and any unique skills or experience, especially if they’re relevant to the job at hand. Mention previous employment and any industry awards or recognition related to it, along with involvement with charities or other non-profit organizations.

Think of this section as a resume-in-a-nutshell, recapping the highlights and achievements of the people you’ve chosen to surround yourself with. Actual detailed resumes for you and your management team should go in the plan’s appendix, and you can cross-reference them here. You want your readers to feel like your top staff complements you and supplements your own particular skill set. You also want readers to understand why these people are so qualified to help make your business a success.

This section will spell out the compensation for management team members, such as salary, benefits, and any profit-sharing you might be offering. If any of the team will be under contract or bound by non-compete agreements, you would mention that here, as well.

If your company will have a Board of Directors, its members also need to be listed in the business plan. Introduce each person by name and the position they’ll hold on the board. Talk about how each might be involved with the business (in addition to board meetings.

Similar to what you did for your management team, give each member’s background information, including education, experience, special skills, etc., along with any contributions they may already have had to the success of the business. Include the full resumes for your board members in the appendix.

Alternately, if you don’t have a Board of Directors, include information about an Advisory Board you’ve put together, or a panel of experts you’ve convened to help you along the way. Having either of these, by the way, is something your company might want to consider whether or not you’re putting together the organization and management section or your business plan.

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Business Plan - Management and Organization

Management and Organization Section of a Business Plan

organizational chart of a business plan

Written by Jason Gordon

Updated at August 5th, 2023

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What is the Management and Organization Section of the Business Plan?

Outline your organizational structure and then tell about your primaries. How your business will be managed and who will be involved is an important consideration in your choice of business entity. For example, in a partnership, it is assumed that partners have equal control in managing the business. In an LLC you make the choice of whether it will be managed by members of the LLC or by hired managers. 

In a corporation, the owners/shareholders may or may not be a part of the management team. In any of the above situations, you will want to develop a plan for the roles of individual members. While individual member roles and responsibilities often change rapidly, you want to have a formalized chain of authority within the business. Remember, too many decision-makers and no single person with authority can be a major challenge to the success of a business.

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Business Management

This section should include the names, positions, and general biography of the key business personnel. This section will be incredibly important to outsider investors (angels or venture capitalists) who are assessing your business. Within the Business Management section you should include answers to the following questions:

  • Name : Who are the key individuals involved in the management of your business?
  • Title : What will be that person's title?
  • Responsibilities : What primary responsibilities does that position entail?
  • Qualifications : What is their background and qualifications for carrying out their intended responsibilities? (This will include work experience, educational degrees, and prior experience in startup ventures.)

Organizational Chart

I recommend that you create a formalized flow-chart demonstrating the hierarchy of authority within the business. This organizational chart should be cross-laid with the key core operational responsibilities of the business. For example, you may split the business responsibilities into: Operations, Sales & Marketing, and Administration & Governance. Outlining the business in this fashion will give individuals a clear sense of their responsibilities. Further, it will establish formal chains of authority that will become increasingly important as the business grows. As you add new employees you will want to integrate them within the organizational chart.Make clear the chain of authority and reporting. Outline both the responsibilities of each individual and their authority to represent the interests of the business. As the business grows you will gradually become more and more specific about the roles and responsibilities of individual members.You may also consider developing a plan for cross-training individuals for specific tasks? You don't want your business to hinge or become dependent solely on the presence of a single individual. This chart will also serve as credentials for business when approaching outside investors. These investors will want to see that the business is stable and that there is ample talent to perform all of the functions necessary to carry out the business's functions and grow goals.  

Professional and Advisory Support

When forming your business you will begin to forge relationships with outside parties who can provide advice and services to your business. Depending on your business organization, you may have professional advisors, such as a board of directors or you may have a less formal advisory board. Below are a list and explanation of some of the more common professional and advisory support for a startup business.

  • Accountant - An accountant can be extremely valuable in 3 areas: Entity formation, business compliance, and tax strategy. An accountant will be able to help you understand the tax considerations that go into choosing an entity type. They can also help you understand the rules for business compliance state and federal income tax, tax deductions, tax credits, sales & use, transfer, deductions, capital gain loss, employee withholding, estimated tax payments, financial statements, auditing, etc.
  • Small Business Attorney - A small business attorney is useful in a number of important areas. Entity selection and formation, contracts, intellectual property, employment law, securities regulation, business compliance & governance, collection efforts, etc.
  • Insurance Agent - Depending on the nature of the business, you may require various types of insurance coverage. Common types of insurance includes casualty & damage on property, personal injury protection, professional liability, life insurance, health insurance in employee benefit plans, etc.
  • Banker - I cannot express the importance of having a relationship with your bank representative. Many small businesses make the mistake of banking with large financial institutions, rather than choosing smaller, more intimate, local banks. When you are seeking loans to operate your business you will have a much easier time working with a banker who knows you personally and understands your business.
  • Mentors - Find someone who you know and respect to serve as your mentor. Preferably, this is someone who has experience with startup ventures. Starting a venture can be nerve-racking. It helps to have someone close who has gone through this process before. This person will provide moral support more than expertise in a particular industry.
  • Board of Advisors - A board of advisors is like a semi-formal group of mentors. Rather than providing moral support, these individuals help to guide you through the process of starting, managing and growing your business. You should try to assemble a diverse group with a variety of professional experiences. Preferably, these individuals will be a mix of knowledgeable entrepreneurs and industry experts.
  • Board of Directors - If you choose the corporate form to do business, you will have a board of directors. Many closely held corporations don't have outside members on the board of directors; rather, the board consists of the owners and key members. As the business begins to grow, you may have directors who are either equity investors or experts who you compensate with equity ownership. In either case, you should seek investors and experts who can provide the greatest degree of guidance and support to your business.

You will want to detail the names, experience, and qualifications of these individuals within the business plan. The primary purpose is to demonstrate to outside investors that you have adequate support to handle your operations and intended growth path.

Related Topics

  • Business Plan, Part 1 (Outline Overview)
  • Business Plan, Part 2 (The Executive Summary)
  • What is a Mission Statement?
  • What is a Values Statement?
  • Setting Company Goals
  • Business Plan, Part 4 (Market Analysis)
  • Business Plan, Part 5 (Competitive Analysis)
  • Business Plan, Part 6 (Marketing Plan)
  • Business Plan, Part 7 (Operations)
  • Business Plan, Part 8  (Management and Organization)
  • Business Plan, Part 9 (Financial Projections)
  • Business Plan, Part 10 (Appendices)
  • Business Plan , (Final Modifications)

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Business Organizational Chart

Organizations use many metrics to get validated learning. They use actionable metrics, business models, department charts, analytics, and a lot more. But still, there is one thing that can improve the organizations' decision-making because they give an abstract view of the whole organization. By the end of this article, you will learn about business organizational charts , their importance, and some examples for businesses.

1. What is a Business Organizational Chart?

A business organizational chart is an abstract view of the whole organization, which tells us the relationship between multiple entities working inside the organization. Moreover, dozens of departments work in an organization and work cross-functionally.

To track those organizations and avoid uncertainties, excellent and well-known organizations never forget to make the business organizational chart, which tells the business owners, board of directors, stakeholders, employees, managers how the whole business is functioning.

Let us tell you the importance of a business organizational chart . Take an example of an employee working in an organization with a complex hierarchy. Suppose an organization doesn't contain the business organizational chart or assume they have and never published it to the whole firm. In that case, an employee will never know who is above him and to whom he should report.

Business Organizational Chart

Why do Companies Need Organizational Charts?

Some endless reasons and situations make companies have a good business organizational chart. Some of the critical cases are listed below.

It Communicates the Responsibilities

Business organizational charts tell everyone about their roles and responsibilities, why they are being employed, how they will perform their functions, and if any uncertainty strikes, then what they must do.

Employees Know to Whom They Report

Business organizational charts tell the employees to whom they must communicate or report. If an organization doesn't have any organizational chart, employees will never know their true importance or position.

Decision Making

As described above, an organizational business chart helps the managers, board of directors, CEO, or C-suite take important business decisions. It provides business leaders a sense of how they must lead to make the business sustainable at all levels.

2. How to Create a Business Organizational Chart?

Business leaders must know the importance of business organizational charts. Whether you are starting a business or working in a company that has imposed on you a leader-level position, then you must know how to make a perfect business organizational chart. This section will get a general and high-level overview of making a perfect and complete business organizational chart. Readers can follow the listed steps.

2.1 Identify Organizational Chart Types

The first step in this vital process is identifying the business organizational chart that best fits your business case. There are four types of business organizational charts that managers, C-Suite, board of directors must know. The four types of business organizational charts are listed below:

Hierarchical organizational chart: A hierarchical organizational chart is a chart that helps organizations that have both complex and straightforward hierarchies. Many entities say that organizations spread across multiple departments should only make hierarchical organizational charts. But, a small business can also make a hierarchical business organizational chart. A hierarchical business organizational chart starts from the C-suite and then falls to the low-level positions of the organizations. The connections in hierarchical business charts tell that an employee must report or communicate.

Functional organizational chart: A functional organizational chart is the same as a hierarchical business chart, but there are still many differences. It is best for an organization with departments spread across multiple locations and work cross-functionally to track them with a functional business organizational chart. The functional business organizational chart includes both the positions and departments. The position depicts the leader or head of each department.

Matrix organizational chart: The matrix organizational chart depicts the employees or departments who have multiple supervisors. This organizations have the most complex hierarchies, and so the matrix organizational charts are best to handle these organizations. The matrix organizational chart also depicts the managers who work in multiple departments of the same organization.

Circle organizational chart: It is also a hierarchical chart that includes the leading positions at the circle's core. In contrast, the low-level positions are listed above the top places.

2.2 Order the employee data

The next important step is to gather and organize the employee data and arrange them according to the type of business organizational chart best for your business case. All the charts discussed above have connections and little to more hierarchies, so after listing every employee, connect them according to whom they communicate or report.

2.3 Make your chart look perfect

After identifying, listing, and connecting every employee in the business organizational chart, try to search for an answer to this question, how can this chart be completed? You will find the answer in the tools or products used extensively in business diagram-making.

There are hundreds of tools available on the Internet organizations use to make the charts for their business. You can see or use Microsoft Office (Excel, Outlook, PowerPoint, Word) or Google Sheets. But the best practice is to choose efficient tools in many ways and boost productivity. The best and trending tool that has been used for diagram-making for two years is EdrawMax , which is consistently iterating to make the business procedures easy and quick.

2.4 Use the tool and complete the chart

Find the best tool according to your business use case, and it is time to use it and fill the business organizational chart. You can take help from multiple people in the organization to avoid errors. The best practice is to start from the template to avoid mistakes and boost your production.

After you have completed the chart, take it to review by your supervisors and then pass it to the C-suite, who will approve it and share it with everybody to make the consensus. If it succeeds, then the chart must be shared across the organization.

3. Business Organizational Chart Examples

To help you make your concepts clear about the business organizational chart, we have gathered some practical use cases that show how they can be implemented.

Example 1: Organizational Chart for Small Business

This business organizational chart can provide many helpful insights in decision-making for small businesses. As described above, to avoid confusion, small businesses can use the hierarchical business organizational chart to map the entities working inside the company. The chart shows from top to bottom how the business is working. In this top-to-the-bottom business organizational chart, every entity is connected indirectly. Still, all the departments get the notes from one department that is the COO of the organization. This chart also helps employees to understand positions.

Organizational Chart for Small Business

Example 2: Big Business Organizational Chart

If you believe that your business is big and has many departments and complex hierarchies, you can use this big business organizational chart. An enormous business organizational chart includes both positions and departments working inside the company. The chart shows the connection representing the relationship between each position and department which helps in complex decision-making. You can also take ideas from this chart while making a big business organizational chart. You can also include a short description of every employee listed on the chart.

Big Business Organizational Chart

Example 3: Startup Organizational Chart

The diagram perfectly defines the startup organizational chart. Most of the time, the startups don't have many hierarchies and departments, and this chart is for these types of startups. The startups which belong to a parent organization have a different organizational chart or structure. The chart can be made using a hierarchical business organizational chart. Every department or entity in the chart is connected indirectly and communicates to a single entity called the co-founder of an organization. When the startup grows into a sustainable business, all the entities share it with the COO.

Startup Organizational Chart

Example 4: Organizational Chart for Partnership

If the entity in the organization wants to manage the organization's partnership, then an organizational chart can also be made for this purpose. Take the idea from this organizational chart for partnership which shows both public and private partnerships. The public partner of the organization is the financial advisor and legal representative; meanwhile, the private partner includes the objects which reside inside an organization. If you are worried about how you would manage the partners of your organization, then you can start with mapping the partners in business organizational charts.

Organizational Chart for Partnership

Example 5: Sole Proprietorship Organizational Chart

A Sole Proprietorship, also known as a sole trader, is an unincorporated entity or business with a single leader or manager. He is responsible for paying personal income tax from the gains earned from the sustainable enterprise. An organizational business chart can also be made for this. Usually, the business that includes the outside partnership is also included in the business organizational chart. Still, in this situation, the chart ends at the above single position like this pinned sole proprietorship organizational chart.

Sole Proprietorship Organizational Chart

Example 6: Manufacturing Company Organizational Chart

Every business logic can be mapped to the business organizational chart. Take the concept from this construction business organizational chart. The chart is made with the help of a hierarchical business organizational chart framework because a construction company has many departments, and sometimes they work cross-functionally. The organizational chart also includes the regulatory body department of the ISO center. The chart starts from the board of directors and ends at the low-level positions of the organization.

Manufacturing Company Organizational Chart

4. Best Business Organizational Chart Maker

The mistakes in business organizational charts can harm both the reputation and daily operations of the business. So, every action should be taken to avoid errors in the chart. EdrawMax Online provides hundreds of tools and more than five thousand diagram-making symbols to help you make business organizational charts and other diagrams ideally. The application is straightforward and has all the tools and templates to help you avoid mistakes in business organizational charts and boost your productivity.

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What is an Organizational Chart

What do you want to do with organization charts.

An organizational chart shows the internal structure of an organization or company. The employees and positions are represented by boxes or other shapes, sometimes including photos, contact information, email and page links, icons and illustrations. Straight or elbowed lines link the levels together.  With our org chart software, this creates a clear visual depiction of the hierarchy and ranks of different people, jobs, and departments that make up the organization.

Organizational Charts also are known as Organization Charts, Org Charts, Organograms, Organogram Charts (sometimes spelled Organigrams or Organigrammes ) and Hierarchy Charts . Don’t be fooled: Despite all the different names, they’re all the same thing.

8 minute read

Do you want to create your own organization chart? Try Lucidchart. It's fast, easy, and totally free.

In 1855, railway general superintendent Daniel McCallum (1815-1878) designed what is thought to be the first modern organizational chart. It was an illustrated diagram of the New York and Erie Railway. McCallum had it drawn up by draftsman and civil engineer George Holt Henshaw (1831-1891). McCallum, born in Scotland, also served as a Union major general in the Civil War. Henshaw, a Canadian, worked for waterworks and railway companies in Canada, the United States and Denmark.

The term “organizational chart” took another 50 to 60 years to come into common use. Consulting engineer Willard C. Brinton used the term in his 1914 textbook, Graphic Methods for Presenting Facts. He touted the value of the charts and said they should be more widely used. The charts were mainly used in engineering circles until the 1920s, when they began to find their way into the business world.

The lesser-known synonyms “Organigram” and “Organogram” came into use in the 1960s.

A related diagram is called an Organigraph . While is still reflects organizational structure, it’s less linear than an org chart and serves a different purpose: to illustrate associations and opportunities among departments, products or supply chains.

Types of organizational charts

What is an organizational chart's best format? Depending on your needs and the type of organization, you may want to choose a less traditional org chart format. There are three main types of org charts:   hierarchical, matrix and flat .

Hierarchical Org Chart : This is the most common type, and it gives rise to the synonym Hierarchy Chart . A hierarchy is where one group or person is at the top, while those with less power are beneath them, in the shape of a pyramid. Think of a monarchy with a king or queen at the top, or an organization with the CEO at the top. With a hierarchy, members typically communicate with the person they report to and anyone who reports directly to them.

Matrix Org Chart :  This is usually only seen when individuals have more than one manager. For example, an organization could have a team of graphic designers who all report to the head graphic designer. The graphic designers are also working on other projects that are likely headed by a separate project manager. In this case, the graphic designers will have two managers.

Matrix Org Chart

Flat Org Chart : This type, sometimes referred to as a Horizontal Org Chart , has little or no levels of middle management and typically consists of two levels:  the top administrators and the workers. In companies like this, the workers have more responsibility and are more directly involved in decision-making.

Relationships in the charts are sometimes called line relationships (or chain of command ), depicting supervisor to subordinate, and lateral relationships , showing people on the same level. With line relationships, you might have solid lines , showing the main lines of authority, or dotted lines , showing secondary lines of authority. There are no hard and fast rules in the symbols and lines used in org charts, as long as the formal relationships are made clear.

Pros and cons of different organization types

The types of organizations reflected in these chart types have advantages and disadvantages.  In a nutshell:

In a hierarchical, vertical, top-down organization , lines of authority and communication should be clear. In its purest form, think of the military. In the business world, think of the chief executive and other C-suite executives, working down to perhaps directors, senior managers, middle managers, team leaders and team members. If the strength of this structure is clarity and stability, the potential weakness is rigidity, the inability to be flexible when called for. The management layers can sometimes bloat an organization as well.

In a matrixed organization , cross-department relationships may be more fruitful and cooperative. However, having more than one person or department to answer to can also create confusing loyalties or conflicts of interest for employees.

In a flat, horizontal structure , most layers of management are cut out, with close relationships between the top and the employees. This is common in smaller companies and organizations, but it’s generally not practical for larger organizations. Employees may feel a stronger sense of teamwork and autonomy, though conflicts among employees can become more pronounced due to fewer people doing the work.

Uses of org charts

What is the best use for an organizational chart? No matter which layout you choose to use, Org Charts are useful for laying out relationships in your organization and ensuring that everyone knows how to communicate essential information.

You can use org charts for:

Organizational and supervisory communication ,  such as helping employees know who reports to whom, or helping people get to know each other across the organization. Adding employee photos can help a lot, allow people to connect faces and names.

Restructuring , such as switching roles in a team to better utilize everyone’s talents.

Workforce planning , such as figuring out the details of a new hiring initiative.

Resource planning , such as reducing inefficiencies by rearranging roles.

Genealogy , because a family tree is really just a type of Org Chart. You can include photos, dates of birth and death and links to other information about each person.

Getting more visual with organizational charts

There are few rules with org charts, so any visual elements that help to communicate are fair game.

  • Using photos can help people get to know each and connect names and faces.

Using different shapes and/or colors can help to define different departments, work groups, job levels or other useful breakdowns.

Using company logos or icons can customize your chart to your organization’s feel.

Using animations in PowerPoint can help bring a presentation to life as you talk about the chart’s different parts.

Using 3D shapes can make your chart more appealing as it pops from the page.

org chart with photo

Limitations of org charts

  • They can quickly become out of date, especially in organizations with a large amount of turnover. Online charts are easier to update than printed ones, but even online charts can become outdated if not tended to regularly. This can be mitigated with editable online documents, as well as automation, such as employee departures and arrivals triggering Org Chart updates.

They don’t reflect management style . They show lines of authority, but not how that authority is exercised.

Organigraphs, the close relative of org charts , might be more useful if your purpose to illustrate or discover other associations among people or departments.

How to plan and draw a basic organizational chart / organogram

  • Define your purpose and scope . For example, do you intend your chart to be a “who’s who” resource? You might want to include photos and contact info, including email links. Are you charting your whole company, or maybe just department or work group. Might it be more than one chart? Think about what is most useful for your purposes.

Gather the information . You might find an existing list of employees on which to base your chart, or an outdated Org Chart that still might be a helpful starting point. Remember to gather contact info, photos and whatever else you might plan to use. You might need to find other resources to clarify the lines of authority and spell them out for your chart.

Determine what platform you plan to use to build your chart, and how you plan to display it. Lucidchart provides a powerful, easy-to-use platform to build and display charts online. (See more on Lucidchart below.)

Plan for ongoing updates to the chart. Remember, things change quickly in many organizations, so you’ll need a way to efficiently keep the chart or charts up to date. That’s a lot easier with a collaborative online platform like Lucidchart.

More tips for organizational charts / organograms

  • Try breaking down your org chart into manageable pieces to get started. This way, all of the information is consistent and leads back to the highest level of the organization. You can section off different areas of your chart with the following categories:  department, team, unit, project, location.

You may want to round out your chart by including the details of people or departments . Adding contact information, location, and other notes can make the organization more efficient and eliminate confusion about who does what.

You might use colors or shapes to define certain groups or levels of employee.

Use Lucidchart's  org chart import   to automatically build an org chart from a Google Sheet, Excel file, or CSV.

How to make an org chart with Lucidchart

Want to create org charts that highlight your company’s culture? Choose a layout that works best for your structure, update a design with your company colors, and add employee photos to each role. You can even add links and videos to your document for some extra pizzazz. Try clicking on our  org chart templates and make it your own.

For a truly dynamic experience , Lucidchart lets you share and embed org charts on your own site. When you share a chart with others, you can also set permissions so people can comment on the doc or collaborate with you in real-time. Just click Share > Embed to generate an embed code for your site. If you update your org chart in Lucidchart’s editor, the embedded chart will also update. How’s that for easy updates?

Helpful Resources

  • How to make an org chart in Excel
  • How to make an org chart in Word
  • How to make an organizational chart
  • What is an org chart and how to create one

With drag-and-drop shapes, real-time collaboration and advanced sharing features, Lucidchart makes it easy to create your own org chart.

Business Organizational Chart

author

Whether your organization is more hierarchical or flat, you can model it with the help of the business organizational chart . In this article, we will see what the business organizational chart is, its benefits, why we use it, how to make it, different types of business structure, and a lot more. So, let's dive deep into it.

What is a Business Organizational Chart?

  • Why Use Business Organizational Charts?
  • What are the Different Types of Business Structures?

How to Make a Business Organizational Chart?

Business organizational chart templates, use edrawmax for organizational chart creation.

The business organizational charts are the pictorial representation of the internal structure of the company. It tells us the hierarchy of the roles and entities in the company. Their structure, who communicates, and reports to whom? The responsibilities of the entity of the company, their relationship with other members, etc.

It usually looks like a hierarchical chart showing which role is derived from what role. For example, it will show us if there is a CEO in the company, then the CFO, CIO, and other C-suite will work under him. These charts are usually used for managing and planning the entities.

If elaborating more, then the business organizational chart is the graphical representation of the organization that tells us the details about the different departments at the company.

Benefits of Business Organizational Charts

The business organizational chart is crucial to know about the structure of the organization. It helps us to keep track of every entity of the company. Some of the benefits are listed below.

  • It makes communication and collaboration feasible across all the departments of the organization.
  • It shows the responsibility of every entity and helps to improve it.
  • It makes us understand the different roles in a department and how a department is derived from another department.
  • It helps us to acclimatize new staff to their responsibilities.

Why Use Business Organizational Charts

It is imperative to model an organizational chart for your company or department. Many companies work according to it. It tells you about the roles and responsibilities of the employees working in the company.

The business organizational charts help you to improve and extend the entity-based structure of the company. It's like a blueprint that tells you about the relationship between different teams, employees, and departments at the company.

The organizational charts are also necessary for this way that it helps you to understand to whom you should and need to communicate. The cherry on the top, the organizational chart, helps to do the risk evaluation and management of the company. You also do operational risk control plus; you can make a good disaster recovery plan if you have a business organizational chart.

All-in-One Diagram Software

  • Superior file compatibility: Import and export drawings to various file formats, such as Visio
  • Cross-platform supported (Windows, Mac, Linux, Web)

The Different Types of Business Structures

The business organizational charts are of four types, and their bits and bytes are mentioned below.

Functional Top-Down

Functional Top-Down

This type of chart is what its name suggests. It helps us to know about how the organization is working or functioning. The chart contains the departments like IT, finance, human resources, marketing, sales, operations, etc. But as the name depicts it tells us in the top-down order. First, the chart shows us the C-Suite department, and then the senior management takes the lead, then mid-management and, then the chart further flows in the same way.

The divisional business organizational chart is used by those organizations that contain vast geography. They have multiple departments. To manage those departments, the divisional chart is made.

Divisional org chart

For example, the organization can have a human resource department, supply-chain department, hardware developing, and software developing departments. The whole finance and treasury department, etc. These departments then have more divisional and other types of business organizational carts to model their internal structure.

Matrix Chart

Matrix Chart

This type of chart models the structure in which the employee is divided into different teams and is working on a project plus, these employees report to the product or project manager. These types of companies work cross-functionally. This chart is used to track the communication and collaboration within companies.

Horizontal/Flat

This type of chart models those small companies, like a startup that contains little to no hierarchy. Those companies where there is no management or departments, etc. Where the employees manage themselves.

Horizontal/Flat org chart

In this section, we will not deep dive much but only discuss the general process of making a business organizational chart for a company. See the steps carefully.

Know the structure of your company

The very first step in this regard is to understand the high-level structure of the company. Is your company more hierarchical, does it contain many departments, is it more matrixed, or is it flat with no hierarchy or departments?

Know the employees

Now, gather the information about every employee in the company. To whom they communicate, their roles, responsibilities. In which department they work or communicate with. Every bit of information is required to model a structure for your company.

Deploying the information

See how you will mark this information on the chart. See the template below.

org chart

You have to mark all the information in this form.

Publish the chart

Publish it across the whole organization and consider it as a blueprint of your organization. With the help of this model, you can extend, correct, or trim the chart or structure again.

Every novice can create professional and concise business organizational charts with Edraw Org Chart Maker and free org chart templates. The business organizational chart is an excellent way to illustrate the inner structure and hierarchy of a business or any other type of organizations. It can facilitate communication and help staff know their roles and functions in the business.

org chart in EdrawMax

EdrawMax offer lots of organization chart templates, including sales organizational chart, business board organizational chart, service organizational chart, market organizational chart, etc.

Sales Organizational Chart

Sales Organizational Chart

Market Organizational Chart

Market Organizational Chart

HR Department Org Chart

HR Department Org Chart

Business Board Organizational Chart

Business Board Organizational Chart

Service Organizational Chart

Service Organizational Chart

Trade Startup Org Char

Trade Startup Org Char

Doing a business organizational chart is very professional, and headache work. You need to perform this task very carefully as the decisions inside the company are made with the help of this. The professinal org chart software - EdrawMax cares for your needs.

EdrawMax is an all-in-one diagram-making software that helps you to create any diagram efficiently. You can make the organizational chart with the help of this software. EdrawMax contains dozens of templates that you can use to make your product faster. You are allowed to import your samples and modify them further with the help of EdrawMax.

The software contains thousands of pre-generated symbols that you can use to make you perfect. You are allowed to export your project to different social media sites and download it in different formats. The software is free for the preparatory work, but you have to go for the pricing option for more advanced features.

Organizational Chart Templates

More Organizational Chart Examples

Project Organizational Chart

Get Started! You Will Love This Easy-To-Use Diagram Software

EdrawMax is an advanced all-in-one diagramming tool for creating professional flowcharts, org charts, mind maps, network diagrams, UML diagrams, floor plans, electrical diagrams, science illustrations, and more. Just try it, you will love it!

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What Is an Organizational Chart?

  • How It Works

Hierarchical Organizational Chart

  • Other Types
  • Organizational Chart FAQs

The Bottom Line

  • Business Essentials

Organizational Chart Types, Meaning, and How It Works

James Chen, CMT is an expert trader, investment adviser, and global market strategist.

organizational chart of a business plan

Erika Rasure is globally-recognized as a leading consumer economics subject matter expert, researcher, and educator. She is a financial therapist and transformational coach, with a special interest in helping women learn how to invest.

organizational chart of a business plan

Investopedia / Yurle Villegas

An organizational chart is a diagram that visually conveys a company's internal structure by detailing the roles, responsibilities, and relationships between individuals within an entity. It is one way to visualize a bureaucracy .

Organizational charts are alternatively referred to as "org charts" or "organization charts."

Key Takeaways

  • An organizational chart graphically represents an organization's structure, highlighting the different jobs, departments, and responsibilities that connect the company's employees to each other and to the management team.
  • Organizational charts can be broad-based, depicting the overall company, or can be department- or unit-specific, focusing on one spoke on the wheel.
  • Most org charts are structured by using the "hierarchical" model, which shows management or other high-ranking officials on top, and lower-level employees beneath them.
  • Other types of charts include the flat org chart, the matrix chart, and the divisional org chart.

Understanding Organizational Charts

Organizational charts either broadly depict an enterprise organization-wide, or drill down to a specific department or unit.

Organizational charts graphically display an employee's hierarchical status relative to other individuals within the company. For example, an assistant director will invariably fall directly below a director on the chart, indicating that the former reports to the latter. Organizational charts use simple symbols such as lines, squares, and circles to connect different job titles that relate to each other.

Regardless of an organization's structure, org charts are extraordinarily useful when an entity is contemplating restructuring its workforce or changing its management complex. Most importantly, org charts let employees transparently see how their roles fit into the overall company structure.

This most common model situates the highest-ranking individuals atop the chart and positions lower-ranking individuals below them. Organizational hierarchies generally depend on the industry, geographical location, and company size.

For example, a public company typically shows shareholders in the highest box, followed by the following in descending vertical order:

  • Chair of the board of directors
  • Vice-chair of the board
  • Board members
  • Chief executive officer ( CEO )
  • Other C-suite executives (joined to one another by horizontal lines)

Other job titles that may follow c-suite execs include:

  • Senior vice president
  • Vice president
  • Assistant vice president
  • Senior director
  • Assistant director
  • Assistant manager
  • Full-time employees
  • Part-time employees
  • Contractors

Many formal organizations are organized hierarchically and can be shown in chart form. These include corporations but also nonprofits, governments, schools & universities, and the military (as the chart below illustrates).

There is no single correct way to fashion an organization chart, as long as it identifies the officials, employees, departments, and functions of the firm, and how they interact with each other.

Other Types of Organization Charts

  • Flat — also known as a "horizontal" chart, the flat org chart positions individuals on the same level, indicating more power equality and autonomous decision-making ability than is typical with employees in hierarchical corporations.
  • Matrix — This more complicated organizational structure groups individuals by their common skill-sets, the departments in which they work, and the people they may report to. Matrix charts often interconnect employees and teams with more than one manager, such as a software developer who is working on two projects—one with their regular team manager, and another with a separate product manager. In this scenario, the matrix chart would connect the software developer to each manager they are working with, with vertical lines.
  • Divisional — This chart subdivides the company based on some specific criteria. It could be by product lines offered or geographic regions. An example would be an auto manufacturer organizing its company by product type. The respective divisions would have a certain autonomy but this would likely incur additional overhead cost.

What Should an Organizational Chart Show?

An organizational chart should visually show what the hierarchical status of a particular employee relative to other individuals within the company. For example, an assistant director will invariably fall directly below a director on the chart, indicating that the former reports to the latter. 

Why Is an Organizational Chart Important?

Org charts depict an organization's hierarchy, which can clearly identify seniority and lines of authority that ought to be followed. It can also show which roles are responsible for what tasks, divisions, departments, or regions. This can remove ambiguity and improve communication.

What Are the Most Commonly Used Organizational Charts?

The two types of organizational chart formats that are most often used are hierarchical and flat. Hierarchical is the most common and it shows the ranking of individuals based on their role in the company in a descending vertical order. A flat format, also known as a "horizontal" organizational chart, places all individuals on the same level, and is indicative of an autonomous decision-making ability where this power is equally shared.

How Do I Make an Organizational Chart?

There are software packages and web templates available to help make an organizational chart. You can even produce one by hand. The key is to depict the organization's hierarchy, with more senior positions at the top. Underneath each position should be subordinate positions and roles, which may be segregated by division or department. Depending on how the organization is structured in reality, the chart should approximate it.

What Are Other Types of Organizational Charts?

Less commonly used, but still effective in defining roles, are the matrix and divisional organizational charts. The matrix organizational chart groups individuals by their common skill-sets, the departments in which they work, and the people they report to. It is dubbed "matrix" as it shows employees and teams interconnecting with more than one manager. Divisional would show the organization of a company based on some specific criteria, say a product line or geographical area. For example, an auto manufacturer might be organized based on the different types of products they offer.

Organizational charts allow one to visually understand an organization's structure and hierarchy. This can give an overview of how information and instructions are deployed through organizations, which can range from government bodies to corporations to the military. The most senior positions appear at the top of the chart with subordinate roles falling under them. The chart's appearance and flow will vary depending on an organization's size and how its roles are arranged.

organizational chart of a business plan

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organizational chart of a business plan

Organizational charts explained: a beginner’s guide

Make your company’s org chart work as hard as you do

By the team at Slack February 19th, 2024

An organizational chart maps out a company’s workforce, including its team structure, workers’ reporting relationships and employees’ responsibilities.

Done well, an org chart can be a lot more than just a map. A good organizational chart (org chart) can streamline business processes and help employees excel in their roles. It can be a resource for support, collaboration and team building.

Read on to take an in-depth look at org charts and to learn how to make a successful one for your company.

What is an organizational chart?

Abstracted org chart for mobile

You might hear organizational charts referred to as org charts, organograms, organigrams or hierarchy charts. They all essentially refer to the same thing: a visual representation of a company’s internal structure.

An org chart maps out the employees within an organization, grouping them by team and showing how employees relate to each other.

Org charts illustrate reporting relationships and chains of command to give a simple overview of a company’s organizational structure, its hierarchy and how each employee fits into the big picture.

What should an org chart include?

An org chart contains information on verticals, teams, reporting relationships and individual employees. For each employee, an organizational chart might show their:

  • Contact information
  • Responsibility

The chart may use lines, arrows and other symbols to illustrate professional relationships and hierarchy among individual members.

Why are org charts important?

An org chart gets new hires up to speed, keeps longtime employees informed and builds confidence among investors. Having an organizational chart is particularly handy for companies with remote workers because it maps out the whole distributed workforce, including each remote employee’s role and the overall chain of command.

Any employee should be able to turn to the chart to answer questions such as:

  • Who’s on the leadership team?
  • How do I fit into my company’s organizational structure?
  • Who can answer my questions about (insert specific subject)?
  • Who reports to whom?

Organizational charts should also tell employees how downsizing, promotions and other organizational changes might affect them. When it’s designed well, a chart can even communicate a company’s values and philosophies, such as its positions on inclusivity, collaboration and hierarchy.

Limitations of organizational charts

  • Org charts can easily become outdated as companies restructure and employees shift roles
  • Charts may only show formal reporting relationships, excluding the nuances of informal professional relationships within a company
  • Updating an org chart can be laborious, complex and time consuming, depending on the tool used to create it
  • Organizational charts may not clarify management styles, communication methods and how each manager interacts with their team

Types of organizational charts

We all know how powerful graphics can be. A picture is worth a thousand words, right? (Well— if you use the right picture.)

To get the most out of an org chart, you must first decide on its design and how to visually represent your company’s organizational structure.

Hierarchical/top-down

This type of org chart starts with one person—typically the company’s president or CEO—at the top. It then takes on a pyramid shape that represents the workforce hierarchy. The higher you’re represented on the pyramid, the higher you are in the hierarchy.

  • Pros: This format offers clarity on the lines of authority and communication. Employees can easily understand their roles, teammates and reporting relationships. A hierarchical org chart also provides employees with a defined path for professional growth.
  • Cons: This structure offers limited flexibility in terms of hierarchy and may create silos that could hinder cross-functional collaboration and innovation.

Divisional structure

This layout is similar to the hierarchical chart but breaks down a large company’s structure by product line, geographic location or another grouping method. Large companies with independent departments that control their own resources often use divisional structure charts.

  • Pros: Divisional structure provides more flexibility to respond to market changes. It also gives more autonomy to each division within a large company.
  • Cons: Like top-down org charts, divisional structure charts could lead to siloing, hinder cross-functional collaboration, and make it difficult to spot duplication or overuse of resources.

A matrix org chart uses a grid to show relationships among cross-functional teams. This layout illustrates how employees work with others from different departments and how they report to multiple supervisors. It gives managers visibility to select people from different departments to work on a project.

  • Pros: This structure helps break down silos and foster cross-department collaboration.
  • Cons: Reporting to more than one manager or business unit can create confusion or conflict among employees.

Flat/horizontal

A flat or horizontal organizational chart takes the focus away from employee hierarchy. All members have a similar amount of power, with fewer hierarchical levels in the company. This design is most common among small businesses with simple structures, where employees often have more responsibility, wear many hats and are more directly involved in decision-making.

  • Pros: This approach encourages closer relationships between executives and employees and empowers all team members to take leadership and be decisive.
  • Cons: Companies have limited potential to scale within this structure. As organizations grow, they often move to hierarchical or matrix org charts.

How to create an organizational chart

Let’s run through the step-by-step process of creating an org chart for your company.

Determine your company’s organizational structure

Clarify your organization’s structure before you begin building a chart. Lay out how your company’s departments relate to each other on a high level.

Identify roles and relationships

Understand your company’s chain of command. Identify each employee’s span of control, and outline each business unit’s specialization. Then, map out reporting relationships among all employees. You can gather this information by surveying team members or working with the HR department.

Choose the right organizational chart type

Now that you understand your company’s structure on both a high level and an individual employee level, it’s time to pick an org chart design.

Your chart should mirror the organization’s reporting relationships, reflect decision-making processes, and comply with the company’s size and growth plan.

Know your audience

Understanding the audience for an org chart can help you decide how much detail to include. For example, an org chart containing details on each individual in the company may be limited to internal use. A simplified, high-level version might be more suitable for external parties.

Best practices for designing org charts

Keep your org chart simple, uncluttered and easy to understand. Use shapes, colors and line styles to distinguish hierarchy, relationships and process flows.

Highlight key roles and functions to help readers quickly identify critical personnel and understand the company’s organizational structure. Regularly update the org chart as the team and structure evolve. An outdated chart could cause confusion and errors.

Best tools and software for creating org charts

Various tools and applications can help you build and maintain an org chart. Any tool you use should integrate with your company’s existing productivity platform to ensure that everyone has access to the org chart for efficient communication and collaboration.

  • BambooHR works well for small businesses and HR departments
  • ClickUp incorporates an org chart tool into its management platform
  • Deel lets users apply filters to understand how teams work together and who can answer their questions
  • Lucidchart offers intuitive features and is best for large organizations
  • Slack Atlas uses profile pictures, location information and fun facts to build a well-rounded portrait of each member of a Slack workspace .

How to use an org chart

A good organizational chart promotes collaboration and makes it easy for colleagues to find and understand each other’s roles. You can use a well-made org chart to:

  • Onboard new employees : Demonstrate employee responsibilities and reporting relationships to new hires
  • Manage growth and change: Visualize how teams grow and interact to inform hiring decisions
  • Improve clarity: Understand how employees fit and interact within their company’s organizational structure
  • Enhance communication: Empower team members to ask questions and take initiative by providing a deep understanding of various roles and reporting relationships
  • Facilitate resource allocation: Allocate resources based on team structure and capabilities
  • Streamline processes: Identify redundancies and inefficiencies in the organizational structure

Maximizing the power of organizational charts with Slack

Organizational charts do more than map out a company’s workforce. They can provide powerful context to help employees collaborate and communicate effectively.

Providing context with Slack Atlas

Slack Atlas uses profile pictures, location information and fun facts to build a well-rounded portrait of each member of a Slack workspace . Employees can use Atlas to learn about a colleague before direct-messaging them on Slack . Informing employees about one another helps build strong professional relationships in remote workplaces , boosting both morale and productivity.

Integrating organizational charts in Slack

Atlas provides searchable profile information and a dynamic org chart to encourage connection and promote transparent collaboration in Slack. Employees can learn about their colleagues and their company’s organizational structure right in Slack, where they’re already working.

Tracking org chart changes and updates in Slack

Atlas syncs with HR tools to populate employee information via Slack’s SCIM API , ensuring that every profile stays accurate and up to date. Workspace administrators can make specific profile fields editable for employees to add their unique spin.

Org chart security in Slack

When you’re handling employee information, data security is a must. Atlas uses the same enterprise-grade security and identity-management capabilities central to the Slack platform, focusing on security governance and risk management. 

The power of an org chart at your fingertips

Slack Atlas is available in all markets and languages supported by Slack. You can access Slack Atlas on the Enterprise Grid plan at no additional cost. It’s also available as a paid add-on to the Business+ plan. Learn more and start using Atlas today .  

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Business Plan: What It Is + How to Write One

Discover what a business plan includes and how writing one can foster your business’s development.

[Featured image] Woman showing a business plan to a man at a desk.

What is a business plan?

A business plan is a written document that defines your business goals and the tactics to achieve those goals. A business plan typically explores the competitive landscape of an industry, analyzes a market and different customer segments within it, describes the products and services, lists business strategies for success, and outlines financial planning.  

In your research into business plans, you may come across different formats, and you might be wondering which kind will work best for your purposes. 

Let’s define two main types of business plans—the traditional business plan and the lean start-up business plan. Both types can serve as the basis for developing a thriving business, as well as exploring a competitive market analysis, brand strategy, and content strategy in more depth. 

There are some significant differences to keep in mind [ 1 ]: 

The traditional business plan is a long document that explores each component in depth. You can build a traditional business plan to secure funding from lenders or investors. 

The lean start-up business plan focuses on the key elements of a business’s development and is shorter than the traditional format. If you don’t plan on seeking funding, the lean start-up plan can serve mainly as a document for making business decisions and carrying out tasks. 

Now that you have a clear business plan definition, continue reading to learn how to start writing a detailed plan that will guide your journey as an entrepreneur.  

How to write a business plan 

In the sections below, you’ll build the following components of your business plan:

Executive summary

Business description 

Products and services 

Competitor analysis 

Marketing plan and sales strategies 

Brand strategy

Financial planning

Explore each section to bring fresh inspiration and reveal new possibilities for developing your business. Depending on which format you're using, you may choose to adapt the sections, skip over some, or go deeper into others. Consider your first draft a foundation for your efforts and one that you can revise, as needed, to account for changes in any business area.

1. Executive summary 

This is a short section that introduces the business plan as a whole to the people who will be reading it, including investors, lenders, or other members of your team. Start with a sentence or two about your business, your goals for developing it, and why it will be successful. If you are seeking funding, summarize the basics of the financial plan. 

2. Business description 

Use this section to provide detailed information about your company and how it will operate in the marketplace.

Mission statement: What drives your desire to start a business? What purpose are you serving? What do you hope to achieve for your business, the team, and your customers? 

Revenue streams: From what sources will your business generate revenue? Examples include product sales, service fees, subscriptions, rental fees, license fees, and more. 

Leadership: Describe the leaders in your business, their roles and responsibilities, and your vision for building teams to perform various functions, such as graphic design, product development, or sales.  

Legal structure: Are you operating as a partnership or a corporation? If you’re registering a specific legal structure within your province or territory , include it here and the rationale behind this choice. 

3. Competitor analysis 

This section will include an assessment of potential competitors, their offers, and marketing and sales efforts. For each competitor, explore the following:

Value proposition: What outcome or experience does this brand promise?

Products and services: How does each one solve customer pain points and fulfil desires? What are the price points? 

Marketing: Which channels do competitors use to promote? What kind of content does this brand publish on these channels? What messaging does this brand use to communicate value to customers?  

Sales: What sales process or buyer’s journey does this brand lead customers through?

4. Products and services

Use this section to describe everything your business offers to its target market. For every product and service, list the following: 

The value proposition or promise to customers, in terms of how they will experience it

How the product serves customers, addresses their pain points, satisfies their desires, and improves their lives

The features or outcomes that make the product better than those of competitors

Your price points and how these compare to competitors

5. Marketing plan and sales strategies 

In this section, you’ll draw from thorough market research to describe your target market and how you will reach it. 

Who are your ideal customers?   

How can you describe this segment according to their demographics (age, ethnicity, income, location, etc.) and psychographics (beliefs, values, aspirations, lifestyle, etc.)? 

What are their daily lives like? 

What problems and challenges do they experience? 

What words, phrases, ideas, and concepts do consumers in your target market use to describe these problems when posting on social media or engaging with your competitors?  

What messaging will present your products as the best on the market? How will you differentiate messaging from competitors? 

On what marketing channels will you position your products and services?

How will you design a customer journey that delivers a positive experience at every touchpoint and leads customers to a purchase decision?

6. Brand strategy 

In this section, you will describe your business’s design, personality, values, voice, and other details that go into delivering a consistent brand experience. 

What are the values that define your brand?

What visual elements give your brand a distinctive look and feel?

How will your marketing messaging reflect a distinctive brand voice, including tone, diction, and sentence-level stylistic choices? 

How will your brand look and sound throughout the customer journey? 

Define your brand positioning statement. What will inspire your audience to choose your brand over others? What experiences and outcomes will your audience associate with your brand? 

7. Financial planning  

In this section, you will explore your business’s financial future. If you are writing a traditional business plan to seek funding, this section is critical for demonstrating to lenders or investors that you have a strategy for turning your business ideas into profit. For a lean start-up business plan, this section can provide a useful exercise for planning how you will invest resources and generate revenue [ 2 ].  

Use any past financials and other sections of this business plan, such as your price points or sales strategies, to begin your financial planning. 

How many individual products or service packages do you plan to sell over a specific time period?

List your business expenses, such as subscribing to software or other services, hiring contractors or employees, purchasing physical supplies or equipment, etc.

What is your break-even point, or the amount you have to sell to cover all expenses?

Create a sales forecast for the next three to five years: (No. of units to sell X price for each unit) – (cost per unit X No. of units) = sales forecast.

Quantify how much capital you have on hand.

When writing a traditional business plan to secure funding, you may choose to append supporting documents, such as licenses, permits, patents, letters of reference, resumes, product blueprints, brand guidelines, the industry awards you’ve received, and media mentions and appearances.

Business plan key takeaways and best practices

Remember: Creating a business plan is crucial when starting a business. You can use this document to guide your decisions and actions and even seek funding from lenders and investors. 

Keep these best practices in mind:

Your business plan should evolve as your business grows. Return to it periodically, such as every quarter or year, to update individual sections or explore new directions your business can take.

Make sure everyone on your team has a copy of the business plan, and welcome their input as they perform their roles. 

Ask fellow entrepreneurs for feedback on your business plan and look for opportunities to strengthen it, from conducting more market and competitor research to implementing new strategies for success. 

Start your business with Coursera 

Ready to start your business? Watch this video on the lean approach from the Entrepreneurship Specialization :

Article sources

BDC. “ Step 2—Prepare a winning business plan , https://www.bdc.ca/en/articles-tools/start-buy-business/start-business/create-effective-business-plan." Accessed November 13, 2022.

CBDC. " NEW fillable CBDC Business Plan ,   https://www.cbdc.ca/en/new-fillable-cbdc-business-plan." Accessed November 13, 2022.

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This content has been made available for informational purposes only. Learners are advised to conduct additional research to ensure that courses and other credentials pursued meet their personal, professional, and financial goals.

IMAGES

  1. 32 Organizational Chart Templates (Word, Excel, PowerPoint, PSD)

    organizational chart of a business plan

  2. How to write a business plan effectively in 2024: a comprehensive guide

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  3. A Simple Guide to Organizational Charts for Small Business Owners

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  4. How to Make a Business Organizational Chart in 4 Simple Steps

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  5. Organizational structure to highlight the company structure and the

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  6. Organizational Chart Examples to Quickly Edit and Export in Many Formats

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  1. How to Make a Business Organizational Chart

    Step 1: Decide how to structure your business organizational chart. The first step in creating an org chart for your business is deciding what type of chart you want to use. Generally,...

  2. How to create an organizational chart (with free examples)

    Summary An organizational chart outlines how your company functions in real time. This diagram shows the reporting relationships between job titles and the roles in your organization. We'll explain the different types of organizational charts and provide free templates for you to customize your own.

  3. Writing the Organization and Management Section of Your Business Plan

    Organization The organization section sets up the hierarchy of the people involved in your business. It's often set up in a chart form. If you have a partnership or multi-member LLC, this is where you indicate who is president or CEO, the CFO, director of marketing, and any other roles you have in your business.

  4. Small Business Organization Chart

    By Becky Simon | April 5, 2022 Creating an organizational chart can help a small business organize and plan for growth. We've simplified the process with a step-by-step how-to guide, example org charts, and expert tips.

  5. How to Write a Business Plan: Organization Structure

    What is the Organizational Structure for a Business Plan? The organization structure section should discuss whether your business will be a sole proprietor, limited liability corporation, or corporation, who will run your business, each person's responsibility, and how your business will expand if needed.

  6. Organizational Chart: Definition, Examples & Templates

    An organizational chart is a visual representation of a company's internal structure. Also known as organograms or org charts, these assets show how teams and departments are organized, showcase relationships across an organization and each individual's role and responsibilities. Here's an example of an organizational chart:

  7. Business Plan Organization and Management: How to Write Guide

    The organizational section of your business plan outlines the hierarchy of individuals involved in your business, typically in a chart format. This section identifies the President or CEO, CFO, Director of Marketing, and other roles for partnerships or multi-member LLCs.

  8. How to make the best org chart for your business

    1. Functional top-down hierarchy Perfect for showing a traditional business structure, the hierarchy chart starts with the C-Suite at the top, then it's broken into departments or divisions. Within each division, you'll list senior management, middle managers, senior staffers, mid-level personnel and junior staff members.

  9. Creating an Organizational Chart for a Small Business

    An organizational chart, or an org chart, provides a visual representation of an organization's internal structure. It outlines relationships between departments and employees, establishes the chain of command in an organization, and defines the role of each staff member.

  10. Write your business plan

    Use an organizational chart to lay out who's in charge of what in your company. Show how each person's unique experience will contribute to the success of your venture. ... Example lean business plan. Before you write your business plan, read this example business plan written by a fictional business owner, Andrew, who owns a toy company.

  11. Creating Your Business Plan: Organization & Management

    This section of your Business Plan should include the following: your company's organizational structure, details about the ownership of your company, profiles of your management team, and the qualifications of your board of directors.

  12. 20 Organizational Chart Examples for Small Businesses

    Jun 23, 2022 Are you looking for a small business organizational chart that fits your business? Then you have come to the right place. A good organizational chart can give hierarchy and structure to your business, and can help your team perform to its fullest potential.

  13. 7 Organizational Structure Types (With Examples)

    A vertical organizational chart has a clear chain of command with a small group of leaders at the top—or in the center, in the case of a circular structure—and each subsequent tier has less...

  14. Business Plan Section 3: Organization and Management

    This section of your business plan, Organization and Management, is where you'll explain exactly how you're set up to make your ideas happen, plus you'll introduce the players on your team. As always, remember your audience. If this is a plan for your internal use, you can be a little more general than if you'll be presenting it to a ...

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  16. Business Organizational Chart Explained with Examples

    1. What is a Business Organizational Chart? A business organizational chart is an abstract view of the whole organization, which tells us the relationship between multiple entities working inside the organization. Moreover, dozens of departments work in an organization and work cross-functionally.

  17. Organizational Planning Guide: Types of Plans, Steps, and Examples

    Organizational planning is like charting your company's path on a map. You need to know what direction you're headed to stay competitive. But what exactly is organizational planning and how do you do it effectively? This guide will cover: The Different Components or Types of Organizational Plans? The 5 Process Steps of Organizational Planning

  18. What is an Organizational Chart

    An organizational chart shows the internal structure of an organization or company. The employees and positions are represented by boxes or other shapes, sometimes including photos, contact information, email and page links, icons and illustrations. Straight or elbowed lines link the levels together.

  19. Create an Organizational Chart (How-to, Examples, Tips)

    An organizational chart (also called org chart, organigram, or organizational breakdown structure) visualizes a company's hierarchy or structure. It is a diagram comprised of simple text boxes containing names, roles, and functions and is connected with lines to illustrate reporting relationships. Org charts are often used when beginning a ...

  20. How To Write A Business Plan (2024 Guide)

    Describe Your Services or Products. The business plan should have a section that explains the services or products that you're offering. This is the part where you can also describe how they fit ...

  21. Business Organizational Chart: Definition, How to & Templates

    The business organizational chart is crucial to know about the structure of the organization. It helps us to keep track of every entity of the company. Some of the benefits are listed below. It makes communication and collaboration feasible across all the departments of the organization. It shows the responsibility of every entity and helps to ...

  22. Organizational Chart Types, Meaning, and How It Works

    An organizational chart is a diagram that visually conveys a company's internal structure by detailing the roles, responsibilities, and relationships between individuals within an entity. It is...

  23. Organizational charts explained: a beginner's guide

    An organizational chart maps out a company's workforce, including its team structure, workers' reporting relationships and employees' responsibilities. Done well, an org chart can be a lot more than just a map. A good organizational chart (org chart) can streamline business processes and help employees excel in their roles.

  24. 41 Organizational Chart Templates (Word, Excel, PowerPoint)

    An organizational chart, otherwise known as an organogram or org chart, is a pyramid-type diagram that represents the structure of a business. This type of diagram outlines the links between different positions and job titles within a company. Organizational charts are similar to the structure of a family tree.

  25. Business Plan: What It Is + How to Write One

    1. Executive summary. This is a short section that introduces the business plan as a whole to the people who will be reading it, including investors, lenders, or other members of your team. Start with a sentence or two about your business, your goals for developing it, and why it will be successful. If you are seeking funding, summarize the ...

  26. Business Reorganization Plan Template

    Maths Resources. Capacity Activities. Hands On Activities. Maja Ercegovac. Aug 19, 2023 - Business Reorganization Plan Template. It was based in 1929 and published pamphlets for the university in its early years earlier than expanding into quarterlies and books. Inform readers of the first focus of the reorganizational effort. He onl.