Owner / Management Team
The success of a business heavily depends on the personality and qualification of the owner (management): As an entrepreneur, you have to realize your business idea and constantly push it forward.
This chapter will document that you are capable of running your business. It will deal with your management qualities. A simple line up of your former activities and professions is hereby not sufficient. Demonstrate which one of your qualifications are important for a success of your business.
Being Successful In A Team
Building a business requires various abilities and talents. Depending upon the situation, abilities like levelheadedness or being unafraid of decision-making, attention to detail or strategic farsightedness, capacity for teamwork or self-assertiveness, can be important.
For everyone who is planning to open an own business, the question arises whether to do that alone or with the help of others. Both ways have their advantages and disadvantages. A single owner can make all decisions by himself/herself and there is no danger that a long decision making process in a team can cause delays. On the other hand, a single founder is not always able to show all necessary abilities that are necessary to run a business successfully.
In a team, members can complement each other and combine their knowledge and experiences. But then, too many cooks spoil the broth, as a common saying goes. That is why every team should be aware of its strengths and weaknesses and develop strategies to ensure common actions. It is important that all team members share the same vision and don’t get in the way of each other. The process of building a team is characterized by many challenges. So if you decide to have a team, take your time for it!
In order for you to run a business successfully, you need to have practical experience and theoretical knowledge. Also, do not underestimate the importance of personal competences like goal-directedness, ability to cope with pressure, ability to communicate and the ability to work in a team. The bigger and more complex your project is, the higher the demands on you as an entrepreneur.
In this chapter, you will describe the competences and abilities of each of the business founder and the management team. Show, how these abilities can be beneficial for the company and what areas of responsibilities each owner (manager) will fill. Hereby, it is important to show practice related experiences, for example in connection with former leadership and distribution responsibilities or well-founded knowledge of the market and the industry. You can attach resumes and references to support your exposition.
If you founded your company during or right after your college/university time, you will most likely not have any real work experience. Since potential lender like to see just these kinds of experiences, you need to provide a substitution for these missing experiences. That includes activities like the leading of groups and seminars, the participation in committees and/or associations, etc.
Internships and visits abroad (not tourist related) should be included as well. Furthermore, it can be interesting for potential lenders to learn that the founder team has been working together for several years already, for example in research, and wants to use the results of the former work to develop a product (spin-off).
Closing of Gaps
Create job profiles for the most important segments of your business and work out the kinds of abilities and competences that are necessary to fill these jobs. Then, compare these profiles with the abilities and competences you (and your founder/management team) bring to the table. If you find gaps, describe how and when you intend to close them.
It is not necessary to fill all important positions in your business immediately. That could result in uncontrolled costs that your business can not afford during the start-up phase. Rather it is recommended to pursue a prudent staff expansion that is oriented on the current needs of the business. If possible, use part-time staff and/or external service provider for some of these positions until your business is solid enough to support a full-time staff.
Every business has so called “key personnel” that plays (next to the founder/owner) a more or less important role for the business (i.e. know-how upholder, people with important customer contacts). Therefore, explain if there are any dependencies and reliances on these people and how you plan to bind these people to your company.
Have in mind, that a dependency on key personnel can be a risk for your business. That is why lenders like to see a solution for the case that one of these persons is leaving the business.
Income for the Owner / Management
Include information about how much money you (and other founder / owner) plan to take out of the business as salary. You can use your salary from former jobs or published average incomes for your orientation. Your salary should be enough to cover your living expenses, which do not include luxury items. Avoid taking out too much money from the business since exaggerated salaries will be a strain on the financial situation of your business.
- Who are the founder / owner of the business and what functions do they have in the management? Who are the other members of the management team?
- What abilities and professional experiences does the management bring to the company?
- Do you have entrepreneurial experiences?
- Does the management bring enough experience in sales and marketing and technical expertise to run the business sufficiently?
- Are the most important requirements of the job profiles covered by the owners / founders’ personal profiles?
- How do you plan to close possible gaps?
- Ho do you plan to bind key personnel to your business?