The part of the business plan that describes your organization provides potential investors with a greater understanding of the way your business works.

Summary

It's best to start with an overview of your organization, a short description of what your business does, followed by its history, its goals, and ways that distinguish your business from others that sell similar products or perform similar services. Here is where you can describe the way you plan to meet your goals. You should also describe your business model, and your company's strategy, with its long-term and short-term objectives, and the methods you intend to use in order to meet those objectives. Additionally, you must list the risks your business venture faces.

Products and Services

If You Make a Product

Now is the time to describe the things you make, taking the reader from raw material to finished product. You might include a time line or a flow chart to help explain the process. You should also list suppliers, their location, and the costs associated with buying the raw materials and transporting them to your business location. You should note any contingency plans you have in place in case there is a break in the production chain, if you lose suppliers, or if there is a sudden increase in orders. Quality control and after-the-sale customer service issues can be dealt with here.

If You Are a Retailer

You should talk about your sources of supplies, including how you select what you are going to sell and how you select vendors. Again, a flow chart would be useful to show how the supply and distribution chain works. A description of the way you manage your inventory is also necessary.

If You Provide a Service

Service providers need to describe the service they provide, their customers, and the way the service will be provided. The amount of time the work takes, supplies, and equipment all need to be detailed. If there is a warranty on goods and services, you should describe it here.

The Legal Structure of Your Business

You should explain the legal structure of your business -- sole proprietorship, partnership, corporation -- and describe why you have chosen that structure.

Management and Employees

A organizational chart showing the company's management team and the duties of each manager will help investors understand how the work of the company will be allocated. Compensation, benefits, vacation, and sick leave issues can be dealt with here.

It will be necessary for you to describe the account system you will use and whether you will be doing your bookkeeping internally or turning to outside sources to handle certain financial responsibilities.

Other Issues

Finally, the plan should show who you will use to deal with legal matters, how you plan to insure your company, and how you will address security matters.