Create your org chart before you hire your sixth team member.

Small business organisation chartAs your baby grows up it will need more structure.

Systems, processes, routine and structure will set you free, not confine you.  If you are serious about growing your business the sooner you have these in place and working smoothly, the sooner you can move out from working IN the business, to working ON it – to eventually not being needed at all.

In this post we outline why you need an organisation structure and chart (org chart), why it’s important (and even from day 1) and give you a suggested hierarchy.

Make sure the org chart you devise is the chart as you envisage your business will be when you exit.  This is really important.  No doubt you’ll change the chart a few times over the years as you get to understand your business better, or adapt it, but key is to always think of it as how the structure of your business will look when you hand over the keys (sell.)

You may feel too busy to implement an org chart before you put on too many team members but we recommend you do that before you let too many  in.  So you may as well do it now (even if your sixth team member is months away from walking in the door.)  By having it in place – on your wall now – you start to think and talk in roles.  This is an important habit to build because you want it to sound natural when talking with your team

“OK, that’s a great question Peter – but which role do you think owns that answer/approval?  Yep, I agree – but I don’t wear that hat, so best go see the Marketing Manager.”

As Gerber eloquently illustrates in The E-myth book, having a clearly defined org chart from day 1 will help you with responsibility and accountability within your business as you grow.

Let’s start with the KRAs or Key Reporting/Responsibility Areas:

  • Strategy
    • Planning
    • Product Strategy
    • Strategic Finance
    • Exit
  • Management
    • Leader/Manager Development
    • Profitability
    • Recruitment
    • Resourcing
    • Organisational Training
    • Performance & Pay
    • Culture & Communication
  • Business Development
    • Competitor Research
    • Marketing
    • Sales
    • Customer Relations
  • Operations
    • Finance
    • Admin
    • Legal & Compliance
    • Systems
  • Production
    • Profitability
    • Knowledge & Learning
    • Training
    • Supplier Relations

Here you can see each corner of the business, and which area reports to which roles:

Key Reporting Areas

Now all you need to do is put a name in each box to explicitly say who owns that corner:

Organisation Chart

There are plenty of other ways to structure an org chart so adapt this one to how you think it best fits your business.

What a small business owner/manager should do to bring structure into their business:

  1. Create an org chart for the business that you will eventually exit/sell
  2. Assign people to each role
  3. ‘Talk in roles’, and encourage your team to do so as well

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