Creating a Small Business Organizational Chart

Organizational charts are important business tools that help clarify your team’s structure, responsibilities and opportunities for growth. Even the smallest of small businesses benefit from having an org chart for their team. They can come in handy in a variety of scenarios, the least of which is simply helping you stay organized and efficient as a business. If you need to talk to investors, pointing to a clear management structure can also help you make a compelling case for your business.

Below we’ll discuss the whys and hows for creating an organizational chart for your business so you can hop to it in creating yours.

Why Your Small Biz Needs an Org Chart

As a small business leader, you’re used to having your hands in it all, but as your business grows, it will become increasingly important to begin delegating tasks and responsibilities to team members – and delineating those responsibilities in an org chart will make identifying any skill gaps on your team much more apparent.

A foundational org structure can help in several ways, including the following:

• Improving operational efficiency – A fleshed out organizational chart may reveal redundancies or gaping holes in your workflow. If one person is taking on too many tasks whereas another team member hardly has enough to do, it could be time to reshuffle the org chart to ensure you are meeting all your needs. This may mean turning one job into two, outsourcing some of the work, or taking other steps to improve productivity.

• Improving communication – A clear org chart helps speed up communication because employees know exactly who to go to with a question or concern. When responsibilities and reporting structures are clear, collaboration across teams becomes easier and there may be less ambiguity when it comes to decision-making responsibilities.

• Speeding up onboarding – Org charts can be most beneficial to new hires who are still learning the ins and outs of the company. For them, org charts are like a map to help them navigate projects, responsibilities and communication of the business.

• Identifying growth opportunities – Workplace structures are constantly evolving. While there’s no reason to reorg just for the sake of it – it can be a helpful growth exercise to map out what you hope a future org chart could look like.

How to Create an Org Chart for Your Small Biz

Now that you know why you need an org chart, making one should be fairly straightforward. There are templates you can download for free or just get out a pen and paper and get to work.

The most common org structure for businesses is hierarchical. This is where you have a leader on top with vertical lines dropping below to indicate their direct reports. There are also lateral relationships within a hierarchical org chart to identify team members who are on equal footing with each other in terms of the business structure.

Other types of org charts to consider for your small business include a matrix organizational chart, which is useful when employees report to multiple supervisors, or a circle chart, which puts the emphasis on equality rather than hierarchy.

As you develop your org chart, think about both the type of chart you want as well as the functional roles that will fill those slots. And remember, org charts are meant to evolve, so don’t worry if it’s not perfect on your first go-around.