Steps to creating an Organizational Chart

An organizational chart can have a profound impact on a small business more so than any other development step. An organizational chart should be developed around functions, not personalities. You want to develop something long lasting. It identifies who is accountable for what. 

  • First think of what you would like your business to be like in five years.
  • Now, take the time to list every activity in the office, no matter how small, that needs to be accomplished in a day or week. This would go from unlocking the doors in the morning to dealing with clients. It may help to imagine that labor is free and you have a single person for each activity
  • Take a piece of paper and place your name at the top and your title. Put a box around it. 
  • Next write down the positions that report to you. Include those that one day may be needed. Draw a line from them to you. This is your second layer in your organization. 
  • Then write down all those positions that report to the second layer of your organization, again remember to include those that one day may be needed. Draw lines from that position to the positions in the second layer.
  • Continue this activity until you have exhausted all the needed positions. This is your organization.
  • Take your list of daily/ weekly activities and divide them into the appropriate listed positions. 
  • Now with the positions filled with activities, place the name of the person that is currently performing those activities today. A person’s name will undoubtedly be used several times. 
  • As the owners, if your name appears in several boxes, you need to decide if this is the best use of your time and efforts. Is there someone else that can perform those duties allowing you to perform more profitable tasks? 

The role of the organizational chart is to outline a company structure. Not developing a position for a particular person or personality. In following this process you are describing all the work that has to be done within the organization.  With this information a description or summary of the results to be achieved by each position can be written. Later, a contract with the employee who fulfills that position can be constructed and signed.  

Kevin Weir - 11/2/2022


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