No matter the size of your business, whether you’re starting out or already established, creating an organizational chart for small business planning is a necessary exercise.
There are numerous reporting relationships to visualize, especially when you have more than one manager in your small business.
Making an organizational chart can feel challenging, but this guide will make it easier to design an organizational chart that reflects many types of corporate structure.
Or you can customize a Venngage organizational chart template to create a chart that reflects your management structure in just a few minutes.
What is an organizational chart?
An organizational chart, or an org chart, provides a visual representation of an organization’s internal structure. It outlines relationships between departments and employees, shows who reports to whom (chain of command), and gives a high-level view of roles/titles
You can see how this hierarchical organizational structure chart example structures the employees of a company.
The most common structure has small business owners, or the chief executive officer (CEO), listed on the top.
Other C-suite executives or the vice president are listed below them. Department managers and team leaders are below them, followed by employees. But depending on the organization, an organizational structure may be flat (fewer layers), matrixed, or divisional.
An org chart helps you navigate your company and can be included in onboarding documents for new employees to familiarize themselves with the organizational structure.
You can make the organizational chart your own by adding your branding to the diagram.
Venngage’s My Brand Kit feature imports your brand identity from your website so you can apply it to your designs.
Examples of organizational chart for small businesses
There are two basic types of organizational structure charts for a small business:
- flat organizational structure
- hierarchical organizational structures
Flat organizational structure
A flat org chart or horizontal organizational structure is composed of limited or no middle management between lower-level employees and upper management, like in this organizational chart example.
This type of organizational chart is common for small businesses and startups in their initial years of operation.
As this structure does away with several levels of management, it enables employees to quickly and independently make choices.
The decision-making power for the business is shared among employees on the same level, and they are held accountable for their decisions.
Hierarchical organizational structure
A hierarchical structure or top-down chart is shaped like a pyramid.
It is a traditional reporting structure adopted by most companies.
Hierarchy charts look like this:
A single person or a group is seated at the top, followed by managers in the middle and the rank-and-file employees at the bottom.
The organizational chart is divided into different departments with each employee reporting directly to a supervisor. This is most commonly used by large organizations and government units.
According to Taggd, a recruitment platform, many companies are implementing a hybrid organizational structure. It refers to a flexible approach where the roles and responsibilities shift as per the company’s requirements and objectives.
How to write an organizational plan
Before you create an organizational structure, you need to have an organizational plan. It should include things such as, how your company will operate, who the decision makers are, and how responsibilities are divided.
An organizational helps you:
- Identify the core functions you need to add to the org chart.
- Define responsibilities and show visual hierarchy effectively in the chart.
- Explain employees how their role aligns with the company’s objective.
How to make an organizational chart for a small business
Create your small business’ organizational chart by following these simple steps.
Step 1: Determine the structure you want your business to follow
The first thing to do when making an org chart is to determine the corporate structure it will follow.
Choose the one that best suits your business needs from the two types of organizational structure discussed above: the flat org structure or the hierarchical organizational chart.
Step 2: Choose an org chart software
Creating an org chart might come as a challenge to some. But there are numerous free or paid tools online that can help. One of the best solutions is Venngage’s Organizational Chart Maker.
We have plenty of professional smart org chart templates that can be easily edited with just a few clicks. Our library of visuals includes 40,0000+ icons as well as over 4 million high-quality free stock images.
Step 3: Fill out the organizational chart template with your information
Once you select a template, start filling out the chart templates from Venngage’s online org chart maker.
You can also use Venngage’s AI Autofill feature to create an org chart. Simply add the details as text and they’ll be applied to the template automatically. This saves you the hassle of changing text or icons manually.
Create the right type of organization chart for your business with Venngage’s real-time collaboration feature. With a Venngage business account, you can add team members, and share comments and feedback simultaneously.
Collaborate with your team in real-time with a Venngage business account. And once you’re done, you can download the chart as a high-quality PNG or PDF.
What is the purpose of organizational charts for a small business?
An organizational chart offers a number of advantages to small businesses.
We share the biggest benefits of creating org charts below.
An organizational chart improves communication across teams
When a small business starts growing, people’s new job titles can become confusing.
When merging with larger organizations with several teams and departments, in this example, it becomes crucial that the structure is tracked.
Understanding the hierarchy in the workplace is essential, so you know who your immediate supervisor is and whom to approach in case some issues arise.
A matrix organizational chart makes it easier to see which employees are involved in a project, and who the project manager or executive is. This improves efficiency across the entire organization.
Organizational charts enable easy onboarding for new employees
For new hires to find their way around the office can be quite challenging.
But presenting your organizational structure, like the template below, will facilitate the onboarding process and orient the employee to the chain of command.
Organizational charts can also help guide new hires through the specific functions and work responsibilities of coworkers.
The diagram serves as a cheat sheet, showing them the person to whom they should go for what information.
Organizational charts boost employee productivity
A matrix organizational structure expedites processes in the workplace as it shows the roles and responsibilities of each employee.
This helps reduce the time spent looking for the right people for the right task.
This organizational chart template also includes assistant managers so employees don’t need to go to the top managers for simple problems.
Instead of wasting time searching for information that would otherwise be found in an org chart, the employee becomes productive and efficient.
The organizational chart also prevents overlapping and duplication of work as it identifies positions and tasks assigned to each individual.
These details in org charts also help forge relationships among other employees.
An organization chart facilitates business growth
Employers can also get a clear view of the organizational structure, like in the template below.
They will know where an employee is positioned and the tasks they undertake. This makes it easier for the employer to determine which part of their organization needs improvement.
By taking a step back, owners can see which department is in need of additional manpower and which is overstaffed.
An org chart helps executives organize their workforce and ensure that managers have enough workforce to achieve company goals and objectives. Additionally, it can assist in tracking the distribution of small business loans across departments, leading to better growth.
According to Gallup survey, companies with a clear organizational structure report a 21% increase in profitability.
Gallup Survey
FAQs about organizational charts
How can you create a small business organizational chart with Venngage?
Sign up for a free Venngage account using your email, Google, or Facebook profile.
Choose one of Venngage’s wide array of organizational chart templates for small businesses. To add information, titles, and visuals to your org chart, use Venngage’s drag-and-drop smart editor.
Then customize your org chart easily. Add or remove nodes in your org chart by clicking on the ‘+’ or ‘-‘ buttons. When you change the text or images, the nodes automatically resize to fit the content. Then you can download your organizational chart as a PNG or PDF file. Or share your design directly with your team through a private link.
What is a good organizational structure?
An organizational structure is deemed good when it helps a business reach its objectives. It should also be designed to aid individual employees’ growth. Additionally, org charts should reduce conflicts between individuals and team members, and remove duplication and overlapping of work.
Make your org chart for your small business today
Streamlining communication and driving efficiency has never been easier than with the help of organizational charts. It is an effective management tool that can help improve team performance for planning purposes. Org charts also act as a visual personnel directory.
To help you organize your teams and ultimately lead them to success, use the organizational chart examples that we’ve shared in this post. These Venngage templates will help your company’s overall performance in the long run.
