How to Create an Organizational Chart for Your Small Business

By Becky Simon | April 5, 2022

  • Share on Facebook
  • Share on LinkedIn

Link copied

Creating an organizational chart can help a small business organize and plan for growth. We’ve simplified the process with a step-by-step how-to guide, example org charts, and expert tips.

Included on this page, you’ll learn why your small business needs an organizational chart,  how to create a simple organizational chart from a template, and how company culture plays a part in the shape of your chart.

What Is a Small Business Organizational Chart?

A small business organizational chart is a structured visual display of the people who fill the roles in a company and their working relationship with one another. It is a straightforward graphic that shows who reports to whom.

Aseem Kishore

Aseem Kishore, the CEO of Help Desk Geek , outlines some of the benefits of creating an organizational chart. “Organizational charts are gaining huge popularity — and rightly so, because they have many advantages. The most fundamental advantage of an organizational chart is the fact that the reporting line and chain of command become clear. [Organizational charts] also help in noting job vacancies and overall headcount.”

Members of the C-suite and directors typically create the organizational chart but lower-level managers should also provide input. To make a chart more visually appealing, consider consulting with a designer once you have finalized the basic structure of your chart. 

Visit our guide to learn more about organizational charts, including how to create one from scratch in Microsoft Excel .

Why a Small Business Needs an Organizational Chart

With an organizational chart, small businesses can more easily outline the roles and reporting structure of their employees. By outlining the organizational structure, companies can help provide a roadmap for growth, as well as improved visibility and communication.

Some of the biggest advantages of having an organizational chart for small businesses include the following:

  • Improve Visibility: By making your business more transparent, you’ll increase trust and communication among employees and departments. An organizational chart can foster visibility by making reporting information available to all members of the organization. “For smaller businesses, the basic aim is to clarify each other's positions in order to avoid office politics,” says Kishore. He suggests creating a simple chart and sharing it with all employees.
  • Reinforce Company Culture: Your organizational chart can help establish and provide insight into your company’s culture. A chart that outlines a long, tall hierarchical structure may represent a company that has a lot of room for advancement in set roles, while a short, wide structure may represent a company that encourages employees to try many things and be less specialized.

David Reid

  • Improve Onboarding: Having an organizational chart available for new hires can help them familiarize themselves with the people they will be working with.

Stella Monteiro

  • Encourage Accountability: An organizational chart lays out exactly who reports to whom and who is responsible for various people and projects. Having one can help ensure that managers are not overburdened and that no one gets lost in the shuffle. “For leadership, a well-designed organizational chart makes it easy to view headcount allocation per department, front versus back ratio, and other important metrics,” says Monteiro.

Types of Small Business Organizational Charts

There are many types of organizational charts, but most small businesses will choose one of three: flat, hierarchical, or matrix. We’ve outlined the distinctions among the display types below:

Hierarchical Organizational Chart

  • Matrix: Matrix-style charts are most useful for companies that work on multiple projects at once, or with teams that are not always discrete from one another. The matrix style divides employees by department, but also by project, to visually display what everyone is working on at a given time. This chart will likely need to be updated more often than the others as projects reach completion and tasks change.

How to Create a Small Business Organizational Chart

Creating a small business organizational chart is a simple process. First, organize the names and titles of the people in your organization. Then, determine who reports to whom and create a chart. Add design elements to personalize your chart, then share it with your organization.

organizational chart in business plan

  • Create Your Chart: Start at the top with your CEO and work down from there by adding the CEO’s direct reports, then their direct reports. It is generally easier to approach your chart row by row, adding all the employees in one tier across the company, before adding the employees that report to each of them. Keep it simple at this stage, and stick to names and titles. Don’t worry about adding visual flair at this point — just ensure that your data is accurate.
  • Proofread and Make Changes: Share your draft chart with others to verify its accuracy and make any needed changes. Compare your chart against your employee roster to ensure that titles are up to date and that all names are spelled correctly.
  • Add Design Elements: Add employee headshots and company branding, and change the colors of departments or tiers. Standardize your spacing and shapes. A basic chart requires very little design, but if you plan to share your organizational chart widely, you may consider consulting with a designer for this step. For design inspiration, check out our roundup of free organizational chart templates for Microsoft Word .
  • Share and Store: Share your completed organizational chart with your employees, and store it in an easily accessible place. Update your organizational chart on a regular basis to maintain accuracy.

How to Make a Simple Organizational Chart for a Small Business Using a Template

You can create an organizational chart very simply, using our downloadable Excel templates . Use the templates as a simple, pre-made base that you can add to and customize to suit your organization. 

We’ll walk you through step by step on how to create an organizational chart from a template below.

1. Download Your Organizational Chart Template

Hierarchical Organizational Chart Template

Download Hierarchical Organizational Chart Template — Microsoft Excel

This template provides a simple base hierarchy that you can build upon to create your own organizational chart. Copy and paste the name bubbles, connecting lines, and photo placeholders to create your layout, and then add photos and customize the look. Hierarchical organizational charts are widely used by small businesses and are the easiest to revise and build on as your business grows.

Once you have downloaded your template, open it in Microsoft Excel.

Pro Tip: Make sure to click Enable Editing at the top of the spreadsheet. Doing so will allow you to make changes to the document.

Org Chart Enable Editing

2. Enter Your Company Information

  • Click on the Company field and enter the name of your company. 
  • In the Compiled By field, enter your name. 
  • Enter the date in the Date Completed field.

Org Chart Compiled By

3. Draft Your Layout

Determine how many employees you need to include and where they fall within your chart. Start at the top and determine how many employees are at each level; then, complete each successive level. Make a list of names and who they report to.

Pro Tip: Sketch your layout on a piece of paper to use for reference when creating your chart in the template.

4. Add Employee Entries to the Chart as Needed

Org Chart Add Blank Icons

  • Click and drag the newly pasted icon to the exact spot you would like to place it. Repeat the copy-and-paste process on the image placeholder icon.

Org Chart Top Level

5. Enter Your Employee Information

  • Click on the top-most bubble (which is colored blue-gray by default) in the template and enter the name of the highest-ranking employee in your company, as well as their title. 

Org Chart Filled

6. Review and Revise

Send your first draft to colleagues to review, and make any needed changes. Verify that names and titles are spelled correctly and that lines of report are correct.

7. Add Employee Photos

Once your layout is complete and the employee information has been entered into your chart, change the placeholder images to pictures of your employees. 

Org Chart Change Picture

  • Repeat these steps for every employee on your chart.

8. Customize Your Chart

  • To customize the look of your chart, click on an icon in your chart. 
  • With an icon selected, click on the Shape Format tab .

Org Chart Shape Format

From this tab, you can change the shapes and colors of your employee entries.

Org Chart Shape Format Tab

Pro Tip: You can also access these tools by right-clicking an icon and clicking Format Shape from the drop-down menu.

  • To change the shape of an icon, locate the Insert Shape tab, click Edit Shape , then highlight Change Shape . 
  • Choose from a variety of shapes in the following drop-down menu.

Org Chart Change Shape

  • To change the color scheme of an icon, locate the Shape Styles tab. 
  • Change the background color of a shape by selecting a color from the Shape Fill drop-down menu, or change the color of an outline by clicking Shape Outline . 
  • You can add various edge effects to a shape from the Shape Effects menu, or select a pre-made theme by browsing with the arrow buttons. 

Org Chart Shape Color

Pro Tip: Maintain visual cohesion by ensuring that employee icons on the same level are the same color and shape as one another.

9. Save and Share Your Chart

Save your organizational chart in an accessible drive, and share it with your team. Revisit and revise your chart on a regular basis to ensure that it is accurate and up to date.

Small Business Org Chart Sample Template

Hierarchical Organizational Chart Template Example

Download Hierarchical Organizational Chart Template Example — Microsoft Excel

This template is an example of a simple organizational chart for a small business. It is prefilled with the names and job titles of three tiers of employee hierarchy but can be easily customized to suit your needs. Add or subtract employees, change the reporting lines, and enter job titles to create an organizational chart for your own small business.

Tips for Creating an Organizational Chart for a Small Business

An organizational chart for a small business can take many forms. We’ve rounded up some tips, from incorporating headshots and other design elements to considering multiple versions of a chart, and expanded on them below:

  • Use Employee Headshots: If you are using your organizational chart to aid in onboarding new employees, including headshots is a great way to help familiarize them with the people they will be working with. It is unlikely they will be able to meet everyone on their first day, and it can be very helpful to put a face to a name.
  • Use Cohesive Design Elements: An organizational chart can be as simple as titles connected by lines, but paying attention to spacing and adding cohesive color and shapes can both make a chart easier to read and more memorable. Consider using a template or working with a designer to create a chart that is easy to parse and nice to look at.
  • Use Available Software: An organizational chart is easy to make in Microsoft Word , Microsoft Excel, or Google Sheets. You can also use flowchart creators like Lucidchart to make simple charts, as well as more powerful image creation and editing tools like Adobe Photoshop to make more complicated graphics. All of these tools offer their own advantages, so use the ones you are most familiar with for best results.
  • Create an Initial Chart Without Names: When creating an organizational chart for your company for the first time, consider leaving out names. Start by listing out all of the roles and responsibilities that are needed to do business. When you add names, it will be easier to see the gaps and easier to plan to fill them. “By removing names from the equation, we can concentrate on structuring our organization rather than particular people,” explains Reid.
  • Multiple Versions: You may find it useful to create different versions of your chart for different use cases. A chart for onboarding new hires may have photos, for example, where an internal reference chart for C-levels may not need them. “You might also consider a chart with current positions and one with open positions, as both will function as a tool for decision-making and growth,” suggests Monteiro.
  • Keep Things Concise: In general, keep your chart as simple as is needed. As your business grows and your chart expands, you might consider displaying whole teams as a single entry on your chart, rather than listing the names of everyone on those teams. “My organizational chart is in the form of a single-page PDF file. I believe having multiple pages makes it more complicated, so I always aim to fit everything on one page. When modifications are needed, I make them on a separate file and convert it into a new PDF to retain records over time,” says Anevski.

What Is the Best Organizational Structure for a Small Business?

The best organizational structure for a small business is typically a hierarchical form that reflects the needs and current reality of the company. Organizational structures vary widely based on the company size, the industry, and the changing nature of projects.

Smaller businesses have fewer employees, which can mean that people fill multiple roles. If you find that your employees wear many hats without rigidly defined roles, you might try a flatter structure. If your positions and roles are well-defined and unchanging, a traditional top-down hierarchy may be best. 

If your company works on multiple projects at the same time, with multiple teams, a matrix might be best to display that reality. Some small businesses may find that the top of their hierarchy remains unchanging while their teams change based on the project. A project-based structure can provide some flexibility for small businesses that may have less specialized teams. “A project-based structure has worked best for our small business. Our industry culture supports this structure as most of us operate using smaller workflows. The project-based system helps add to the resource pool and makes it more diverse. It also helps in allocating resources and finishing deadlines with increased clarity,” says Gamez. 

The shape of your structure may grow wider or longer, depending on how many rungs of accountability your business has and how often they work together. “My small business has always used a functional organizational structure, but no matter what you do, employees should be organized according to their skillset and corresponding function in the company,” suggests Anevski.

The Role a Work Culture Plays in Creating an Organizational Chart for a Small Business

Your chart can reinforce and reflect your culture in many ways. A smaller business should try to encourage interdepartmental cooperation and problem-solving rather than strict role-based work because this can promote better visibility, increased accountability, and better company-wide problem-solving.

“Culture has a profound effect on organizational structure. If a company's culture is open and very lean, that would reflect in its structure, which would not be very tall, rather wide — with cross-functional teams included. However, if the company has longer reporting lines, the structure will be longer as well,” explains Kishore. A company that is stricter in its approach to roles and rigidity will produce a taller, narrower chart. Either way, a chart that reflects the reality of the company will result in better trust and cooperation between employees who know what they are responsible for and whom they report to.

“My company culture focuses on teamwork,” says Anevski. “With the functional structure, each separate department is managed independently, helping different teams feel self-determined. The structure also allows employees to focus on their specific roles while encouraging growth and specialization.” 

Meanwhile, Reid his experience working in the culture of a taller chart. “We utilize the standard hierarchical model for our organization. The culture helps shape the structure by enforcing some measures. For example, government regulations require us to have specific procedures to be compliant. This compliance model requires structural changes to be incorporated. The structural requirements for incorporating formal communication differ from more informal communication,” he says.

Examples of Small Business Organization Charts

An organizational chart can take many forms, especially for small businesses. We’ve provided some examples of the kinds of charts you might expect to find in different small business situations below.

  • Tech Startup: This organizational chart represents a very small tech startup with a very small staff. Most employees report directly to the CEO, who takes care of most unlisted tasks and oversees the general management of the company. It is likely that every employee on this chart is regularly delegated tasks outside of their strict job description.

​​What to Do After You Create a Small Business Organizational Chart

Once your organizational chart has been created, don’t let it languish. Revisit and revise your chart regularly, utilize it when onboarding employees or introducing your business to people, and share it with employees so that they can stay informed.

  • Regularly Revisit and Revise: As your business grows, it is important to revise your organizational chart to reflect those changes. Set a schedule to revisit your chart a few times a year and make updates as needed. “As a business owner, you should expect that your small business won’t stay small forever. As it grows and hires more employees, your organizational chart will need to be modified. Always be prepared to add more people to your chart. For any small business, the chart will start out small and grow over time,” says Anevski.
  • Utilize It Often: Consult your chart when considering hiring new employees or creating new teams. Your organizational chart can be a great tool to introduce your business to new employees and clients, as well as identify gaps in your command chain.
  • Make It Available to Employees: When your chart is available to employees, you make it easier for them to contact the right people and answer questions. “We give the organizational chart to each of our employees. If someone ever needs information, they can follow the chain of command or go directly to the appropriate department, ” explains Reid.
  • Plan Individual Employee Growth: Your organizational chart can be a great tool to track and plot employee growth. “We use it to assist organizations in preparing their career proposition for employees, developing their job architecture, and workforce planning. It is a powerful tool for HR to partner with the company leadership,” Monteiro shares.
  • Create and Change Teams: Your organizational chart can help put together teams for new projects. Use it to see what people have done in the past and where they might be needed for future projects. “We use our organizational chart to delegate resources based on the nature of the project, skills required, and deadline dates. Since all resources are plotted as project-based, if the same skills are needed, a project shares and swaps resources. It has helped us become more agile and dynamic with our decision-making capabilities,” says Gamez.

Optimize Your Organizational Chart for a Small Business with Smartsheet

Empower your people to go above and beyond with a flexible platform designed to match the needs of your team — and adapt as those needs change. 

The Smartsheet platform makes it easy to plan, capture, manage, and report on work from anywhere, helping your team be more effective and get more done. Report on key metrics and get real-time visibility into work as it happens with roll-up reports, dashboards, and automated workflows built to keep your team connected and informed. 

When teams have clarity into the work getting done, there’s no telling how much more they can accomplish in the same amount of time.  Try Smartsheet for free, today.

Discover why over 90% of Fortune 100 companies trust Smartsheet to get work done.

  • Product overview
  • All features
  • Latest feature release
  • App integrations
  • project icon Project management
  • goal icon Goals and reporting
  • asana-intelligence icon Asana AI
  • workflow icon Workflows and automation
  • portfolio icon Resource management
  • my-task icon Admin and security
  • list icon Personal
  • premium icon Starter
  • briefcase icon Advanced
  • Goal management
  • Organizational planning
  • Project intake
  • Resource planning
  • Product launches
  • View all use cases arrow-right icon

organizational chart in business plan

  • Help Center
  • Asana Academy
  • Certifications
  • Work management hub
  • Customer stories
  • Get support
  • Developer support
  • Customer Success
  • Project plans
  • Team goals & objectives
  • Team continuity
  • Meeting agenda
  • View all templates arrow-right icon
  • Business strategy |
  • How to create an organizational chart ( ...

How to create an organizational chart (with free examples)

An organizational chart outlines how your company functions in real time. This diagram shows the reporting relationships between job titles and the roles in your organization. We’ll explain the different types of organizational charts and provide free templates for you to customize your own.

You’re having a family dinner when your grandma pulls out the family tree. She uncrinkles the piece of paper and traces her name down the line. As she searches, her finger lands on a name. “See! There he is, right next to your cousin Charles!” She points to the name of your third cousin, proving that this name matches that of a famous poet. 

In this guide, we’ll explain how to make an org chart, the different types of organizational charts, and provide free templates so you can customize and build your own.

3 ways to transform your enterprise project management

Watch a live demo and Q&A session to help you streamline goal-setting, accelerate annual planning, and automate how teams intake strategic work.

How to make an organizational chart

An organizational chart is a way to visualize your company’s structure. To create an org chart, you’ll need to gather team member information and decide how you’d like to build the chart. 

As you consider the reporting relationships in your organization, you can plan your chart from top to bottom. 

Organizational chart example

1. Define scope

You can treat your organizational chart like any other new project you work on. Defining the scope of your org chart can help ensure it clearly represents your team structure . The scope will determine the overall purpose of your organizational chart.

Consider these questions to get started:

Will your org chart act as a resource for team members to know who’s who within the company? 

Will you share your organizational chart with external stakeholders or partners? 

Will you need multiple charts for different levels of the company? 

Asking these questions from the start can help you gather the right information and map out your chart.

2. Gather information

Gathering information is the most important step of making an organizational chart because without the right information, you won’t be able to proceed.  You can gather information by surveying individual team members through email or working with your HR department. 

You’ll need up-to-date information about the people in your company, including employee names and their latest job titles. You’ll also need to understand reporting relationships throughout your company, such as the hierarchy between managers and direct reports. Consider gathering headshots of your team for added personalization.

3. Decide how to build your chart

Deciding how to build your organizational chart is crucial because different tools can make the process easier. Drawing out your org chart by hand isn’t time efficient and will make your results hard to share, so consider harnessing the power of a tool for this process. 

Using an editable PDF can save you time because the template is pre-built with placeholders. You can then easily share the PDF with the rest of your company. 

4. Plan for updates

After creating your org chart, use a team calendar to plan for regular updates. After all, it’s likely that your company structure and team dynamics will change often. 

People switch in and out of positions, new employees are hired, and reporting relationships change. With a digital org chart, it’s easy to update the structure and redistribute it to team members.

Organizational chart templates

Creating an organizational chart can be easier when building from an org chart template. Most companies follow similar structures, whether it’s a top-down structure or a matrix structure. 

You can use the org chart examples below as jumping-off points. To create your custom org chart, determine which organizational type best represents your company structure. Then, update the template to fit your unique team needs.

Types of organizational charts

There are four common org chart types. Each one of these charts uses a different chart design and represents a different way that a company might function. Since an organizational chart is basically a hierarchy chart—a visual translation of your company’s internal structure—the chart type you use should mirror your organization’s reporting relationships and decision-making procedures.  

Types of organizational charts

1. Functional top-down

A functional top-down org chart is the most common structure, with the company functioning as a hierarchy. At the top of this organizational structure there is one team member, who usually has the title of president or CEO. 

Branching off from that team member are the leaders who are next in charge, like the company vice presidents. The organizational hierarchy extends further into departments and eventually branches into teams. 

2. Matrix organizational chart

The matrix organization is a more complex structure than the traditional top-down design. If your company uses this reporting structure, team members report to multiple managers. 

While employees likely have a primary manager they report to for their department, they may also report to a project manager . These secondary project managers also have department managers they report to, which makes the matrix org chart look rectangular instead of tree-like. 

3. Divisional structure

A divisional organizational structure is a high-level version of the traditional hierarchical structure. Divisional structures make sense for companies that have departments working independently from one another. 

For example, companies with separate product lines may work in divisional structures because each product line has separate IT, marketing, and sales departments.

4. Flat organizational chart

The flat organizational chart is unique because it shows few or no levels of management. This type of organizational structure may be present in a small business or a modern business that’s experimenting with no chain of command. 

With this type of organizational structure, the company promotes wide-spread team member self-management and decision-making. 

How to use an org chart

You can benefit your company by using an organizational structure because it provides a visual representation of different departments and job titles in action. This chart can help team members understand how to collaborate with one another and feel confident in their role and responsibilities. 

Visualize reporting relationships

As a manager, you may use an org chart to show work responsibilities and reporting relationships to new team members. When onboarding new hires, the org chart helps team members get to know their fellow teammates and what they do. It also helps new team members remember who’s who within the company. 

Manage growth and change

Organizational charts can also help the leadership team stay organized and manage growth or change within the company. For example, if a department head notices that one team has become larger than other teams, they can shift or hire new team members to create balance.

See where everyone fits

An org chart creates clarity by showing everyone in the company where they fit in the organizational structure. If a new member joins the team, they can glance at the organizational chart and understand that they have five other members on their team, two assistants below them, and a project manager above them. They can also see that their project manager reports to a department manager.

Improve communication

Having an established organizational structure for your company can improve communication because it makes reporting relationships clear. Without an organizational chart in place, team members may not know who to go to when they have questions. The org chart makes it clear who leads what, so team members can feel empowered to ask questions and collaborate with others.  

Create visual directory

An org chart is essentially a visual directory of your organization. You can  update the chart when team members get promoted or when they leave. Keeping a visual directory up to date keeps everyone informed of who’s working at the company and what their current position is.

Limitations of using an org chart

While organizational charts can increase communication among teams, there are limitations of using them. Knowing these limitations can help you find solutions to any potential issues before they occur.

Can get outdated quickly

Org charts can get outdated quickly as companies restructure and shift team roles. Team members must be mindful and keep the org chart updated with current company structure and staff names. 

Solution: Assign someone to regularly update and redistribute your organizational chart in order to maintain this valuable resource.

Only shows formal relationships

The organizational chart is a one-dimensional document, so it doesn’t offer much explanation beyond the reporting structure it provides. While it’s useful in visualizing the basic company structure, it only shows formal relationships. Many companies function and thrive on various informal reporting relationships that wouldn’t show up on a traditional org chart. 

Solution: Use an org chart as a jumping off point, but keep in mind there may be other working relationships that the org chart doesn’t capture.

Doesn’t display management style

While the org chart shows managers and the team members that report to them, it won’t show what each manager is like. For example, the org chart may show that one manager has two team members and another manager has five team members. Assumptions may be made that the manager with more team members is a stronger leader, but the org chart won’t show that the manager with less team members has a more hands-on management style . 

Solution: Use your org chart as a first point of reference, but be mindful that face to face contact is the best way to understand reporting relationships among internal teams.

Can be difficult to update

Not only can printable org chart worksheets or drawn-out organization charts become outdated quickly, they can also be difficult to update. After all, if your chart is created in a static tool, you’ll have to start from scratch every time your organization’s structure changes.

Solution: Instead of creating your chart in a fixed workspace, opt for a dynamic tool. Platforms like Microsoft Word, PowerPoint, and Excel are easily updated. Or, take it one step further with org chart software or a project management tool that uses integrations and apps to connect your team to data visualizers that map out workflows, like LucidChart and Miro .

Streamline your organizational structure with a chart

While there are limitations to organizational charts, these charts offer a helpful way to understand your company structure. It can also improve communication with upper management by clarifying roles and responsibilities. To build an organizational chart for your company, use our free editable PDFs and customize them as you see fit. 

Need help streamlining teamwork? Find out how Asana helps teams communicate effectively. 

Related resources

organizational chart in business plan

The ultimate guide to program management

organizational chart in business plan

4 types of concept maps (with free templates)

organizational chart in business plan

6 tips to build a strong organizational culture

organizational chart in business plan

How to use benchmarking to set your standards for success

Skip to main content

  • Contact sales
  • Get started Get started for free

Figma Design

Design and prototype in one place

organizational chart in business plan

Collaborate with a digital whiteboard

organizational chart in business plan

Translate designs into code

organizational chart in business plan

Figma Slides

Co-create presentations

organizational chart in business plan

Explore all Figma AI features

Get the desktop, mobile,
and font installer apps

See the latest features and releases

  • Design systems
  • Prototyping
  • Wireframing
  • Online whiteboard
  • Team meetings
  • Strategic planning
  • Brainstorming
  • Diagramming
  • Product development
  • Web development
  • Design handoff
  • Engineering
  • Product managers

Organizations

Creator fund

Build and sell what you love

User groups

Join a local Friends of Figma group

Learn best practices at virtual events

Customer stories

Read about leading product teams

Shortcut: The Figma blog

Stories about how products take shape—and shape our world

organizational chart in business plan

Get started

  • Developer docs
  • Best practices
  • Reports & insights
  • Resource library
  • Help center

How to make an effective organizational chart

how to create an org chart

No matter what design challenge you're taking on, your team needs context—starting with organizational structure. Once you understand organizational roles and responsibilities, you can achieve efficient workflow, clear communication, and informed decision-making. But with many companies shifting to hybrid remote and in-person teams, it's not always easy to tell who's doing what on a project.

Organizational charts can help dynamic teams flex roles and navigate responsibilities. Read on to find out:

  • What is an organizational chart and when to use one
  • Key benefits of organizational charts
  • How to make your own with FigJam's organizational chart templates

What is an organizational chart?

An organizational chart (also known as an org chart, organogram, or organigram) is a visual representation of a company's internal structure. At a glance, you can see roles, responsibilities, and relationships across an organization.

Org charts came into use during the industrial revolution, and they're still evolving to reflect new types of organizational structures. Picture a startup where everyone pitches in when needed, no matter their rank. A flat organizational chart sharing team roles can boost collaboration and prevent overlap.

Design your organizational chart in FigJam

FigJam's free org chart template makes it easy to get started.

4 key benefits of organizational charts

Getting a bird's eye view of your company structure helps you understand the chain of command for decision-making. That way, you can involve key players and communicate across different departments. Updated organizational charts help capture changing players and roles in real time, helping your team in four key ways.

  • Clarify the chain of command: Hierarchical structures aren't always obvious in modern organizations. But to get approvals, you need to know who's in charge of what. Org charts get everyone on the same page, in large organizations and small startups alike.
  • Promote communication: With teams spread out across offices and time zones, you might not know who to go to for what. Org charts capture names, roles, and contact information, facilitating effective communication.
  • Aid decision-making: Leaders can consult org charts to make informed choices when delegating work, distributing resources, and managing performance.
  • Capture changes in reporting relationships: When a company is restructuring or expanding, org charts can capture how these changes impact employee roles and responsibilities. Clear, updated org charts help make transitions smoother and more transparent.

When to use organizational charts

Organizational charts make team planning and collaboration easier, especially at four crucial moments.

  • For budgeting: Say your team takes on a new project. Who on your team has bandwidth for extra work? Do you need to hire contractors or outsource work? A glance at an org chart can help you see who you need to fill key roles, so you can allocate resources to meet project goals.
  • During hiring and onboarding: An organizational chart helps human resources teams spot staffing gaps and hire new employees to meet changing needs. During onboarding, these visual aids help new hires understand their responsibilities, meet their teams, and settle into their roles.
  • In project management: Project managers use organizational charts to manage resources across projects. Org charts help managers figure out who's the best fit for tasks, who reports to whom, and who grants approvals.
  • In company restructuring: Updated organizational charts are crucial to guide teams through major changes. Teams rely on them to grasp their changing responsibilities, new reporting relationships, and how they fit into the big picture.

4 key types of organizational charts for modern organizations

What type of org chart is the best fit for your organizational structure? That depends on your company’s size, goals, and culture. Try on the four popular org chart examples below, and you may find a close fit.

1. Hierarchical org chart

Hierarchical organizational charts are especially common in large companies and government departments. Here the flow of authority and responsibility is often top-down—from the C-suite to the most junior employees, and from the presidential cabinet to aides. Leaders sit at the top, with support staff ranked in tiers below.

2. Flat org chart

Flat or horizontal organizations typically have fewer layers of middle management, so their charts have fewer layers and employees have more autonomy. Flat org charts are popular among startups and small businesses for tight teamwork and quick pivots. Entry-level employees may report directly to top management and have direct relationships with vendors.

3. Matrix org chart

A matrix organizational chart groups employees into departments by skill and role. A matrix structure makes sense for many creative teams, who handle multiple projects simultaneously for different teams and project managers. In these cases, rank and title are less relevant than skillsets and assignments. For example, a designer’s time may be allocated by a creative director to projects across departments, from product to marketing.

4. Divisional org chart

A divisional structure (or multi-divisional form ) is often divided into geographic regions or product lines. Each division has autonomy, while still working towards shared organizational goals. For example, a global brand could have international divisions with unique org charts, while maintaining global brand standards and company values.

How to make an organizational chart in 5 steps

Create an organizational chart to understand roles and manage resources with this step-by-step guide.

Step 1: Define the purpose of your org chart.

Is your goal to improve communication, streamline decision-making, or manage organizational change? Jot down your goal as a reminder of what you're trying to capture and why.

Step 2: Choose the appropriate org chart type.

Browse org chart templates to find the best fit for your project purpose and organization's structure. Choose from hierarchical, flat, matrix, or divisional structures.

Step 3: Collect organizational data.

Gather names, job titles, and reporting relationships to fill in your template with key details. Job descriptions, the employee directory, and previous organizational charts can help.

Step 4: Get creative with online tools.

Make your org chart modern and memorable with online tools, including this popular org chart widget .

Step 5: Update regularly.

Keep your org chart current to reflect changes in your organization. An outdated chart can lead to confusion, while an updated one promotes transparency.

Pro tips for an effective organizational chart

Apply these tips to excel at org charts:

  • Incorporate handy details. Boost transparency and usability with useful employee info, such as contact information, photos, and department functions.
  • Use color coding. This simple trick makes departments and roles easy to tell apart at a glance—and makes your chart more memorable and appealing.
  • Make it easy to find. Upload your org chart to a shared drive, intranet, or a tool like FigJam .

Jumpstart your organizational chart with FigJam

Boost transparency and collaboration with compelling, accurate organizational charts created with FigJam's online collaborative whiteboard . Use it to:

  • Brainstorm , design, and chart reporting structures
  • Guide project team members to success with clear roles and reporting lines
  • Explore design options to add brand elements to your organizational chart
  • Browse org chart examples from the Figma community

Ready to design clearer roles and responsibilities?

  • Credit cards
  • View all credit cards
  • Banking guide
  • Loans guide
  • Insurance guide
  • Personal finance
  • View all personal finance
  • Small business
  • Small business guide
  • View all taxes

You’re our first priority. Every time.

We believe everyone should be able to make financial decisions with confidence. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free.

So how do we make money? Our partners compensate us. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. Here is a list of our partners .

How to Create a Small Business Organizational Chart in 4 Easy Steps

organizational chart in business plan

Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website or click to take an action on their website. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money .

Profile photo of Elizabeth Kellogg

Whether you're just starting out or have been in business for a while, creating and maintaining a business organizational chart can be an extremely helpful way to illustrate how your company operates and can also be used to show how you're going to grow and change in the future.

What is a small business organizational chart? A business organizational chart, sometimes also referred to as a "business org chart," is a visual representation of the structure of your business—it outlines the role of each employee and clarifies who reports to whom within your company. In many cases, developing and updating this chart will fall under the purview of your small business HR department, but if you don't currently have a separate human resources branch (or even if you do) it's worth understanding how these tables work and how to create one.

In this guide, therefore, we'll explain exactly how to create a business organization chart in four simple steps—discussing the various types of diagrams you can choose from, as well as the different goals you should consider when making an org chart for your company.

organizational chart in business plan

How to create a business organizational chart

Although looking at business organizational chart examples can be overwhelming, creating one of these diagrams for your company can be broken down into four easy steps. By taking this process one step at a time, you'll be able to decide which type of chart is best for your business and ultimately, develop a table (like many other operational documents you have) that can be utilized throughout the lifecycle of your business. With this in mind, let's get started:

Step 1: Decide how to structure your business organizational chart.

The first step in creating an org chart for your business is deciding what type of chart you want to use. Generally, there are four popular designs to consider and you'll want to choose the one that best suits your business's needs.

Hierarchical business organizational chart

To begin, a hierarchical diagram starts at the top of the business and works its way down the chain of command (as you can see below). A vertical line between individuals indicates that the employee above directly supervises the employee below. Hierarchies also show lateral relationships, where two people are on equal footing within the business framework, but may still collaborate or share responsibilities—these charts use horizontal lines to connect lateral workers. The business organization chart here shows how the company is structured starting with the CEO and progressing through the rest of the company.

Overall, most small businesses use a hierarchical organizational chart because it’s the simplest option. This being said, you can use this type of business org chart even if you only have a few names to fill in—as your business grows, it's easy to add new employees.

Functional business organizational chart

Next, you might consider a functional business organizational chart if your company is large enough to divide employees into departments. This type of diagram shows the head of each department and all the individuals who report to them. A functional chart is not entirely distinct from a hierarchical chart, but it does have a slightly different emphasis based on the different departments.

You can use this same information in all small business organization charts:

Name of employee (leave blank if the position is open)

Department (sales, marketing, accounting, operations, etc.)

Position or job title (sales representative, supervisor, account manager)

Description of duties (a brief phrase or two should be sufficient)

Location (if you have more than one office)

Contact information (physical address, phone number or extension, business cell phone number, work email address)

Photo (to recognize each other with ease)

As you can see, although the functional small business org chart is fairly similar to the hierarchical option, this diagram can be useful for distinguishing departments, giving a larger insight into how your company functions in this specific way.

Matrix business organizational chart

The third option, called a matrix or cross-functional business organizational chart, is useful if workers report to multiple supervisors. Like hierarchical graphs, matrix org charts illustrate the immediate supervisory relationships between employees, but they also show the project manager, team, or department to which an employee reports. Solid lines once again indicate that an individual is the primary manager of the person below them. Dotted lines demonstrate a less direct, but nonetheless important, reporting connection.

As this org chart from the Project Management Institute shows, the matrix small business organizational chart is often used by companies with project managers that work across different teams. Similarly, you may find that product, research, and engineering-based companies are more likely to utilize this type of diagram to illustrate their business structure.

Circle business organizational chart

Finally, the last option to consider is the circle business org chart. The circle diagram has become increasingly popular, especially among startup small businesses that wish to discard traditional business hierarchies. The idea behind these graphs is that all teams—and the employees that comprise them—play an equally important role in the company.

Once again, although this example shows dummy text, you can see how you would complete the chart based on your business's information. Each department makes up a spoke in the wheel and the employees within are listed in each section. As we discussed above, you would fill in essential information for each employee—name, job title, brief description, contact information, etc.

Ultimately, this first step may take time—you'll want to consider your business as it exists now and how you want it to grow—that way, you can determine which of these four org chart options will work best for illustrating your company structure.

Step 2: Collect employee information and categorize the data.

Now, once you’ve decided on the type of business organizational chart you’ll use, the rest of your chart development is fairly straightforward.

For your next step, therefore, you'll want to write a list of all the employees at your company and include the pertinent information about them that we mentioned above.

If you selected a hierarchical chart, you'll place each individual in their proper order on the list. The business owner occupies the first tier, anyone who reports directly to them belongs on the second tier, and the chart progresses from there. If you chose a functional or circle chart, you'll organize your list by each department, as shown in the examples we explained above. Finally, if you opted for a matrix small business org chart, you'll want to be sure to make note of all supervisory relationships.

Step 3: Decide how you'll complete your business org chart.

After you've gathered all of the information you need for your employees and categorized it based on the chart type you've selected, you'll want to determine how you're going to complete your chart. As you saw in our examples above, there are images and small business org chart templates you can download and edit using a software program like Adobe Photoshop.

On the other hand, you might choose to create your business organizational chart in a simple, reliable program you might already own, like Microsoft Office (Excel, Outlook, PowerPoint, or Word) or Google Sheets. You also have the option to purchase a template from a provider like SmartDraw or Lucidchart. To make the most out of your investment, however, you might consider purchasing an HR or payroll software that includes this functionality (among other features). As an example, Gusto's all-inclusive platform allows you to create an org chart within their system, as well as manage your essential payroll and HR tasks.

Although technically , you could diagram your small business org chart by hand, if you use an online template or software, you can modify your graph with ease as your business expands and staff changes.

Step 4: Fill in your business organizational chart and file it securely.

Finally, once you've chosen how you're going to complete your org chart, you'll be ready to actually fill it in.

With the data you've compiled, you'll fill in each box or branch of the chart that you’ve picked. Once again, if your diagram is hierarchical, you'll start with the owner or CEO of the business at the top. Then, you'll create a box below the owner for each person who is an immediate report, and draw a solid vertical line down from the proprietor to each of these supervisees. You'll continue this process for each layer in the company chain of command, and move down the corporate ladder until you’ve placed every employee on the chart.

If your graph is a functional design, you'll fill in the primary boxes with the information for the head of each department and the remainder with the information for every individual they directly manage. You'll follow the same procedure with a matrix chart—with this chart, however, don't forget to include secondary managers to the side of each department, and make dotted lines (or some other distinction) between boxes to represent those additional supervisory relationships.

Last, with a circle chart, you'll add the information employees and duties of each department to the corresponding pie slice, and your diagram is complete.

Once you've completed your small business org chart, you'll want to be sure you save it in a secure location—if you're not utilizing an HR software or another program that allows you to save it within that system. You'll want to keep your organizational chart on hand to update as your business grows and changes.

Along these lines, it's also helpful to store a copy of your org chart on a shared company server, drive, or employee portal so that everyone in your company can see it (but not change it)—this way, everyone in your organization can understand how the company is structured and refer back to the chart as needed.

How much do you need?

with Fundera by NerdWallet

We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

Small business organizational chart templates

If you're not ready to invest in a software platform to build your diagram, you may be interested in exploring different small business organizational chart templates. As we mentioned, there are well-known solutions, like Microsoft Office, that offer org chart templates that you can download and use for your business. Let's look at a few examples:

Microsoft Office : Within the templates section of the Office website, you can find various, free business org chart templates that you can download for free and customize within PowerPoint, Word, or Excel. For a simple hierarchical chart option, you might start with this "Minimal organization chart."

24Slides : Among other business template options, 24Slides offers free small business org chart templates that you can copy and edit within Google Slides. They also offer these templates in different types including the classic hierarchical chart, as well as the circle chart.

Canva: Image editing and graphics platform Canva allows you to design and customize your own business organizational chart (for free, you just need to sign up for an account) using their system.

Vizzlo : Although Vizzlo does offer paid plans, with their free version, you can access over 100 different chart types, including small business org templates. Plus, you have the option to edit your template within Vizzlo, or create your chart direct in PowerPoint or Google Slides using a Vizzlo integration.

Of course, these are only a few options—there are numerous additional templates and examples you can find by searching and browsing online.

The benefits of a business org chart

As we've shown through our four-step guide, creating a business organizational chart can be a fairly straightforward and simple process. However, if you're just starting out, or don't have a dedicated employee or department to work on developing this graph, you may be wondering if you really need an org chart. Ultimately, the decision is up to you—but, to this end, it's worth highlighting some of the benefits of one of these diagrams and why they can be so useful for your small business.

Clarify management structure

If you're just starting your business the process necessary to construct a business organizational chart forces you to officially distribute tasks and flesh out the roles of each individual and the purpose of each department in your enterprise. This avoids confusion later, as your business grows. Of course, you can always restructure your business organizational chart down the road—however, if you outline the expectations for each position early on, you’re already a step ahead in the entrepreneurial process.

On the other hand, if your company is more established, a business org chart helps both new and existing employees to understand where they fit within the company’s framework, which clarifies any questions regarding the chain of command. This transparency saves time and increases efficiency, as workers can consult your organizational chart and determine exactly who to speak with when faced with a given issue. Plus, if your business organizational chart is well-structured, your employees will already know not just the name of the proper individual to consult, but also what position they hold and what responsibilities they oversee.

Increase operating efficiency

Another benefit of creating and maintaining a small business org chart is that by doing so, you can examine your company’s current structure and unearth potential ways to improve it. Are certain employees responsible for too many tasks, and others too few? Is there unnecessary overlap between individual workers? Are there any duties that fall through the cracks? Should you reorganize in order to meet those needs, hire additional workers, or possibly even outsource these assignments? You may find that you can better utilize the workers you already have, and thereby increase productivity.

A business organizational chart can also improve cross-functional communication throughout your business, which leads to more effective project management. It’s easier to accomplish tasks that involve multiple workers or teams when the reporting structure is clear, and everyone knows who to talk to about what.

Demonstrate current success

Even if you think that your business wouldn’t benefit from an organization chart, you may find that potential lenders want to see one when you're applying for financing. Similar to a business plan, banks, institutions like the SBA, and potential investors want assurance that you’ve carefully considered the structure of your business, as such preparation is often an indicator of future success.

As financial professionals, they’ll also want to ensure that the business organizational method you’ve chosen is one that they believe is likely to prosper—so that you can pay back your potential business loan on time.

Facilitate future planning

Finally, a small business organizational chart can help you prepare for the evolution and expansion of your business. In this vein, we'd recommend that you create two versions of your organization chart: one that reflects your current company structure and one that shows your growth objectives. You might even consider additional charts that indicate how you might reorganize should unexpected changes occur, like reductions in funding or the sudden departure of a key employee.

Your second business organizational chart, of course, will have a lot of blank spaces—room for all the positions you’d like to fill in the future as implement your business growth strategies. In this way, you can use your chart to find possible holes that exist in your current staffing, and you’ll have a built-in roadmap for future hiring.

The bottom line

At the end of the day, taking the time to plan and create a business org chart can be extremely beneficial for your small business—now and in the future. Whether you develop this diagram yourself, or work with your team to do so, you can follow our four simple steps to complete the process relatively quickly and easily.

Plus, if you already utilize a payroll or HR software, you can check to see if your platform already includes an org chart builder. If it doesn't, you might decide to use one of the templates we've discussed here. On the other hand, if you don't have an HR or payroll software, you might consider exploring some of the top options out there—Gusto, Zenefits, etc.—as any of these solutions will not only allow you to create a small business org chart, but will also help you efficiently and effectively an important part of your day-to-day operations.

This article originally appeared on JustBusiness, a subsidiary of NerdWallet.

On a similar note...

We use essential cookies to make Venngage work. By clicking “Accept All Cookies”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts.

Manage Cookies

Cookies and similar technologies collect certain information about how you’re using our website. Some of them are essential, and without them you wouldn’t be able to use Venngage. But others are optional, and you get to choose whether we use them or not.

Strictly Necessary Cookies

These cookies are always on, as they’re essential for making Venngage work, and making it safe. Without these cookies, services you’ve asked for can’t be provided.

Show cookie providers

  • Google Login

Functionality Cookies

These cookies help us provide enhanced functionality and personalisation, and remember your settings. They may be set by us or by third party providers.

Performance Cookies

These cookies help us analyze how many people are using Venngage, where they come from and how they're using it. If you opt out of these cookies, we can’t get feedback to make Venngage better for you and all our users.

  • Google Analytics

Targeting Cookies

These cookies are set by our advertising partners to track your activity and show you relevant Venngage ads on other sites as you browse the internet.

  • Google Tag Manager
  • Infographics
  • Daily Infographics
  • Popular Templates
  • Accessibility
  • Graphic Design
  • Graphs and Charts
  • Data Visualization
  • Human Resources
  • Beginner Guides

Blog Beginner Guides How to Create a Small Business Organizational Chart

How to Create a Small Business Organizational Chart

Written by: Letícia Fonseca Jun 09, 2023

How to Create a Small Business Organizational Chart

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.

Click to jump ahead:

What is an organizational chart?

  • Organizational charts for small businesses examples

What is the purpose of organizational charts for a small business?

How to make an organizational chart for a small business, faqs about organizational charts.

An organizational chart, or an org chart, provides a visual representation of an organization’s internal structure. It outlines relationships between departments and employees, establishes the chain of command in an organization, and defines the role of each staff member.

You can see how this hierarchical organizational chart example structures the employees of a company.

Corporate Organizational Chart Template

The most common structure has small business owners, or the chief executive officer, 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.

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.

Organizational chart for small businesses examples

There are two basic types of organizational 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 .

Company Management Organizational Chart Template

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:

Corporate Healthcare Organizational Chart Template

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.

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.

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.

Tech Flow Chart Template

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.

Hospital Organizational Chart

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.

Organizational Chart for Small Business

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.

Company Structure Flow Chart Template

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.

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

With the necessary data you have compiled, you can start filling out the chart templates from Venngage’s online org chart maker.

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.

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.

Discover popular designs

organizational chart in business plan

Infographic maker

organizational chart in business plan

Brochure maker

organizational chart in business plan

White paper online

organizational chart in business plan

Newsletter creator

organizational chart in business plan

Flyer maker

organizational chart in business plan

Timeline maker

organizational chart in business plan

Letterhead maker

organizational chart in business plan

Mind map maker

organizational chart in business plan

Ebook maker

What is an Organizational Chart

What do you want to do with organization charts, i want to create my own organization chart on lucidchart., i want to create an organization chart from a template that is already made..

An organizational chart shows the internal structure of an organization or company. The employees and positions are represented by boxes or other shapes, sometimes including photos, contact information, email and page links, icons and illustrations. Straight or elbowed lines link the levels together.  With our org chart software, this creates a clear visual depiction of the hierarchy and ranks of different people, jobs, and departments that make up the organization.

Organizational Charts also are known as Organization Charts, Org Charts, Organograms, Organogram Charts (sometimes spelled Organigrams or Organigrammes ) and Hierarchy Charts . Don’t be fooled: Despite all the different names, they’re all the same thing.

8 minute read

Do you want to create your own organization chart? Try Lucidchart. It's fast, easy, and totally free.

In 1855, railway general superintendent Daniel McCallum (1815-1878) designed what is thought to be the first modern organizational chart. It was an illustrated diagram of the New York and Erie Railway. McCallum had it drawn up by draftsman and civil engineer George Holt Henshaw (1831-1891). McCallum, born in Scotland, also served as a Union major general in the Civil War. Henshaw, a Canadian, worked for waterworks and railway companies in Canada, the United States and Denmark.

The term “organizational chart” took another 50 to 60 years to come into common use. Consulting engineer Willard C. Brinton used the term in his 1914 textbook, Graphic Methods for Presenting Facts. He touted the value of the charts and said they should be more widely used. The charts were mainly used in engineering circles until the 1920s, when they began to find their way into the business world.

The lesser-known synonyms “Organigram” and “Organogram” came into use in the 1960s.

A related diagram is called an Organigraph . While is still reflects organizational structure, it’s less linear than an org chart and serves a different purpose: to illustrate associations and opportunities among departments, products or supply chains.

Types of organizational charts

What is an organizational chart's best format? Depending on your needs and the type of organization, you may want to choose a less traditional org chart format. There are three main types of org charts:   hierarchical, matrix and flat .

Hierarchical Org Chart : This is the most common type, and it gives rise to the synonym Hierarchy Chart . A hierarchy is where one group or person is at the top, while those with less power are beneath them, in the shape of a pyramid. Think of a monarchy with a king or queen at the top, or an organization with the CEO at the top. With a hierarchy, members typically communicate with the person they report to and anyone who reports directly to them.

Matrix Org Chart :  This is usually only seen when individuals have more than one manager. For example, an organization could have a team of graphic designers who all report to the head graphic designer. The graphic designers are also working on other projects that are likely headed by a separate project manager. In this case, the graphic designers will have two managers.

Flat Org Chart : This type, sometimes referred to as a Horizontal Org Chart , has little or no levels of middle management and typically consists of two levels:  the top administrators and the workers. In companies like this, the workers have more responsibility and are more directly involved in decision-making.

Relationships in the charts are sometimes called line relationships (or chain of command ), depicting supervisor to subordinate, and lateral relationships , showing people on the same level. With line relationships, you might have solid lines , showing the main lines of authority, or dotted lines , showing secondary lines of authority. There are no hard and fast rules in the symbols and lines used in org charts, as long as the formal relationships are made clear.

Pros and cons of different organization types

The types of organizations reflected in these chart types have advantages and disadvantages.  In a nutshell:

In a hierarchical, vertical, top-down organization , lines of authority and communication should be clear. In its purest form, think of the military. In the business world, think of the chief executive and other C-suite executives, working down to perhaps directors, senior managers, middle managers, team leaders and team members. If the strength of this structure is clarity and stability, the potential weakness is rigidity, the inability to be flexible when called for. The management layers can sometimes bloat an organization as well.

In a matrixed organization , cross-department relationships may be more fruitful and cooperative. However, having more than one person or department to answer to can also create confusing loyalties or conflicts of interest for employees.

In a flat, horizontal structure , most layers of management are cut out, with close relationships between the top and the employees. This is common in smaller companies and organizations, but it’s generally not practical for larger organizations. Employees may feel a stronger sense of teamwork and autonomy, though conflicts among employees can become more pronounced due to fewer people doing the work.

Uses of org charts

What is the best use for an organizational chart? No matter which layout you choose to use, Org Charts are useful for laying out relationships in your organization and ensuring that everyone knows how to communicate essential information.

You can use org charts for:

Organizational and supervisory communication ,  such as helping employees know who reports to whom, or helping people get to know each other across the organization. Adding employee photos can help a lot, allow people to connect faces and names.

Restructuring , such as switching roles in a team to better utilize everyone’s talents.

Workforce planning , such as figuring out the details of a new hiring initiative.

Resource planning , such as reducing inefficiencies by rearranging roles.

Genealogy , because a family tree is really just a type of Org Chart. You can include photos, dates of birth and death and links to other information about each person.

Getting more visual with organizational charts

There are few rules with org charts, so any visual elements that help to communicate are fair game.

Using photos

Using different shapes and/or colors can help to define different departments, work groups, job levels or other useful breakdowns.

Using company logos or icons can customize your chart to your organization’s feel.

Using animations in PowerPoint can help bring a presentation to life as you talk about the chart’s different parts.

Using 3D shapes can make your chart more appealing as it pops from the page.

Limitations of org charts

They can quickly become out of date,.

They don’t reflect management style . They show lines of authority, but not how that authority is exercised.

Organigraphs, the close relative of org charts , might be more useful if your purpose to illustrate or discover other associations among people or departments.

How to plan and draw a basic organizational chart / organogram

Define your purpose and scope.

Gather the information . You might find an existing list of employees on which to base your chart, or an outdated Org Chart that still might be a helpful starting point. Remember to gather contact info, photos and whatever else you might plan to use. You might need to find other resources to clarify the lines of authority and spell them out for your chart.

Determine what platform you plan to use to build your chart, and how you plan to display it. Lucidchart provides a powerful, easy-to-use platform to build and display charts online. (See more on Lucidchart below.)

Plan for ongoing updates to the chart. Remember, things change quickly in many organizations, so you’ll need a way to efficiently keep the chart or charts up to date. That’s a lot easier with a collaborative online platform like Lucidchart.

More tips for organizational charts / organograms

Try breaking down your org chart.

You may want to round out your chart by including the details of people or departments . Adding contact information, location, and other notes can make the organization more efficient and eliminate confusion about who does what.

You might use colors or shapes to define certain groups or levels of employee.

Use Lucidchart's  org chart import   to automatically build an org chart from a Google Sheet, Excel file, or CSV.

How to make an org chart with Lucidchart

Want to create org charts that highlight your company’s culture? Choose a layout that works best for your structure, update a design with your company colors, and add employee photos to each role. You can even add links and videos to your document for some extra pizzazz. Try clicking on our  org chart templates and make it your own.

For a truly dynamic experience , Lucidchart lets you share and embed org charts on your own site. When you share a chart with others, you can also set permissions so people can comment on the doc or collaborate with you in real-time. Just click Share > Embed to generate an embed code for your site. If you update your org chart in Lucidchart’s editor, the embedded chart will also update. How’s that for easy updates?

Helpful Resources

  • Organization Chart Examples and Templates
  • What is an org chart and how to create one
  • How to make an org chart in Excel
  • What is the organizational structure of a company?
  • How to make an organizational chart
  • How to make an org chart in Word

With drag-and-drop shapes, real-time collaboration and advanced sharing features, Lucidchart makes it easy to create your own org chart.

Hero index image

Table of contents

Organizational chart for a small business

What is a business organizational chart.

Whether you're a seasoned business owner or a novice entrepreneur, there's one powerful tool you should always have in your management toolbox - the business organizational chart - a visual representation of the hierarchical structure of an organization. It shows the relationships and relative ranks of the company's parts and positions/jobs. Much like a family tree , it details who reports to whom, the levels of management, and the lines of communication and authority.

In a small business, where roles might be multifunctional, and employees may wear several hats, an organizational chart can help create clarity, foster an understanding of responsibilities, and facilitate smoother operations. This article will help you understand the purpose and structure of a business organizational chart, how to create one, and the benefits it can bring to your small business.

Understanding how a business organizational chart Works for small organizations

While large corporations often have complex, multi-tiered organizational charts, small businesses typically employ more superficial, flexible structures. The business size doesn't negate the need for an organizational chart. Having one in a small business may be even more beneficial due to the versatility of roles.

In small organizations, the business owner usually sits at the top of the chart, followed by key management personnel and their respective teams. Depending on the structure and type of the business, it may include categories such as administration, sales, marketing, finance, operations, or customer service.

An organizational chart can aid in understanding who is responsible for what, avoiding duplication of duties, and ensuring accountability. For instance, in a tight-knit team, knowing who to approach for approving expenses or handling customer complaints can be made more apparent using an organizational chart.

What are the components of a typical business organizational chart?

A typical organizational chart includes four main components:

Position title: This indicates the job title of the position, such as "CEO," "Marketing Manager," or "Sales Associate."

Employee name: If a position has been filled, the name of the employee should be listed here. This can be left blank if the role is vacant.

Lines of reporting: Solid lines represent direct reporting relationships. Dotted lines might indicate an indirect or secondary reporting relationship.

Departments/teams: These are groupings of roles that work together to achieve a specific part of the company's objectives, such as "Sales Department" or "Finance Team."

Advantages of making a business organizational chart

Creating an organizational chart for your small business brings several significant benefits:

Clarity: It clearly defines each team member's roles and responsibilities, eliminating confusion and streamlining operations.

Accountability: It establishes clear lines of authority and reporting relationships, thereby fostering employee accountability.

Decision-making: It facilitates quicker decision-making , as the organization's hierarchy is clearly outlined.

Onboarding: It is an excellent tool for onboarding new employees, providing a snapshot of the company's structure and reporting relationships.

Planning: It helps in workforce planning and can highlight gaps or redundancies in your organizational structure.

How to make a business organizational chart that truly works

Now that you understand what an organizational chart is and its importance, here are some tips and tricks to help you create one that truly works:

Keep it simple: Avoid over-complicating the chart. Keep it simple and easy to read.

Update regularly: As your business evolves, so should your organizational chart. Keep it updated to reflect changes in staff or structure.

Use software tools: Many tools, like Miro, can help you create a dynamic and interactive organizational chart.

Share the chart: Make the chart readily available to all employees. It can be a reference point for who to turn to in certain situations.

Consider alternative formats: Depending on the nature of your business, a traditional top-down hierarchical chart may not be the best fit. Consider other formats such as matrix, flat, or circular organizational charts.

In conclusion, an organizational chart is more than just a diagram showing your business's hierarchy. It's a roadmap to clarity, accountability, and efficient operations. Regardless of the size of your business, having an organized chart can streamline processes and provide a clear vision of the structure and relationships within your organization. So, if you haven't already done so, it might be time to consider creating one.

Get on board in seconds

Plans and pricing.

IMAGES

  1. 41 Organizational Chart Templates (Word, Excel, PowerPoint, PSD)

    organizational chart in business plan

  2. How to Create an Effective Small Business Organizational Chart

    organizational chart in business plan

  3. A Simple Guide to Organizational Charts for Small Business Owners

    organizational chart in business plan

  4. How To Create A Small Business Organizational Chart With Examples

    organizational chart in business plan

  5. Organizational Chart Template Free

    organizational chart in business plan

  6. 41 Organizational Chart Templates (Word, Excel, PowerPoint, PSD)

    organizational chart in business plan

COMMENTS

  1. Organizational Chart: Definition, Examples & Templates - Venngage

    This is the most commonly used type of organizational chart. The vertical or hierarchical chart places the individual with the most authority at the top, while those with less authority are positioned below, forming a pyramid-like structure. Example: A CEO at the top, followed by managers, then employees.

  2. Small Business Organization Chart - Smartsheet

    Download Hierarchical Organizational Chart Template Example — Microsoft Excel. This template is an example of a simple organizational chart for a small business. It is prefilled with the names and job titles of three tiers of employee hierarchy but can be easily customized to suit your needs.

  3. Create an Organizational Chart with Free Examples ... - Asana

    To create an org chart, you’ll need to gather team member information and decide how you’d like to build the chart. As you consider the reporting relationships in your organization, you can plan your chart from top to bottom. 1. Define scope. You can treat your organizational chart like any other new project you work on.

  4. How To Create An Org Chart: Examples + Template | FigJam

    Step 3: Collect organizational data. Gather names, job titles, and reporting relationships to fill in your template with key details. Job descriptions, the employee directory, and previous organizational charts can help. Step 4: Get creative with online tools. Make your org chart modern and memorable with online tools, including this popular ...

  5. 20 Organizational Chart Examples for Small Businesses - Visme

    The organizational chart will help the team understand the responsibilities of all the employees, helping to reduce wasted time and increase efficiency. 3. Make Quick Data-Driven Decisions. Small businesses have come to rely heavily on data-driven decisions to improve sales and grow their business.

  6. How to Make a Business Organizational Chart - NerdWallet

    Step 1: Decide how to structure your business organizational chart. The first step in creating an org chart for your business is deciding what type of chart you want to use. Generally, there are ...

  7. How to Create a Small Business Organizational Chart

    Learn what an organizational chart is and how it can benefit your small business. Find out how to make an org chart with Venngage's online tool and templates.

  8. What is an Organizational Chart - Lucidchart

    An organizational chart shows the internal structure of an organization or company. The employees and positions are represented by boxes or other shapes, sometimes including photos, contact information, email and page links, icons and illustrations. Straight or elbowed lines link the levels together. With our org chart software, this creates a ...

  9. Organizational chart for a small business - Miro

    In a small business, where roles might be multifunctional, and employees may wear several hats, an organizational chart can help create clarity, foster an understanding of responsibilities, and facilitate smoother operations. This article will help you understand the purpose and structure of a business organizational chart, how to create one ...

  10. What is an Organizational Chart? Definition, Examples and ...

    Learn the definition, purpose, and types of organizational charts, and follow the steps to create one for your business. Find out how to use software, online tools, or manual methods to design and customize your chart.