How To Create An Organizational Chart For Your Small Business?


Developing a business organizational chart for your small business can be a relatively beneficial method to demonstrate how the firm regulates. These charts are also an incredible way to reveal how the company will thrive and improve in the upcoming years.

Business organizational chart summarizes the position of every staff member and verifies who registers to whom in the firm. There are several tools and software, for example, zenflowchart that allows you to make organizational diagrams quickly with ease.

The business organizational chart is an optical indication of business structure. (Not sure which business structure best suits your company? Suggested resource for further reading: Marketwatch).

Easy Guide To Develop An Organizational Chart For Small Business


We have divided the whole process into four separate steps so that it will be easy for you to get a quick grasp on how to make a small business organizational chart.

1. Decide how to structure your business organizational chart

The initial aspect of developing an organizational diagram for small businesses is to determine what kind of chart you prefer to utilize. In general, there are four prominent chart designs to select from, and you can pick the one that is ideal for your company’s requirements.

Hierarchical business organizational chart

The hierarchical diagram begins at the top of the company and comes down to the employee structure. There will be a vertical line implying that the people above directly regulate the staff below them. Several small companies use this diagram because it is the simplest choice. It is better to prefer this chart when you need to fill in limited names since it will be easy to add new staff when the firm thrives.

Functional business organizational chart


The large firms that need to split up staff into separate branches use functional business organizational charts. It reveals the chief of every department and all the employees who are under their supervision. For instance, you can follow the same format we have provided here while creating small business organization charts:

  • Name of employee
  • A recent photograph of the employee
  • Respective department
  • Role in the company or job title
  • A brief explanation of their corresponding duties
  • Company’s location (in case the firm has branches in different areas)
  • Contact information of the employee

Matrix business organizational chart

This diagram design is beneficial if employees need to report to numerous managers. The matrix business organizational charts demonstrate the precise supervisor-employee links. In addition to that, they also reveal the project director, department, and team. This type of chart is better for firms with project managers that operate with several teams. Businesses that deal with engineering, research, and products tend to use this diagram more often.

Circle business organizational chart

Here is the fourth design, which is the circle business organizational chart. This circle illustration is quite famous, particularly among small startup firms that hope to remove traditional company structures. These graphs indicate that all teams and the corresponding members have a uniformly significant role in the business.

2. Obtain employee data and organize the information


Next, you have to make a list of all of your firm’s staff members. If you choose a hierarchical diagram, you have to arrange the people in the correct order on the list. The first tier is for the firm owner, and the second tier should be occupied by the people who report directly to them.

If you use a functional or circular chart, you have to arrange the list by department. In case you chose a matrix organizational diagram for your small firm, make sure to keep track of all supervisory links.

3. Conclude how you will finalize the business organizational chart

After collecting the data of your employees and organizing it according to the chart type you prefer, you will need to figure out how you will finish the diagram. You can download photos and small company organizational chart templates and alter them with online software applications.

On the flip side, you can use a dependable tool such as Google Sheets or Microsoft Office (Outlook, Excel, Word, or PowerPoint) to design your business organizational chart in an easy and simple way. You can also purchase a template from an online template site or platform. However, in order to get the best out of the investment, it is better to consider acquiring HR or payroll software that offers this capability.

It is possible to technically draw the small business organizational diagram by hand. However, it is better to utilize an online template or software as you can easily adjust the graph when your company grows and the team member changes.

4. Fill in the business organizational chart and document it precisely


You will have to fill in each box or area of the specific chart with the data you have collected before. If the graph is hierarchical, you will need to begin at the top with the company holder or CEO of the firm. After that, make sure to develop a box for each individual who reports directly to the owner and illustrate a vertical line from the owner to each manager.

You have to repeat this method for every layer of the firm’s chain of command and work your way down the corporate structure until you have included all the employees. If your graph features a functional layout, you will have to fill in the central boxes with data for every department’s chief and the remaining boxes with information for each employee they directly supervise.

The above process is the same as the matrix diagram. However, make sure not to forget to incorporate minor supervisors at the side of each department. It is better to draw dotted lines or any other thing between boxes in order to illustrate the extra supervisory links. At last, using a circle chart, you will need to fill in the details of each department’s personnel and responsibilities in the matching pie diagram. Then, the diagram will be completed.

Bottom Line

We have listed all the essential steps you have to follow in order to create organizational charts for your small business. Whether in the present or for the future, a business org diagram is a great way to enhance the company’s operations and upcoming changes.