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how important is planning in a business

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Why Is Strategic Planning Important?

Above view of team creating a strategic plan

  • 06 Oct 2020

Do you know what your organization’s strategy is? How much time do you dedicate to developing that strategy each month?

If your answers are on the low side, you’re not alone. According to research from Bridges Business Consultancy , 48 percent of leaders spend less than one day per month discussing strategy.

It’s no wonder, then, that 48 percent of all organizations fail to meet at least half of their strategic targets. Before an organization can reap the rewards of its business strategy, planning must take place to ensure its strategy remains agile and executable .

Here’s a look at what strategic planning is and how it can benefit your organization.

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What Is Strategic Planning?

Strategic planning is the ongoing organizational process of using available knowledge to document a business's intended direction. This process is used to prioritize efforts, effectively allocate resources, align shareholders and employees on the organization’s goals, and ensure those goals are backed by data and sound reasoning.

It’s important to highlight that strategic planning is an ongoing process—not a one-time meeting. In the online course Disruptive Strategy , Harvard Business School Professor Clayton Christensen notes that in a study of HBS graduates who started businesses, 93 percent of those with successful strategies evolved and pivoted away from their original strategic plans.

“Most people think of strategy as an event, but that’s not the way the world works,” Christensen says. “When we run into unanticipated opportunities and threats, we have to respond. Sometimes we respond successfully; sometimes we don’t. But most strategies develop through this process. More often than not, the strategy that leads to success emerges through a process that’s at work 24/7 in almost every industry.”

Strategic planning requires time, effort, and continual reassessment. Given the proper attention, it can set your business on the right track. Here are three benefits of strategic planning.

Related: 4 Ways to Develop Your Strategic Thinking Skills

Benefits of Strategic Planning

1. create one, forward-focused vision.

Strategy touches every employee and serves as an actionable way to reach your company’s goals.

One significant benefit of strategic planning is that it creates a single, forward-focused vision that can align your company and its shareholders. By making everyone aware of your company’s goals, how and why those goals were chosen, and what they can do to help reach them, you can create an increased sense of responsibility throughout your organization.

This can also have trickle-down effects. For instance, if a manager isn’t clear on your organization’s strategy or the reasoning used to craft it, they could make decisions on a team level that counteract its efforts. With one vision to unite around, everyone at your organization can act with a broader strategy in mind.

2. Draw Attention to Biases and Flaws in Reasoning

The decisions you make come with inherent bias. Taking part in the strategic planning process forces you to examine and explain why you’re making each decision and back it up with data, projections, or case studies, thus combatting your cognitive biases.

A few examples of cognitive biases are:

  • The recency effect: The tendency to select the option presented most recently because it’s fresh in your mind
  • Occam’s razor bias: The tendency to assume the most obvious decision to be the best decision
  • Inertia bias: The tendency to select options that allow you to think, feel, and act in familiar ways

One cognitive bias that may be more difficult to catch in the act is confirmation bias . When seeking to validate a particular viewpoint, it's the tendency to only pay attention to information that supports that viewpoint.

If you’re crafting a strategic plan for your organization and know which strategy you prefer, enlist others with differing views and opinions to help look for information that either proves or disproves the idea.

Combating biases in strategic decision-making requires effort and dedication from your entire team, and it can make your organization’s strategy that much stronger.

Related: 3 Group Decision-Making Techniques for Success

3. Track Progress Based on Strategic Goals

Having a strategic plan in place can enable you to track progress toward goals. When each department and team understands your company’s larger strategy, their progress can directly impact its success, creating a top-down approach to tracking key performance indicators (KPIs) .

By planning your company’s strategy and defining its goals, KPIs can be determined at the organizational level. These goals can then be extended to business units, departments, teams, and individuals. This ensures that every level of your organization is aligned and can positively impact your business’s KPIs and performance.

It’s important to remember that even though your strategy might be far-reaching and structured, it must remain agile. As Christensen asserts in Disruptive Strategy , a business’s strategy needs to evolve with the challenges and opportunities it encounters. Be prepared to pivot your KPIs as goals shift and communicate the reasons for change to your organization.

Which HBS Online Strategy Course is Right for You? | Download Your Free Flowchart

Improve Your Strategic Planning Skills

Strategic planning can benefit your organization’s vision, execution, and progress toward goals. If strategic planning is a skill you’d like to improve, online courses can provide the knowledge and techniques needed to lead your team and organization.

Strategy courses can range from primers on key concepts (such as Economics for Managers ), to deep-dives on strategy frameworks (such as Disruptive Strategy ), to coursework designed to help you strategize for a specific organizational goal (such as Sustainable Business Strategy ).

Learning how to craft an effective, compelling strategic plan can enable you to not only invest in your career but provide lasting value to your organization.

Do you want to formulate winning strategies for your organization? Explore our portfolio of online strategy courses and download the free flowchart to determine which is the best fit for you and your goals.

how important is planning in a business

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Importance of Planning in Business Management

Planning is one of the most important tasks in business or any type of management as well. It is really does not a matter of the size of the business. Does not matter if it is a profitable or non-profitable business organization you are going to start, a planning is a must. Why? The reason is that the planning is the first element of the four core elements of management. It is very easy to start a business, but without proper planning it will fall apart soon after the inception.  So, p laning is one of the most important works an entrepreneur must do.

I have listed top reasons why planning is important in business organization. Below the important points are discussed.

Planning for Uncertainty

Uncertainty is a common phenomenon for every type of profitable or non-profit business organization. When you do not have any knowledge of any future event, then it is called to be an uncertainty. Here a business plan comes with a solution. A business plan is a future course of actions. That means you enlist a set of work you will be doing after launching the business. You know your steps. Now you know what you will be doing throughout the business life cycle. By pointing out your future actions, you are avoiding many uncertainties. For example, maybe you do not know how you will find an effective employee for your organization. But in the plan, you mentioned that the recruitment process will be handled by a third party. It will surely reduce the uncertainty in the future.

Reducing the Business Risk

Risk is the chance of happening a thing that may bring profit or loss for your business. Risk deals with chances. That means it’s about the probability. You cannot be completely sure of an event. For example, a flood may occur in the beginning of the year which may result in decrease in sales. Business risk will always be there. Here plan plays an important role. A business plan includes a list of events that may or may not take place in the future and a set of solutions. So, if those problematic events take place, the business owner goes for a solution. So, you know the solution for a set of problems. In this way, an effective business plan is very much important for your business.

Planning for a better Growth

A business does not stand alone is the same place year after year. It needs to grow. Why? Because, if a business does not expand, you cannot increase profit after a certain amount. So, you need your business grown. A business plan tells you when you will want to inject more money in your business, that’s investment plan. You want to take loan for your business? When do you want to do that? After reaching few certain goals? Do you want to take more investors? Or you just want to borrow from your relatives? A business plan creates a timeline for the future investment which ensures a future growth and results in increased profit margin .

Taking a Specific Action for your Business

We have already talked about that a plan is a set of future actions that you are going to execute. There are specific actions you will be taking for your business. A business plan enlists future business opportunities that might be utilized in the future. For that, a business might need to develop the strengths needed to utilize those opportunities in the future. By taking proper actions in the business, a company develops its strengths. For example, a specific action might be recruitment of a set of sale’s executive who will be working under the condition of sales commission when there is a chance of high sales growth. A business plan identifies specific action for your business.

Proper Management of Cash Flow

Managing cash flow is a vital task in a business organization. If you do not know how to utilize the cash flow, you might end up with losses. As a result, your business will fail. A business plan creates a financial plan. It tells you how you will pay the payment to your suppliers or how much credit will be there. It will also help you to maintain a good relationship with your suppliers if you go with your plan. Though it is very critical task, but still you must manage you cash flow according to your business plan.

Planning includes the SWOT Analysis

A business plan also includes a SWOT Analysis. The SWOT is an acronym. The elaboration of SWOT is the strengths & weaknesses of and the opportunities & threats for a business organization. So, it will help you to identify the strengths and weaknesses, not only for your business but also for your competitors’. It will also help to identify the opportunities & threats for your business. It will help you to compare your business with the business of your competitors. As a result, you will be able to be more competitive in your industry.

Valuation of the Business

A business plan tells about the value of the business. When you have the complete business plan, you know what can be the value of that business in future. Measuring the value is critical when it deals with the fair value. But an effective business plan certainly can tell you what might be the business worth of.

Efficient and Effective Use of the Resources

Resources are not unlimited. As every business has a limitation for the resources, those businesses want to utilize those resources efficiently. Low cost production can be achieved only if the resources are utilized properly. A business plan has a set of actions. So, you know how much resource you will need in the future. As a result, resource allocation can be done beforehand. For example, you may need to take a business loan. But why should you take the loan today if you start your production in the next week?

Enlisting the Short Term and Long Term Goals

Setting goal is one of the most important tasks in small or large sized business organization. Every business organization needs to set its short term and long term goals in the inception. A business includes a set of business goals. These goals maybe divided into short terms and long term goals. Short term goals are those goals that can be achieved within a very short period of time, perhaps a week or a month. Reaching the monthly target sale can be an example of a short term goal. On the other hand, capturing a large market share can be an example of a long term goal. For the both cases, the goals should be specific, reachable, and countable. A business plan specifies those goals. By setting up the goal, a business planner makes a way to the success of the business organization because everyone knows for what they are working in the organization. This is why an effective business plan includes a set of business goals.

Creation of Distinctive Advantages

A business plan helps you to identify the strengths and weaknesses of your business. This is exactly what you need to develop competitive advantages for your business. You may have one advantage that your competitors do not possess. For example, you have the ability to recognize an efficient employee in the interview board. But your competitors can not select the correct people for their organization. So, you can build an efficient workforce which may lead to a distinctive advantage.

Determine the Future Recruitment

As a business plan has an expansion plan in it, it has the recruitment plan as well. If you know the time when you are going to inject more fund into your business, you also know how many people you will have to recruit to look after the new operations.

A Gateway to the Feasibility Study

A business plan is the complete set of actions that you will execute. You perhaps soon will start your business. But how do you know that the business will bring profit for you? Do you have any confirmation for it? Here the feasibility study comes to play the next role. The feasibility study assesses the practicality of the business plan. It will examine the business plan, and tells you if the business will be able to make the profit or not.

Additional Reading on the Significance of Business Planning

What are the essential elements of a business plan.

According to the QuickBook, a business plan must have 7 elements. Those are the executive summary, business description, market analysis, organization management, sales strategies, funding requirements, and financial projections.

What are some Uses of Business Plan?

The most important uses of an effective business plan are sticking to the plan, understanding the pressure points, dealing with the possibility of failure, managing more investment, taking loans from venture capitalists, selling the plan, and many more.

What is the Importance of Planning in Management?

Planning is the first priority in a business. In management, the planning give you the opportunities to set the future course of actions.

Why Planning is Important in Life?

Without making and following a plan, a person may fall apart. Passing a life without a proper plan is like meaningless. Planning helps us to select future course of actions, organizing our lives, setting up the proper directions, and achieve desired goals. Without planning, our lives are like buildings with weak pillars.

What is the Importance of Planning in Education?

Planning for education is one of the most important tasks in our lives. The most important reasons are financial supports, selection of institutions, achieving a desired goal, reaching a target career, and finally, uses of knowledge for a better world.

What is the most popular Quote by Peter Drucker on Planning?

One of the strongest quotes I encountered in my life is by Peter F. Drucker, – “Unless commitment is made, there are only promises and hopes; but no plans.”

In Conclusion

We have elaborated most important points on the importance of business planning. Without a business plan, a business person is totally blind. If the person does not have a plan, s/he does not know what to do next. In every step he takes, he needs time to make a decision. But if there is a business plan, there is certainty.

  • https://en.wikipedia.org/wiki/Feasibility_study
  • https://www.sba.gov/starting-business/write-your-business-plan
  • https://en.wikipedia.org/wiki/Business_plan
  • https://www.financialplanning.org.uk/wayfinder/what-financial-planning

SHEIKH FAIZUL HAQUE

Sheikh Faizul Haque is an internet entrepreneur and the founder of The Strategy Watch ; Graduated from North South University with a double major in Accounting & Finance in Bangladesh.

With a strong interest in developing and improving Business Strategy and to Conduct Business Analysis.

Table of Contents

What is a business plan, the advantages of having a business plan, the types of business plans, the key elements of a business plan, best business plan software, common challenges of writing a business plan, become an expert business planner, business planning: it’s importance, types and key elements.

Business Planning: It’s Importance, Types and Key Elements

Every year, thousands of new businesses see the light of the day. One look at the  World Bank's Entrepreneurship Survey and database  shows the mind-boggling rate of new business registrations. However, sadly, only a tiny percentage of them have a chance of survival.   

According to the Bureau of Labor Statistics, about 20% of small businesses fail in their first year, about 50% in their fifth year.

Research from the University of Tennessee found that 44% of businesses fail within the first three years. Among those that operate within specific sectors, like information (which includes most tech firms), 63% shut shop within three years.

Several  other statistics  expose the abysmal rates of business failure. But why are so many businesses bound to fail? Most studies mention "lack of business planning" as one of the reasons.

This isn’t surprising at all. 

Running a business without a plan is like riding a motorcycle up a craggy cliff blindfolded. Yet, way too many firms ( a whopping 67%)  don't have a formal business plan in place. 

It doesn't matter if you're a startup with a great idea or a business with an excellent product. You can only go so far without a roadmap — a business plan. Only, a business plan is so much more than just a roadmap. A solid plan allows a business to weather market challenges and pivot quickly in the face of crisis, like the one global businesses are struggling with right now, in the post-pandemic world.  

But before you can go ahead and develop a great business plan, you need to know the basics. In this article, we'll discuss the fundamentals of business planning to help you plan effectively for 2021.  

Now before we begin with the details of business planning, let us understand what it is.

No two businesses have an identical business plan, even if they operate within the same industry. So one business plan can look entirely different from another one. Still, for the sake of simplicity, a business plan can be defined as a guide for a company to operate and achieve its goals.  

More specifically, it's a document in writing that outlines the goals, objectives, and purpose of a business while laying out the blueprint for its day-to-day operations and key functions such as marketing, finance, and expansion.

A good business plan can be a game-changer for startups that are looking to raise funds to grow and scale. It convinces prospective investors that the venture will be profitable and provides a realistic outlook on how much profit is on the cards and by when it will be attained. 

However, it's not only new businesses that greatly benefit from a business plan. Well-established companies and large conglomerates also need to tweak their business plans to adapt to new business environments and unpredictable market changes. 

Before getting into learning more about business planning, let us learn the advantages of having one.

Since a detailed business plan offers a birds-eye view of the entire framework of an establishment, it has several benefits that make it an important part of any organization. Here are few ways a business plan can offer significant competitive edge.

  • Sets objectives and benchmarks: Proper planning helps a business set realistic objectives and assign stipulated time for those goals to be met. This results in long-term profitability. It also lets a company set benchmarks and Key Performance Indicators (KPIs) necessary to reach its goals. 
  • Maximizes resource allocation: A good business plan helps to effectively organize and allocate the company’s resources. It provides an understanding of the result of actions, such as, opening new offices, recruiting fresh staff, change in production, and so on. It also helps the business estimate the financial impact of such actions.
  • Enhances viability: A plan greatly contributes towards turning concepts into reality. Though business plans vary from company to company, the blueprints of successful companies often serve as an excellent guide for nascent-stage start-ups and new entrepreneurs. It also helps existing firms to market, advertise, and promote new products and services into the market.
  • Aids in decision making: Running a business involves a lot of decision making: where to pitch, where to locate, what to sell, what to charge — the list goes on. A well thought-out business plan provides an organization the ability to anticipate the curveballs that the future could throw at them. It allows them to come up with answers and solutions to these issues well in advance.
  • Fix past mistakes: When businesses create plans keeping in mind the flaws and failures of the past and what worked for them and what didn’t, it can help them save time, money, and resources. Such plans that reflects the lessons learnt from the past offers businesses an opportunity to avoid future pitfalls.
  • Attracts investors: A business plan gives investors an in-depth idea about the objectives, structure, and validity of a firm. It helps to secure their confidence and encourages them to invest. 

Now let's look at the various types involved in business planning.

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Business plans are formulated according to the needs of a business. It can be a simple one-page document or an elaborate 40-page affair, or anything in between. While there’s no rule set in stone as to what exactly a business plan can or can’t contain, there are a few common types of business plan that nearly all businesses in existence use.  

Here’s an overview of a few fundamental types of business plans. 

  • Start-up plan: As the name suggests, this is a documentation of the plans, structure, and objections of a new business establishments. It describes the products and services that are to be produced by the firm, the staff management, and market analysis of their production. Often, a detailed finance spreadsheet is also attached to this document for investors to determine the viability of the new business set-up.
  • Feasibility plan: A feasibility plan evaluates the prospective customers of the products or services that are to be produced by a company. It also estimates the possibility of a profit or a loss of a venture. It helps to forecast how well a product will sell at the market, the duration it will require to yield results, and the profit margin that it will secure on investments. 
  • Expansion Plan: This kind of plan is primarily framed when a company decided to expand in terms of production or structure. It lays down the fundamental steps and guidelines with regards to internal or external growth. It helps the firm to analyze the activities like resource allocation for increased production, financial investments, employment of extra staff, and much more.
  • Operations Plan: An operational plan is also called an annual plan. This details the day-to-day activities and strategies that a business needs to follow in order to materialize its targets. It outlines the roles and responsibilities of the managing body, the various departments, and the company’s employees for the holistic success of the firm.
  • Strategic Plan: This document caters to the internal strategies of the company and is a part of the foundational grounds of the establishments. It can be accurately drafted with the help of a SWOT analysis through which the strengths, weaknesses, opportunities, and threats can be categorized and evaluated so that to develop means for optimizing profits.

There is some preliminary work that’s required before you actually sit down to write a plan for your business. Knowing what goes into a business plan is one of them. 

Here are the key elements of a good business plan:

  • Executive Summary: An executive summary gives a clear picture of the strategies and goals of your business right at the outset. Though its value is often understated, it can be extremely helpful in creating the readers’ first impression of your business. As such, it could define the opinions of customers and investors from the get-go.  
  • Business Description: A thorough business description removes room for any ambiguity from your processes. An excellent business description will explain the size and structure of the firm as well as its position in the market. It also describes the kind of products and services that the company offers. It even states as to whether the company is old and established or new and aspiring. Most importantly, it highlights the USP of the products or services as compared to your competitors in the market.
  • Market Analysis: A systematic market analysis helps to determine the current position of a business and analyzes its scope for future expansions. This can help in evaluating investments, promotions, marketing, and distribution of products. In-depth market understanding also helps a business combat competition and make plans for long-term success.
  • Operations and Management: Much like a statement of purpose, this allows an enterprise to explain its uniqueness to its readers and customers. It showcases the ways in which the firm can deliver greater and superior products at cheaper rates and in relatively less time. 
  • Financial Plan: This is the most important element of a business plan and is primarily addressed to investors and sponsors. It requires a firm to reveal its financial policies and market analysis. At times, a 5-year financial report is also required to be included to show past performances and profits. The financial plan draws out the current business strategies, future projections, and the total estimated worth of the firm.

The importance of business planning is it simplifies the planning of your company's finances to present this information to a bank or investors. Here are the best business plan software providers available right now:

  • Business Sorter

The importance of business planning cannot be emphasized enough, but it can be challenging to write a business plan. Here are a few issues to consider before you start your business planning:

  • Create a business plan to determine your company's direction, obtain financing, and attract investors.
  • Identifying financial, demographic, and achievable goals is a common challenge when writing a business plan.
  • Some entrepreneurs struggle to write a business plan that is concise, interesting, and informative enough to demonstrate the viability of their business idea.
  • You can streamline your business planning process by conducting research, speaking with experts and peers, and working with a business consultant.

Whether you’re running your own business or in-charge of ensuring strategic performance and growth for your employer or clients, knowing the ins and outs of business planning can set you up for success. 

Be it the launch of a new and exciting product or an expansion of operations, business planning is the necessity of all large and small companies. Which is why the need for professionals with superior business planning skills will never die out. In fact, their demand is on the rise with global firms putting emphasis on business analysis and planning to cope with cut-throat competition and market uncertainties.

While some are natural-born planners, most people have to work to develop this important skill. Plus, business planning requires you to understand the fundamentals of business management and be familiar with business analysis techniques . It also requires you to have a working knowledge of data visualization, project management, and monitoring tools commonly used by businesses today.   

Simpliearn’s Executive Certificate Program in General Management will help you develop and hone the required skills to become an extraordinary business planner. This comprehensive general management program by IIM Indore can serve as a career catalyst, equipping professionals with a competitive edge in the ever-evolving business environment.

What Is Meant by Business Planning?

Business planning is developing a company's mission or goals and defining the strategies you will use to achieve those goals or tasks. The process can be extensive, encompassing all aspects of the operation, or it can be concrete, focusing on specific functions within the overall corporate structure.

What Are the 4 Types of Business Plans?

The following are the four types of business plans:

Operational Planning

This type of planning typically describes the company's day-to-day operations. Single-use plans are developed for events and activities that occur only once (such as a single marketing campaign). Ongoing plans include problem-solving policies, rules for specific regulations, and procedures for a step-by-step process for achieving particular goals.

Strategic Planning

Strategic plans are all about why things must occur. A high-level overview of the entire business is included in strategic planning. It is the organization's foundation and will dictate long-term decisions.

Tactical Planning

Tactical plans are about what will happen. Strategic planning is aided by tactical planning. It outlines the tactics the organization intends to employ to achieve the goals outlined in the strategic plan.

Contingency Planning

When something unexpected occurs or something needs to be changed, contingency plans are created. In situations where a change is required, contingency planning can be beneficial.

What Are the 7 Steps of a Business Plan?

The following are the seven steps required for a business plan:

Conduct Research

If your company is to run a viable business plan and attract investors, your information must be of the highest quality.

Have a Goal

The goal must be unambiguous. You will waste your time if you don't know why you're writing a business plan. Knowing also implies having a target audience for when the plan is expected to get completed.

Create a Company Profile

Some refer to it as a company profile, while others refer to it as a snapshot. It's designed to be mentally quick and digestible because it needs to stick in the reader's mind quickly since more information is provided later in the plan.

Describe the Company in Detail

Explain the company's current situation, both good and bad. Details should also include patents, licenses, copyrights, and unique strengths that no one else has.

Create a marketing plan ahead of time.

A strategic marketing plan is required because it outlines how your product or service will be communicated, delivered, and sold to customers.

Be Willing to Change Your Plan for the Sake of Your Audience

Another standard error is that people only write one business plan. Startups have several versions, just as candidates have numerous resumes for various potential employers.

Incorporate Your Motivation

Your motivation must be a compelling reason for people to believe your company will succeed in all circumstances. A mission should drive a business, not just selling, to make money. That mission is defined by your motivation as specified in your business plan.

What Are the Basic Steps in Business Planning?

These are the basic steps in business planning:

Summary and Objectives

Briefly describe your company, its objectives, and your plan to keep it running.

Services and Products

Add specifics to your detailed description of the product or service you intend to offer. Where, why, and how much you plan to sell your product or service and any special offers.

Conduct research on your industry and the ideal customers to whom you want to sell. Identify the issues you want to solve for your customers.

Operations are the process of running your business, including the people, skills, and experience required to make it successful.

How are you going to reach your target audience? How you intend to sell to them may include positioning, pricing, promotion, and distribution.

Consider funding costs, operating expenses, and projected income. Include your financial objectives and a breakdown of what it takes to make your company profitable. With proper business planning through the help of support, system, and mentorship, it is easy to start a business.

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What Is Business Planning?

Why Business Planning Isn't Just for Startups

Susan Ward wrote about small businesses for The Balance for 18 years. She has run an IT consulting firm and designed and presented courses on how to promote small businesses.

how important is planning in a business

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Business planning takes place when the key stakeholders in a business sit down and flesh out all the goals , strategies, and actions that they envision taking to ensure the business’s survival, prosperity, and growth.

Here are some strategies for business planning and the ways it can benefit your business.

Business planning can play out in many different ways. Anytime upper management comes together to plan for the success of a business, it is a form of business planning. Business planning commonly involves collecting ideas in a formal business plan that outlines a summary of the business's current state, as well as the state of the broader market, along with detailed steps the business will take to improve performance in the coming period.

Business plans aren't just about money. The business plan outlines the general planning needed to start and run a successful business, and that includes profits, but it also goes beyond that. A plan should account for everything from scoping out the competition and figuring out how your new business will fit into the industry to assessing employee morale and planning for how to retain talent.

How Does Business Planning Work?

Every new business needs a business plan —a blueprint of how you will develop your new business, backed by research, that demonstrates how the business idea is viable. If your new business idea requires investment capital, you will have a better chance of obtaining debt or equity financing from financial institutions, angel investors , or venture capitalists if you have a solid business plan to back up your ideas.

Businesses should prepare a business plan, even if they don't need to attract investors or secure loans.

Post-Startup Business Planning

The business plan isn’t a set-it-and-forget-it planning exercise. It should be a living document that is updated throughout the life cycle of your business.

Once the business has officially started, business planning will shift to setting and meeting goals and targets. Business planning is most effective when it’s done on a consistent schedule that revisits existing goals and projects throughout the year, perhaps even monthly. In addition to reviewing short-term goals throughout the year, it's also important to establish a clear vision and lay the path for your long-term success.

Daily business planning is an incredibly effective way for individuals to focus on achieving both their own goals and the goals of the organization.

Sales Forecasting

The sales forecast is a key section of the business plan that needs to be constantly tracked and updated. The sales forecast is an estimate of the sales of goods and services your business is likely to achieve over the forecasted period, along with the estimated profit from those sales. The forecast should take into account trends in your industry, the general economy, and the projected needs of your primary customers.

Cash Flow Analysis

Another crucial component of business planning is cash flow analysis. Avoiding extended cash flow shortages is vital for businesses, and many business failures can be blamed on cash flow problems.

Your business may have a large, lucrative order on the books, but if it can't be invoiced until the job is completed, then you may run into cash flow problems. That scenario can get even worse if you have to hire staff, purchase inventory, and make other expenditures in the meantime to complete the project.

Performing regular cash flow projections is an important part of business planning. If managed properly, cash flow shortages can be covered by additional financing or equity investment.

Business Contingency Planning

In addition to business planning for profit and growth, your business should have a contingency plan. Contingency business planning (also known as business continuity planning or disaster planning) is the type of business planning that deals with crises and worst-case scenarios. A business contingency plan helps businesses deal with sudden emergencies, unexpected events, and new information that could disrupt your business.

The goals of a contingency plan are to:

  • Provide for the safety and security of yourself, your employees, and your customers in the event of a fire, flood, robbery, data breach, illness, or some other disaster
  • Ensure that your business can resume operations after an emergency as quickly as possible

Business Succession Planning

If your business is a family enterprise or you have specific plans for who you want to take over in the event of your retirement or illness, then you should have a plan in place to hand over control of the business . The issues of management, ownership, and taxes can cause a great deal of discord within families unless a succession plan is in place that clearly outlines the process.

Key Takeaways

  • Business planning is when key stakeholders review the state of their business and plan for how they will improve the business in the future.
  • Business planning isn't a one-off event—it should be an ongoing practice of self-assessment and planning.
  • Business planning isn't just about improving sales; it can also address safety during natural disasters or the transfer of power after an owner retires.
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  • Business Essentials

The Importance of Strategic Planning

how important is planning in a business

Every successful business has a plan and knows where it is heading in the future. Setting a plan with goals, target dates, and a purpose should be finalized before embarking on a business. Taking the time on an ongoing basis to review the company's past performance, and predict its future performance, gives it a road map to follow.

Without strategic planning , which is knowing the current state of your business and where you want it to go, most businesses will fail. A strategic plan allows you to see what is important, how to get there, the pitfalls to avoid, and the noise to ignore. Below we discuss some of the reasons why strategic planning is important and how to implement it.

Key Takeaways

  • Strategic planning is crucial for a business as it creates a map for a business to follow and course correct when need be.
  • The first part of a strategic plan is the business plan, which outlines the purpose of the business, budgets, goals, and the mission statement.
  • Making time to evaluate your business on an ongoing basis will allow you to determine how well your results are adhering to your plan. This will allow you to make adjustments or double-down on how the business is being run.
  • Communicating your strategic plan to your employees is critical so that everyone is on the same page and working towards the same goals.
  • Reviewing and following up on your business will highlight strengths and weaknesses in your business so that you can continue with what works well and eliminate what is hindering the growth of your business.

Making a Business Plan

The very first strategic planning most businesses do is a business plan . When you first start your business, you will likely have prepared a mission statement , a budget, and a marketing and promotion plan. The business plan is a good first step, but it needs to be reviewed and updated as the business continues and grows. If you shove it in a drawer and let dust gather on it, it won't serve as the foundation of your business, as it was meant to.

Using Goal-Based Planning

How you go about conducting strategic planning will depend on many variables, including the size of your business, the time frame included, and your personal preferences. The most common style of plan is goals-based. In this type of plan, you set goals for the business (financial and non-financial) and map out the steps needed to meet those goals.

For example, if your goal is to have $100,000 in revenues next year, the steps to get there might include bringing in five new clients a month and attending three trade shows. Whatever the goals you set for your business, they should be concrete and measurable so that you know when you reach them. Another method of strategic planning is mission-based.

When you first started your business, you likely developed a mission or values statement, outlining the purpose of your company and its overall reason for being. A mission-based strategic plan ties each part of the plan into the mission, to ensure that the company is always operating in the service of that mission.

For example, if your mission statement is to be recognized as a leader in the financial services sector and to help families become financially independent, your strategic plans should address how you will meet those goals.

Making Time

It can be difficult to find the time to plan your business. Other, more pressing priorities, like trying to bring in revenue , may grab your attention; however, carving out time regularly will help you keep on top of your business.

Blocking off a few hours a day or week to focus on your plan should be part of your business operations. During that time, you can examine the prior week's financial performance and update any marketing initiatives to make sure that your business is on track with your initial plan. If it's not, then you'll need to make adjustments to get back on track.

Regardless of how often you plan, make sure that you set it in stone in your day planner. Block off the time and don't let anything else get in the way. Turn off your cell phone and, if at all possible, go somewhere away from your office to plan in order to minimize distractions.

Promoting Communication

As a business owner, you will most likely have employees. It is critical to inform them of your strategic plan so that they are on the same page and working towards the same goal as you.

Including your staff in your strategic plan will instill a feeling of responsibility in their jobs that will help ensure productivity.

For example, if you have a sales team and your strategic plan involves bringing in five new clients a month, your sales team needs to be aware of this so that they know the goal to achieve. If they don't, perhaps they would be under the assumption that bringing in two new clients a month is excellent, when in actuality, it is only 40% of your goal. Without clear communication to your employees, your business will be a boat set adrift without any course to follow.

Following Up

A critical part of the planning process is reviewing your previous plan and comparing it to your actual results. Were you able to bring in five new clients last month? If not, why not? Tweak the plan going forward to account for changes in your business or the general economic climate. The more experience you get with the planning process and with the operational side of your business, the more accurately you will be able to plan.

Once you have had your business running for a while and block out time to follow up on your strategic plan, you will be able to determine where the strengths and weaknesses in your business lie. This would allow you to correct course, perhaps changing your business plan and goals slightly to focus on your strengths, while allowing you to eliminate your weakness, making your business stronger and increasing the likelihood of achieving your goals.

The Bottom Line

Planning out the future of your business is the best way to ensure success. Creating an initial plan and communicating that plan to your employees will ensure that everyone is working towards the same goal.

Taking out time to review your business's results and comparing them to your plan will help ensure that the right policies and procedures continue whereas those that are not benefiting the company will be removed. It may seem awkward and difficult at first to create a strategic plan, but with practice, you will be able to move your business in the right direction.

how important is planning in a business

  • Terms of Service
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  • Your Privacy Choices
  • 17.1 Is Planning Important
  • Introduction
  • 1.1 What Do Managers Do?
  • 1.2 The Roles Managers Play
  • 1.3 Major Characteristics of the Manager's Job
  • Summary of Learning Outcomes
  • Chapter Review Questions
  • Management Skills Application Exercises
  • Managerial Decision Exercises
  • Critical Thinking Case
  • 2.1 Overview of Managerial Decision-Making
  • 2.2 How the Brain Processes Information to Make Decisions: Reflective and Reactive Systems
  • 2.3 Programmed and Nonprogrammed Decisions
  • 2.4 Barriers to Effective Decision-Making
  • 2.5 Improving the Quality of Decision-Making
  • 2.6 Group Decision-Making
  • 3.1 The Early Origins of Management
  • 3.2 The Italian Renaissance
  • 3.3 The Industrial Revolution
  • 3.4 Taylor-Made Management
  • 3.5 Administrative and Bureaucratic Management
  • 3.6 Human Relations Movement
  • 3.7 Contingency and System Management
  • 4.1 The Organization's External Environment
  • 4.2 External Environments and Industries
  • 4.3 Organizational Designs and Structures
  • 4.4 The Internal Organization and External Environments
  • 4.5 Corporate Cultures
  • 4.6 Organizing for Change in the 21st Century
  • 5.1 Ethics and Business Ethics Defined
  • 5.2 Dimensions of Ethics: The Individual Level
  • 5.3 Ethical Principles and Responsible Decision-Making
  • 5.4 Leadership: Ethics at the Organizational Level
  • 5.5 Ethics, Corporate Culture, and Compliance
  • 5.6 Corporate Social Responsibility (CSR)
  • 5.7 Ethics around the Globe
  • 5.8 Emerging Trends in Ethics, CSR, and Compliance
  • 6.1 Importance of International Management
  • 6.2 Hofstede's Cultural Framework
  • 6.3 The GLOBE Framework
  • 6.4 Cultural Stereotyping and Social Institutions
  • 6.5 Cross-Cultural Assignments
  • 6.6 Strategies for Expanding Globally
  • 6.7 The Necessity of Global Markets
  • 7.1 Entrepreneurship
  • 7.2 Characteristics of Successful Entrepreneurs
  • 7.3 Small Business
  • 7.4 Start Your Own Business
  • 7.5 Managing a Small Business
  • 7.6 The Large Impact of Small Business
  • 7.7 The Small Business Administration
  • 7.8 Trends in Entrepreneurship and Small-Business Ownership
  • 8.1 Gaining Advantages by Understanding the Competitive Environment
  • 8.2 Using SWOT for Strategic Analysis
  • 8.3 A Firm's External Macro Environment: PESTEL
  • 8.4 A Firm's Micro Environment: Porter's Five Forces
  • 8.5 The Internal Environment
  • 8.6 Competition, Strategy, and Competitive Advantage
  • 8.7 Strategic Positioning
  • 9.1 Strategic Management
  • 9.2 Firm Vision and Mission
  • 9.3 The Role of Strategic Analysis in Formulating a Strategy
  • 9.4 Strategic Objectives and Levels of Strategy
  • 9.5 Planning Firm Actions to Implement Strategies
  • 9.6 Measuring and Evaluating Strategic Performance
  • 10.1 Organizational Structures and Design
  • 10.2 Organizational Change
  • 10.3 Managing Change
  • 11.1 An Introduction to Human Resource Management
  • 11.2 Human Resource Management and Compliance
  • 11.3 Performance Management
  • 11.4 Influencing Employee Performance and Motivation
  • 11.5 Building an Organization for the Future
  • 11.6 Talent Development and Succession Planning
  • 12.1 An Introduction to Workplace Diversity
  • 12.2 Diversity and the Workforce
  • 12.3 Diversity and Its Impact on Companies
  • 12.4 Challenges of Diversity
  • 12.5 Key Diversity Theories
  • 12.6 Benefits and Challenges of Workplace Diversity
  • 12.7 Recommendations for Managing Diversity
  • 13.1 The Nature of Leadership
  • 13.2 The Leadership Process
  • 13.3 Leader Emergence
  • 13.4 The Trait Approach to Leadership
  • 13.5 Behavioral Approaches to Leadership
  • 13.6 Situational (Contingency) Approaches to Leadership
  • 13.7 Substitutes for and Neutralizers of Leadership
  • 13.8 Transformational, Visionary, and Charismatic Leadership
  • 13.9 Leadership Needs in the 21st Century
  • 14.1 Motivation: Direction and Intensity
  • 14.2 Content Theories of Motivation
  • 14.3 Process Theories of Motivation
  • 14.4 Recent Research on Motivation Theories
  • 15.1 Teamwork in the Workplace
  • 15.2 Team Development Over Time
  • 15.3 Things to Consider When Managing Teams
  • 15.4 Opportunities and Challenges to Team Building
  • 15.5 Team Diversity
  • 15.6 Multicultural Teams
  • 16.1 The Process of Managerial Communication
  • 16.2 Types of Communications in Organizations
  • 16.3 Factors Affecting Communications and the Roles of Managers
  • 16.4 Managerial Communication and Corporate Reputation
  • 16.5 The Major Channels of Management Communication Are Talking, Listening, Reading, and Writing
  • 17.2 The Planning Process
  • 17.3 Types of Plans
  • 17.4 Goals or Outcome Statements
  • 17.5 Formal Organizational Planning in Practice
  • 17.6 Employees' Responses to Planning
  • 17.7 Management by Objectives: A Planning and Control Technique
  • 17.8 The Control- and Involvement-Oriented Approaches to Planning and Controlling
  • 18.1 MTI—Its Importance Now and In the Future
  • 18.2 Developing Technology and Innovation
  • 18.3 External Sources of Technology and Innovation
  • 18.4 Internal Sources of Technology and Innovation
  • 18.5 Management Entrepreneurship Skills for Technology and Innovation
  • 18.6 Skills Needed for MTI
  • 18.7 Managing Now for Future Technology and Innovation
  • Understand the importance of planning and why organizations need to plan and control.

Planning is the process by which managers establish goals and specify how these goals are to be attained. Plans have two basic components: outcome or goal statements and action statements. Outcome or goal statements represent the end state—the targets and outcomes managers hope to attain. Action statements reflect the means by which organizations move forward to attain their goals. British prime minister Theresa May is determined to change the way that public companies’ boards are comprised by advocating that employees be part of every board. As a part of her action statement, she advocated putting an employee representative in every boardroom, just like Mick Barker, a railway worker since the 1970s, has been quietly helping to shape decision-making as a member of the board of directors at the top of transport giant First Group. 2

Planning is an intellectual activity. 3 It is difficult to see managers plan, because most of this activity unfolds in the mind of those doing the planning. While planning, managers have to think about what has to be done, who is going to do it, and how and when they will do it. Planners think both retrospectively (about past events) and prospectively (about future opportunities and impending threats). Planning involves thinking about organizational strengths and weaknesses, as well as making decisions about desired states and ways to achieve them. 4

Planning for organizational events, whether in the internal or external environment, should be an ongoing process—part of a manager’s daily, weekly, and monthly duties and a routine task for all members of high-involvement organizations. Plans should be continually monitored. Managers and other organizational members should check to see if their plans need to be modified to accommodate changing conditions, new information, or new situations that will affect the organization’s future. Plans need to be administered with flexibility, as organizations learn about new and changing conditions. Clearly, the Calico Candy Company failed to monitor its plans in this way. By thinking of planning as a continuous activity, methods can be formulated for handling emerging and unforeseen opportunities and threats. Planning is one process through which organizational activity can be given meaning and direction.

Why Should Managers Plan?

Managers have several reasons for formulating plans for themselves, their employees, and various organizational units: (1) to offset uncertainty and change; (2) to focus organizational activity on a set of objectives; (3) to provide a coordinated, systematic road map for future activities; (4) to increase economic efficiency; and (5) to facilitate control by establishing a standard for later activity.

Several forces contribute to the necessity for organizational planning. First, in the internal environment, as organizations become larger and more complex, the task of managing becomes increasingly complex. Planning maps out future activities in relation to other activities in the organization. Second, as the external environment becomes increasingly complex and turbulent, the amount of uncertainty faced by a manager increases. Planning enables organizations to approach their environment systematically.

A study out of Cornell University and Indiana University found that absenteeism cost companies $40 billion per year; the absence of planning was one of the biggest problems businesses face. Firms that follow a clearly defined plan in their day-to-day operations will be more successful than those that do not. The authors state, “organizational controlled consequences that would tend to deter absenteeism.” Interestingly, this may be as simple as inspecting the organizational policies that provide the “rules” for employee absenteeism. 5

Do Managers Really Plan?

Managers should plan formally, but do they? Some observers contend that managers typically are too busy to engage in a regular form of systematic planning. McGill University management professor Henry Mintzberg notes:

When managers plan, they do so implicitly in the context of daily actions, not in some abstract process reserved for two weeks in the organization’s mountain retreat. The plans of the chief executives I have studied seemed to exist only in their heads—as flexible, but often specific, intentions. . . . The job of managing does not breed reflective planners; the manager is a real-time responder to stimuli. 6

Others disagree. After reviewing a number of studies focused on the degree to which planning and other managerial activities are inherent parts of managing, management professors J. Carroll and J. Gillen state that “the classical management functions of Fayol, Urwick, and others are not folklore as claimed by some contemporary management writers but represent valid abstractions of what managers actually do and what managers should do.” 7 Barbara Allen, president of Sunbelt Research Associates, notes that she did a considerable amount of planning before launching her new business. Now that she is operating successfully, she reviews and updates her plans periodically. 8

Managers often are very busy people. Some act without a systematic plan of action; however, many managers do plan systematically. 9 For example, many managers develop systematic plans for how their organization will react to a crisis. United Airlines, for example, created a crisis planning group. The group developed United’s crisis contingency plan book, which specifies what the airline’s crisis management team should do in the event of a crisis. Keri Calagna, principal, Deloitte Risk and Financial Advisory, Deloitte & Touche LLP, comments that up to 20.7% of a firm’s value resides in reputation but that CEOs and 77% of board of directors members identified reputation risk as the area about which they felt most vulnerable and that only 39% had a plan to address it. 10

The question about whether managers really plan and the observation that many times they are simply too busy to retreat to the mountaintop and reflect on where the organization should be going and how it should get there miss the point: there are different types of planning.

Concept Check

  • What is the process where managers establish goals and outline how these goals will be met called?.
  • How do the internal and external environments of the organization and its strengths and weaknesses impact the planning process?
  • Why should managers plan?

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The Business Planning Process: 6 Steps To Creating a New Plan

The Business Planning Process 6 Steps to Create a New Plan

In this article, we will define and explain the basic business planning process to help your business move in the right direction.

What is Business Planning?

Business planning is the process whereby an organization’s leaders figure out the best roadmap for growth and document their plan for success.

The business planning process includes diagnosing the company’s internal strengths and weaknesses, improving its efficiency, working out how it will compete against rival firms in the future, and setting milestones for progress so they can be measured.

The process includes writing a new business plan. What is a business plan? It is a written document that provides an outline and resources needed to achieve success. Whether you are writing your plan from scratch, from a simple business plan template , or working with an experienced business plan consultant or writer, business planning for startups, small businesses, and existing companies is the same.

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The Better Business Planning Process

The business plan process includes 6 steps as follows:

  • Do Your Research
  • Calculate Your Financial Forecast
  • Draft Your Plan
  • Revise & Proofread
  • Nail the Business Plan Presentation

We’ve provided more detail for each of these key business plan steps below.

1. Do Your Research

Conduct detailed research into the industry, target market, existing customer base,  competitors, and costs of the business begins the process. Consider each new step a new project that requires project planning and execution. You may ask yourself the following questions:

  • What are your business goals?
  • What is the current state of your business?
  • What are the current industry trends?
  • What is your competition doing?

There are a variety of resources needed, ranging from databases and articles to direct interviews with other entrepreneurs, potential customers, or industry experts. The information gathered during this process should be documented and organized carefully, including the source as there is a need to cite sources within your business plan.

You may also want to complete a SWOT Analysis for your own business to identify your strengths, weaknesses, opportunities, and potential risks as this will help you develop your strategies to highlight your competitive advantage.

2. Strategize

Now, you will use the research to determine the best strategy for your business. You may choose to develop new strategies or refine existing strategies that have demonstrated success in the industry. Pulling the best practices of the industry provides a foundation, but then you should expand on the different activities that focus on your competitive advantage.

This step of the planning process may include formulating a vision for the company’s future, which can be done by conducting intensive customer interviews and understanding their motivations for purchasing goods and services of interest. Dig deeper into decisions on an appropriate marketing plan, operational processes to execute your plan, and human resources required for the first five years of the company’s life.

3. Calculate Your Financial Forecast

All of the activities you choose for your strategy come at some cost and, hopefully, lead to some revenues. Sketch out the financial situation by looking at whether you can expect revenues to cover all costs and leave room for profit in the long run.

Begin to insert your financial assumptions and startup costs into a financial model which can produce a first-year cash flow statement for you, giving you the best sense of the cash you will need on hand to fund your early operations.

A full set of financial statements provides the details about the company’s operations and performance, including its expenses and profits by accounting period (quarterly or year-to-date). Financial statements also provide a snapshot of the company’s current financial position, including its assets and liabilities.

This is one of the most valued aspects of any business plan as it provides a straightforward summary of what a company does with its money, or how it grows from initial investment to become profitable.

4. Draft Your Plan

With financials more or less settled and a strategy decided, it is time to draft through the narrative of each component of your business plan . With the background work you have completed, the drafting itself should be a relatively painless process.

If you have trouble writing convincing prose, this is a time to seek the help of an experienced business plan writer who can put together the plan from this point.

5. Revise & Proofread

Revisit the entire plan to look for any ideas or wording that may be confusing, redundant, or irrelevant to the points you are making within the plan. You may want to work with other management team members in your business who are familiar with the company’s operations or marketing plan in order to fine-tune the plan.

Finally, proofread thoroughly for spelling, grammar, and formatting, enlisting the help of others to act as additional sets of eyes. You may begin to experience burnout from working on the plan for so long and have a need to set it aside for a bit to look at it again with fresh eyes.

6. Nail the Business Plan Presentation

The presentation of the business plan should succinctly highlight the key points outlined above and include additional material that would be helpful to potential investors such as financial information, resumes of key employees, or samples of marketing materials. It can also be beneficial to provide a report on past sales or financial performance and what the business has done to bring it back into positive territory.

Business Planning Process Conclusion

Every entrepreneur dreams of the day their business becomes wildly successful.

But what does that really mean? How do you know whether your idea is worth pursuing?

And how do you stay motivated when things are not going as planned? The answers to these questions can be found in your business plan. This document helps entrepreneurs make better decisions and avoid common pitfalls along the way. ​

Business plans are dynamic documents that can be revised and presented to different audiences throughout the course of a company’s life. For example, a business may have one plan for its initial investment proposal, another which focuses more on milestones and objectives for the first several years in existence, and yet one more which is used specifically when raising funds.

Business plans are a critical first step for any company looking to attract investors or receive grant money, as they allow a new organization to better convey its potential and business goals to those able to provide financial resources.

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Other Helpful Business Plan Articles & Templates

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  • Business Planning
  • Skills & Tools

Business planning skills describe your ability to create a roadmap for the success of a business. This ability encompasses documenting the specific details of the business such as the goals and aims that a firm sets, the planned steps towards the achievement of those goals, and the criteria that measures and monitors the firm’s success.

Whether an already established company or a new start-up, business planning is needed everywhere. Any document created in the process that organizes all the data, manages your plans, and communicates them to stakeholders is known as a ‘business plan’.

Why is business planning important

Business planning can be arduous as well as time-consuming but its importance is not debatable in any case. Whether planning an expansion of operations or launch of a new and exciting product, business planning is the necessity of all large and small companies.

Utilizing your skills to come up with a sound business plan requires a lot of research, hence, keeping you well-informed about the true position of your business in the market, relative to competitors. Gathering information for business planning purposes can help you identify any weaknesses and foresee potential threats so that strategies can be developed to deal with problems even before they occur.

The business plan that a company comes up with also serves as a reference point. It helps you determine whether or not you have drifted from your original vision and in case you have, it helps you get back on track. Therefore, starting a business without carefully planning it is like setting off on a journey without a roadmap. It can also serve as a great motivational tool when you review the plan to see how far you have already come.

How to improve business planning skills

Take the following measures to improve your business planning skills:

  • Adopt a conservative approach . In all your financial projections and estimates, you must be conservative so that you don’t overpromise the returns to any particular business. For instance, if you are certain that the business will capture 30% of the market share I the first year, you may state is only as an opinion and give reasons for why you believe so. However, in making financial projections, taking only 10% market share into consideration will give much more credible results.
  • Emphasize on people as much as ideas and concepts . As good as the business idea may be, it can never be successful enough until you make the acquisition of a strong management team a part of your planning. Venture capitalists as well as individual financiers are much more likely to invest in businesses that not only have a good concept but also a team with good credentials and expertise.
  • Support every claim with evidence . Business planning requires making several claims but all those claims must be backed up by proof. Otherwise, you will have no credibility. If you say, for instance, that your staff qualified enough to make the business success, their resumes must reflect it too.

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Business Jargons

A Business Encyclopedia

Definition : Planning is the fundamental management function, which involves deciding beforehand , what is to be done, when is it to be done, how it is to be done and who is going to do it. It is an intellectual process which lays down an  organisation’s objectives and develops various courses of action , by which the organisation can achieve those objectives. It chalks out exactly, how to attain a specific goal.

Planning is nothing but thinking before the action takes place . It helps us to take a peep into the future and decide in advance the way to deal with the situations, which we are going to encounter in future. It involves logical thinking and rational decision making.

Characteristics of Planning

characteristics of planning

  • Managerial function : Planning is a first and foremost managerial function provides the base for other functions of the management, i.e. organising, staffing, directing and controlling, as they are performed within the periphery of the plans made.
  • Goal oriented : It focuses on defining the goals of the organisation, identifying alternative courses of action and deciding the appropriate action plan, which is to be undertaken for reaching the goals.
  • Pervasive : It is pervasive in the sense that it is present in all the segments and is required at all the levels of the organisation. Although the scope of planning varies at different levels and departments.
  • Continuous Process : Plans are made for a specific term, say for a month, quarter, year and so on. Once that period is over, new plans are drawn, considering the organisation’s present and future requirements and conditions. Therefore, it is an ongoing process, as the plans are framed, executed and followed by another plan.
  • Intellectual Process : It is a mental exercise at it involves the application of mind, to think, forecast, imagine intelligently and innovate etc.
  • Futuristic : In the process of planning we take a sneak peek of the future. It encompasses looking into the future, to analyse and predict it so that the organisation can face future challenges effectively.
  • Decision making : Decisions are made regarding the choice of alternative courses of action that can be undertaken to reach the goal. The alternative chosen should be best among all, with the least number of the negative and highest number of positive outcomes.

Planning is concerned with setting objectives, targets, and formulating plan to accomplish them. The activity helps managers analyse the   present condition to identify the ways of attaining the desired position in future . It is both, the need of the organisation and the responsibility of managers.

Importance of Planning

  • It helps managers to improve future performance , by establishing objectives and selecting a course of action, for the benefit of the organisation.
  • It minimises risk and uncertainty , by looking ahead into the future.
  • It facilitates the coordination of activities . Thus, reduces overlapping among activities and eliminates unproductive work.
  • It states in advance, what should be done in future, so it provides direction for action.
  • It uncovers and identifies future opportunities and threats .
  • It sets out standards for controlling . It compares actual performance with the standard performance and efforts are made to correct the same.

Planning is present in all types of organisations, households, sectors, economies, etc. We need to plan because the future is highly uncertain and no one can predict the future with 100% accuracy, as the conditions can change anytime. Hence, planning is the basic requirement of any organization for the survival, growth and success.

Steps involved in Planning

Steps of Planning

By planning process, an organisation not only gets the insights of the future, but it also helps the organisation to shape its future. Effective planning involves simplicity of the plan, i.e. the plan should be clearly stated and easy to understand  because if the plan is too much complicated it will create chaos among the members of the organisation. Further, the plan should fulfil all the requirements of the organisation .

Related terms:

  • Strategic Planning
  • Human Resource Planning Process
  • Controlling
  • Succession Planning
  • Gap Analysis

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Brilliantio

Why Planning Is Important (Explained)

By: Author Paul Jenkins

Posted on May 4, 2022

Categories Business , Productivity

When it comes to planning, most people think of things like schedules and organization. While these are important aspects of effective planning, there’s much more to it than that! Good planning can help you achieve your goals and dreams by keeping you on track and focused – in business, and in life. Here are just a few reasons why planning is so important.

Why Planning Is Important

Plans are important. Although they may seem like an onerous mechanism designed to burden you with strict regulations and stressful deadlines, the planning process can actually be a liberating force that opens your mind to new possibilities and helps you put your ideas into action.

If you stay flexible and dynamic enough, planning can become a way of life. Your plans will change depending on the situation – and like life itself, they won’t always work out the way you hoped. But if you know how to adapt at all times, there’s no reason things can’t turn out for the best.

Planning is important in business and management because it gives companies a firm structure for their future so that their activities are consistent and organized.

Planning is also important in education because it helps students study for exams or complete assignments and learn more about certain subjects by preparing them with easy-to-understand information before the actual exam takes place.

Why Is Strategic Planning Important in an Organization?

Planning is critical for any business. In most cases, companies that don’t have a mission and vision are doomed to fail – because, without goals, there are no targets or actions to guide the company.

Without a plan, it’s almost like you’re flying blind in the dark or playing without a net – which can lead to unpredictable results. And remember, we all know what happens when you shoot in the dark: You usually hit something hard.

So … why is strategic planning important?

Because it enables organizations to achieve their strategic goals and achieve them well. It helps them prioritize and allocate resources effectively – leading to greater efficiency and a higher standard of living for all.

Of course, it takes time to create an effective plan, but when it’s done well, every organization benefits from having it in place as soon as possible, even if there are no immediate benefits at first glance.

Planning Is a Way to Stay Goal-Oriented

Setting goals is one of the most important things you can do as a business leader because they help you stay focused. Planning allows you to create a good structure and keep your team on task.

Once you’ve set your goals, it’s time to develop a plan that will help you achieve those goals.

A good business plan gives direction to your business and serves as a source of inspiration for everyone involved in your business. It provides an overview of what’s going on in the business and how it plans to achieve its goals.

If you don’t have this kind of clarity, it’s much harder for your employees to know what their specific jobs are or how they contribute to the company’s overall mission.

Your business planning doesn’t have to fill several volumes and require a group presentation before it’s approved by all the managers in your organization-you can quickly create it on your own or with a handful of members of your team who’ve relevant experience in the field (or all by yourself if you’re ambitious).

Even though large companies use complex planning methods, that doesn’t mean small companies have to. Even if you just write down a few key points about why certain strategies are effective and what results they’re likely to produce, it can be easier to write down an idea like this when you’re trying to figure out which avenues are worth pursuing next.

Long-Range Plans Provide the Guidance Needed to Meet the Goals of An Organization

For organizations to survive and thrive, they must make good long-term plans. Otherwise, their goals won’t be achieved or they’ll not be able to keep up with the rapid changes the world is currently experiencing.

For plans to be effective, they must be aligned with an organization’s goals.

In addition, a plan is only complete if there are measures to track progress. Long-term planning requires good communication within an organization so that everyone involved understands what needs to be done and how it fits into the big picture.

For example, if you were in charge of a mail delivery company, your plan might include hiring new employees who’ve good interpersonal skills so they can better deal with customers and solve problems that arise. If you include too much detail in your plan or try to cover too many areas without focusing on what’s most important to the success of your business, you could run out of time and resources before you get anything done.

Whether you’re running a small business from home or a large company with thousands of employees around the world, being able to plan for the future will help you keep up with growing demands and changing trends.

Without thoughtful, long-term planning, a business won’t be able to survive in today’s fast-paced global marketplace. Good planning is critical when dealing with organizational change.

It Helps an Organization Meet Its Objectives and Missions

Most companies have a mission statement, sometimes more than one. But what does it mean?

A mission statement is the reason for a company’s existence. It describes what the company wants to achieve and what values guide its behavior. Mission statements usually begin with the words “Our mission is…” or “The mission of [company name] is…”. They’re meant to be inspirational, visionary, and even poetic.

Mission statements are often confused with corporate goals.

A corporate goal describes how you’ll achieve your mission. For example, “Increase our sales by 30% over 2 years” would be a goal of the chief executive officer (CEO) of a chain of toy stores who wants to grow his business.

The CEO might say to his team, “Our mission is to increase sales by 30% over time. To achieve that goal, I want us all to focus on selling more toys.” Although the goal may follow from a discussion of the mission, these are different things, and goals don’t always have to follow directly from an organization’s stated purpose.

The Importance of Strategic Planning

What’s strategic planning?

Strategic planning may sound like a highfalutin term from the business world or something only large corporations need to worry about, but a strategic planning process is actually something every organization can use.

Let’s take online publishing, as an example.

The concept itself is pretty simple: you look at your team and your goals, and then design either a written plan or a visual graphic – the best way to achieve those goals. This way, you can identify what’s working and what could be better in clear steps.

Strategic Planning to Support and Engage Your Audience

The first step in strategic planning is to figure out who your audience is and where they’re going.

Once you’ve done that, you can tailor your content to their interests (and keep them engaged by avoiding the most common social media marketing mistakes). For example, if one of your followers likes Game of Thrones, they might also be interested in posts about medieval weaponry.

Next, think about how you can best communicate with these people.

Do you create short videos? Longer blog posts? Or do you want to set up an email list so people can get information from just one place? If it helps you organize things, take note of how often and when certain posts are optimal – maybe Facebook Live works best in the morning, or maybe Twitter conversations thrive on Tuesday evenings.

Also, think about how much time each strategy will take – some tactics require more energy than others!

Then, once you’ve got everything planned out and all the details ready to go, don’t forget to document it all somewhere. A masterful strategic plan should have some sort of record so everyone knows exactly why things are happening the way they are!

An Effective Business Plan Provides a Roadmap for Success

An effective business plan aims to achieve one or more of the following goals:

  • To help attract investors by showing that your company is stable has lots of potential and will yield a high return on investment
  • To help you secure financing by providing lenders with financial information about your business
  • To guide the management team as they make day-to-day decisions about how to run their business and conduct the organizational activity
  • To help you anticipate challenges so you can better manage them as they arise

Of course, if businesses didn’t need plans, it wouldn’t be a bad thing! Having a plan can take time away from other important tasks, like running your business and making money for yourself.

However, most large companies in the United States have written formal business plans that outline their goals for the future and methods for achieving them.

Therefore, it’s safe to assume that if professional businesses include formal plans in their operations, small businesses can benefit from planning as well-at least enough to provide an outline for success but not necessarily an exhaustive guidebook to managing every aspect of their company on a daily basis or down to the last decimal point in Excel spreadsheet projections.

Why Is Planning Important in Management?

Planning is an essential part of management. It helps the company set goals for the future, sets a course to sail from the present into the future, and helps keep things organized and efficient as time passes.

Most organizations will have at least one project manager dedicated to this job.

Planning also sets the course for communication and decision-making within an organization. Daily planning and effective project management ensure that everyone knows what needs to be done and when it needs to be done, helping the business run more smoothly from day to day.

Finally, project planning helps with accountability- when you’re not just making decisions off the cuff, you’ve concrete records of how those decisions have impacted your business (or personal life) in the past, which can help you make better decisions in the future.

A plan may seem like a dull affair at times, but once you realize that it pays off over time, it becomes one of your most valuable tools for staying in control of your situation.

What Should Be Included in a Business Plan

A business plan is a document that clearly communicates the mission, purpose, and goals of your business. The first and most important section of the business plan is the executive summary. This is what investors will read to decide if they want to invest in your business.

To get where you want to go, there are some important things to consider:

  • First, how does your business or idea fit into the world?
  • What is the business idea?
  • What makes it special and different?
  • Then, who are your customers or clients?
  • What problems do they have that your service or product can provide a solution for?
  • You should also take a look at the competition – who’s doing the same thing?
  • How is your business better than theirs?

Business Plans Help Facilitate Communication, Establish Priorities, and Set Smart Goals

Planning is important, and your business plan should be the foundation for it. This document lays out your company’s organizational goal, priorities, goals, and strategies (both short and long term) so that everyone involved can work toward the same goal. It also ensures that nothing falls through the cracks.

Good communication is at the heart of good planning, and the implementation of a plan:

  • It helps you communicate with others about what your business does and how it does it. Collaboration is an effective way to make smart decisions, improve productivity and quality of work, and increase the success of your business.
  • It sets priorities for your team . You can create a plan based on several possible goals that are most important to you – such as increasing revenue or improving customer service – or based on industry standards or benchmarks, such as industry-specific revenue goals.
  • It helps you plan your human resource management and the effective funneling of innovative ideas.
  • For each goal, you’ll specify exactly what results you want to achieve and by when. You can then use milestones to track progress against those expectations. This gives you insight into where you stand and allows you to re-evaluate if you need to make adjustments.
  • This allows you to be flexible with your goals, leaving room for changes that depend on circumstances such as seasonal demands or economic changes beyond your control. While you’ll keep an eye on key performance indicators to make sure no one strays too far from their goals, having some wiggle room gives you more opportunity to adjust when things go wrong and seize opportunities when something unexpected happens that could bring great new value to your organization (or rather, “your” organization).
  • In short, a plan helps keep everyone working together toward a common goal while leaving room for spontaneous developments along the way.

Proper Planning for All Areas of Your Business Can Help You Achieve Your Goals

Planning is important in every area of your life, but especially in business. When you create a good plan, you think about the future you want to achieve and lay out steps to get there. It’s the roadmap to ensuring you meet important goals.

In planning, you ask yourself questions and think honestly about what’ll help you achieve your goals. When you have a plan, you’re prepared for unexpected difficulties.

Geektonight

Planning in Management: Definitions, Importance, Characteristics, Process

  • Post last modified: 10 August 2023
  • Reading time: 35 mins read
  • Post category: Management

What is Planning?

Planning is the primary function of management that involves formulating a future course of action for accomplishing a specific purpose. Planning enables managers to decide what task to do, how to do the task, when to do the task and by whom the task has to be done.

Table of Content

  • 1 What is Planning?
  • 2 Definitions of Planning
  • 3.1 Forms Goals
  • 3.2 Remains as a Continuous Process
  • 3.3 Gives Direction
  • 3.4 Tackles Uncertainty
  • 3.5 Minimises Duplication and Wasteful Activities
  • 3.6 Supports and Promotes Innovative Ideas
  • 3.7 Facilitates Decision Making
  • 3.8 Sets Standards for Controlling Function
  • 3.9 Facilitates Coordination
  • 4.1 Continuous Process
  • 4.2 Intellectual Process
  • 4.3 Futuristic Approach
  • 4.4 Flexible process
  • 4.5 Primary Function of Management
  • 4.6 Assists Decision Making
  • 4.7 Goal-oriented Approach
  • 4.8 Pervasive
  • 5.1 Setting Organisational Objectives
  • 5.2 Examining Business Environment
  • 5.3 Assessing Available Alternatives and Selecting the Most Appropriate Alternative
  • 5.4 Formulating secondary plans
  • 5.5 Ensuring cooperation and participation
  • 5.6 Following up
  • 6.1 Time-consuming
  • 6.2 Expensive
  • 6.3 Gap Between Targets and Results
  • 6.4 Resistance Towards Change
  • 6.5 Paperwork
  • 6.6 Reason of Frustration
  • 6.7 Problem of Over-target
  • 7.1 Strategic plans
  • 7.2 Tactical plans
  • 7.3 Operational plans
  • 7.4 Contingency plans
  • 8.1 What is Planning?
  • 8.2 What are the Features of Planning?
  • 8.3 What is the Process of Planning?
  • 8.4 What is the Importance of Planning in Management?
  • 9 Management Topics

To be more precise planning lays a foundation for establishing a mission statement, defining organisational goals and determining resources needed to achieve organisational goals. On the other hand, in a narrow sense, planning is the tactic to complete a specific task.

Definitions of Planning

By going through the definitions of planning we will be able to understand its concept therefore some definitions are as follows:

Planning is the continuous process of making present entrepreneurial decisions systematically and with best possible knowledge their futurity, organising systematically the ef- forts needed to carry out these decisions and measuring the results of these decisions against the expectation through organised systematic feedback. Peter Drucker
Planning is deciding in advance what to do, how to do and who is to do it. Planning bridges the gap between where we are, where we want to go. It makes possible things to occur, which would not otherwise occur. Koontz and O’Donnell

Importance of Planning in Management

The importance of planning in management is explained in the following points:

Forms Goals

Remains as a continuous process, gives direction, tackles uncertainty, minimises duplication and wasteful activities, supports and promotes innovative ideas, facilitates decision making, sets standards for controlling function, facilitates coordination.

Planning is a goal-oriented process that helps in determining what each individual in an organisation has to achieve at the end and executing work accordingly. In addition, the planning function enhances the efficiency of other managerial functions.

Planning in any organisation is a never-ending function. This is because every organisation operates in a dynamic business environment which is subject to frequent changes. As new changes become known, revisions and amendments are made to plans.

Planning channelises the efforts of people in an organisation in the best possible manner to attain the desired results. For example, during the planning process, plans are laid for each department of the organisation, which helps people at all levels to know exactly what work they have to perform so that organisational goals can be achieved without any hindrances.

Planning is helpful in making predictions with the available amount of information. This helps organisations/businesses tackle an uncertain future. Planning assists in finding a better way to achieve goals by anticipating a future risk or chances of occurrence of future risks.

As mentioned earlier, planning helps individuals at all levels to know what they exactly need to do. This helps in preventing the duplication of work, authority, responsibility, etc. As a result, wastage of resources and efforts is minimised.

Nowadays, organisations operate in an environment of cut-throat competition. Customers always demand something new or unique. If an organisation fails to fulfil customers’ demands, customers can easily switch to competitors.

Planning enables managers to think out of the box, generate new ideas and provide something unique to customers with less cost and more efficiency, thereby satisfying customers.

Planning as a guide plays an important role in making efficient and accurate decisions. For instance, the production department of an organisation needs to choose between two vendors who supply raw materials at the same cost and of the same quality level.

However, the two vendors differ in delivery time. In this case, the decision of choosing the vendor will be made as per the planned number of days.

Planning and controlling are inter-related functions of management. Planning sets goals for the organisation and controlling ensures their accomplishment within the decided time period. In addition, controlling direct the course of planning by highlighting the areas where planning is required.

The planning function helps management in aligning department-wise activities of the organisation. The plans made by one department are understood and supported by another department.

Overall planning that is done by top management facilitates departments to coordinate and plan accordingly to achieve organisational goals.

Characteristics of Planning

The characteristics of the planning function are explained as follows:

Continuous Process

Intellectual process, futuristic approach, flexible process, primary function of management, assists decision making, goal-oriented approach.

Planning is done for a specific period of time and plans are reformed at the end of that specific period as per the new requirements and changing conditions. Planning goes on, till the existence of an organisation, as issues and problems keep cropping up, and plans are needed to tackle the problems effectively.

Planning requires creative thinking to visualise the future situation and frame plans accordingly. It is the outcome of managers’ thinking process based on their experience and knowledge.

Planning is conducted to achieve future organisational goals while efficiently utilising organisational re- sources. This is done by predicting future situations and making forecasts.

Planning involves a flexible approach. Since the future is uncertain and unpredictable, changes in the business environment take place in the form of competition, government policies, customer demand, etc. Thus, there is always room for flexibility in planning to incorporate future changes.

Planning is done prior to all other functions of management, i.e., organising, staffing, directing, controlling, coordinating, reporting and budgeting. It is the first, foremost and base managerial function of any organisation. The effectiveness of a management’s plan determines the competence of the management’s activity for the planned time period.

Planning comprises decision making because it is an activity of making choices from the available alternatives for performing tasks. Hence, planning comprehends decision making as its indispensable part.

Planning emphasises defining the aims, objectives and goals of the organisation. It also involves the identification of alternative courses of action to decide on a suitable action plan, which should be undertaken for the attainment of goals.

Planning is regarded as pervasive because it is present in all the segments of an organisation. It is required at all levels of management. The scope of planning differs at different levels of management and departments.

Process of Planning

The process of planning involves a number of steps in chronological order which are given below:

Setting Organisational Objectives

Examining business environment, assessing available alternatives and selecting the most appropriate alternative, formulating secondary plans, ensuring cooperation and participation, following up.

The planning process begins with the first step of establishing organisational objectives. It involves identifying organisational goals to be achieved by examining internal and external business conditions. For this, the answers to be given for the following questions:

  • What is to be achieved?
  • What actions are to be taken?
  • Who is to perform it?
  • How is it to be undertaken?
  • What should be the time frame?

The next step in the planning process is to examine internal and external factors that influence the business environment.

The internal factors include strengths and weaknesses (for example, the efficiency of available resources) of the organisation, while external factors involve threats and opportunities (for example, overall economic and industrial environment and competitive position of the organisation).

The next step in the planning process is to evaluate all available alternatives and then select the best alternative. Generally, an alternative is evaluated against risks associated, costs involved, upcoming benefits, etc.

The successful accomplishment of organisational objectives is confirmed by formulating secondary or alternative plans. These plans are derived for various activities, units, departments, etc., and indicate a sequence in which various tasks are to be performed and the time schedule for per- forming those tasks.

In this step, employees at middle and lower levels of management are encouraged to participate in the successful accomplishment of organisational goals. Suggestions were given by operating personnel to help the management rectify shortcomings in plans and set things right at the start of the planning process and at the time of its implementation.

The last step in the planning process is to provide the scope of follow-up for determining the value of plans made and implemented. This step involves a continuous review of plans for ensuring their relevance and effectiveness.

Reviewing plans on a continuous basis helps the organisation develop sound plans for the future and avoid mistakes that took place while implementing the previous plans.

Limitations of Planning

In spite of several advantages, the planning function also has certain limitations. We have here listed the key limitations of planning :

Time-consuming

Gap between targets and results, resistance towards change, reason of frustration, problem of over-target.

Planning turns out to be a time-consuming activity as it requires data collection, data analysis, forecasting, etc., for selecting the best future course of action.

Planning requires expertise and the collection of authentic data, which incurs a lot of costs for the organisation. For instance, companies like IBM need to do a lot of planning prior to starting any new venture. For this, such companies also spend a lot on research and pay highly to experts to get their advice.

Planning is done by top-level management and implemented by middle and lower-level management. This creates a gap between the plan set and actual results achieved as different employees may have different perceptions of accomplishing plans.

Planning often requires changes due to the dynamic business environment. However, as a natural human tendency, employees are always reluctant to accept changes and may not provide their full cooperation.

Planning involves paperwork as plans cannot be finalised in one go. The plans are reworked again and again and after getting a final plan, subordinates give the copies of the plan to the top-level management in the form of a report or a proposal to get the plans finalised for implementation.

Sometimes, planned targets are not achieved by managers and employees irrespective of their best efforts. Such failures frustrate them and cause a low level of motivation in them.

Planning sometimes makes the top-level management fix targets that are unachievable and causes problems of over-expectation from employees.

Types of Plans

Plans bind individuals, resources, departments and organisations to achieve specific goals in the future. Plans help design organisational goals effectively which fits into the hierarchy from top to lower level of management. In an organisation, there are different types of plans made.

Some important types of plans are explained as follows:

Strategic plans

Tactical plans, operational plans, contingency plans.

Strategic plans are a framework for an organisation. These plans contain the mission of an organisation and outline goals to be achieved. Strategic plans aim to turn the vision of an organisation into reality. Thus, strategic plans are long-term and forward-looking in nature and accommodate future growth and expansion of an organisation. These plans are generally developed by top management and are implemented by middle and lower management.

For instance, Varun works as a top-level manager for Dino’s PizzaSizz. As a top-level manager, he has to make use of strategic planning to ensure that the long-term goals of the organisation are attained. Varun in consultation with other top-level managers developed strategic plans for achieving growth, increasing productivity and profitability and boosting return on investments, as all these are parts of the desired future of the pizzeria.

Varun and other top-level managers developed organisational objectives through strategic plans so that middle- and lower-level managers can create compatible plans aligned with those objectives. Varun also involved other level personnels because strategic plans require multilevel involvement.

Tactical plans are developed by middle-level management for a span of generally less than three years. These plans contain instructions for lower-level management on what should be done, how should be done and by whom should be done. In addition, tactical plans define tactics which managers adopt for achieving objectives mentioned in the strategic plan. Tactical plans also provide information on resources to be employed and work distribution among the sublevels within each department.

For instance, when Mira, the middle-level manager at Dino’s PizzaSizz, learns about Varun’s strategic plan for improving productivity, Mira im- mediately began to think about possible tactical plans. Tactical planning for Mira included things like testing a new process in making pizzas in a shorter amount of time or perhaps looking into purchasing a better oven that can speed up cooking pizza or even exploring ways to better map out the delivery routes and drivers.

As a tactical planner, Mira required to form a set of calculated actions that takes a shorter amount of time and is narrower in scope than the strategic plan but still help to bring the organisation closer to its long-term goal.

An operational plan is developed by the supervisors, team leaders and facilitators for supporting tactical plans. It governs the day-to-day operations of an organisation/business. Operational plans can be of two types, namely single use plans (for example, budget) and ongoing plans.

For instance, Ravi, the frontline manager at Dino’s PizzaSizz, has the responsibility of operational planning. Scheduling employees each week, creating a monthly budget, developing a promotional advertisement for the quarter to increase the sales of a certain product or outlining an employee’s performance goals for the year and doing an assessment, ordering and stocking inventory are the operation plans Ravi need to make and get executed.

A continuing or ongoing plan is the one which is made once and its value is retained over a period of years. The plan undergoes periodic revisions and updates. Following are examples of on-going plans:

  • Policy : A policy is a broad guideline followed by managers to deal with the important aspects and areas of decision making. Policies are referred to as those general statements which explain how managers should handle their routine management responsibilities. For example, a typical human resources policy of an organisation addresses the matters related to the hiring of employees, terminations of non-performing employees, performance appraisals as an important culture, pay increases and discipline of employees.
  • Procedure : A procedure is a standard set of directions that provides stepwise instructions of carrying out activities or tasks for achieving and attaining the organisational objectives. For example, typically, organisations have procedures/processes to purchase supplies and equipment. The procedure of purchasing supplies and equipment generally starts with a supervisor who completes the purchase requisition. After that, the requisition is then sent for approval to the next level of management. As the requisition gets approved, it is forwarded to the purchasing department. The amount of the purchase requisition is considered by the purchasing department either to place an order or to secure quotations bids from several vendors before placing the order.
  • Rule : A rule is a statement that explicitly guides employees for what they can and cannot do. Rules promote the safety of employees by placing the ‘do’ and ‘don’t’ statements. It also directs for the uniform treatment and the behaviour of employees in an organisation/business. For example, the rules of absenteeism and unpunctuality allow supervisors to make discipline related to fair decisions quickly.

A successful organisation depends upon the fact that how intelligently, flexibly and constantly its management chases, adapts and masters the changing conditions. A strong management entails to ‘keep all options open’ approach at all times. This is where contingency planning comes into the organisation.

In contingency planning, an alternate plan is identified, analysed and implemented so that in case the original plan proves insufficient, the backup is ready to be used. The factors which are beyond managers’ control are kept in mind and the alternative future scenarios are prepared carefully.

When unanticipated problems and events occur, managers may need to change their plans. It is best to anticipate the changes during the planning process as things don’t always go as expected. Management should develop alternatives to the existing plan and keep them ready for use when unexpected circumstances occur.

Planning is the primary function of management that involves formulating a future course of action for accomplishing a specific purpose.

What are the Features of Planning?

The Features of the planning function are as follows: 1. Planning is a Continuous Process 2. Planning is Intellectual Process 3. Planning is a Futuristic Approach 4. Planning is a Flexible process 5. Planning is the Primary Function of Management 6. Planning Assists in Decision Making 7. Planning is Goal-oriented Approach 8. Planning is Pervasive

What is the Process of Planning?

The process of planning involves a number of steps in chronological order which are given below: 1. Setting Organisational Objectives 2. Examining the Business Environment 3. Assessing Available Alternatives and Selecting the Most Appropriate Alternative 4. Formulating secondary plans 5. Ensuring cooperation and participation 6. Following up

What is the Importance of Planning in Management?

The importance of planning in management is explained in the following points: 1. Planning Forms Goals in Management 2. Planning Gives Directions in Management towards Achieving Organisational Goals 3. Planning Tackles Uncertainties of future 4. Planning assists in finding a better way to achieve goals 5. Planning Minimises Duplication and Wasteful Activities 6. Planning Supports and Promotes Innovative Ideas in Management 7. Planning Facilitates Decision Making 8. Planning Sets Standards for Controlling Function 9. Planning helps management to Build Coordination

Management Topics

  • What is Management ?
  • Who Is a Manager ?
  • Marketing CIs Management an Art or Science
  • Classical Management Approach
  • Planning in Management
  • Decision Making in Management
  • Organising in Management
  • What is Organisation Structure ?
  • What is Departmentation ?
  • What is Span of Control ?
  • What is Authority ?
  • What is Staffing ?
  • What is Human Resource Planning ?
  • What is Job Analysis ?
  • What is Recruitment ?
  • Modern and Others Schools of Management Thought
  • What is Selection ?
  • What is Coordination ?
  • What is Controlling ?
  • What is Leadership ?
  • What is Organisational Change ?
  • Motivation in Management
  • Motivation Theories
  • Maslow’s Hierarchy of Needs
  • Herzberg Two Factor Theory
  • Mcclelland’s Needs Theory of Motivation

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What Is Planning And Its Importance?

Do you ever think about high-performing CEOs and wonder where they get the time to do it all? Do you…

What Is Planning And Its Importance?

Do you ever think about high-performing CEOs and wonder where they get the time to do it all? Do you marvel at high-profile actors who juggle multiple projects with ease? Have you ever wanted to do more in the same 24 hours?

The secret to productivity is simple: planning. Read on to understand what is planning, its importance and its significance in management.

The Meaning And Significance Of Planning

Planning is a  basic component of project managemen t. It is the process of creating a roadmap to decide which actions need to be taken to achieve a specific goal. Planning is fact-based and it increases our chances of success.

To create a successful plan, one must apply logical reasoning to factually analyze the steps that need to be taken. One must also account for any unforeseen situations. One’s ability to make good plans increases with practice. Those who are in the habit of making plans are aware of previously experienced circumstances that are likely to be encountered during the execution of the plan.

Let’s take a detailed look at five key points that explain the importance of planning:

Importance Of Planning In Management

The importance of planning in management can hardly be overstated. It is a critical function of project management. The success of any business endeavor greatly depends on the effectiveness of the plan.

Let’s look at five major points on the importance of planning in management:

Resource Optimization:

Whether a company is an enterprise worth several billions of dollars or a bootstrapped start-up, it will always have finite resources. A business can’t spend beyond certain limits. Even corporate giants tend to utilize their resources carefully.

Hence, the management at most organizations emphasizes the importance of planning.

Ask yourself the following questions to understand how you can utilize resources better:

What are the resources that need to be allocated to different departments to enable them to achieve their target?

How can you maximize productivity and avoid wastage of resources?

All such questions are answered by planning.

Goal Setting:

Setting SMART goals is critical to an organization’s success. The goals should push everyone out of their comfort zones and inspire them to work hard. However, they should not be impossible to reach or else they will lead to failure.

Organizations grow by setting higher targets and planning how they will meet them. A well-made plan can enable a team to improve its productivity tremendously.

Risk Management:

One of the most important functions of planning is that it helps in managing risk. The ability to predict, prevent, or manage risks and contingencies is an essential need of any business.  For instance, the government could bring regulatory changes during the current pandemic to mitigate damage. Or the financial markets could be unpredictable as a result of disruptions due to the pandemic.

Planning empowers businesses to overcome such unforeseen challenges.  While you can’t predict when the next such disruption will happen, you can plan how the business will run in each eventuality and which processes, technology,  or investments will be needed in such scenarios.

Fostering Corporate Culture And Team Spirit:

Organizations that understand the importance of planning take steps to improve their human resource management and work culture as well.

An organization’s work culture is a key factor in determining employee performance. By planning work efficiently and thoughtfully managers can create well-knit and self-sufficient teams that have the necessary resources and knowledge to carry out their responsibilities. Such workforce planning leads to the success of the team and the organization as a whole.

Gaining An Edge Over Competitors:

Strategic planning helps companies identify their core competencies as well as the areas they need to do better to hold on to their market position. Research-based planning can be used by organizations to spot competitor weaknesses and turn them into opportunities for growth.

The importance of planning in management is evident from these various functions that are instrumental in driving an organization’s growth and success. 

Successful Implementation Strategies

What is planning without successful implementation? If you want to manage the performance of your organization, you need to be able to execute your strategy as well. There is a lot of work that goes into it, such as: 

  • Having an implementation schedule that considers both short-term as well as long-term goals. Having a plan also means that you are prepared for what’s to come. Sometimes, it even helps you make adjustments if and when the action items need changes. You can roll out your plan successfully by creating a calendar. 
  • After you’ve devised a schedule, your priority should be to track your goals and action items. Weekly or monthly strategy meetings are necessary for bringing everyone on the same page and making sure that they are headed in the right direction. Having a checklist helps in such situations. 
  • While tracking is essential for your plan, it’s equally important to keep revisiting and making necessary revisions and changes. Getting feedback from your team is instrumental in ensuring that every need is met and the plan has been reviewed from multiple perspectives. For example, long-term plans often meet unanticipated changes (can be internal or external). By being flexible and willing to adapt you can make adjustments on the go and keep pace with changing trends.

The significance of planning can be gauged by the fact that it is considered the nucleus of management activities. You can now learn about the importance of planning in Harappa’s Leading Self course. This personal leadership course helps you learn how to plan and execute your work optimally.

The tools and concepts in the course will help you face challenges and plan your professional growth. The course teaches you the balcony and dance floor framework which helps increase awareness and understand the significance of planning. Enroll in the course today to improve your overall performance and empower yourself to become a great manager!

Explore topics such as  Career Development ,  Career Planning , the  Iceberg Model ,  Career Pathing ,  Taking Ownership at Work  from our Harappa Diaries section and lead on a path of self-development.

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Importance of Planning: Process, Objectives

  • Post author: Disha Singh
  • Post published: 15 December 2022
  • Post category: Management
  • Post comments: 0 Comments

Table of Contents

  • 1 What is the Meaning of Planning?
  • 2.1 Increase Efficiency
  • 2.2 Reduces Business Related Risks
  • 2.3 Provides Direction
  • 2.4 Encourages Creativity and Innovation
  • 2.5 Helps in Motivation
  • 2.6 Helps in Decision Making
  • 2.7 Helps to Achieve Objectives
  • 2.8 Provides Basis of Control
  • 3.1 Establishing Verifiable Goals
  • 3.2 Establishing Planning Premises
  • 3.3 Deciding Planning Period
  • 3.4 Finding Alternative Course of Action
  • 3.5 Evaluating and Selecting a Course of Action
  • 3.6 Implementing Plan
  • 3.7 Measuring and Controlling the Programme
  • 4.1 Objectives
  • 4.2 Strategies
  • 4.3 Policies
  • 4.4 Procedure
  • 4.5 Programmes
  • 4.7 Budgets
  • 5.1 What is the importance of planning?
  • 5.2 What are the steps in planning process?
  • 5.3 What are the objectives of organisation?

What is the Meaning of Planning?

Planning is deciding in advance what is to be done. When a manager plans, he projects a course of action for the future, attempting to achieve a consistent, coordinated structure of operation aimed at the desired result. Below this, we will be learning about the importance of planning .

Importance of Planning

Importance of Planning

Planning increases the efficiency of an organisation. All business organisations would like to be successful, have goodwill in the market, and have higher profits. For attaining these attributes the thinking process has to be very effective.

These are the various importance of planning explained below:

Increase Efficiency

Reduces business related risks, provides direction, encourages creativity and innovation, helps in motivation, helps in decision making, helps to achieve objectives, provides basis of control.

Importance of Planning

Planning makes optimum utilization of all available resources. It helps to reduce wastage and avoids duplication of work.

Planning helps to forecast business-related risks and also helps to take necessary precautions to avoid these risks and prepare for future uncertainties.

Direction means to give proper information, accurate instructions and guidance to the subordinates. Planning tells us what to do, how to do and when to do it. It helps the organization to achieve its goals through systematic coordination of the employees.

Planning helps managers to express their creativity and innovation. It brings satisfaction to the managers and eventually succeeded in the organization.

A good plan provides various financial and non-financial incentives to both managers and employees. These incentives motivate them to work hard and achieve the objectives of the organization.

A manager makes many different plans. Then they evaluate every course of action and choose the best strategy. So decision-making is facilitated by planning.

Without Planning each and every activity will be based on trial and error which will give rise to confusion. Every organization has certain targets. Planning helps an organization achieve its aims by avoiding overlapping, confusion and misunderstanding.

Planning is the first function of management. The other functions like organizing , staffing, directing and controlling etc. are organized for implementing plans. Controlling records the actual performance and compares it with the standards set.

In case the performance is less than the standards set then deviations are ascertained and proper corrective measures are taken to improve the performance in future.

Planning and controlling both are dependent on each other. Planning establishes standards for controlling. Therefore, Planning is necessary for the effective and efficient functioning of every organization irrespective of its size, type and objectives.

Steps in Planning Process

These are the steps in planning process each step is explained well and in easy language which help to understand:

Establishing Verifiable Goals

Establishing planning premises, deciding planning period, finding alternative course of action, evaluating and selecting a course of action, implementing plan, measuring and controlling the programme.

Steps in Planning Process

The first step in planning is to determine the enterprise’s objectives. These are more often set by upper-level managers. The objective may vary from a desired sales volume or growth rate to the development of a new product .

Plans are made to operate in the future. The second step in planning is to establish planning premises i.e. assumption on the basis of which plans will be ultimately formulated.

Planning premises are vital to the success of planning as they supply important facts and information related to the future like population trends, economic conditions, production costs, government control etc.

The next task is to decide the period of the plan whether it’s a yearly plan or a plan which is spread over a longer span of time. The choice of planning period is decided based on the time required in the development of the new product, the time required to recover capital investment and the length of commitments already made.

The next in planning is to search for and examine an alternative course of action. For Ex-Products may be sold directly to the consumers by the company’s salesman or through exclusive agencies.

Having searched for alternative courses, the next step is to evaluate and analyze them in the light of premises and goals and select the best alternative. This is done with the help of quantitative techniques and operations research.

The best possible course of action has now to be implemented in other words, putting the plan into action. For this, the managers have to develop derivative plans for each department. A draft version of the action plan should be communicated to inform those directly affected and gain their cooperation.

The process of control is a critical part of any plan. Managers need to check the progress of their plans i.e. follow up so that they can take remedial action if the plan is not working as per schedule or change the original plan if it is unrealistic.

Objectives of Organisation

These are the related terms of the objectives of organisation :

Objectives of Organisation

Objectives may be defined as the goals which an organization tries to achieve. Objectives are the ends towards which the activities of the enterprise are aimed. Objectives provide direction to various activities and serve as a benchmark for measuring the efficiency and effectiveness of the organization.

A strategy is a special kind of plan formulated to meet the challenge of the policies of the competitors. Strategy can be shaped by the general forces operating in an industry and the economy. The strategy must be consistent with the external environment.

Policies may be described as plans which are meant to serve as broad guidelines for decision-making in a firm. Policies exist at various levels of the enterprise. A policy should be definite, positive and clear.

A policy is a standing plan which assists decision-making and should be referred to as a general statement of the established rule.

For example, A firm has a policy of promotion from within the organization. If a vacancy arises; the first preference is given to existing employees.

Procedure lays down the manner or method by which work is to be performed in a standard and uniform way. A procedure is a standing plan acting as a means of implementing a policy.

For Example, The sales department lays down a policy to execute all orders within 48 hours. So a procedure has to be followed in a chronological and systematic order to fulfil the orders.

Programmes are precise plans which need to be made to discharge a non –repetitive task. The essential ingredients of every programme are time phasing and budgeting . Specific dates should be laid down for the completion of each successive stage of a programme.

For Example, An enterprise has a programme of opening 5 branches in different parts of a country so they have to allocate funds and time period for:

  • Securing the necessary accommodation.
  • Recruiting personnel to manage the business.
  • Arrange the supply of goods that are to be sold through the branches Often a single step in a programme is set up as a project .

Rules are explicit statement that tells the members of the organization what they can or cannot do. Rules do not allow any room for interpretation because it clearly specifies the action needed to be done in a particular situation. Rules enforce discipline.

For example, The use of Mobile Phones at the workplace during office hours is restricted.

Budgets are plans for future periods of time containing statements of expected results in numerical terms. Budgets are very useful for an enterprise.

Being expressed in numerical terms, they facilitate the comparison of actual results with planned ones and serve as a control device. The important budgets are sales budget, production budget, cash budget, Revenue, and Expense Budget.

FAQ Related to the Importance of Planning

What is the importance of planning.

Following are the importance of planning given below: 1. Increase Efficiency 2. Reduces Business-Related Risks 3. Provides Direction 4. Encourages Creativity and Innovation 5. Helps in Motivation 6. Helps in Decision Making 7. Helps to Achieve Objectives 8. Provides Basis of Control

What are the steps in planning process?

The following are the steps in planning process: 1. Establishing Verifiable Goals 2. Establishing Planning Premises 3. Deciding Planning Period 4. Finding an Alternative Course of Action 5. Evaluating and Selecting a Course of Action 6. Implementing Plan 7. Measuring and Controlling the Programme.

What are the objectives of organisation?

The following are the objectives of organisation: 4.1 Objectives 4.2 Strategies 4.3 Policies 4.4 Procedure 4.5 Programmes 4.6 Rules 4.7 Budgets .

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  • Introduction, Meaning, Importance, Features and Limitations of Planning

Just like management is a never-ending activity, so is planning. In fact business planning, it is one of the primary functions of management . It sets up the stage for all further functions of management like organizing, directing etc. Let us understand the concept of planning.

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We already know what planning is, it is the deciding of what is to be done in advance. It is the groundwork for all future plans of the organization . Planning bridges the gap between where the organization currently find itself and where it wishes to be.

So in essence business planning comprises of setting objectives for the organization and developing a plan of action to achieve these objectives. Once the objectives are set, the managers and workers can have a clear vision of what to work towards.

Managers are a very important part of the function of business planning. Planning requires innovation, creativity and multi-tasking from the managers. And planning is a function that managers of all levels must perform, i.e upper, middle and lower management .

Browse more Topics under Planning

  • Planning Process
  • Types of Plan

Importance of Business Planning

Planning is an important function of management, it tells the manager where the organization should be headed. It also helps the organization reduce uncertainty. Let us take a look at some important functions of planning.

1] Planning provides a sense of Direction

Planning means coming up with a predetermined action plan for the organization. It actually states in advance what and how the work is to be done. This helps provide the workers and the managers with a sense of direction , a guidance in a way. Without planning their actions would be uncoordinated and unorganized.

2] Planning reduces Uncertainty

Planning not only sets objectives but also anticipates any future changes in the industry or the organization. So it allows the managers to prepare for these changes, and allow them to deal with the uncertainties. Planning takes into consideration past events and trends and prepares the managers to deal with any uncertain events.

3] Planning reduces Wastefulness

The detailed plans made keep in mind the needs of all the departments. This ensures that all the departments are on the same page about the plan and that all their activities are coordinated. There is clarity in thought which leads to clarity in action. All work is carried out without interruptions or waste of time or resources ,

4] Planning invokes Innovation

Planning actually involves a lot of innovation on the part of the managers . Being the first function of management it is a very difficult activity. It encourages the manager to broaden their horizons and forces them to think differently. So the managers have to be creative, perceptive and innovative.

5] Makes Decision=Making Easier

In business planning the goals of the organization have been set, an action plan developed and even predictions have been made for future events. This makes it easier for all managers across all levels to make decisions with some ease. The decision-making process also becomes faster.

6] Establishes Standards

Once the business planning is done, the managers now have set goals and standards. This provides the manager’s standards against which they can measure actual performances. This will help the organization measure if the goals have been met or not. So planning is a prerequisite to controlling.

Limitations of Planning

While business planning is important and a requisite for every organization, it does have some limitations. Let us take a look at some limitations of business planning.

1] Rigidity

Once the planning function is complete and the action plan is set, then the manager tends to only follow the plan. The manager may not be in a position to change the plan according to circumstances. Or the manager may be unwilling to change the plan. This sort of rigidity is not ideal for an organization.

2] Not ideal in Dynamic Conditions

In an economic environment rarely anything is stagnant or static. Economic, political, environmental, legal conditions keep changing. In such a dynamic environment it becomes challenging to predict future changes. And if a manager cannot forecast accurately, the plan may fail.

3] Planning can also reduce creativity

While making a plan takes creativity after that managers blindly follow the plan. They do not change the plan according to the dynamic nature of the business. Sometimes they do not even make the appropriate suggestions to upper management. The work becomes routine.

4] Planning is Expensive

Planning is a cost-consuming process. Since it is an intellectual and creative process, specialized professionals must be hired for the job. Also, it involves a lot of research and facts collection and number crunching. At certain times the cost of the planning process can outweigh its benefits.

5] Not Completely Accurate

When planning we have to forecast the future and predict certain upcoming events in the organization and the industry. So, of course, there cannot be hundred per cent certainty in such cases. So it can be said that business planning lacks accuracy

Solved Question for You

Q: Which of the following can be referred to planning?

  • Departmentation
  • Government policy
  • Forecasting
  • All of the above

Ans: The correct option is C. Planning is forecasting as it is deciding what to do in advance. Planning is futuristic as it never relates to the past. So planning bridges the gap between where the company is and where it wishes to go.

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One response to “Introduction, Meaning, Importance, Features and Limitations of Planning”

You made a good point that I should be wary of dynamic situations when dealing with business planning. Nevertheless, I still think that having a good business plan is essential for the game development company that I’m planning to start in the future. Perhaps hiring a business planning consultant would be a good way to have a good footing from the very beginning of the venture.

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Why Is Planning Important? (25 Reasons)

There’s a familiar wisdom: “Failing to plan is planning to fail.” I’ve always held this thought close because it captures the essence of why planning matters.

It’s the feeling of crossing off that last item on your to-do list that rewards a well-made plan. It’s about facing the busyness of life with intention, not just action.

Planning goes beyond simple lists; it’s about setting realistic goals for what we can accomplish. It helps all of us, regardless of how swamped we feel.

Keep reading, and find out why planning isn’t just a task — it’s an essential life skill.

Table of Contents

Planning Sets Clear Goals and Objectives

Planning aids in making informed decisions, planning identifies potential obstacles and trials, planning outlines steps to achieve these goals, planning ensures adaptability and flexibility, planning enables the setting of priorities, planning promotes financial stability and control, planning minimizes risks and uncertainties, planning improves time management, planning allows for better resource allocation, planning helps in tracking progress and performance, planning fosters a proactive approach to tasks, planning encourages long-term vision and foresight, planning boosts confidence and peace of mind, planning facilitates efficient workflow coordination, planning optimizes productivity, planning enhances team communication and collaboration, planning minimizes crisis management needs, planning allows for better quality control, planning spurs personal and professional growth, planning establishes a sense of direction and purpose, planning enhances strategic thinking, planning maximizes available opportunities, planning enables consistency in actions and results, planning cultivates discipline and responsibility, what are some common misconceptions about planning, what is the difference between planning and goal setting, does planning take away spontaneity, what should i do if my plan isn’t working, final thoughts.

Clear goals and objectives give direction to our efforts. When we plan, we establish what we want to achieve and how we’ll get there, creating a roadmap for success. This guides our daily actions and ensures all tasks contribute to an overarching purpose.

Having precise goals and objectives deters us from distractions and keeps our energy channeled toward productive activities. This prevents wasting effort on unrelated tasks and maintains everyone’s focus on what’s important.

Goals and objectives are the motivators that keep us focused and striving forward. They rally a team around a common cause and can create a shared sense of accomplishment.

With everyone working towards the same aims, the collective effort can achieve greater results and foster unity within the group.

Informed decisions are the product of careful planning and groundwork. When we plan, we collect data, explore various scenarios, and decide how to utilize resources best.

This preparation enables us to choose actions that advance our goals in the most effective way.

Here’s why preparation is crucial for informed decision-making:

  • It gives us insight into our current situation through thorough data analysis.
  • We can predict and evaluate risks, preparing us for different eventualities.
  • By understanding our resources, we can allocate them where they’ll make the most impact.

Armed with comprehensive information, our choices are more strategic and less about guesswork. When the unexpected happens, a solid plan provides us with a framework to adapt our decisions swiftly while keeping our goals in sight.

Planning thus equips us with the framework for consistently making good choices and staying agile.

Every journey toward a goal can encounter roadblocks. Planning helps us foresee these potential obstacles, allowing us to strategize ways to either avoid or overcome them.

Recognizing such hurdles in advance prevents them from derailing our plans and allows us to progress smoothly toward our objectives.

Identifying challenges ahead of time is advantageous:

  • It prompts the creation of contingency plans.
  • We can minimize the impact of challenges on our progress.
  • We are better equipped to stay the course even in the face of adversity.

Awareness of potential obstacles optimizes our use of time and resources — key factors in maintaining a steady pace toward our goal.

Moreover, this aspect of planning strengthens our problem-solving skills. It makes us question assumptions, plan for contingencies, and increase our overall strategic acumen.

Planning creates a step-by-step guide towards your goals. It’s like following a recipe; you have all the necessary steps laid out for you.

Each step is a clear action that moves you closer to your goal. This way, you can avoid feeling overwhelmed and focus on one task at a time. Completing each step also builds momentum, giving you small wins and boosting your motivation as you progress.

Having a plan with outlined steps provides structure to your efforts. It prevents confusion about what needs to be done next and keeps you aligned with your final goal.

This structure is essential for making consistent progress and actually achieving what you set out to do.

When you plan, you’re not just deciding what to do; you’re also preparing to adjust when needed.

Changes can come from anywhere — new trends, unexpected events, or new information. Planning ensures you can adapt to these changes without straying from your main goals.

  • New information : When you learn something new that could impact your goals, you can adjust your plan to include it.
  • Unexpected events : If something happens that you didn’t see coming, you’ve got a framework to figure out the next steps.
  • Changing trends : Trends can shift quickly; with a plan, your goals can evolve as needed.

Flexibility in planning is all about staying relevant and effective. This adaptability is essential for long-term success in a world that’s constantly changing.

Having a plan helps you figure out what needs your attention the most. When multiple tasks are competing for your time and resources, it’s important to know which ones are crucial for your goals.

Planning helps you see the big picture and identify which pieces of the puzzle are key:

  • You know what is urgent and needs to be done right away.
  • You understand what is important and can contribute significantly to your goals.
  • You find out what tasks can wait or be delegated to others.

This way, you can focus your time and effort on where they will have the most impact.

Prioritizing stops you from spreading yourself too thin and ensures that important tasks are not overlooked. It helps you stay productive and effective, making the best use of your time and resources.

When you have a plan, you’re better able to handle your money and keep your finances steady. Planning means you keep track of how much money you have, how much you’re spending, and how much you need for the future.

It’s like planning a trip; you make sure you have enough fuel in the tank to get to your destination without running out.

By planning, you budget for expenses , save for emergencies , and invest for growth . This way, you’re not caught by surprise with bills you can’t pay. It’s about control — making sure you’re in charge of your money instead of money worries controlling you.

Financial stability comes from this kind of careful planning. Whether for your own life or a business, being stable with your money means less stress and more space to focus on reaching your goals. Stability and control go hand in hand, and planning is the key to both.

Life is full of things we can’t predict, but planning helps you deal with them better. By thinking ahead, you can figure out what might go wrong and have a plan to handle it. This doesn’t mean you can avoid all risks, but it does mean you’re ready for them.

  • Spotting trouble : When you plan, you look for things that could cause problems.
  • Getting ready : You make plans for how you will deal with these troubles if they happen.
  • Staying calm : Knowing you have a plan in place helps you stay calm when faced with risks.

Reducing risks and being less uncertain makes it easier to move forward toward your goals. It’s about being smart before problems happen instead of just reacting to them after they occur.

Good planning is like a recipe for managing your time well. It helps you see how much time you have, what you need to do, and when you should do it. With a plan, you’re less likely to waste time because you know exactly what your tasks are for the day.

Planning ahead means you set aside time for the important things and cut out what’s unnecessary. This allows you to focus on what’s really needed and get things done more effectively.

With a plan, you can balance work, rest, and fun, making sure no part of your life takes over completely.

When you manage your time through planning, your days feel less rushed and more productive. You’re able to work smarter , not harder, because you’ve laid out a clear timeline for your tasks.

Having a plan means you understand where to best use your resources, which include time, people, and money. It ensures you are not wasting any of these valuable resources on things that do not help you reach your goals. Think of it like packing for a trip; you need to decide what’s essential to take with you to have a successful journey.

When you plan, you:

  • Assign resources where they’re needed most.
  • Avoid spending on things that aren’t important.
  • Make sure you have enough resources to finish what you start.

By doing this, you make the most out of what you have. You put every part of your resources to good use, which means less waste and more efficiency. Better resource allocation helps you reach your goals faster and more smoothly.

Keeping track of how well you’re doing is a big part of reaching your goals. Planning lets you set up ways to measure this progress. It’s like having milestones on a road trip — each one you pass shows you’re getting closer to where you want to go.

Through planning, you:

  • Set benchmarks that show you how far you’ve come.
  • Can see if you need to work faster or slower.
  • Get to celebrate small successes on the way to your big goal.

These measures help you understand if you’re on the right track or if you need to change how you’re working. It’s an important part of making sure you’re moving towards your end goal and lets you feel a sense of achievement as you see the progress you’re making.

Planning makes you proactive, which means you take charge of what needs to be done instead of just reacting to things as they happen. It’s about being ready and taking the initiative.

When you’re proactive, you’re not waiting for problems to appear — you’re already working to prevent them or get a head start on solving them.

With a proactive approach, you are:

  • Staying ahead of problems.
  • Preparing for opportunities.
  • Always thinking about the next step.

This method of dealing with tasks makes you more efficient and less stressed because you’re not constantly putting out fires. Instead, you’re setting things up so that problems are less likely to happen.

Being proactive gives you a sense of control over your work and your life, making you more confident in your ability to handle whatever comes your way.

Putting together a plan encourages you to look ahead and think about the future. This isn’t just about guessing what might happen; it’s about preparing yourself to meet and even shape the future you want.

Having a long-term vision means you have a clear idea of where you want to be down the road, and foresight is about understanding the steps you need to get there.

With foresight, you create a roadmap for the coming years, not just for the immediate time. It helps you to:

  • Stay focused on the bigger picture, even when smaller, day-to-day tasks compete for your attention.
  • Anticipate changes and possible trends in your field, so you’re never caught off guard.
  • Align your short-term efforts with your long-term goals to make sure everything you do contributes to where you want to end up.

Long-term vision and foresight mean that you are working today with tomorrow in mind. It keeps you moving in the right direction, making sure that each step takes you closer to your ultimate goals.

Knowing that you have a plan in place can really help with your confidence. It’s like having a map when you’re in unfamiliar territory — you feel more secure and ready to face what’s ahead.

When you plan, you know that you have thought things through and are prepared for different possibilities.

Peace of mind comes with this confidence. You’re less anxious about the unknown because you’ve laid out a path to follow. This makes it easier to focus on the here and now, knowing you’re set for the future.

Workflow coordination is all about making the work process smooth and efficient. Planning plays a key role in this because it helps organize tasks and ensures everyone knows what they’re supposed to do.

If your team is like a machine, then planning is like the oil that keeps all the parts moving without friction.

Planning helps to ensure that:

  • Every task is assigned to the right person.
  • Work is done in the right order to avoid backtracking or delays.
  • Everyone knows what to do and when so they can prepare and act quickly.

Good workflow coordination means the work gets done faster and with fewer mistakes. It saves time and helps everyone stay on track. When people work well together, more can be done, and the whole team or project moves forward more effectively.

Planning can help you do more in less time. It’s like having a clear map when you’re on a road trip — you know the best route to take and avoid getting lost. With a detailed plan, you spend less time figuring out what to do next and more time actually doing it.

Good planning means you’re:

  • Clear on what tasks are most important.
  • Ready to start working right away.
  • Not wasting time on things that don’t help you reach your goal.

By focusing on the right tasks, your work is more effective. You get more done because you’re not sidetracked by unimportant tasks. Planning sets you up for a productive day, every day.

When you plan with a team, everyone knows what’s going on. It’s like having everyone in sync, each person playing their part at the right time. Planning helps people work together better because they know what’s expected and when.

Here’s how it helps teams communicate and work together:

  • Clear roles : Everyone knows what their job is.
  • Shared goals : The team is united and moving in the same direction.
  • Updates and feedback : It’s easier to share progress and talk about what’s next.

When teams have good communication and work well together, they can achieve much more. Problems get solved faster, and everyone feels part of the success. This is how great teamwork happens, and it all starts with a solid plan.

Dealing with emergencies can be stressful. However, if you plan ahead, you’re less likely to face a crisis.

Planning lets you see problems before they become big issues. It’s like putting a safety net under a tightrope walker — if something goes wrong, you’re prepared to catch the fall.

Good planning means:

  • You’re not always “putting out fires”.
  • You can stay calm because you have a plan for when things get tough.
  • You can focus on moving forward instead of always fixing things.

By reducing the need for last-minute solutions, planning saves you stress and trouble. Instead of reacting to problems, you’re ahead of them. This helps keep everything running smoothly, and when surprises do happen, you’re ready to handle them.

Quality control is making sure that everything you do meets a certain standard. Planning helps with this because it sets out what those standards are and how to reach them. It’s like a chef tasting a dish at different stages to make sure it’s turning out right.

With a plan in place, you can check your work as you go. You can fix small mistakes before they turn into big problems. This way, the final result — whether it’s a product, a service, or any project — is the best it can be.

Good planning sets up checkpoints where you can review what’s been done. This helps you stay on track and maintain the quality of your work.

Better quality control leads to better outcomes and happier people, whether they’re customers or those using what you’ve created.

Growing as a person or in your career doesn’t just happen — it comes with trying new things and learning from experiences.

Planning gives you a structure to follow as you aim to get better in different areas. It’s like having a workout routine; by following it, you get stronger and fitter over time.

Here’s how planning helps you grow:

  • Setting goals : You know what you want to improve on.
  • Learning new skills : You make time for training and practice.
  • Reflecting on progress : You look back at what you’ve done and see how far you’ve come.

By making plans for growth, you push yourself to keep learning and improving. You’re not stuck in one place because you’re actively working to get better. This not only helps in your personal life but also boosts your career.

Feeling like you know where you’re going gives your actions meaning. Planning creates a sense of direction and purpose, like having a personal mission statement. It keeps you moving forward with intention instead of just going through the motions.

When you have direction and purpose:

  • You’re more motivated to achieve your goals.
  • You make choices that align with what’s important to you.
  • You have a reason for doing what you do every day.

Having this direction helps steer all of your actions. You know why you’re working hard and what you’re aiming for. This sense of purpose drives you to keep moving toward your goals, even when it gets tough.

Strategic thinking is all about making plans that will help you in the long run. It’s like playing chess; you need to think about your moves and how they will affect your future game.

Planning encourages you to develop this kind of thinking because you have to make decisions that are not just good for now, but for the future too.

With planning, you learn to look ahead, think about trends, and anticipate what might happen. This helps you make smarter choices and plan better strategies. Strategic thinking is a skill you can get better at over time, and planning is a great way to practice.

Developing strategic thinking through planning means you are better prepared for the future. You can set goals and figure out the best way to achieve them. This kind of thinking is valuable in all areas of life and can lead to better decisions and more success.

When you have a plan, you’re ready to grab opportunities as they come. It’s because you have a clear idea of what you need and what you can do. Planning helps you make the most of chances that could help you move forward with your goals.

Planning lets you:

  • Identify opportunities : You can spot chances to improve or grow.
  • Prepare to act : You’re ready to go when a good opportunity shows up.
  • Match opportunities to goals : You can tell if an opportunity will actually help you with your goals or not.

Being ready and able to take advantage of opportunities is important. It can mean the difference between making a big leap forward or missing out. Planning helps you be in the right place at the right time with the right tools.

Consistency means doing things in a steady and reliable way. When you plan, you create routines and habits that make sure you keep doing what works. It’s like a daily workout routine that helps you stay in shape.

Here’s how planning helps you stay consistent:

  • Daily tasks : You know what you need to do each day.
  • Expectations : Others know what they can expect from you.
  • Results : Keeping up consistent actions leads to consistent results.

A plan helps you stick to a successful formula without getting distracted by new, unproven ideas. This kind of consistency can build trust if you’re working with others and help you make steady progress toward your goals.

Discipline is about making yourself do the things you need to do, even when you might not feel like it. Responsibility means that you are the one in charge of your actions and their outcomes. Planning helps develop both of these qualities.

With a plan, you have a schedule to stick to, which helps you build discipline.

You are also the one making the plan, which means you’re taking responsibility for what needs to be done. It’s like deciding to save money by cooking at home instead of eating out — you’re choosing a plan that requires discipline but is better for you in the long run.

A good plan helps you take control of your life and your goals. This can lead to better habits and more success, personally and professionally.

Frequently Asked Questions

There are some common misconceptions about planning that may hinder its effectiveness or value. Here are some examples:

• Planning is only for big or complex projects : This is a misconception that planning is not necessary or useful for small or simple projects. However, planning can help any project by providing clarity, direction, and structure, regardless of its size or complexity.

Planning can also help avoid potential problems or risks during the project execution.

• Planning is a one-time activity : This is a misconception that planning is done only at the beginning of a project and then forgotten. However, planning is an ongoing process that requires constant monitoring and updating to reflect changes or feedback in the environment.

Planning can also be flexible and adaptable to accommodate new opportunities or challenges that may emerge during the project execution.

• Planning is the same as strategy : This is a misconception that planning and strategy are interchangeable terms. However, planning and strategy are different but related concepts that serve different purposes:

– Strategy is a long-term and comprehensive plan that defines the overall direction and goals of the organization. – Planning is a short-term and specific plan that outlines the activities and tasks to implement the strategy.

Planning and goal setting are two related but distinct concepts.

Goal setting involves the process of defining specific objectives or desired outcomes that you want to achieve. This could be anything from a personal goal like running a marathon to a professional goal like achieving a specific sales target.

The key characteristic of goal setting is that it focuses on specific outcomes you want to achieve.

Planning , on the other hand, involves determining the strategies and tactics necessary to achieve those objectives. In other words, planning is identifying the steps you need to take to achieve your goals.

While goal setting and planning are distinct concepts, they are closely related and essential to achieving success.

Goal setting helps ensure you have a clear idea of what you want to achieve, while planning provides a roadmap for how to get there. Even the most well-defined goals can be difficult or impossible to achieve without effective planning.

Not necessarily. While planning organizes your time and tasks, it also allows you to set aside time for spontaneity and flexibility. Good planning accounts for the unexpected and adapts to changes.

If your plan isn’t working, assess what is going wrong. Do you need more time? Are the steps not clear? Adjust your plan based on your assessment. Sometimes, consulting with others or taking a break can provide fresh insight.

As we end, let’s remember why planning stands out as a smart move. It’s the key that starts the engine of our daily actions. With a solid plan, we make clear decisions, save time, and dodge troubles.

You know the feeling when things just work out? That’s planning, doing its magic!

Let’s keep it in mind — the time we spend making plans today is our investment in a smoother tomorrow. Simple planning can make the big things and the small daily tasks easier to handle.

This applies to all of us, no matter where we come from. Let’s all plan a bit better and watch how it helps us build strong and happy lives.

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Jessa Claire

Jessa Claire is a registered healthcare provider. Music lover. Daydreamer. Thalassophile. Foodie. A hardworking Capricorn. Most days, an incurable empath. An old soul. Down-to-earth. Vibrant.

When she's not writing, she can be seen relaxing with headphones on or engrossed in her favorite fan fiction book.

Business Tips from SCORE: A business plan gives owners a guide to their operations

One of the sure ways of launching a business that will fail is not to plan its launch and growth.

Most budding entrepreneurs’ eyes roll back in their head when they hear “business plan.” It doesn’t have to be complicated or voluminous. It might be as simple as a one-page Business Model Canvas – BMC − plan or if needed a deeper dive with a full business plan . But there’s no better way to think through important issues and gain focus in your business than by creating a guide.

Not only will building a business plan help you get a better handle on where you are and how you’ll grow, but it’s an absolute necessity if you seek outside investment.

A business model is a way of describing how the enterprise will make money.  Strategyzer’s Business Model Canvas is a 9-block process that explores, initially, value proposition (your offer, but not what you are selling), customer segments (to whom are you making the offer(s)), communication channels (how will you reach your customer segments). Then validate your assumptions. Then follow-up with customer relationships , activities, resource and strategic partners , expenses and revenue streams . The right side of the BMC canvas focuses on the customer and market or external factors that are not totally under your control. The left side focuses on the internal that is mostly in your control. The middle is the value proposition that represents the exchange of value between your customers and your business.

Here’s an easy guide on how to build a business plan step-by-step.

Step 1: Describe the “Big Idea” in an executive summary

Think of the executive summary as an explanation of your unique selling proposition. You want someone to be able to immediately grasp what your company does and the value you bring to the market.

This section should include a mission statement, brief explanations of the products or services you plan to offer, a basic introduction of key team members and where your company is located. If you’re seeking financing, you’ll also need to include basic information about your finances and plans for use of borrowed funds.

Step 2: Conduct a market analysis

This is where you’ll get into more detail by describing your industry and where your business fits into its landscape. Some questions to answer:

  • What exactly does your business do? 
  • What do you sell and why do you sell it? 
  • Why is your product or service needed? 
  • Who’s going to benefit from the products or services you provide?

Step 3: Introduce your team with a company description

In this section, include information like the legally registered name of your company, your business address, the company’s legal structure (LLC, sole proprietorship, etc.) and key team members. 

If your company is large, consider using an organizational chart to show who’s in charge of what. Also, include any special skills or unique experience your team has that will help advance your mission.

Step 4: Describe the value of your products and services

Piggyback on what you wrote in your market analysis to give details about your products and/or services. Give a thorough explanation of what your product or service does, how it works, your pricing structure, your ideal customer and your distribution strategy.

If you have intellectual property like patents, copyrights or trademarks, mention those as well, along with any research you plan to conduct or have completed.

Step 5: Describe your “go to market” strategy with a marketing and sales plan

How are you going to acquire customers? How are you going to create loyalty? There’s no right or wrong strategy here, only the strategy that makes sense given your current circumstances, the market and your customers’ attitudes. Over time, this may evolve, which is fine!

You can describe your sales process, how you’ll initially attract prospects, how you’ll deepen that attraction into a purchase, what a typical sales cycle might look like, what happens after the sale and so on. 

Step 6: Dive into the numbers with a financial analysis

Depending on how long you’ve been in business, you may not have a lot of concrete numbers for this section. Or, you may have a lot.

If you’re a startup, you’ll have to supply financial projections — forecasted income statements and balance sheets, for example. Be detailed for the first year, breaking down your projections quarterly or, even better, monthly.

If you’re established and are writing the plan to guide your growth strategy, you should include profit and loss statements, balance sheets, cash flow statements, a section for metrics like profit margin and a statement of your total assets and debts. This is also a great place to include any charts and graphs that help tell the financial story of your business. 

Step 7: If you need funding, explain why and for what 

If you’re seeking outside investment, use this section to provide details about your capital needs. How much do you anticipate needing over the next three to five years, what will it be used for, what are the terms you’re seeking, what opportunities will it allow you to exploit, and how will it help you meet your growth targets? And, don’t forget to include your “skin in the game” investment.  A critical step for lender evaluations.

Step 8: Anything else to include?

If you want to include additional information — resumes, leases, permits, bank statements, contracts, photos, charts, diagrams, etc. — include them at the end of your plan in an appendix.

Regardless of which format you select remember that a business plan is a guide, compass and companion for you to reach your business objectives.

Contributed by Marc L. Goldberg, Certified Mentor, SCORE Cape Cod & the Islands, www.score.org/capecod , 508-775-4884.  A SCORE Mentor Can Help You Build a Detailed Business Plan.  Sources: ASK Score 2023, An Easy Guide to the Business Model Canvas, Creately Blog, May 18, 2022.

  Thanks to our subscribers, who help make this coverage possible. If you are not a subscriber, please consider supporting quality local journalism with a Cape Cod Times subscription.  Here are our subscription plans.    

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How Fast Should Your Company Really Grow?

  • Gary P. Pisano

how important is planning in a business

Growth—in revenues and profits—is the yardstick by which the competitive fitness and health of organizations is measured. Consistent profitable growth is thus a near universal goal for leaders—and an elusive one.

To achieve that goal, companies need a growth strategy that encompasses three related sets of decisions: how fast to grow, where to seek new sources of demand, and how to develop the financial, human, and organizational capabilities needed to grow. This article offers a framework for examining the critical interdependencies of those decisions in the context of a company’s overall business strategy, its capabilities and culture, and external market dynamics.

Why leaders should take a strategic perspective

Idea in Brief

The problem.

Sustained profitable growth is a nearly universal corporate goal, but it is an elusive one. Empirical research suggests that when inflation is taken into account, most companies barely grow at all.

While external factors play a role, most companies’ growth problems are self-inflicted: Too many firms approach growth in a highly reactive, opportunistic manner.

The Solution

To grow profitably over the long term, companies need a strategy that addresses three key decisions: how fast to grow (rate of growth); where to seek new sources of demand (direction of growth); and how to amass the resources needed to grow (method of growth).

Perhaps no issue attracts more senior leadership attention than growth does. And for good reason. Growth—in revenues and profits—is the yardstick by which we tend to measure the competitive fitness and health of companies and determine the quality and compensation of its management. Analysts, investors, and boards pepper CEOs about growth prospects to get insight into stock prices. Employees are attracted to faster-growing companies because they offer better opportunities for advancement, higher pay, and greater job security. Suppliers prefer faster-growing customers because working with them improves their own growth prospects. Given the choice, most companies and their stakeholders would choose faster growth over slower growth.

Five elements can move you beyond episodic success.

  • Gary P. Pisano is the Harry E. Figgie Jr. Professor of Business Administration at Harvard Business School and the author of Creative Construction: The DNA of Sustained Innovation (PublicAffairs, 2019).

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The importance of strategic planning for farmers and ranchers.

Men look at phone in front of grain silos

“God will not suffer man to have a knowledge of things to come; for if man had a foresight of his prosperity, he would be careless; and if he had an understanding of his adversity he would be despairing.”  This quote by St. Augustine contains the essence of why managers plan. The future is uncertain, and planning is a process for developing a stratagem for taking an offensive position regarding the future.

Planning, or more specifically, strategic planning, is a process of defining long-term goals and objectives of an organization and determining the best course of action to achieve them. It involves such steps as defining the current situation, identifying strengths, weaknesses, opportunities, and threats, and developing a plan of action to take advantage of opportunities and overcome challenges. Parsons (2018) outlined six key components of a business plan and why a farm or ranch should make the effort to develop a business plan (Parsons, 2015).

In this Center for Agricultural Profitability article , CAP Director Larry Van Tassell discusses two steps that make planning strategic: defining the mission of the business, and assessing the external environment and its implications for the farm business.

Read the full article

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  1. 11 Important Business Plan Benefits & Purposes

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  2. Creating a Business Plan: Why it Matters and Where to Start

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  3. What is Planning? definition, characteristics, steps and importance

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  4. 5 Tips For A Strong Business Plan

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  5. 10 Reasons Why a Business Plan important in your business?

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  6. Why is Strategic Planning Important to a Business

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COMMENTS

  1. Why Your Business-Planning Process Is More Important Than The ...

    Wait another three months for your meeting with the CFO, and maybe you can get it approved.". I believe the most important part of writing a business plan is the process, not the plan itself ...

  2. Why Is Strategic Planning Important?

    Before an organization can reap the rewards of its business strategy, planning must take place to ensure its strategy remains agile and executable. Here's a look at what strategic planning is and how it can benefit your organization. Free E-Book: How to Formulate a Successful Business Strategy Access your free e-book today. DOWNLOAD NOW

  3. Importance of Planning in Business Management

    Planning is one of the most important tasks in business or any type of management as well. It is really does not a matter of the size of the business. Does not matter if it is a profitable or non-profitable business organization you are going to start, a planning is a must. Why?

  4. Business Planning: It's Importance, Types and Key Elements

    Sets objectives and benchmarks: Proper planning helps a business set realistic objectives and assign stipulated time for those goals to be met. This results in long-term profitability. It also lets a company set benchmarks and Key Performance Indicators (KPIs) necessary to reach its goals.

  5. Why Is Planning Important?

    | Business Planning & Strategy | Importance of Business Plans By Chron Contributor Updated August 28, 2020 Planning in business is essential to success. When a company has a...

  6. Definition & Examples of Business Planning

    Contingency business planning (also known as business continuity planning or disaster planning) is the type of business planning that deals with crises and worst-case scenarios. A business contingency plan helps businesses deal with sudden emergencies, unexpected events, and new information that could disrupt your business. The goals of a ...

  7. The Importance of Strategic Planning

    Key Takeaways. Strategic planning is crucial for a business as it creates a map for a business to follow and course correct when need be. The first part of a strategic plan is the business plan ...

  8. 17.1 Is Planning Important

    Plans should be continually monitored. Managers and other organizational members should check to see if their plans need to be modified to accommodate changing conditions, new information, or new situations that will affect the organization's future.

  9. The Business Planning Process: Steps To Creating Your Plan

    The Better Business Planning Process. The business plan process includes 6 steps as follows: Do Your Research. Strategize. Calculate Your Financial Forecast. Draft Your Plan. Revise & Proofread. Nail the Business Plan Presentation. We've provided more detail for each of these key business plan steps below.

  10. Business Planning

    Business planning skills describe your ability to create a roadmap for the success of a business. This ability encompasses documenting the specific details of the business such as the goals and aims that a firm sets, the planned steps towards the achievement of those goals, and the criteria that measures and monitors the firm's success. Whether an already established company or a new start ...

  11. Why is Strategic Planning Important? & Top 4 Benefits

    Direction: Strategic planning offers a sense of direction and outlines measurable goals. It's a tool that's useful for guiding day-to-day decisions and also for evaluating progress and changing approaches when moving forward. Future Focus: Strategic planning allows organizations to anticipate and respond to changes in the business environment.

  12. The Importance of Planning in an Organization

    Planning helps an organization chart a course for the achievement of its goals. The process begins with reviewing the current operations of the organization and identifying what needs to be...

  13. What is Planning? definition, characteristics, steps and importance

    Importance of Planning It helps managers to improve future performance, by establishing objectives and selecting a course of action, for the benefit of the organisation. It minimises risk and uncertainty, by looking ahead into the future. It facilitates the coordination of activities.

  14. The Top 5 Advantages Of Planning Ahead In Your Business

    One of the most important activities you can do for your business to ensure you reap financial success is to plan. Planning gives your company a clear direction when mapping out your goals....

  15. Why Business Planning Is Important for Your Business Growth

    Business planning helps you focus on the right things. When you go through the planning process, you'll decide what's important for your business. This is enormously helpful when you get into the day-to-day grind. With a clear plan, you can focus on what's most important, rather than spending time trying to figure out what you should be ...

  16. Planning For Success: A Four-Step Cycle For Leaders

    The key to planning is precision. The more precise your plan is, the easier it will be to execute. Of course, all of these things can be done once your plan is in motion; however, you will save ...

  17. 5 reasons you need a business plan

    While these are all very important steps to take, a business plan will be central to how you start, grow and develop your business. Here are 5 reasons why you need a business plan: 1. It will help you steer your business as you start and grow. Think of a business plan as a GPS to get your business going. A good business plan guides you through ...

  18. Why Planning Is Important (Explained)

    Planning is important in business and management because it gives companies a firm structure for their future so that their activities are consistent and organized.

  19. What Is Planning? Definitions, Importance, Characteristics, Process

    The importance of planning in management is explained in the following points: 1. Planning Forms Goals in Management. 2. Planning Gives Directions in Management towards Achieving Organisational Goals. 3. Planning Tackles Uncertainties of future. 4. Planning assists in finding a better way to achieve goals.

  20. What Is Planning And Its Importance?

    Planning is a basic component of project managemen t. It is the process of creating a roadmap to decide which actions need to be taken to achieve a specific goal. Planning is fact-based and it increases our chances of success. To create a successful plan, one must apply logical reasoning to factually analyze the steps that need to be taken.

  21. What is the Importance of Planning? 8 Importance, Process

    Planning helps to forecast business-related risks and also helps to take necessary precautions to avoid these risks and prepare for future uncertainties. Provides Direction Direction means to give proper information, accurate instructions and guidance to the subordinates. Planning tells us what to do, how to do and when to do it.

  22. Business Planning: Introduction, Importance and Limitations ...

    Importance of Business Planning. Planning is an important function of management, it tells the manager where the organization should be headed. It also helps the organization reduce uncertainty. Let us take a look at some important functions of planning. 1] Planning provides a sense of Direction.

  23. Why Is Planning Important? (25 Reasons)

    A well-executed business plan can help to maximize profits, reduce costs, and improve customer satisfaction. Event Planning Planning is essential in organizing events such as weddings, conferences, and parties. It involves coordinating vendors, selecting a venue, and creating a schedule of activities.

  24. How to build a successful business plan in eight steps

    A business plan is a guide, compass and companion for you to reach your objectives. ... But there's no better way to think through important issues and gain focus in your business than by ...

  25. How Fast Should Your Company Really Grow?

    This article offers a framework for examining the critical interdependencies of those decisions in the context of a company's overall business strategy, its capabilities and culture, and ...

  26. The Importance of Strategic Planning for Farmers and Ranchers

    The future is uncertain, and planning is a process for developing a stratagem for taking an offensive position regarding the future. Planning, or more specifically, strategic planning, is a process of defining long-term goals and objectives of an organization and determining the best course of action to achieve them.

  27. 9 Key Management Skills: How to Show Them on Your Resume

    6. Planning. Managers are required to think ahead to ensure the current activities and projects align with overall business goals. Planning ahead, and taking the initiative to brainstorm plans for the future, shows future employers that you are goal- and results-oriented, organized, and ready for any obstacles that may come your way.

  28. Planning Your Career: How to Map a Path to Success

    To make up for this deficit, during business school, I tirelessly formed connections, amassing business cards at events and digitizing them, leading to my now extensive and robust network. 3. What opportunities are available to you? Leverage available resources for maximum impact. If your business has a budget for business development, use it.

  29. 2024 Digital Marketing Strategy Guide

    A digital marketing strategy is a plan that gets a product or brand in front of potential customers. The goal could be to grow the brand or hit specific revenue targets. ... so you can focus on ...