THE IMPORTANCE OF BUSINESS PLANNING

THE IMPORTANCE OF BUSINESS PLANNING

THE IMPORTANCE OF BUSINESS PLANNING

 Business planning involves a systematic analysis of business operations, activities and structure in order to identify the long-term development plans of the business organisation.
A well-structured planning process will incorporate 3 inter-related plans:
1.       A business plan will identify the long-term goals and objectives of the organisation.
2.       An operational plan details how these long-term plans will be implemented during the period of the plan.
3.       An administrative plan details the business support needs which will need to be developed in order to ensure the successful implementation of the overall strategic plan.

If a business organisation does not engage in planning activities there is likely to be an adverse impact upon business performance for the following reasons:

1.       no control of business operations
2.       no understanding of market needs
3.       no targets established to monitor performance
4.       no quality standards established
5.       no financial performance indicators identified.

A business organisation planning to implement major changes to its business operations will require the following:

·         up-to-date, accurate and reliable management information that will inform management decisions
·         targets will need to be established which are based upon accurate research and information, presented in a format that promotes understanding
·         effective communications between the functional areas within the business in order to co-ordinate the planning process
·         monitoring systems will need to be established in order to assess business performance against the set targets
·         consultation with key stakeholders such as individual employees, their managers/supervisors and staff teams will enable them to understand their contribution to the overall success of the business.


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