Planning is a defined process that aid to develop a strategy to achieve a desired objectives either in business or any other sphere of human life. The purpose is mainly to solve related or expected problems and to facilitate necessary action that will reduced the lack of planning
The role of the business owner or entrepreneur in planning is to identify a desirable future and to prepare a course of action to get to the reality of such future. The place of planning in every nation cannot be overemphasize. Every year in the Nigerian Nation, the President read the budget speech for that year. Every sector of the economic and all and sundry in the business circles, whether private, public or governments are alert to view the prospect for the year in the overall progress of the country from the budget speech of Mr. President. Budgeting is one process of planning and all countries of the world traditionally practice this type of planning process.
If Nigerian with all the resources you can think of should spend months on the drawing board, charting the course for its citizens, then every business irrespective of size and age, must of necessity take time to plan its activities. Ignoring the place and importance of planning has led to the retrogression of 75% of many businesses. Some entrepreneurs see planning as a waste of time, others just take for it granted and trust in their abilities to coordinate every business by heart.
Budgeting is one process of planning and all countries of the world traditionally practice this type of planning process.
Planning as been seen as a sure and dependable step towards averting and controlling unpleasant business experiences which ordinarily could lead to business collapse. Running a business is very much like taking a ride on the highway, with many other competing road users, each though on the same interest, but with diverse purpose. While some drive safely to their various destinations, others cannot but have deflated tyres, which attract some bills from the hospitals and mechanic workshops, while other become casualties resulting in death.
Why is it so? For physical accident, it’s not the act of God, as many would think. Rather it is due to lack of effective plan and preparation before the onset of the journey. As the safety of the journey depends to a large extent on the care of the driver, so also is the survival of a business. On the highway there are traffic lights: red, yellow and green. There are also the road signs that inform the drivers of dangers ahead, but only few drivers look at these signs.
Planning is all about taking PRESENT decision about the FUTURE of your business. There are many advantages of planning for the progress of the business. Among these profits of planning are:
Planning enables the business owner or entrepreneur to concentrate on his/her goals. A business that is not planned is more easily susceptible to distractions than the one that is planned. Planning lays down the step-by-step process for achieving any business goals and must be done on a yearly, quarterly, monthly, weekly and daily basis. Concentration is the fuel that stirs up your passion as a business owner in constant light. So, with business plan your vision and passion are glued together with the help of concentration and focus.
2. A Secure Future
Those business owners or entrepreneurs who plan their business activities are made to take decisions concerning the present and the future. Those that don’t plan are concerned only about the present and they are crippled by the inability to see into the future of their business. Planning your business brings about better control, easier management, and better relationship with staff, customers and clients. When we plan and do it daily, weekly, monthly, quarterly and yearly for any business, such business will not lose opportunities for greatness and expansion.
3. A Steady and Sure Guideline
A plan is a guide to where you are going. A plan has a time frame. A two-month plan enables you to know where you will be in two months time. With planning, you get result, even if not exactly as you planned. Planning your business is like a construction process; it is a continual exercise. We need a guide to get us to our destination, so also for your business you need guidelines which are clearly spelt out in your business plan.
4. Efficient and Effective Communication
No successful business can operate in a vacuum and no business succeed without enlisting the help of others. For this help to be easily rendered, to the investors, supplier, customers, partners and anyone networking with your business, an effective communication network is needed in your planning process. An effective communication is achieved with a good plan of network. It is efficient and effective communication that spelt our various and specific goals that other business entities and processes linked up with your own business.
While the Multinational Corporation requires plans to enable them control those who are close to the action, small business owners and entrepreneurs need planning to enable them discipline themselves, if chaos and anarchy are to be avoided. With good business plan, there is effective discipline of the use of financial, human and material resources.
Planning your business is extremely important for small business success. It represents a step away from fire-drill, reactionary mode of operation. It is a wise decision to look continuously into the future and to anticipate and react to the current environment.
Business that plan on a continuously basis, carry long-term results. They settle controversy efficiently. They have a higher level of confidence in the next step to take. They communicate more easily with significantly outsider, control their activities better and make investment more wisely.