Planning Your Business

Market research provides the necessary information on how the potential market will consider your product or service. The next step is planning your business. Once you have a clear understanding of the market, you can create a business plan. A business plan will help you determine the most effective way to structure your business and identify the steps you need to take to reach your goals. This page provides you with comprehensive information about planning your business. You will see what a business plan is. Who are the users of the business plan? What are the uses of a business plan? and What does a good business plan contains?

What is a business plan?

A business plan is a written document that lays the foundation and a road map of your business. A business plan is especially vital for startups as it describes how you will achieve the planned goal of the business. The business plan contains details, including marketing strategies, financial standpoints, and operational requirements. To prepare the proper business plan, you need to understand the plan’s objective and who the plan user is.

Users of business plan

five person by table watching turned on white iMac

Users of a business plan are both internal and external to the business. Internal users include strategic implementers of the business, while external users can be partners, financial institutions, potential customers, and suppliers. Different users have different uses of the business plan.

What are the uses of a business plan?

As it is for the users, we can categorize the uses of a business plan into internal and external uses.

Internal uses

Internally, a business plan has the following uses: –

  • It is a coordinating instrument for ensuring focused and coordinated implementation efforts among implementers.
  • It ensures that all executing individuals speak the same language regarding business goals and direction.
  •  It facilitates all the strategic implementers to Read the strategic activities using the same page.
  • Planing should, therefore be participatory.

External uses

External to the business, a business plan has the following potential uses: –

  • A business plan is a point of attraction to potential investors for startups and those already in business.
  • A business plan is also necessary while looking for funding from financial institutions and other sources. Planning act as a tool for verifying the viability of the business.

What does a good business plan contain?

A good business plan includes the following: an executive summary, product or service description, the market strategy and competitive analysis, Operational structure, Product description, Raising capital, financial analysis, and projections. A good business plan will also include appendices that further describe various areas of the plan.

Gap bridging between now and the future

Planning is setting objectives and determining the course
of action to achieve the goals. Planning is also concerned with identifying
alternatives and selecting the best options for implementation. Technically,
Planning is about deciding beforehand what to do, how to do it, when, and who
to do it. Some people call planning a process of peeping into the future. By
peeping into the future, Planning enables managers to make the appropriate
decision regarding the organizational direction before reaching there. Through
Planning, managers can build the gap between now and the organization’s

Planning is a primary of the four essential management functions: organizing, Leadership, and Control. Business and Management Gurus abbreviated the four functions as   P-O-L-C, as described in the diagram below.

Importance of  Planning

The importance of Planning stems from the ability to build the gap between the organization’s present and the future. Through Planning, managers make predictions of future situations, thus, minimizing the danger of not meeting objectives. Out of the many advantages of Planning, the following are the top five advantages of having Planning in place. 

  • Planning becomes a direction-setting instrument of the organization by setting an organizational goal and determining the means to achieve the goal.
  • By predetermining the tasks to be completed, Planning minimizes the risk of not achieving objectives. 
  • Planning reduces the possibility of chaos and confusion in the organization by decreasing overlapping and wasteful activities.
  • As a primary function of management, planning cheers up innovative ideas in the organization.  
  • Planning is a decision-making aiding technique of the organization. 

Characteristics and Features of Planning

Planning is also an approach to problem-solving as it provides a systematic way of viewing problems and developing a set of actions necessary for solving the problem. Specific features of Planning that describe the rationale (why Planning) for Planning include the following:-

  • Planning is a primary function of management. It focuses on achieving the objectives.
  • Planning typically offers a unique opportunity for information-rich and productively focused discussions between the various managers.
  • Planning enables increased focus on and coordinated action while minimizing wasted time and ensuring there are benchmarks for the control process.
  • Planning facilitates decision-making and choosing from among alternative future courses of action.
  • Planning is futuristic hence a forecasting technique.
  • Planning answers the question of how to of the organization.
  • Planning answers how much and how many resources are necessary to achieve a set objective.
  • Planning is a gap bridging instrument between ‘now and the future. The future of all organizations depends on the quality of plans made by the manager.

The Planning Process

The planning process involves the following five main stages:

  1. Identify problems and needs
  2. Develop goals and objectives
  3. Developing tasks that are necessary in meeting the objectives.
  4. Determining resources needed to implemente the identified tasks.
  5. Creating a timeline
  6. Developing alternative strategies
  7. Select strategies and develop a detailed plan
  8. Design a monitoring and evaluation plan
  9. Finalising the plan
  10. Distributing the plan to the users of the plan for implementation.