Why planning is important before putting up a business?

Can you give me some specific instances where you have/need to plan?

*Planning Definition

Planning means looking ahead and chalking out future courses of action to be followed.

It is a preparatory step. It is a systematic activity which determines when, how, and who is going to
perform a specific job. So this is according to Koontz & O’Donell, Planning is deciding in advanced what to
do, how to do and who is to do it.

What is the difference between GOAL AND PLAN?

GOALS ARE THE TARGETS

PLANS ARE THE MEANS OR ACTIONS TO USE TO ACHIEVE THE SAID PLANS

NATURE OF PLANNING

a. Planning is a mental activity

It is an intellectual and rational process.

A mental exercise involving imagination, foresight, and sound judgment.

It requires a mental disposition of thinking before acting in the light of facts rather than guess.

You will think of objectives, alternative courses of action and above all, in making decision for
choosing certain alternatives, so you as a future manager, you will go through this intellectual
process. So Planning is a mental activity

b. Planning is goal-oriented

All planning is linked up with certain goals and objectives.

Planning has no meaning without being related to goals and objectives.

It must bridge the gap between where we are and where we want to go at the minimum cost.

c. Planning is forward looking

So it is futuristic in nature. You are predicting what would be the future of your organization after
executing those plans you created.

d. Planning pervades all managerial activity

Planning is a pervasive function of management. It is found at all levels and all departments of an
organization.

It is the job of all managers in all types of organization. So whatever be the nature of activity,
management starts with planning

e. Planning is the primary function

Planning is said to be the most basic and primary function of management.

Still remember the 4 functions of management?

So as a matter of fact, all other functions of management depend upon planning. For example,
control cannot exist without planning.

Planning is therefore the primary function of management

f. Planning is based on facts

Planning is neither poetry nor philosophy.

It is based on facts and experience, and thereby realistic in nature.

g. Planning is flexible

Plans should not be made rigid (not willing to change / not be subjected to any change).

It should be as flexible as possible to accommodate all possible changes in the enterprise or

business with a view to coping with the changing conditions in the market.

h. Planning is essentially decision making

Planning involves selection of suitable course of action from several alternatives (choices).

You should estimate the feasibility (achievable, capable of being done) and profitability (gainful)
of the different alternatives and to choose the best one out of them.

PLANNING STEPS

Define the goal/objectives

Develop premise (presumptions) with regards to the future of your organization.

Analyze and choose alternatives or choices

Then from those alternatives, you will then implement it.

Then after implementing, you will evaluate results and modify or correct some actions.

What do you think will happen if you do not plan at all?

TYPES OF PLAN

Strategic Plan

This define the organization’s long-term vision and how the organization intends to make its vision a
reality

In short, strategic planning is the determination of the basic long-term objectives of an enterprise. Top
level managers such as CEOs or presidents will design and execute this.

Time frame: 3 to 5 years or even 10 years

Strategic Planning begins with a vision that clarifies the purpose of the organization and expresses what
it hopes to be in the future. You will define your Mission statement also

It specifies also how the organization will be positioned for competitive advantage.