Why is planning important for my business?

Planning has been defined as the first step in the management process. It gives a business the direction needed to achieve its goals. I have compiled a small list of reasons why we should incorporate planning in the overall management of small businesses.

1.       Gives direction

This is the most important function of planning, it allows you to see where you business is heading. By stating your goals in your plan you have essentially stated what you want to achieve, how you will achieve it, and by when you will achieve it, giving your business direction.

2.       Facilitates control

Control allows you to measure the actual performance of the business against set goals and plans, wherein you can take corrective action if necessary. Without planning it becomes difficult for you to take control in the business.

3.       Promotes co-ordination

By setting out goals, the activities in your business become focused in one direction. Members of your organization become aware of those goals and they easily co-ordinate their activities and work as a team.

4.       Reduces the impact of change

This could be described as reducing business related risk also. Formulating a plan and setting goals allows the business to anticipate change that may affect them in the future. This in return reduces uncertainty, risks, and guesswork caused by change.

5.       Assists in organizing

Organization in a business is plays an important role because without it the successful implementation of a plan is not possible. By making a plan you can easily see the different parts of the business that are reconcilable with each other as well as the primary targets of the business as a whole.