Planning is the most important management activity because...............

Planning

 

A predetermined course of action

·         Streamline Operations

Planning is important to set the Business working together to achieve common goals and objectives.  With a good plan everyone will be clear on the task to be achieved.

 

A strategic long term plan involves all aspects of the Business.  A strategic plan for expansion will involve all departments internal to the business and external factors; this plan will give all stakeholders focus and streamline the expansion process

 

·         To gain financial assistance.

 

In applying for an EU / Government grant, a bank loan or private investment a Business must provide a Business plan to prove they are focused and have researched all necessary areas.  Financial institute will also want evidence that they will get a return on their investment.

In applying for a bank loan the bank will want the business to provide a detailed Cash Flow Forecast of predicted receipts and payments for the months ahead.

 

·         Encourages staff to accept change

A good clear plan will help employees accept change.  Business should include staff in this planning process.  If staff is involved they will have a clearer understanding of the plan and will be more willing to accept it.

 

In preparing an operational plan, for example an Anti-Bullying policy, Business should get staff input and involvement. Staff will be clear on the importance of the policy and will be more willing to implement the policy.

 

·         Failing to plan is planning to fail.

A Business plan gives a business clear aims and objectives.  It can highlight present internal Strengths and Weakness and external future threats and opportunities.

 

A SWOT analysis is a planning tool.  A SWOT will for example help a Business identify weakness (giving too much credit) and turn them into strengths (offer credit but being paid back on time and avoiding bad debts).  It will help Business identify opportunities (expansion) that can be planned for and availed of.  Identify threats (competition) to plan for and prepare for.

 

·         Achieve goals

Plan can help a business achieve short term specific goals.  It will give relevant stakeholders a guide on schedules of time and required actions.

 

A short term tactical plan could be prepared in order to achieve a certain monthly profit figure.  This could be a plan to increase adverting thus increase sales and profits.