Why Plan?

As such, business planning requires effort and commitment. However, since business planning and business success have a positive correlation; there is no getting around the fact that business planning is important.

This paper briefly shows why business planning is important, why it is resisted, and what benefits business planning can offer.

Why business planning is important.

The future is unpredictable. However carefully we lay out plans, certain things will undoubtedly come along that weren't anticipated. Responsible business leaders however, cannot sit back and wait for the future to control them. They need to take charge of their future.

Many business leaders, particularly those in small business, think planning is a waste of time and effort. They feel that their time is far better spent on present business activities, rather than planning for an inaccurately forecasted future. Usually, an organisation with this kind of leadership doesn't survive in the long term - the market place has become too aggressive and competitive. The organisation whose leadership has clearly considered its future, and who have developed plans to get there, is the organisation most likely to succeed.

Business planning requires that the leadership clearly define what they are trying to achieve, what obstacles they will face, how they will achieve their goals, what resources they will need, and how to make it all happen. Business planning is a way of becoming master of your own destiny.

Following are some reasons why business planning is important:

It focuses the business.
Focus and direction are fundamental to organisation success - the sharper the focus, the better the results.

Business planning helps clarify and focus the organisation on what is important, where the organisation needs to be, and how to get there. Such clarity and focus can produce enormous improvements in both productivity and quality of working life.

It provides coordination and direction.
A business plan improves coordination and teamwork. If the organisation is working toward a common point, everyone may be doing their own bit, but all will be working toward the same end. Business planning helps pull the organisation together; it helps provide a unified sense of direction for all concerned.

It is motivating.
Business planning provides a clear-cut sense of purpose, which comes from developing a mission and vision, and from setting goals and targets. The result is that everyone knows what the organisation is striving for. This motivates people to help the organisation to achieve its goals.

It leads to better decision making.
Developing a business plan demands that you consider various alternatives and that you evaluate the future implications of all decisions.
It also helps you anticipate and prevent future problems before they arise.

It provides a new way of controlling the business.
By developing a plan of what you are going to achieve, you are in a position to measure results, and to adjust strategies to keep the organisation on target. Setting targets puts into place benchmarks against which progress can be measured.

Plans increase your thinking time but reduce your doing time.
In this way, brains are substituted for effort.

It provides confidence in the future.
Walking in the dark is always more uncertain than walking in the light. By developing a business plan, you will always know where you are going and how you are going to get there.

Most importantly, developing a business plan will help you compete more effectively in the market place, both today and tomorrow. It will provide you with the road map to becoming a healthy, thinking and profitable business. It will help you create the organisation of your dreams.

Yet business leaders, particularly small business leaders, continue to avoid one of their most important obligations - developing and implementing a business plan.

Some reasons why organisations do not plan:

I know what I'm doing.
Great. But does the rest of the organisation? Does your bank? Do you know what your specific strengths are, and how to use them to your best advantage? Do you know your customer intimately? Does every employee in your organisation know what you are striving for?

It's too complicated.
Not if you keep it simple. And after you have done it once, it's easy to update and maintain.

Too financially oriented.
Numbers are the language of commerce. But the philosophy, which we are presenting, is that you must be as financially literate as is necessary to monitor, control and run your business effectively. You don't have to have a Ph.D. to understand the concepts in financial plans.

Not enough time.
People who say they don't have time to plan are those who don't have time to get properly organised. If you can't find enough time to even modestly plan for survival and success, look forward to becoming a part of the failure statistics. Those who fail to plan may as well plan to fail. Effort put into a business plan produces rewards that far exceed the initial investment of time.

The value of planning.

It is essential that you see the value of planning before you begin your plan. A half-hearted attempt will not produce the benefits that are possible.
So what do business plans achieve?

• Helps create the future that you want for your organisation.
  
  
• Improves the day-to-day running of your organisation.
  
  
• Contributes to the growth and long term future of your organisation.
  
  
• Helps you utilise your resources more efficiently.
  
  
• Minimises crisis management.
  
  
• Minimises costly mistakes by foreseeing and anticipating problems.
  
  
• Contributes to the quality of working life of those in the organisation by providing a sense of control.
  

Most importantly, there is much research to show that one of the major contributory factors to business failure is lack of planning.

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