The Planning Process for a Business

Planning is defined as deciding ahead of time what will be done in the future. It is the act of pondering before acting. It entails deciding on goals and the activities that must be completed to achieve them.

The planning process involves a company’s steps to develop budgets to guide its future activities. The primary goal of planning is to get everyone on board, understand the goals, and put operational processes in place to help the organisation achieve them. 

There is a need for a planning process in every organisation. Planning provides direction for action by stating how work will be done in advance. Planning ensures that goals and objectives are clearly defined to be used as a guide for deciding what action to take and in which direction to take it. 

By deciding on the goals and objectives to be achieved, how such goals should be achieved and what action should be taken, planning provides direction. By coordinating the activities of various parties, planning reduces overlapping and wasteful activities.

Managers anticipate the future and decide what activities must be carried out with the help of the planning process. Planning entails deciding what to do, how to do it, when to do it, and who to do it with.

Need for the planning process

• Planning is goal-oriented: The organisation is set up with a broad goal. Specific goals and the activities that will be used to achieve them are outlined in the plans. As a result, planning serves a purpose. Planning is useless unless it aids in the achievement of predetermined organisational objectives.

• A primary function is planning: Planning lays the groundwork for all other management functions. All other tasks are carried out following the plans that have been drawn up. As a result, planning comes first. The other management functions are intertwined and equally important. On the other hand, planning serves as the foundation for all other functions.

• Planning is in every department: Planning is required at all levels of management and in every department of the organisation. It is not solely the responsibility of top management or any one department. However, the scope of planning varies depending on the level and department.

• Flexible planning: Plans are created based on forecasts. Because the future is uncertain, planning must be flexible enough to accommodate changes in future conditions. It is possible that activities planned based on certain future assumptions will not pan out.

• Continuous planning: Plans are created for a specific period – a month, quarter, or year. A new plan must be created at the end of that period based on new requirements and future conditions. 

• Planning is futuristic: Planning entails looking forward and into the future. The goal of planning is to meet future events to an organisation’s benefit effectively. Future events and conditions can be predicted using forecasting, and plans can be made accordingly.

• Planning involves choices: Planning entails deciding between various options and activities. 

Advantages of the planning process

1. Reduce uncertainty: The future is uncertain. With proper planning, uncertainty can be turned into certainty to a certain extent.
2. Bring cooperation and coordination: Planning can help the organisation’s various departments work together and coordinate their efforts. Departmental rivalries and conflicts could be avoided with proper planning.
3. The economy in operation: As previously stated, planning selects the best option from various options, resulting in the most efficient use of resources. The organisation’s goals are easily accomplished.
4. Prepare for unpredictable contingencies: Not all events can be predicted. These unexpected occurrences are called contingencies. These occurrences may have an impact on the smooth operation of a business.
5. Achieving predetermined objectives: Planning activities aim to achieve the enterprise’s objectives. Only effective planning allows for the timely achievement of objectives.
6. Reduce competition: The competition provides an opportunity for the business to grow. Simultaneously, intense competition should be avoided. Through planning, it is possible to reduce competition.

Types of plans 

• Standing or repeated use plan: These plans are created by managers at various levels. They are designed to be used repeatedly and to deal with recurring issues. A standing plan provides a ready guide to action when a specific and familiar problem arises. It is an important tool for establishing predictable behaviour patterns in a business.

• Single-use or operating plans: A standing plan establishes a structure of expected behaviour to achieve the desired outcomes. They are extremely useful tools for making managerial decisions. However, a manager can use single-use plans and these standing plans to decide ahead of time what action to take to address a specific problem or a set of problems that arise within a specific time frame. A new plan is devised for the next period or problem once the problem has been solved or the time limit has expired. 

• Programmes: Programmes are detailed plans of action carried out in a specific order of objectives, policies, and procedures. A programme lays out the main steps that must be taken to achieve a goal and estimates when it will be completed.

• Budgets: A budget is a numerical estimate of the number of men, dollars, materials, and equipment needed to carry out a plan or programme.

• Projects: A project is a specific task that must be completed as part of a larger plan. As a result, setting up a project is a single step in a programme. A period has a distinct object and an unmistakable end.

Conclusion

The planning process is a company’s steps to develop budgets to guide its future activities. Strategic plans, tactical plans, operating plans, and project plans are some of the documents that may be created. The main goal of process planning is to improve and modernise a company’s business methods. Process planning is intended to convert design specifications into manufacturing instructions, and produce products that meet the function and quality specifications at the lowest cost possible.