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 Importance of planning in business


Planning is an important role of the management of a business organization and is a very central part of running a successful business. It helps in shaping the future of the business and determining the steps to be taken in order to achieve the level of success the management is envisioning. It determines the technology to be used in the future of the business and how to prepare and enable training of the staff in order to achieve the desired outcomes or short term and long term goals that the business is planning to achieve. Therefore it’s a very important process of business. The following are the reasons why you need to plan your business:

Maximum utilisation of resources

Planning ensures that resources are efficiently used and therefore minimising wastage. This is because the processes are well laid out, infrastructure put in place and training of staff involved conducted as the management intends. Resources are well allocated thus maximising production and helping the business reach its objectives.


Setting goals

Planning helps the management decide where they want the business to be in future, therefore, they set goals to be achieved within specific time limits to motivate the staff to work towards a certain objective in short term or in the long run.

Planning helps in dealing with risks and uncertainties

In a business environment, unforeseen events are bound to occur and they must be dealt with as soon as possible. They must not take the business by surprise. Planning helps to formulate ‘what-if’ situations and provides what must be done to overcome them.

Planning helps in team building

When the management comes up with a plan it’s communicated to the rest of the organisation. Everyone’s role is clearly stated thus they work together bringing together their expertise to complete the assigned tasks. Conflicts are also greatly reduced therefore creating harmony among staff and a good working environment.

Planning facilitates innovation

Planning selects the best alternative, therefore the alternatives have to exist first for them to be selected. This encourages the management and the organisation to think and come up with valid solutions thus encouraging innovation by challenging them to solve problems.

Planning helps in decision making

The management is tasked to make decisions on behalf of the organisation. Planning sets the stage for the decision making process by discovering the alternatives available and setting the criteria for evaluating the next steps to be followed.

Planning helps in controlling how tasks are done

By setting the goals and objectives the work is divided and assigned to the staff. It requires planning to decide what, when, where and how the tasks are going to be done. This includes the time to complete duties in order to achieve desired objectives.

Planning provides direction to the organisation

the objectives are clearly defined and the business gets a direction to take towards a specific goal, all the employee’s efforts are directed towards achieving a particular objective.

Businesses have to plan so that they can be ready for unlikely events in the future and how to deal with them. Planning determines the technology infrastructure to put in place in order to cope with the competitive environment. The planning process is very important if a business is to be successful.