Planning as an entrepreneur is the process of setting goals, developing strategies, and outlining tasks and schedules to accomplish goals.
HERE’S WHAT YOU’LL LEARN:
- Why planning is important
- The benefits of planning as an entrepreneur
- Major steps in planning
Planning as an entrepreneur means looking ahead and chalking out future courses of action to be followed, it s a preparatory step. It is a systematic activity which determines when, how and who is going to perform a specific job. Planning is a detailed programme regarding future courses of action. It is rightly said “well plan is work half done’’. Therefore planning takes into consideration available and prospective human and physical resources of the organization so as to get effective co-ordination, contribution and perfect adjustment. It is the basic entrepreneurial function which includes formulation of one or more detailed plans to achieve optimum balance of needs or demands with the available resources.
According to Urwick ‘’planning is a mental predisposition to do things in an orderly way, to think before acting and to act in the light of facts rather than guesses’’. Planning is deciding the best alternative among others to perform different entrepreneurial functions In order to achieve predetermined goals.
According to Koontz and O’Donnell, ‘’planning is deciding in advance what to do, how to do and who is to do it. Planning bridges the gap between where we are and where we want to go. It makes possible things occur which would not otherwise occur’’
Planning in its current usage in entrepreneurship implies a consciousness of what is happening in the enterprise. It does not preclude creativity or instinct, but it does not add the layer of awareness that spells the difference between survival and extinction in a changing environment. Planning does involve:
- An understanding of the business’ history
- An exanimation of the business’ environment
- An assessment of the business’ mission
- A process for reaching those goals
- A process for gathering information
- A realization that planning is a continuing process that is constantly evolving.
Planning as an entrepreneur does not necessarily mean trying to project the future, but being aware of a range of likely possibilities and being prepared for them when they occur.
STEPS IN PLANNING:
Establishment of objectives:
- Planning requires a systematic approach.
- Planning starts with the setting of goals and objectives to be achieved.
- Objectives provide a rationale for undertaking various activities as well as indicate direction of efforts
- Moreover objectives focuses on the attention of the entrepreneur on the end result to be achieved
as a matter of fact, objectives provide nucleus o the planning process. Therefore, objectives should be stated in a clear, precise and unambiguous language. Otherwise the activities undertaken are bound to be ineffective
- As far as possible, objectives should be stated in quantitative terms.
- Such goals should be specified in qualitative terms
- Hence objectives should be practical, acceptable, workable and achievable.
Establishment of planning premises:
- Planning premises are the assumption about the lively shape of events in future
- They serve as a basis for planning
- Establishment of planning premises is concerned with determining where one tends to deviate from the actual plans and causes of such deviations
- It is to find out what obstacles are there in the way of the enterprise during the course of operation
- Establishment of planning premises is concerned to take such steps that avoid these obstacles to a great extent.
- Planning premises may be internal or external. Internal includes capital investment policy, management, labour, relations, philosophy of management, etc. whereas external includes socio-economic, political and economic changes.
- Internal premises are controllable whereas external are non- controllable.
Choice of alternative course of action:
- When forecast are available and premises are established, a number of alternative course of actions have to be considered
- For this purpose, each and every alternative will be evaluated by weighing its pros and cons in the light of resources available and requirements of the organization
- The merits, demerits as well as the consequences of each alternative must be examined before the choice is being made
- After objective and scientific evaluation, the best alternative is chosen
- The planners should take help of various quantitative techniques to judge the stability of an alternative
Formulation of derivative plans:
- Derivative plans are the sub plans or secondary plans which help in the achievement of the main plan
- Secondary plans will flow from the basic plan. These are meant to support and expedite the achievement of basic plans.
- These detail plans include policies, procedure, rules, programmes, budgets, schedules, etc. for example, if profit maximization is the main aim of the enterprise, derivative plans will include sales maximization, product maximization and cost maximization.
- Derivative plans indicate time schedule and sequence of accomplishing various tasks
- Securing co-operation
- After the plans have been determined, it is necessary rather advisable to take subordinates or those who have to implement these plans into confidence.
The purpose behind taking them into confidence is:
- Subordinates may feel motivated since they are involved in decision making process
- The organization may be able to get valuable suggestions and improvement in formulation as well as implementation of plans.
- Also the employees will be more interested in the execution of these plans.
Follow up or appraisal of plans:
- After choosing a particular course of plan, it is put into action.
- After the selected plan is implemented, it is important to appraise its effectiveness.
- This is done on the basis of feedback or information received from departments or persons concerned.
- This enables the management to correct deviations of modify the plan
- This step establishes a link between planning and controlling functions.
- The follow up must go side by side with the implementation of plans do that in the light of observations made, future plans can be made more realistic.
PLANNING AS AN ENTREPRENEUR:
There’s all I have on planning, hope you’ve had enough to fill you, but in case you’re not satisfied or you didn’t even get the whole package to begin with, here’s a brief summary just for you.
- Planning as an entrepreneur Involves forecasting or predicting what an entrepreneur wants his or her company to look like
- It gives the entrepreneurs, employees and managers sense of direction
- Planning gives entrepreneurs alternatives in case of failure or hindrance in the execution of the main plan
- Planning is a blueprint that shows entrepreneurs or managers how to go about the management of the business objective
Let the conservation start on what you think planning as an entrepreneur really means