Strongpreneur#Business Growth Strategies
February 21, 2019 186
Strongpreneur#Business Growth Strategies
February 21, 2019 186
Planning is the first and most important function of management. It is always good to plan, before embarking on any programme because failure to plan gives rise to inefficiency and lack of direction. Planning for small-scale business owners means identifying what the business plans to do in volume, return on investment, identifying operating strategies, marketing plans, strategies and performance goal.
Planning is a blueprint for action. In Africa, a businessman who wishes to enter into any business has to engage in detailed planning in order to identify the sources of raw material and equipment, determine delivery dates and sources of working capital.
Many projects have failed in some African countries because adequate plans were not properly made to identify all the necessary needs to determine their success.
The essence of planning is to prepare for and predict future events. Planning of business involves the establishment of objectives and a step-by-step determination of the activities and resources necessary to achieve them.
It entails the determination of control, direction and methods of accomplishing the overall organizational objectives.
There are some planning processes an entrepreneur will pass through before taking off in any business endeavor.
These planning processes include:
Setting Organizational Objectives -> Analyzing the Environment/Identification of Opportunities -> Selection of Alternative Courses of Action -> Formulation of Specific Targets -> Implementation -> Feedback.
It is clear if the necessary steps are taken, planning for the future becomes relatively simple. The first thing to do is to determine organizational goals. This is very important because it gives a sense of direction. If a man decides to bake bread this will become objective and will determine the next course of actions.
After an entrepreneur has determined the organizational objectives, then he will now analyze the environment, to determine whether there is an investment opportunity or not. This he can do this by determining the type of products/service customers would need; the reasons why such needs are not at present being satisfied; and whether entrepreneur can satisfy such needs and whether the gap is large enough for him to invest in. The entrepreneur has to search for opportunities as to key competitors, suppliers and the type of technology required.
The entrepreneur should equally determine or examine the environment in terms of the economic, social, political, legal, technological and competitive level of the competitors. This environmental analysis will help the entrepreneur to identify and analyze the opportunities for the success of the business.
At this point, the entrepreneur has to take a decision in choosing the best plan from many alternatives on the ground. The entrepreneur should choose a plan that is not only based on the possibility of being done successfully but also the one which would be flexible enough to accommodate the likely changes in the environment.
At this stage, the entrepreneur needs to set targets and quotas. Quantitative measures help to know if the objectives are being realized or not. This may involve the use of budgets and schedules.
The next step is the implementation of these measures. All the measures for the plan need to be implemented.
Feedback is very necessary; any good plan must always have feedback. To complete the planning process there should be a review of the whole planning process. These help to take corrective actions and serve as a control process.
Planning can be classified into three categories: by terms, by functional areas and by scope.
Planning is classified in terms of:
Many small-scale enterprises do not undertake long-range planning because of the ignorance of how to do it and many are entangled in day-to-day operation.
The realistic steps for undertaking long-range plans should include:
Classification by Functional Areas
Planning can be classified according to the functional areas:
In this case, plans are centered on the five M’s of planning. The advantage in this type of classification is that it helps the entrepreneur to use the systems approach and recognize the interrelationship between these functions. In planning, the promotions department, for example, will consider the financial strength of the company, the activities of the production department and availability of personnel before it decides the right time to start massive campaign programme.
The classifications by scope are company strategies, policies, programmes, and procedures.
1. Company Strategy
All successful organizations have strategies to exploit their environment by first undertaking a detailed analysis of their strengths and weaknesses. Strategy helps a company determine its future plans. After this, a plan of action is formulated.
A good company strategy helps the organization to identify and clarification and answer to these questions, such as:
Policies are very useful because they make for consistency in decision-making. A policy is a company’s standing plan of action to guide its methods of operation. Every company is expected to have policies in all its major areas of operation including:
3. Programme and Procedures
These deal with the manner that an organization goes about to achieve our objectives. Procedures are often restricted to specific departments or units. The sales department could have procedures for initiating and granting credits; the procedure for costing products by the accounting department could be different from the method used by the sales department for entering orders accepting returns while the personnel department may have procedures for leave casual leave or allocating accommodation.
Research shows that many small-scale managers and entrepreneurs do not attach much importance to planning. Many of these entrepreneurs do not attempt any formal business planning. However, there is a positive correlation between the level of education and planning by small-scale entrepreneurs. The tendency, up to this time is to concentrate on production and sales and adjust as the market circumstances dictate.
The reasons were given for their inability to plan include:
Every entrepreneur should engage in business planning, at least, in the short-range. It is particularly important in Africa where there is no adequate published. Information on business trends, published indexes or sophisticated professional associations to provide reliable business forecasts for planning.
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