What is Business Planning

An instant action without thinking cannot always provide effective results. This kind of action always contains high degree of risk. To reduce the degree of risk, there is a need of effective thinking before performing any task.As you know today business world is vulnerable to high degree of risks. To overcome the degree of risks, there is need of effective beforehand thinking. This thinking action is performed in the form of business planning. So business planning can be defined as deciding of facts and strategy regarding the business before establishing a business.

Now let us discuss the number of facts which are planned under business planning. All the facts are given in brief as follow:-

The first thing decided under business planning is ‘What to do?’ This means firstly we need to decide the type of business which should be established. The type of business should suit the requirement of society, be profitable and capable of surviving. Different surveys are held to gather information about these factors before establishing a business. The next thing to decide is ‘When to do?’ The time to begin a business is decided by analyzing market position. The market position should be a favorable one i.e. the business should be able to run in a profitable position at the time when it is to be started. The third thing to decide is How to do?’ Under this step the requirements of business are analyzed and then the sources are recognized from where these requirements can be fulfilled. Firstly financial needs of business are anticipated then sources of finance are analyzed from where these needs can be fulfilled. Now the last thing decided under business planning is ‘By Whom is to do? Different personals are assigned different tasks associated with the business in accordance with their capabilities and talents.

The business planning is the blood life of any business. No business can survive in today economic world without adequate business planning. The more efficient the planning, more efficient would be business. The planning should not be rigid; rather it should be flexible meaning it should be amended with change in circumstances. It is necessary for a good plan that the facts should be based upon realistic facts and figures and not upon imaginary or guessed assumptions.