Business Planning

Importance of Business Planning
By Shum YL

Business planning is many things to various people and although elements of business planning appears in most management literature it has rarely been accorded the status of a stand alone management field.

Some of the reasons why people do business planning:-

  1. Trying to get a bank loan to start a business or a project
  2. Trying to impress an investor
  3. Preparation for listing the company in the stock market.
  4. Planning for the budgets of the next financial year
  5. Taking stock of the company’s financial and feasibility status
  6. Strategic planning for the future

A company can actually do business planning for more than one of the reasons above over a period of time. However, the process is more or less the same which requires the following steps.Below is the my own Business Planning process:-

  1. Setting broad missions or goals
  2. Analyzing information – Study market
  3. Setting objectives and targets
  4. Deciding on strategies
  5. Commandeering resources
  6. Implementing the strategies
  7. Reporting
  8. Monitoring the progress
  9. Take corrective actions

While the above is a bit more harder to remember than the often used “PDCA” cycle used in taking action or solving problems it provides a better understanding of what real businesses do. We advocate the above process in order to ensure that no issues are left out in the process and makes the plans awry. For example; in our model the act of reporting is included. Although it make sense and is logical, most models in planning ignores this with the result that most companies fail to emphasize in management accounting. It is sad to see that a lot of companies pay top money to hire accountants who are actually not contributing any effort to improving business decisions but just to produce reports to adhere to accounting regulations and tax requirements.

Oh, by the way,  before business planning  for any projects or venture, please study the market first or do a feasibility study… Its priceless. Learn how here.

The author is the business consultant of DRC Services which specializes in management consultancy and training. Mr. Shum has many years of senior experiences in financial management and business planning. He has held positions such as director, financial controller, group finance manager and regional business planning manager for multinationals and listed companies. Mr. Shum can be contacted at shumyingloon@gmail.com for assignments on project basis in the field of business planning.

The article above is an independent work submitted by the above author and does not reflect or represent views of the management, owners and agents of this website.

© 2010 Shum Ying Loon. All Rights Reserved Updated 03/09/10 By Clicking on any hyperlinks on this page you hereby agree by our terms and conditions of using this website. Disclaimer: While every effort is made to provide accurate and timely information in this website may contain errors or omission or factual error The owners does not warrant any information in this website and therefore cannot be liable for any claims or losses by users on this site. The owners also does not have control of any materials and information found in sites linked to this website and cannot be liable or any loss or claim resulting in the use of information and materials used in linked sites. Please consult your lawyer, broker, accountant or financial consultants before making any investment or financial decisions.

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