The Importance Of Planning In Business

Planning is an essential function in the success of any business. Planning does not refer simply to pulling out a calendar and recording things to do on random dates. Planning is all about actively plotting a course to meeting goals. Goals are really the start of any discussion about planning in a business.

We all are familiar with the concept of a goal. It’s something we write down that we hope to achieve. However, we could greatly increase the effectiveness of our goals by adhering to a few simple principles.

The first principle is setting a specific goal. For example, the goal, ‘do well in the first quarter’ does not rank as a specific goal. If we changed that goal to read, ‘sell children’s books in the first quarter’ then we are on the right path.

However, a necessary caveat to specific goals is making sure the goal is measurable. So, using the same example again, ‘sell children’s books’ becomes ‘sell $24,000 of children’s books in the first quarter.’ By now we have a goal that is specific enough that we can then break it down into even smaller measurements and know whether or not we are actually getting somewhere with it.

A second principle of goal setting is maintaining a vision. If the company we work for is an internet marketing company, than selling $24,000 worth of children’s books is not a very effective or even applicable goal for our company. While this is an extreme comparison, the principle of vision can help ensure that all goals aim for the same destination. Let’s say that instead of internet marketing we’re in the grocery business and based in Utah.

We’ve conquered local markets in Utah and we want to expand further west into Las Vegas and Southern California in order to take advantage of more lucrative markets. If the vision entails aggressive westward expansion, then all the goals we’re setting will need to help us get there. A vision is actually a long term milestone-type goal, and to accomplish a vision we need to establish benchmarks along the way.

So in the grocery case some appropriate benchmarks might be to establish a store in St. George as the first major benchmark. The next might be to establish a store in Vegas; the third to flood Vegas with stores; and then the fourth and beyond to hit California. A vision is meant to be grand, and can be as grand as the senior directors have imagination.

The final principle of planning is accountability. It doesn’t do much good to establish specific goals within a defined vision when no one holds themselves accountable to the goals and makes efforts to make the vision reality. In order to facilitate accountability (which has to occur at all levels, though headed by the senior directors of a company) certain companies are hiring out managed services.

Managed services allow the directors of companies to focus on their goals and visions and give the grunt work to contracted workers. However accountability happens, through companies’ own workers or through contracted ones, it is a critical step to achieve a well-laid plan.