Business planning is one of the basic functions performed by an entrepreneurs. Business planning assists in determining the future course of action to be followed by entrepreneur to work properly and smoothly. In this article we will discuss What are the Steps in Business Planning Process.
Steps in Business Planning Process
Following are the main steps in the Business Planning Process.
1. Determination of Objectives. Determination of objectives to be achieved through business planning is the first and foremost step in the business planning process. Determination of objectives and goals is the starting point. All the business plans are framed to attain these pre-determined objectives of an enterprise. All these Objectives must be properly and clearly communicated to all level of entrepreneurship. Classification of objectives may be made in prime objectives and secondary óbiectives.
2. Constructing Planning Forecasts. Business planning is based on future forecasts. The second main step in business planning process is formation of forecasts. The accuracy of planning depends upon the accuracy of various forecasts relating to price of product, raw material, power, manpower etc. Hence, all these forecasts should properly considered while framing the business planning.
3. Collection, Analysls and classification of Information. The third main step in business planning process is the systematic and scientific collection, analysis and classification of date and information. Utmost care should be given in gathering the relevant information. The accuracy of business planning is greatly influenced by the correctness of collected data. The collected information must be properly analysed to grouping the data in relevant and irrelevant data. Then, the relevant must be properly present in tabulation form to draw some types of alternatives.
4. Determination of Afternative cases. The fourth step of business planning process is the determination of alternative course of actions on the bases of collected information. Maximum alternatives to solve the problems are to be determined carefully. All these alternatives should be properly analysed to find the most accurate and useful alternative.
5. Evaluation of Selected Course of Action. The fifth important step in business planning process is careful evaluation of selected course of actions. The strong and weak points of each alternative course of actions should be carefully pointed out in terms of its expected results and benefits. The main points to be considered while selecting the best alternatives are cost, risk, capital, manpower, govt. policies, availability of raw materials, tools and equipments. Various statistical and operationał research techniques can be used to evaluate the available alternatives.
6. Selection of Best Plan. After the careful analysis of available alternative, the best alternative is selected. The selected plan must be best suited to the resources of entrepreneur.
7.Formation of Subsidiary Plans. The subsidiary plans are formulated to attan the objectives of prime plan. These subaidiary plans assiat the entrepreneur to implement the master plan successfully.
8. Communication of Plans. The selected plans must be properly communicated to every personnel in the enterprise in time.
9. Controlling the Plan. It is duty of entrepreneur to carefully watch the progress of selected plan. He has to note down the shortcoming and weaknesses of plan to modify in near future.