The Importance of Business Planning

Planning is one of the most important components of any business regardless of the size and shape of the business. It can be short, medium and long term.

  • Short-term or operational planning includes projections of upcoming business activities on a daily, weekly, monthly and annual basis (up to one year).
  • Medium-term or tactical planning is usually considered to be a business projection for up to five years.
  • Long-term or strategic planning is an activity that includes projections of future business development for periods of five, ten (most often) or more years.

Regardless of the far-reaching nature of planning, it should be consistent with and correlated with the mission and vision of the company, whose concrete and clear definition is also very important in the business policy of each company.

In the planning process, SWOT analysis can be used as a constituent tool and method for detecting strengths and opportunities, i.e. weaknesses and threats of the environment and the enterprise itself, and finding ways to avoid or mitigate potential risks and options for achieving the set goals.

In this context, planning is actually a process of predicting future (business) events, with the engagement of the necessary resources to truly achieve these goals.

The document that results from the planning process is called the business plan. Its biggest advantage in the context of planning is that it covers short, medium or long-term planning through a unique study, i.e. product / service planning, marketing, sales and procurement, finance, investments, personnel and other aspects of business. The Business Plan contains the goals, mission and vision of the company and can be considered as an ID card of the organization. What is certainly good about the Business Plan is the fact that it is a “living” document that can be adapted at any time to satisfy different needs. The formulation of the Business Plan can be used as a decision-making method for a number of upcoming business events in the life of an company, for example, when introducing new products and/or services into an company offering, opening new business units, expanding the market and so on.

More about the Business Plan.

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