8 Steps Of Effective Planning For Every Business

Yash Gupta Yash Gupta
Nov 16, 2020 5 min read
8 Steps Of Effective Planning For Every Business

Planning is an important activity of every business organisation. It is the foremost task which every business has to do before starting its initiatives. Every implementation of an idea starts with planning. Therefore, planning has an important role to play in any venture or business.

Many brainstorming ideas die before execution because of improper planning. Effective planning is what makes the lifeline of every business.

Planning, Effective Planning
Planning Definition in General

Here we will discuss the 8 steps planning process of making an effective plan:

1. Recognise the opportunities
2. Create Objectives
3. Planning Premises
4. Finding Alternatives
5. Evaluating Alternatives
6. Choosing Alternatives
7. Making Supporting Plans
8. Implementation of Plans

Steps of Effective Planning
Steps of Effective Planning

1. Recognise the opportunities

Before creating a plan, there is the foremost need to recognize the opportunities that exist in the external environment. There are 8 stages of planning, to make an effective plan, in which Recognising the opportunities comes first. The managers of the organisation must do a clear analysis of all the aspects of the opportunity on the basis of the future as well as of the present.

The management should also do the analysis of the present position of the company so that the strength and weaknesses can be taken out which will lay the foundation for setting up the objectives of the organisation.

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2. Create Objectives

The objectives of an organisation must be very clear and well defined. A proper objective of an organisation must provide a proper direction to the organisation and its different departments. The objective of the organisation decides the future of the organisations, therefore the management must create a clear objective of the organisation.

3. Planning Premises

As we already know that the process of planning premises is done on the basis of the future. But, as the future is uncertain, so we must create some forecasts on the basis of assumptions. These forecasts are known as planning premises. The assumptions may not be true, but considering and forecasting them will make the organisation ready to deal with it.

Therefore, the management must develop the planning premises so that the organisation can survive in case of any occurrence.

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4. Finding Alternatives

There are multiple ways to do a single thing. Similarly, there are multiple ways in which the objectives of an organisation can be achieved. The management must develop and identify all the multiple ways of doing things that can help them in achieving the objective of the organisation.

5. Evaluating Alternatives

After identifying all the ways for achieving the objective, each of the alternatives must be properly evaluated. The process of evaluation of the alternatives must be made on the various factors like investment requirement, risk, uses of resources, profit, etc.

The management should properly analyse the pros and cons of each and every alternative so the best one of them can be taken out.

6. Choosing Alternatives

Once after the evaluation process, the managers will have the proper awareness of the pros and cons of each alternative. Out of all those alternatives, the managers have to make decisions and choose that plan which is more profitable and less risk is involved.

7. Making Supporting Plans

Each main plan requires various work to be done. In order to execute the main plans, there is the requirement of supporting plans for various works like hiring manpower, buying required materials, purchasing raw materials and etc.

The supporting plans are not different plans but they are parts of the main plan which help in managing the different activities and things. The main plans couldn’t take place without the supporting plans and therefore, the managers should create supporting plans to carry forward the work.

8. Implementation of Plans

After the creation of the main plan and the supporting plan, there is a need to bring them into action. The plans should be implemented in such a way that it can help in achieving the objectives.

The process of implementing the plans includes the formation of policies, procedures, budgets, and a sequence of activities to be performed in order to achieve the goals.

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Frequently Asked Questions

What are the effective planning steps of a business?

Steps to make planning effective:

  • Recognise the opportunities.
  • Create Objectives.
  • Planning Premises.
  • Finding Alternatives.
  • Evaluating Alternatives.
  • Choosing Alternatives.
  • Making Supporting Plans.

What is planning in management?

Effective planning defines the correct actions to achieve organisational goals. It helps in the efficient utilization of available resources. Realistic planning helps in achieving organisational goals in the most competitive way. Hence go on and plan to achieve the goals you have set.

What is planning premises?

The forecast or the assumptions about the future which provide a base for planning in the present are known as planning premises. They are the anticipated environment in which plans are expected to operate.

What is a good business plan?

A company often needs a business plan before it can borrow money from a bank. Good plans are usually highly detailed and include information on all aspects of the business, including the industry, marketing, finance, personnel, and various operating procedures.

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