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GENERAL MANAGEMENT
CHECK POINT 7: THE PLANNING PROCESS

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1. key questions in the planning process
2. why is the planning process so important?
3. the efficiency of the planning process
4. strategic and operational plans
5. short- , medium- , and long-term plans
6. important advice about planning
7. eight steps in the planning process
8. why is budgeting so important?
9. three essential principles of successful planning
10. for serious business owners only
11. the latest information online
 

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GENERAL MANAGEMENT
CHECK POINT 7: THE PLANNING PROCESS

Please Select Any Topic In Check Point 7 Below And Click.

1. key questions in the planning process
2. why is the planning process so important?
3. the efficiency of the planning process
4. strategic and operational plans
5. short- , medium- , and long-term plans
6. important advice about planning
7. eight steps in the planning process
8. why is budgeting so important?
9. three essential principles of successful planning
10. for serious business owners only
11. the latest information online
 

DO I NEED TO KNOW THIS CHECK POINT?

 

WELCOME TO CHECK POINT 7

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Resources Management
TUTORIAL 3 Financial Management TUTORIAL 4 Operations Management TUTORIAL 5 Marketing
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HOW CAN YOU BENEFIT FROM CHECK POINT 7?

 
The main purpose of this check point is to provide you and your management team with detailed information about the Planning Process and how to apply this information to maximize your company's performance.
 
In this check point you will be introduced to:
 
• About the key questions in the planning process
• Why the planning process is so important.
• About the efficiency of the planning process.
• About strategic plans.
• About operational plans.
• About short, medium-term and long-term plans.
• About the important advice about planning.
• About the eight basic steps in the planning process.
• Why budgeting is so important.
• About the three essential principles of successful planning... and more.
 

LEAN MANAGEMENT GUIDELINES FOR CHECK POINT 7

 
You and your management team should become familiar with the basic Lean Management principles, guidelines, and tools provided in this program and apply them appropriately to the content of this check point.
 
You and your team should adhere to basic lean management guidelines on a continuous basis:
 
Treat your customers as the most important part of your business.
Provide your customers with the best possible value of products and services.
Meet your customers' requirements with a positive energy on a timely basis.
Provide your customers with consistent and reliable after-sales service.
Treat your customers, employees, suppliers, and business associates with genuine respect.
Identify your company's operational weaknesses, non-value-added activities, and waste.
Implement the process of continuous improvements on organization-wide basis.
Eliminate or minimize your company's non-value-added activities and waste.
Streamline your company's operational processes and maximize overall flow efficiency.
Reduce your company's operational costs in all areas of business activities.
Maximize the quality at the source of all operational processes and activities.
Ensure regular evaluation of your employees' performance and required level of knowledge.
Implement fair compensation of your employees based on their overall performance.
Motivate your partners and employees to adhere to high ethical standards of behavior.
Maximize safety for your customers, employees, suppliers, and business associates.
Provide opportunities for a continuous professional growth of partners and employees.
Pay attention to "how" positive results are achieved and constantly try to improve them.
Cultivate long-term relationships with your customers, suppliers, employees, and business associates.

1. KEY QUESTIONS IN THE PLANNING PROCESS

WHAT IS A PLANNING PROCESS?

Business owners and managers must be fully familiar with the basic elements of the planning process which represents one of the most critical management functions in every business organization.


Regardless of its size, every organization can accomplish satisfactory results only through proper Planning of a broad range of activities. So, whether you are a one-person business owner, or a you own of a large company with many employees, you must ensure that every important step in your business is based on prudent planning to ensure your business success. Remember two old proverbs:

Aim Before You Shoot!
• Measure Seven Times Before You Cut Once!

The Planning Process, on all levels, is concerned with deciding on a course of action in advance and answering a number of questions outlined below.

 

KEY QUESTIONS IN THE PLANNING PROCESS

1.

What to do?

2.

When to do it?

3.

How to do it?

4.

Why to do it?

5.

Who should do it?

6.

How much will it cost?

7.

Where will money come from?

 

ADDITIONAL INFORMATION ONLINE

Sales And Operations Planning By Joedy Skroba.
10 Key Questions To Address Business Plans By Docstoc.
Management Planning By Stan McCarthy, Marketing Man Site.
Questions Related To Opening Your Own Business By Jack Miller.
Key Questions For Business Concept Statement By GNE Corporation.

2. WHY IS THE PLANNING PROCESS SO IMPORTANT?

IMPORTANCE OF THE PLANNING PROCESS

Proper Planning is the cornerstone of good management. Whether it is the chief executive, who is concerned with the best return on funds invested, or the foreman, who is concerned with the most efficient use of the labor force under his control, managers can only achieve success in their area of activities by planning the steps necessary to achieve their respective goals. There are several Reasons why you should engage in planning as outlined below. (13)

REASONS FOR THE PLANNING PROCESS

1.

Planning is essential in establishing a coordinated effort and providing an overall  direction for all employees. When employees know what their company's objectives and expectations are, they begin to cooperate with each other and coordinate their activities toward reaching those objectives. Without proper planning employees will start "running in circles" and this, in turn, will cause deterioration in the company's performance.

2.

Planning is essential in reducing uncertainty by anticipating change within the organization. As a result of planning, managers are motivated to look ahead, to examine the future, to anticipate change, to evaluate the impact of change, and to formulate an effective plan of action. Planning also helps to anticipate consequences of specific actions which might be undertaken in the future.

3.

Planning is essential in reducing overlapping and wasteful activities. As a result of planning, managers are expected to evaluate the situation within their areas of responsibility before the actual implementation of a specific plan of action. By working as a team, managers can develop an overall plan whereby all actions effectively complement each other.

4.

Planning is essential in establishing standards of performance and formulating objectives. Effective planning also motivates managers to develop specific performance parameters which may be subsequently used as a "traveling map" to achieve desired results. Moreover, availability of clear objectives will enable managers to compare actual and planned results, thereby facilitating management control.

 

ADDITIONAL INFORMATION ONLINE

Why A Plan Is Important For Your Business? By Wendy Kerr.
Importance Of A Business Plan By William H. Crookston, USC.
Business Planning Process By Marcus Tarrant, Business Blueprint.
Why Is A Business Plan Important? By Tim Berry, Palo Alto Software.
What Is The Importance Of Planning So You Can Succeed? By NCSA.

3. THE EFFICIENCY OF THE PLANNING PROCESS

THE EFFICIENCY OF THE PLANNING PROCESS

The Planning Process must be initiated and carried out as an integral part of managerial responsibility, thereby making a sound contribution to the desired efficiency of the total business operation. 

The efficiency of the planning effort in the business operation is the contribution value of the plan as measured against input costs. 

A Plan
may be effective in attaining desired objectives, but it would certainly not be efficient if the cost is excessively high. In the measurement of cost, not only must time and money be considered, but also the degree of individual and group satisfaction. 

There is little merit in a plan to cut costs if, in its implementation, the morale of employees is so depressed as to negate the objective of the plan.

KEY QUESTIONS DURING THE PLANNING PROCESS

Next time when you engage in a serious planning activity for your organization, ask yourself these basic questions:

Does this plan make sense?

Is this plan realistic?

Is this plan attainable?

How does this plan fit into our overall strategic “big picture”?

How will this plan affect our organization?

How will our employees accept this plan?

How will our customers react to this plan?

How will this plan affect our company’s “bottom line”?

 

ADDITIONAL INFORMATION ONLINE

Six Business Plan Mistakes By Rick Smith, Crosscut Ventures.
Three Key Elements Of Business Strategic Planning By Wayne Messick.
The Importance Of A Business Plan By Will Schroter, Virtucon Ventures.
The Importance Of Strategic Planning By Scott Cowart, eBoard Solutions.
10 Key Questions To Address In A Business Plan By Jason Nazar, Docstoc TV.

4. STRATEGIC AND OPERATIONAL PLANS

The overall planning activity comprises Two Basic Types Of Plans illustrated below.
 

TWO BASIC TYPES OF PLANS

Strategic Plans

Operational Plans

Strategic plans are prepared on an organization-wide basis and include establishment of overall objectives, development of strategies, and formulation of policies, rules, and procedures necessary to achieve specific objectives. Preparation of strategic plans represents one of the prime responsibilities of the company's top management.

Operational plans specify details about "how" and "when" overall objectives are to be achieved in various areas of company activities. These plans are usually prepared in areas such as general administration, human resources, finance and accounting, operations, marketing and sales.

 

ADDITIONAL INFORMATION ONLINE

Key Parts Of A Business Plan By Michael Sheridan, Docstoc.
Different Types Of Business Plans By Kyle C. Murphy, Docstoc.
The Best Format For A Business Plan By Jason Nazar, Docstoc.
Why Is The Strategic Planning Important? By Boomer Consulting.
Overview Of The Strategic Planning By Erica Olsen, Virtual Strategist.

5. SHORT- , MEDIUM- , AND LONG-TERM PLANS

THE PLANNING PROCESS

The Planning Process has to accommodate various time spans, which are generally grouped into short-, medium-, and long-term periods as illustrated below.
 

CLASSIFICATION OF PLANS

   

Short-Term Plans

 

Medium-Term Plans

 

Long-Term Plans

Short-term plans are prepared for a period of up to one year . Strategic plans for small companies are usually prepared for such a period. Most operational plans for small, medium-sized, and even larger companies are also prepared for such a period. This period may vary from one day to one year, depending upon the specific needs of the company.   Medium-term plans are prepared for a period of between one to five years. Strategic plans for medium-sized companies are generally prepared for several years. In addition, managers frequently prepare financial plans for medium- sized and larger companies for several years ahead in accordance with specific policy requirements.   Long-term plans are prepared for a period in excess of five years. Strategic plans for large organizations are normally prepared for extended periods. In addition, management of large organizations often prepares long-term financial plan in accordance with specific organizational requirements.
 

ADDITIONAL INFORMATION ONLINE

Long Term Planning By iCoachOnline.
Why You Need Medium And Long-Term Plans? By IT Sales Secrets.
Create A Short-Term Plan For Long-Term Success By Rubina Cohen.
Long-Term Planning For Your Direct Sales Business By Julie Anne Jones.
A Business Plan Layout For A Short And Long-Term Project By Mike Harrah.

6. IMPORTANT ADVICE ABOUT PLANNING

IMPORTANT ADVICE ABOUT PLANNING

Probably, one of the most important things which you should remember about planning is outlined here.

An ordinary Planning Process entails a number of steps. Business owners and managers should not ignore these steps, irrespective of whether or not they concern strategic planning for a large multi-national organization or a small company.

Obviously, planning for smaller organizations is much simpler and business owners are not expected to spend half a day to produce a decision worth $100.

On the other hand, business owners should prevent spending only a few minutes on making important planning decisions concerning millions of dollars.

The bottom line is that the common sense should always prevail in the planning process.

 

ADDITIONAL INFORMATION ONLINE

The Four Keys To Business Success By Brian Tracy.
10 Rules For Entrepreneurial Success By Peter Jones.
Top 10 Rules For Business Success By Bruce J. Bloom.
The 10 Keys To Business Development By Jason Nazar, Docstoc.
Perfecting Your Business Developing Strategies By NY Technology Council.

7. EIGHT STEPS IN THE PLANNING PROCESS

THE PLANNING PROCESS

 

A typical Planning Process entails several steps outlined below. (14) This process has equal importance for every business organization irrespective of its size. It is obvious, however, that if you are a one-person business owner, you may skip all tasks related to employees or to a management team, because in your business you are the “chef and the chief bottle-washer”.

 

EIGHT STEPS IN THE PLANNING PROCESS

Step 1: Identify The Opportunities In The Market Place.

Evaluate your company's existing opportunities in light of the market developments, customer needs, your company's strength and weaknesses, and your competition’s strength and weaknesses.

Step 2: Establish Objectives.

Establish objectives for the entire organization in light of the opportunities in the market place, and thereafter sub-divide these objectives for each department and work unit within your organization. Objectives must be realistically attainable and need to spell out specific goals for each department and work unit.

Step 3: Develop The Premises.

Ensure that all employees engaged in the planning process become familiar with your company's existing situation and its current strategies, policies and plans. Also ensure that these employees are familiar with the external environmental factors, such as customers, suppliers, competitors, and government agencies.

Step 4: Identify Alternative Courses Of Action.

Ensure the development of alternative courses of action which might be undertaken by your company in light of its existing strengths and weaknesses and the influence of the external environmental factors mentioned above.

Step 5: Evaluate Alternative Courses Of Action.

Evaluate each alternative plan separately in light of its employee's efficiency, profitability, operational productivity or market penetration.

Step 6: Select The Most Suitable Course Of Action.

Select the most efficient, profitable, and productive course of action. The selection process may involve key members of your company's management team, and sometimes other employees, depending on the scope of the planned course of action.

Step 7: Formulate Supporting Plans.

Identify additional minor problems which might be expected in the process of main course implementation and formulate a set of supporting plans. Engage your key management team in this process.

Step 8: Summarize Financial Plans.

Summarize all financial information relevant to the course of action implementation and prepare a detailed budget.

 

ADDITIONAL INFORMATION ONLINE

How To Set Goals And Objectives By Wily Manager.
Goals And Objectives - Business Operations Blueprint By Chris Hart.
How To Cascade Goals And Objectives By Erica Olsen, My Strategic Plan.
Problem Solving In 5 Steps Strategic Planning Process By David Lazear.
Organizational Objectives In Business Activity By M. Oliver And P. Bateman.

8. WHY IS BUDGETING SO IMPORTANT?

ABOUT BUDGETS

One of the key elements of the planning function is the preparation of Financial Projections, or Budgets, for the organization.

Budgets play a critical role in the effective planning and controlling of activities commonly used by management as financial performance standards. All top managers, therefore, are expected to participate in the Budgeting Process, and formulate accurate financial projections in accordance with strategic and operational planning. These projections represent a set of statements of financial resources allocated for specific organizational tasks which need to be accomplished during a particular period of time.

The scope of information provided by budgets depends upon the type of activity they support. Financial Budgets, for example, summarize the planned level of the company's revenues, expenses, and income, while Production Budgets itemize elements of the projected manufacturing expenditure.

More details about Operating Budgets are provided in Tutorial 3.
 

ADDITIONAL INFORMATION ONLINE

Master Budget By Allen Mursau.
How To Write A Budget For A Business Proposal By John Niemira.
Budgeting Tips For A Small Business By Andrew Patricio, BizLaunch.
How To Make A Company Budget Plan By William Rae, eHowFinance.
Business Accounting: How To Make A Budget By Miranda Chook, eHow.

9. THREE ESSENTIAL PRINCIPLES OF SUCCESSFUL PLANNING

Three essential Principles Of Successful Planning are outlined below.(15)
 

THREE IMPORTANT PRINCIPLES OF PLANNING

The Commitment Principle

The Commitment Principle suggests that once you and your management team decide to act in accordance with your selected plan of action, you must remain committed to that plan during a predetermined period of time, despite any obstacles and possible difficulties which you may encounter in the process. Only through commitment, willpower, and determination will you enhance your chances for success. Remember, that those who run away from the first sign of problems never stand a chance to achieve success.

The Flexibility Principle

The Flexibility Principle suggests that the more flexibility you build into a particular plan, the less danger there is of losses that might be incurred by unexpected events in the future. The cost of flexibility in implementing a specific plan should be evaluated in advance against any possible risks involved in making future commitments.

The Principle Of Navigational Change

The Principle of Navigational Change suggests that you and your management team must act as navigators, continually checking your course of action, and re-drawing the plan as you go along to accomplish a pre-determined objective. Remember that every business represents a dynamic condition, where nothing is "etched in stone". Those managers, who treat their plan as a static entity and are not able to introduce changes while they run their business, are destined to fail in a competitive business environment.

 

ADDITIONAL INFORMATION ONLINE

What Is An Exceptional Company By Michael E. Raynor, Deloitte, LLP.
The Final Rule For Successful Companies By Michael E. Raynor, Deloitte LLP.
 Market Intelligence, Business Intelligence, Strategic Intelligence By I. Maassen.
How To Use The Three Rules Of Exceptional Companies By M. Raynor, Deloitte LLP.
The Differences Between Successful companies By Michael E. Raynor, Deloitte, LLP.

10. FOR SERIOUS BUSINESS OWNERS ONLY

ARE YOU SERIOUS ABOUT YOUR BUSINESS TODAY?

Reprinted with permission.

11. THE LATEST INFORMATION ONLINE

 

LESSON FOR TODAY:
If You Fail To Plan, You Are Planning To Fail!

Benjamin Franklin

Go To The Next Open Check Point In This Promotion Program Online.