Objectives, strategies, programs and budgets are vital to successfully manage any business, including small

Why should you plan?

Is the answer to this simple question: To know what is the way to be followed to achieve the desired goal. The planning is a mental process of reflection, analysis, setting objectives and strategies to follow to achieve a goal given as reason for a business. For example: If the company that is to be dedicated to manage the distribution and sales of solar water heaters, then you have to think about how it intends to sell in the space of a year, a month, a week, a day. Also, if possible, you have to think to potential customers that the product will be sold, housewives, small businesses, enterprises, government institutions, etc. so as to establish a number of policies sold, payment, installation and other factors that facilitate sales or on the contrary, could hamper marketing.

Of course, planning is also responsible for defining the processes that take place to produce and distribute the most efficient way possible business products optimizing the resources which are available. Not the same produce 50 solar heaters at a cost of $ 100 each, to build at a cost of $ 80 per completed unit. Additionally, the program seeks planning time devoted to product realization and each process to have an understanding as possible of the exact dates on which production may have to offer to potential customers.

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The planning process

Moving on, the planning is primarily intellectual work, research, data collection which is then analyzed and used for the preparation of the physical tools that will support the company’s business back. Start by planning the following process, composed of stages:

0. Diagnosis
1. Purposes
2. Premises
3. Objectives
4. Strategies
5. Policies
6. Programs
7. Budgets
8. Procedures

The diagnosis is the basis or foundation of planning

The first step, fundamental, basic and practically mandatory BEFORE planning is the realization of a diagnosis of the current situation of the company , whether newly created or already consolidated. Diagnosis is an objective examination of all areas that make up the company to find out what their condition at the beginning of a period is to plan. From the results of the diagnosis will take the necessary information to identify and define the next stages of planning.

The purposes give the reason for the company

The mission of a small, medium or large stems from the original intentions of the founders and creators of it. When an organization or business is born, it is because one or more persons had or have certain fundamental aspirations or goals primarily qualitative, permanently pursued through the operation of the company. The purposes define the rationale of a business and make the general guidelines to be used to carry out the same activity. An example of purpose to the case that has been used is: “Sell solar heaters to help reduce pollution from fossil fuel use and profit from this activity”

The premises help design plans more effectively

A premise is an assumption about the current and future conditions of certain factors (social, economic, political, etc.) That may affect the development of the planned activities and thus help or hurt achieve desired results. The premises help create scenarios that allow design plans with greater certainty. Using assumptions facilitates the creation of alternatives to help find out how the objectives if these assumptions are met. For example: “It is expected that energy legislation promotes the use of environmentally friendly generators over the next five years”.

The strategies and ways forward to achieve the desired result

From the knowledge of the conditions and actual and potential circumstances that could affect the development of the activities, you can set options to follow in case of scenarios already covered.Strategies define alternative courses of action to use company resources to achieve the objectives defined in one way or another, respecting the circumstances foreseen in the scenarios considered. For example: “To increase sales of solar water heaters, will seek to participate in three exhibitions at national, 5 local fairs in different regions of the central, north and south and a site of national and international”

Written plans are a guide not an obligation

Policies, programs, budgets and procedures are documents resulting from previous stages which are reflected in the general guidelines of action to achieve the desired results reasonably. Do not be disappointed if not achieved as planned.