What is planning?

Running a business is a well-planned process. A plan is a detailed statement of the way a person or a group of people intend to reach long-term objectives or short-term targets. The difference between the planning of individuals and planning in business lies in the objectives and targets set and in the activities needed to achieve them. The planning process is supposed to include the following stages:

The planning process:

Collect information

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Set targets

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Collect additional

information required

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Make detailed plan

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Establish control systems

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Put plan into practice

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Evaluate plan

The principles of planning

1. Information Plans should be based on accurate and factual information. When detailed information is not available the planner will have to rely on experience and judgement. This should not be a mere guesswork.

2. Time The environment in which a business operates is constantly changing. The plan drawn up for a business will therefore vary according to the period of time for which it is intended. A short time scale demands a detailed business plan. For a longer period the plan will be less detailed.

3. Flexibility A plan should be constantly changed as circumstances change and more information becomes available.

4. Control The existence of a plan does not ensure success. The progress must be constantly checked if it is to be implemented properly. Control relies on accurate information.

2. Comprehension check.

Working in pairs, answer the questions.

1. What is planning?

2. What does the difference between the planning of individuals and planning in business lie in?

3. What sequence of measures does the planning process include?

4. What principles should each business plan be based on?

3. Read the text again. Find and write down words in the text that mean the same as the following words and definitions. They are in the same order as they appear in the text.

a. accurate	b. to be going to achieve	c. something that you try to gain
d. the process of deciding how you will do something before you do it	e. basic items	f. data
g. true	h. knowledge and skill gained through time spent doing a job or activity	i. your ability to understand a situation well and make good decisions
j. assumption	k. the conditions and influences in which people carry on a particular activity	l. to run a company or organization
m. steadily varing	n. schedule	o. to make
p. design	q. extent	r. to say in a very firm way that you want something
s. the ability to make changes or to deal with a situation	t. to make people behave in the way you want them to behave or to keep something at the correct level	u. to guarantee advancement
v. to fulfil	w. in due way

Pre-reading task

Work in small groups.

1) Have any of you ever had to consider or draw up a business plan? Why do you think an entrepreneur needs a business plan? Give specific reasons to support your answer.