Planning is a predetermine cause of action. It is a statement outlining an organizational mission and future direction, short and long term performance, targets and strategies

Planning as a formal document containing a mission statement, description of the firm’s goods and services, a market analysis, financial projections and description of management strategies together with policies for attaining the goals;

Planning is a process of determining the goals and objectives of the enterprises for a future period of time developing the strategies guiding the firms operational and utilizing the available resources towards achieving the set goals and objectives.

Planning involves;

·       Predicting into the future by defining the enterprise mission statement

·       Determining the organizational goals and objectives

·       Formulating strategies towards achieving the objectives.

·       Assigning of responsibilities and functions to carry out activities that facilitate goals achievement.

·       Allocating resources

·       Monitoring and evaluation

·       Taking corrective action or re-designing the original.

A business plan is asset of guidelines for how to go about the operations and management of a new business venture. It is an outline of potential issues to address and a set of guidelines to help an entrepreneur make better decisions. Alternatively it can also be defined as a document that describes your business in details and suggests how it might progress in future.

 Why is it important to prepare a business (Why Business planning is important)

It is important to a businessman in the following ways:

·       Shows that the business idea is viable

·       Helps people to become self employed

·       Help in planning for resources

·       It helps to highlight potential problems

·       Helps in decision making

·       Helps business people to prepare for competition

·       Helps to provide an overall view of the business

·       Helps to provide a personal long term guide to progress

·       It guides employees to keep focused

·       Helps in discovering the strength and weaknesses 

 Contents of a Business Plan

·       Introductory Page: This is the cover page that provides a brief summary of the business plan’s contents. It will contain the, name and address of the business, names and addresses of principle officers, nature of business, statement of financing need and statement of confidentiality of the report

·       Executive Summary: These are three or four pages summarizing the complete business plan. This section is a marketing part and should stimulate the interest of the potential investors. It must highlight the key points of the business.

·       Industry Analysis: This section contains an assessment of the external and uncontrollable variables that may impact the business. This includes the legal and political, economic, social and cultural, technological and competitive environments. Its contents include: Future outlook and trends, analysis of competitors, market segmentation and industry forecasts.

·       Description of Venture: This section includes the detailed description of the business in terms of the followings key decisions: Products, services, size of business, office equipment and personnel, background of the entrepreneur(s) and location of the business.

·       Production Plan: This part details how the products will be manufactured in terms of: Manufacturing process (amount subcontracted), physical plant, machinery and equipment and names of suppliers of raw materials.

·        Marketing Plan: This part describes market conditions and how the products or services of the business will be marketed in terms of the following factors: Products and/ services, pricing, distribution, promotion, forecasts and controls.

·       Organizational Plan: This part describes the form of business ownership and lines of authority and accountability for members of the new venture. Its contents include: Form of ownership, identification of business partners or principal shareholders, authority of principals, management team and background and roles and responsibilities of members of the organization.

·       Assessment of Risk: This section identifies the potential hazards and alternative strategies that can be used to meet the business plan goals and objectives. It includes: Evaluation of  the weaknesses of the business, new technologies, substitute products or services, competition  and contingency plans. 

·       Financial Plan: This contains projections of key financial data that determines the economic feasibility of the venture and the financial commitment in the new venture: Pro-forma income statement, cash flow projections, pro-forma balance sheet, break even analysis, sources and application of funds.

·       Appendix: This contains any supporting information that is not necessary in the body of the plan. Reference to these documents must have been made in the business plan itself. It includes: Letters, market research data, leases or contracts, and price lists from suppliers.