Why is Planning Important?

business entrepreneur goals grow business planning strategy success Feb 15, 2021
Business woman planning and strategizing

By Graham Acreman

Earlier in the year I wrote an article, 10 Powerful Business Tips for Owners and Entrepreneurs.

This week I'm going to elaborate on the fourth item – Always Have a Plan.

Growing up in a military family, I was exposed to hard-core planning going back as far as I can remember.  If you wanted a lesson in structure and planning, my house was the place to be.

As a young adult, I can vividly recall arriving on my parents doorstep after a 12 hour drive with young kids. I was still getting out of the car while my Dad greeted me from the doorstep while excitedly sharing a detailed itinerary for our visit that he held his hand.

Looking back, I didn’t always appreciate value of a planning but in hindsight I can see that planning has led to many of my accomplishments and successes.

There are 6 good reasons to have a plan; let’s break it down:

1) A plan helps you to achieve goals.

It’s often been said that a goal without a plan is just a wish.

It’s quite simple - To achieve success, you need to set goals.  To achieve goals, you need to plan. Planning allows you to break your goals down into sequential steps that if followed, will help you attain your goals.

 

2) A plan will help you use your time more effectively.

If you start your day without a plan, you’re likely going to find yourself doing whatever you feel like doing rather than what you should be doing.  I call that drifting. You may spend too much time drifting through your email or checking social media updates.

Alternatively, if you plan your time you will use it more effectively because you took the time to consider what you wanted to accomplish and you know what you need to do. A plan helps you work with intention.

 

3) A plan will help reduce risk.

This is a frequently overlooked component of planning. Good planning to reduce risk can be as basic as ensuring that if one of your team calls in sick that you know what you are going to do. Reducing risk can also be achieved through actions like having a “Plan B” if you lose a major customer, don’t succeed at obtaining funding, or don’t get paid by a major client on time.
 
Good planning will also ensure that you and your business are covered in the event of a fire, flood, or illness.

 

4) A plan will help ensure proper coordination.

This one becomes increasingly more essential as your business grows bigger.  When you only have a couple of employees, it’s easier to stay coordinated. As your business grows, it can be increasingly challenging to ensure that everyone is working in a coordinated manner. I can’t count the number of times I’ve seen business owners contemplate hiring a new employee when a closer look at the existing team revealed that there was lots of capacity.  In effect, the businesses didn’t need another employee – it required a better coordination of efforts.

 

5) A plan helps with decision making.

Every day you make dozens, if not hundreds of decisions. Many of them are small, some are of more significance. When you have a plan that supports a goal, every decision you make should be made in relation to how it helps achieve your goals.  Many of these decisions on their own, won’t account for a major difference in your success.  But, the compounding effect of hundreds of decisions made with your plan in mind will help you achieve success much faster.

Let’s consider a hypothetical business owner named Justin whose business provides plumbing services.  Some days, they reach capacity in terms of the number of customers they can handle.  Justin doesn’t have a plan and will likely take on more business than the business can handle.  This will stress him out as well as all of his employees as they struggle to deal with the volume. Though some customers may be happy, as the business falls behind in servicing, many others will not be.

Justin doesn’t have a plan and consequently he makes decisions on the fly because of the lack of a plan or a goal.

Jennifer, has a similar business in the same industry. The difference is, she has a plan to grow her business and she recognizes that it’s much easier to grow a business if her customers are kept happy.  Based on the stated goals of growing the business and keeping customers happy, Jennifer will likely only book business until it reached a certain capacity – the maximum capacity that can be serviced while still providing a great customer experience.

Additionally, Jennifer will recognize, that based on the increasing number of full-capacity days together with the goal of growing her business – that she needs to find a way to increase her capacity.

As you can see, the difference here is that Justin has no plan which results in him making decisions in isolation whereas Jennifer has a plan which causes in her to strategize how she should be making decisions.
 

6) A plan will help you set direction.

Think of this one as an extension of the first item but even more essential as it helps set direction for your team.  

You and your team should be working on things that are going to lead to the achievement of your company’s goals.

It’s up to you to set direction for your team.

Your employees need direction.  If they’re not provided direction on what they should be doing, most employees will do what they think they should be doing.  The reality is, this may be completely different from what you want them to be doing.

Your employees can’t read your mind and you need to help them understand your goals and the plan and specifically how they can contribute towards it’s success.

As you can see, planning in your business has wide-spread benefits.  Ultimately, planning will make your business better.

Get Strategies, Tips, & Tactics 

Subscribe to the Acreman Business Roundup and get weekly updates that will help you grow your business and build the lifestyle of your dreams.

We hate SPAM. We will never sell your information, for any reason.

How to Demonstrate Your Competence

May 09, 2021

7 Ways to Improve Team Communications

May 06, 2021

How to Be a Better Manager

May 02, 2021

How to Become an Effective Leader

Apr 30, 2021