In today’s mode of conducting business, where there is always a “threat” from the competition and the resources are limited, the planning of future business is extremely important because by adequately planning, you can manage your business better, i.e. it enables you to use available resources in a more efficient way and plan future resources.
The basis for business planning is being aware of the current business, which actually means having a quality accounting / bookkeeping with as much information as possible; this information presents the basis for detailed financial analysis of business.
The second important part of business planning is knowing, i.e. analysing the business environment and assessing the company’s position in regards to its environment. Using different analyses, such as SWOT analysis, Cost Benefit analysis and PEST analysis, you get a clearer picture of advantages and disadvantages of the company in comparison to its competition and the market.
The business plan is drawn up for one business year; besides taking into account the current business, it must be coordinated with long-term strategic objectives of the company.
Considering the fact that making a business plan is actually a projection of future business events, you do not have to adhere to it blindly for the whole year, but it is important to monitor its realisation and changes in the market throughout the year, and amend and correct it as needed, i.e. coordinate business decisions with changes.