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Planning can be formal or informal. Informal planning is where nothing is written down and where there is little exchange of objectives with others. This describes the planning strategy of many small businesses and farms where the owner–operator is the only person who has a vision about where the business is heading. Informal planning often lacks continuity.
Formal planning on the other hand usually covers a period of years. Small and large organisations can spend vast amounts of time and energy planning and consulting with others to formulate their objectives and long term plans.
Planning assists in the achievement of goals over short and long term periods by encouraging participants to think through the factors that affect achieving the goal. For example, the time allocated, the supplies needed, tools required, personal protective equipment needed or weather conditions. Other factors to be considered are seasonal activities, supply and demand and assistance that may be required. If there is a clear goal and work is planned to achieve that goal, there is a greater chance of success.
There are a number of reasons why it is important to plan.
Planning gives direction so there is a defined objective and a clearer understanding of what is to be achieved. Single operators may need to outlay quite large sums of money for equipment and tools; this can lead to waste if a medium to long term plan is not in place.
Lack of planning can increase the impact of change on staff or if self-employed, sudden and unforeseen losses of income and clients. Sometimes outcomes can be different from well laid plans. Even so, the process of planning requires everyone to think through processes, which in turn reduces the impact of change. Some people think that planning reduces flexibility. However good planning is an ongoing activity and requires flexibility as conditions change.
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