How to Plan and Organize a Business

Assign 5- Questions #1-7 pg. 152

1. Explain why planning is so badly needed by small businesses? Why is it so often neglected?

• Planning is so badly needed by small businesses so that they look ahead to the future. 

Planning is the important first step so that the future course of the business is determined. 

Planning is setting objectives and procedures to achieve those objectives.   You must know

where you are going and how to get there for your small business.

• Many reason planning is neglected are due to time constraints, fear of revealing problems

or weaknesses, lack knowledge of how to plan, and feeling that the future is unpredictable

and cannot be planned for.

2. Explain the two overall categories of planning. What are the essential differences between

the two?

• The two overall categories of planning are strategic planning and operational planning. 

Strategic planning is the long-term direction that is needed to have their mission succeed. 

Strategic planning is the definition of the business’s mission and objective and the

strategies needed to accomplish these missions and objectives.

• Operational planning is the setting of policies, methods, procedures, and budgets of the

business.  The strategic planning usually occurs at the beginning before starting your

business while operational planning is continuous occurring before and after the business

begins operations.  Strategic planning is also considered long-term planning while

operational planning focuses on more short-term.

3. Explain each of the following: policies, methods, procedures, budgets, and standards.

• Policies are statements that guide the managers with their decisions.  They are the plans of

actions that guide the decision toward the goals of the business owner.  Methods and

procedures are the detailed instructions for employees to perform their jobs.  They are the

specific actions in order to follow so that consistent results are achieved.  Budgets are the...