THE IMPORTANCE OF BUSINESS PLANNING IN MAKING MANAGEMENT DECISIONS
Abstract
This scientific work addresses the importance of the implementation of the planning process and business planning in accepting management decisions to improve the efficiency of the enterprise. The main purpose of the business plan is to convince future investors that the business project has a strategy of success and deserves the financial support. The business plan helps the CEO of the enterprise to make the appropriate decision on the feasibility or inexpediency of making a business project. This is a practically a working tool used in all areas of entrepreneurship and serves as an effective tool in making management decisions.
The main feature of the management decision is a focus on solving the goals and objectives of the enterprise. It should be noted that the management decision is made only by the CEO of the enterprise or the board of directors. The success of the enterprise depends on the timeliness of management decisions. So, the management decision is a choice of one among alternative decisions; it is a solution that will help to achieve the goals of the enterprise and increase the efficiency of its activities.
The business planning process also pursues similar goals. In modern business conditions, the main tasks of business planning: real and timely assessment of business ideas; establishing the quantitative value of resources, necessary costs and sources of funding; optimal choice of strategy of the enterprise on which the business plan is realized; search for reliable partners and contractors for the implementation of the business plan; assessment of the competitive environment; identification of levels and types of risks that may arise during project implementation and development of methods to reduce them; assistance in management decisions; forecast of the future results, etc.
At the preparatory stage of the business planning process, the necessary information is collected, analyzed, and the strengths and weaknesses of the enterprise, which provides for the implementation of the business project. At the same stage, the positive and negative influence of external factors, the formation of general goals of the business project, as well as outlining ways, methods and means to achieve them.
In turn, the business plan is a document developed on the basis of the analysis of internal and external environment. It formulates the essence of business - ideas, available tools, effective methods and tools for its implementation, as well as calculated rates of return on investment and efficiency of investment, possible risks, expected results, consequences and prospects of business development. All these calculated parameters greatly help to make a balanced and correct management decision.
It is clear that the successful development of the market system in our country requires the latest approaches to management decisions, as well as the management of economic activity in general and entrepreneurial activity. Therefore, the successful implementation of a particular business project becomes impossible without a prior process of business planning and development of a detailed business plan.
So, as a result, it can be argued that those companies that seek to effectively develop their business must develop a detailed business plan that will show the effectiveness of creating a new product or service, the implementation of which will lead to additional profits. Therefore, the use of a business plan in making management decisions regarding the introduction of a new type of product, changes in the volume of manufactured products, changes in technology, improving product quality or a number of other production problems will be a quality tool to solve these problems.
