GREAT STEPS FOR PLANNING AND RESOURCE MANAGEMENT
- Details
- Category: SME toolkit
- Written by with Bridget Olotu
- Hits: 559
This is one important aspect of organisational development that is not given serious thought by many Small and Medium Enterprises (SMEs) or what some call Small, Micro to Medium Enterprises (SMMEs).
There is a popular saying that goes by “He who fails to plan, plans to fail.” Adequate and thorough planning when deployed within an environment or organisation helps to stave off failure. Whether it is on a continental, regional, national, sectoral or individual level, this holds true. The reason many businesses remain small even after many years of operations is due to lack of planning, poor planning and/or lack of execution or poor execution. Someone once said jokingly that many people plan their birthdays better than they plan their lives, career or businesses.Meanwhile in some quarters, some believe that they would/should only plan when they are big, possess massive resources and have started experiencing exponential growths and developments. But that is not true. One of my mentors once said, and I keep this to heart, “You don’t grow big to manage well, you manage well to grow big.” While I totally agree with this statement, let me tinker with it a little. You have to plan well to manage well and it is only when you manage well you grow well. Stated differently, you need good and adequate planning and resource management to grow big.
What is planning?
Planning is simply the act or process of making detailed arrangements in order to achieve a goal, accomplish a task or reach an objective in the nearest or distant future. It also means studying the different options/aspects of a situation or problem and coming up with options/solutions to avert a crisis or to secure an anticipated or much cherished advantage. In planning, it involves details, careful consideration of facts, data, information items, solutions, options and it involves an intention and the design to accomplish that intention. Planning is time-consuming and this is why many entrepreneurs are not attracted to it.
Steps to Planning
To better drive this home, there are important steps to planning an entrepreneur must note. These involve:
I. Objective setting. Every plan seeks to accomplish an objective. It may be short-term, medium- or long-term. And it may be related to any aspect of the business e.g. marketing, sales, financing, business development, product development, human resource management, talent management, succession planning and others. Developing an objective or objectives is like setting an agenda for consideration.
II. Information gathering and analysis. For SMEs that have workers, call an important meeting where you gather their views, suggestions and ideas for analysis. You can also engage the services of consultants who independently provide the information you need or even sit in the meeting during discussions. When you have gathered enough information/data, analyse this with the purpose of arriving at effective solutions.
III. Proffer and adopt solutions. When you have analysed your facts, data or information, the next step is to proffer solutions to problems that you might encounter in meeting the objective(s). Adopt preferred solutions that resonate with your audience.
IV. Provide alternative measures. In other words, consider Plan B. Your solutions could be said to constitute Plan A. What if your Plan A fails, Plan B would help you to minimise your costs and losses or even help you to still achieve your objective.
V. Implement agreed solutions. When you have done all the needed and careful considerations, go ahead and implement.
VI. Review the outcome of your results. If results attained do not equate with the efforts and resources put into the whole process, review and go back to Step II or if you think the objective is becoming too expensive and may not be profitable or in the interest of the business, discard in order to minimise your losses and costs.
Apart from institutionalising planning as a business process within the sector or SMME sector, it is important to say that resource management is also very important. The resources a small business has include, among others, man (workforce), machines (tools and equipment), materials (raw materials, semi-finished or finished goods, intellectual property and inventions) and money. Time is also another important resource. Managing these resources will determine the future and success of the small business. We shall take this piecemeal:
I. Management of the workforce. If there is any resource that is key to the success of the small business, it is the workforce. In many quarters, the human resource is deemed the greatest and most important resource in business. SME owners/managers must spend money on training and development, put in place good welfare packages, organisational systems and structures to manage their human resource elements so they can deliver the multi-dimensional objectives of their businesses.
II. Management of machinery. Adequate management of the tools and machinery used in the business will determine the overall productivity and profitability of the business. Not only must SMEs invest in relevant machinery and tools, they must also see to the good management of these resources. Laptops, computers, stationery, furniture, fittings and electrical, machines and others are to be managed properly and be kept in good condition.
III. Management of materials. Another resource SMEs should manage well is their materials. These could be raw materials, semi-finished or finished goods or information/research products. Managing this well help to lengthen their lifespan, shell life, reduce losses or wastages, improve sales and profitability for the business.
IV. Management of money. This is very important. Adequate management of the financial resources of SMEs will put them in a strong financial position to compete with their large counterparts. Adequate cash management, asset management, management of financial investments are all areas to be considered by SMEs. Many SMEs are trapped in debt and losses because their owners are given to reckless spending of capital, ostentatious living, lack of investment of idle funds and poor financial management skills. This affects the financial status of the organisation, cancelling the firm’s competitive advantages, market and profit potentials and limits the growth of the business.
V. Time management. Ability to manage time productively can also help SMEs. Being able to prioritise tasks is very important. In Eat This Frog, Brian Tracy did a great job in distinguishing between important and urgent tasks, important but not urgent tasks, and others. Every SME owner should own a copy of the book.
In conclusion, beyond writing a business plan or having it prepared for SME owners, planning and resource management is key to the success of the business. Without planning and resource management, a business cannot compete, will lose its advantages, become unprofitable and unattractive even to job seekers, and will wind up for non-performance. However, planning and resource management improves an SME’s competitive advantages, increases sales, profitability, business growth and success.
I believe strongly that if SMEs don’t engage in planning and resource management, they’ll be planning to fail. See you in the next edition and bye.
Articles
GREAT STEPS FOR PLANNING AND RESOURCE MANAGEMENT
Category: SME toolkit Written by with Bridget Olotu Hits: 559
This is one important aspect of organisational development that is not given serious thought by many Small and Medium Enterprises (SMEs) or what some call Small, Micro to Medium Enterprises (SMMEs).
There is a popular saying that goes by “He who fails to plan, plans to fail.” Adequate and thorough planning when deployed within an environment or organisation helps to stave off failure. Whether it is on a continental, regional, national, sectoral or individual level, this holds true. The reason many businesses remain small even after many years of operations is due to lack of planning, poor planning and/or lack of execution or poor execution. Someone once said jokingly that many people plan their birthdays better than they plan their lives, career or businesses.Meanwhile in some quarters, some believe that they would/should only plan when they are big, possess massive resources and have started experiencing exponential growths and developments. But that is not true. One of my mentors once said, and I keep this to heart, “You don’t grow big to manage well, you manage well to grow big.” While I totally agree with this statement, let me tinker with it a little. You have to plan well to manage well and it is only when you manage well you grow well. Stated differently, you need good and adequate planning and resource management to grow big.
What is planning?
Planning is simply the act or process of making detailed arrangements in order to achieve a goal, accomplish a task or reach an objective in the nearest or distant future. It also means studying the different options/aspects of a situation or problem and coming up with options/solutions to avert a crisis or to secure an anticipated or much cherished advantage. In planning, it involves details, careful consideration of facts, data, information items, solutions, options and it involves an intention and the design to accomplish that intention. Planning is time-consuming and this is why many entrepreneurs are not attracted to it.
Steps to Planning
To better drive this home, there are important steps to planning an entrepreneur must note. These involve:
I. Objective setting. Every plan seeks to accomplish an objective. It may be short-term, medium- or long-term. And it may be related to any aspect of the business e.g. marketing, sales, financing, business development, product development, human resource management, talent management, succession planning and others. Developing an objective or objectives is like setting an agenda for consideration.
II. Information gathering and analysis. For SMEs that have workers, call an important meeting where you gather their views, suggestions and ideas for analysis. You can also engage the services of consultants who independently provide the information you need or even sit in the meeting during discussions. When you have gathered enough information/data, analyse this with the purpose of arriving at effective solutions.
III. Proffer and adopt solutions. When you have analysed your facts, data or information, the next step is to proffer solutions to problems that you might encounter in meeting the objective(s). Adopt preferred solutions that resonate with your audience.
IV. Provide alternative measures. In other words, consider Plan B. Your solutions could be said to constitute Plan A. What if your Plan A fails, Plan B would help you to minimise your costs and losses or even help you to still achieve your objective.
V. Implement agreed solutions. When you have done all the needed and careful considerations, go ahead and implement.
VI. Review the outcome of your results. If results attained do not equate with the efforts and resources put into the whole process, review and go back to Step II or if you think the objective is becoming too expensive and may not be profitable or in the interest of the business, discard in order to minimise your losses and costs.
Apart from institutionalising planning as a business process within the sector or SMME sector, it is important to say that resource management is also very important. The resources a small business has include, among others, man (workforce), machines (tools and equipment), materials (raw materials, semi-finished or finished goods, intellectual property and inventions) and money. Time is also another important resource. Managing these resources will determine the future and success of the small business. We shall take this piecemeal:
I. Management of the workforce. If there is any resource that is key to the success of the small business, it is the workforce. In many quarters, the human resource is deemed the greatest and most important resource in business. SME owners/managers must spend money on training and development, put in place good welfare packages, organisational systems and structures to manage their human resource elements so they can deliver the multi-dimensional objectives of their businesses.
II. Management of machinery. Adequate management of the tools and machinery used in the business will determine the overall productivity and profitability of the business. Not only must SMEs invest in relevant machinery and tools, they must also see to the good management of these resources. Laptops, computers, stationery, furniture, fittings and electrical, machines and others are to be managed properly and be kept in good condition.
III. Management of materials. Another resource SMEs should manage well is their materials. These could be raw materials, semi-finished or finished goods or information/research products. Managing this well help to lengthen their lifespan, shell life, reduce losses or wastages, improve sales and profitability for the business.
IV. Management of money. This is very important. Adequate management of the financial resources of SMEs will put them in a strong financial position to compete with their large counterparts. Adequate cash management, asset management, management of financial investments are all areas to be considered by SMEs. Many SMEs are trapped in debt and losses because their owners are given to reckless spending of capital, ostentatious living, lack of investment of idle funds and poor financial management skills. This affects the financial status of the organisation, cancelling the firm’s competitive advantages, market and profit potentials and limits the growth of the business.
V. Time management. Ability to manage time productively can also help SMEs. Being able to prioritise tasks is very important. In Eat This Frog, Brian Tracy did a great job in distinguishing between important and urgent tasks, important but not urgent tasks, and others. Every SME owner should own a copy of the book.
In conclusion, beyond writing a business plan or having it prepared for SME owners, planning and resource management is key to the success of the business. Without planning and resource management, a business cannot compete, will lose its advantages, become unprofitable and unattractive even to job seekers, and will wind up for non-performance. However, planning and resource management improves an SME’s competitive advantages, increases sales, profitability, business growth and success.
I believe strongly that if SMEs don’t engage in planning and resource management, they’ll be planning to fail. See you in the next edition and bye.