CHAPTER ONE

1.1     GENERAL BACKGROUND TO THE SUBJECT MATTER

          This project introduces planning as an important tool to management of small-scale business with a case study of PETER VENTURE.

          It is located at No. 6 Isiokpo Awada Layout, Onitsha – Anambra State.

          This venture deals on production of plastics of various kinds. Emphasis is placed on planning as important tools to the management of small-scale business. Upon completing this project one should be able to describe the importance of planning and why it is needed in a small-scale business and should understand managerial task in planning.

          Planning, being one of the functions is very necessary to the survival of any business. Planning includes the forecasting and selecting of Objectives with policies, programme and procedures for achieving their business goals. It involves making decision, it helps small-scale business to grow, it embraces all the activities which a company undertakes to determine the type of products it will produce/market. It is normally undertaken to determine the present and further requirement of customers, which involves goods and services for their satisfaction (customers). 

          Tools used in planning involve collection of data by coding, tabulating, charting and discussing them in an orderly manner in other to bring out their meaning clearly by analyzing data collected.

     1.2   PROBLEM ASSOCIATED WITH THE SUBJECT MATTER

          Planning is an intellectually demanding process, it requires the conscious determination of course of action, and the basic decision on purpose, knowledge and considered estimates.

          Projects have failed in most business enterprises such as small scale as a result of inadequate plans being made and all variables like to affect the business, not adequate controlled.

          Planning should consider some factors in the environment, which will help or hinder the organization in achieving its goals.

          They should take account of existing organization and provide for control, so performance can be checked with established standards. It focuses on action and purpose, which forecasts actions and tend towards the ultimate goals and not those irrelevant ones. Small scale business management planning seeks to achieve a consistent, coordinated structure of operation focused and desired ends. So without planning action produces nothing but chaos.   

          One main features of planning is to make a decision. This will involve assumptions about the future and about many variable factors usually dealt with in the decision making process.

          Many persons may be involved in planning activities, which must be continuous process, but the main point is that these activities must produce a specific plan, without which plans, planning activities have no real effect.

 1.3   PROBLEMS THAT THE STUDY WILL BE CONCERNED WITH

          Planning being an important tool to small-scale business requires the business enterprise to determine its long-term survival based on finding the most profitable way to allocated limited resources among competing ends. Labour hours to such values as how satisfied individuals and groups in the business of small-scale management.

          The higher up the hierarchy of management the more attention is paid to planning, particularly in setting out goals and strategies for long period ahead. Managers lower in the hierarchy usually deal with sections of the total plan, and are concerned with shorter periods of time. Efficiency of planning is measured by the amount it contributes to purpose and objectives, as offsets by costing and unsought required to formulate and operate it. 

          The most important way management can contribute to growth is by systematic planning probabilities are forecast and programmes developed to take advantage of them. Consistent attention must be given to changing circumstances and many revisions of plans may be needed.

          Items affecting forecasting are as follows:- Political stability, Population trends, Price levels, government control and fiscal policy, employment, productivity and national income, technical environment. Some areas have shown great changes such as computer. Its impact and speed development must be especially noted.

 A Simple Cycle Of Business Plan Activity Can Run Thus:

Planning cycle.

FORECAST PLANS 

 The diagram above shows how planning of small-scale business an important tool to the production and distribution to customers.

 1.4  THE IMPORTANCE OF STUDYING THE SUBJECT AREA

          It is of great importance to studying the area of small scale business planning.

          In planning for longer periods, a forecast of technological changes is vital especially for those companies, which are in area rapidly advancing technology. For an organizational point of view companies have separated the basic day-to-day planning activity from a strategic planning for the future.

          Job is not so rigidly defined as in a large organization and there is more flexibility between jobs. There will be less formality than in larger organizations. Decision-making will be quicker and rules and procedures less rigid, which are usually, based on planning.

          The size of the outdoor staff depends upon many factors, particularly the method of production. Geographical size of the territory usually depends upon the physical nature of the product and services. Work must be planned, so that mechanical gadgets and equipment, raw material are effectively utilized. For efficient production of products (plastics) customer’s demand and buying patterns, factory locations production capacity are applied based on planning and techniques simulation.

          In forecasting it is important to stress the need to examine the economic environment and possible fluctuations in company profits and relations to possible cycles of business activity.

 1.5   DEFINITION OF IMPORTANT TERMS PLANNING:

          Is the most basic of managerial functions. It determines organization objectives and purposes so that every one understands what they have to accomplish.

PLANS

          Is outline drawing showing the relative size, positions of parts.

GOAL (IMPORTANT TOOL):

          It gives broad guidelines towards which more detailed and specific plans are directed. They consist of the purpose, mission and objectives.

 STRATEGIC PLANNING:

Involves deciding upon the major goals of the organization and what policies will be used to achieve them.

TACTICAL PLANNING: 

Involves deciding how resources will be used to help the organization achieve its strategic goals. It relies more on past records and involves shorter time periods.

DECISION:

Is a choice where by a person forms a conclusion about a situation. This represents a course of behaviors about what must or what must not be done. It is the point at which plans, Polices and objectives are translated unto concrete actions. Planning leads to decision guided by company policies, procedures and programmes.

          The purpose of decision-making is to direct human behavior towards a future goal. If there were no alternatives, there would be no need for a decision.  

SMALL-SCALE BUSINESS:         

Is independently owned and do not dominate the market.

It plays an important part in the private enterprise system. Management is processes by which scarce-resources are combined to achieve given ends. Policies are guide to action or decisions of people. Policies are directives issued from a higher authority, and provide a continuous frame work for the conduct of individuals in a business. They are in effect a type of planning. Policies are expressions of a company’s within attitude towards types of behaviour within which it will permit, or desire employees to act. They express the means by which the company’s agreed objectives are to be achieved and usually take the form of statements, telling members how they should act in specific circumstances.

Policies reflect management thinking on basic matters and inform those interested, Management thinking on the activities of the company about the company’s intentions regarding them.

Policy formulation may begin at any level of organization. MBO which has its meaning as Management by Objectives, is one approach to planning that enables all managers to participate fully in planning activities. Subordinate and managers meet to establish objectives and periodically review progress. It is based upon as set of assumptions that under proper conditions, people will find satisfaction at work and will accept responsibility for their results.

Forecasting is extrapolating or projecting the trend of the past experiences into the future. Forecasting sales by product and sale territory is a never-ending responsibility of a market analyst or a sale manager.

Budget control is the basis of control of the activities of a firm, or small-scale business and government.

 REFERENCES

Albert, K.J. (1983) The strategic management handbook New York, McGraw-Hill.

 Anboft, H. I. (1969) Business Strategy, London; Penguin.