Business planning by small owner managed enterprises in the Victorian forestry sector

Planning by owner-managers of small business has not received the attention from researchers a sector of such importance deserves. Using the forestry sector in Victoria as a sample, an investigation into the background and the planning undertaken by the owner-managers of small businesses was designed and implemented. The people consulted by the owner-manager as part of the planning process were identified as well as the topics discussed. A range of approaches to planning were identified and grouped into non-planners, partial planners and formal planners.

The sample was divided into Consultants and Contractors based on the type of work undertaken and the equipment used. Further sub-sets were identified. Contractors were split into Labour Intensive Contractors and Capital Intensive Contractors and the Consultants were also divided by age into "full time" and "later years" sub-sets. These data splits enabled significant insights into the planning of owner-managers.

Hindrances, hurdles and triggers to planning were identified. Informal planning appears to be the normal behaviour for much of the sample until a strong planning trigger overcomes the hurdles and hindrances and leads the owner-manager to engage more conventional planning activities. The owner-manager usually reverts to informal planning once the planning trigger issue is resolved.

Various relationships linking business characteristics, owner-manager demographic details and planning characteristics are explored to reveal some significant correlations that help explain results and can be used to guide professional development programs designed to increase the level of planning undertaken by owner-managers.

Regression analysis was used to show that relationships exist between the perceived value of planning by the owner-manager, level of computer literacy, level of literacy, the effort put into planning and the amount of planning undertaken. Insights into the business operations and management style of the managers interviewed would suggest the low level of planning undertaken will not be increased by just increasing the level of computer literacy and literacy in isolation.

The research reported here contributes to the understanding of planning approaches taken by owner-managers operating similar businesses to those sampled. The relationships between demographic details, organisation characteristics and planning activity provides an insight into the management philosophy and approach that can be used to assist with the design of management capacity building programs within the industry and as a foundation for further investigation.