Profit planning is the process of
developing a plan of operation that makes it possible to determine how to
arrange the operational budget so that the maximum amount of profit can be
generated. There are several common uses for profit planning, with many of them
focusing on the wise use of available resources. Along with the many benefits
of this type of planning process, there are also a few limitations.
The actual process of profit
planning involves looking at several key factors relevant to operational
expenses. Putting together effective profit plans or budgets requires looking
closely at such expenses as labor, raw materials, facilities
maintenance and upkeep, and the cost of sales and marketing efforts.
