In today's major market changes, planning is the first and the most important management function. The environment in which entrepreneurs are located is highly variable and dynamic, and in order to realize their vision and mission with competitive advantage, planning is of utmost importance. It provides the company with answers to questions about the existence of companies, areas of work, strengths and weaknesses of the entire company or certain organizational units, the impact of external and internal factors, the strategy of employee work and the achievement of market advantage with one of today's most important resources as well as the market advantages depending on the subject business operations. Without planning, no organizational unit as well as a company can succeed. Large companies facing modern management are widely used and working on innovative solutions for better planning, while small businesses give less significance to planning since they think that small company should not be elaborated in details although the market shows them just the opposite. The theme and subject of this research work are management functions and planning as the first and the most important function on the example of a private extended stay to point to the importance of planning for small, service activities. For the plan, it is important that the goals are “SMART”: specific, measurable, achievable, and terminable. The paper is written with the intention of analyzing the managerial function of planning and comparing it with the theory on the example of small business entrepreneurship.