Up to 29% of small and medium sized businesses fail to see a reason for preparing a business plan, following research undertaken by Close Brothers Business Barometer, which takes into account views of small and medium sized business owners along with senior management.
Worryingly, 43% of those who do not have a business plan admit they don’t see it as necessary and 20% state they keep business plans in their head. 15% claim having a business plan is not a priority for them.
Those businesses that do have a business plan, a surprising 40% review them at least once a year, with 20% reviewing it every two years.
Although having a business plan is important, it is only useful if it is reviewed regularly and reflects the ambitions of the business, current and future trends and realistic targets are set, bearing in mind the economic and industry challenges. Regular SWOT analysis (strength, weaknesses, opportunities and threats) should be undertaken and the findings should be implemented and regularly followed up. Otherwise reviewing a business plan
becomes another task undertaken by the business with no meaningful outcome.
The CEO of Close Brothers Asset Finance, Mike Randall stated, “It is somewhat concerning that so many small and medium-sized firms do not have a business plan as without clear direction, they may be missing out on opportunities for growth and not realising their full potential.”
“Planning is key to any business throughout its lifecycle. A formal plan can be an extremely valuable tool for managing and growing a business as it allows a company to recognise its strengths and weaknesses and ensure they have appropriate plans in place.”
‘Of the companies we talked to that do have a business plan, the majority said they believe that financial strategy is the most important aspect of it.”
“Indeed, it’s vital that business owners take the time to plan and regularly review their financial strategy to ensure they have the right funding in place to meet the needs of their business, at its current stage of the business lifecycle.”
Contact Avery Clifton to discuss your business’s plan.