One-third of SMEs don't work from a business plan

Almost one-third (29 per cent) of small business owners don’t have a business plan in place, according to new research by Close Brothers Asset Finance.

Of those that do not currently work from a business plan, almost half (43 per cent) said they don’t deem one necessary, while a fifth stated they prefer to keep their ideas in their head as opposed to on paper.

An additional 15 per cent claim that devising and working to a business plan simply isn’t a priority for them.

These figures are derived from the new Close Brothers Business Barometer; a quarterly survey which measures the opinions of SME owners.

Mike Randall, CEO, Close Brothers Asset Finance, said: “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 small businesses that do work to a business plan, almost 40 per cent review their plan a minimum of once each year, while a fifth review it once every two years.

Mr Randall believes that business plans are most useful when they are regularly reviewed to ensure that the plans in place best reflect the current and future goals of the business.

“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,” added Randall.

“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.”

Date published 5 May 2015 | Last updated 5 May 2015