A third of SMEs say they do not have a business plan despite evidence that those that do are consistently more profitable and more than twice as successful in achieving their goals, according to research say Harris & Co accountants Northampton, the specialist small business accountants.
The survey of 450 SMEs from different sectors found that 34% said they had no business plan in place. Of these, two third (68%) said they saw no need to have one, while 10% said they did not know they needed one.
The research also showed that the majority (70%) of SMEs that did have a business plan were profitable, compared to only half (52%) of those that did not. They were also more than twice as likely to achieve their top three business goals of increasing profits, increasing revenue growth and attracting new customers (69% success rate) compared to those without a business plan (31% success rate).
Lucy Fox, general manager UK cloud solutions for Exact, said: ‘The findings clearly show there are many SMEs who are missing out on the added value a business plan can offer, the consequence being that many may be failing to reach their full growth and business potential as a result.’
One of the main reasons given for not having a business plan was the belief it would take too much time to develop, with 23% of SMEs saying they were ‘too busy’ to produce one. Respondents also said they had no one to help with creating a business plan (8%) or failed to do one themselves because they were ‘not comfortable with numbers".
Fox said: ‘While the results should serve as a bit of a wake-up call, they also highlight that more needs to be done to address some of the misconceptions over what is involved in the planning process. Many don’t seem to realise that with the help of a trusted financial advisor, like an accountant, creating a plan can be done easily and the benefits can be enormous.’