Of those that admitted they do not have a business plan, the majority say they don’t believe it is necessary, while almost a fifth say they prefer to keep plans in their head and a further 15 per cent claim that it just isn’t a priority for them.
The figures are drawn from the results of the latest Close Brothers Business Barometer, a quarterly survey that canvasses the views of small to medium sized business owners and senior management.
Commenting on the findings, Mike Randall, CEO of 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.”
The Close Brothers Business Barometer also showed that of those firms that do rely on a business plan, almost two fifths review it at least once a year while a fifth review it once every two years. A further 14 per cent only review it once every two to five years.
“Organisations of all shapes and sizes may benefit from a business plan however, a plan is only useful if it is reviewed regularly to ensure that it meets the current and future needs of the business. Therefore it’s sensible to review current performance on a regular basis and identify opportunities for improvement and growth.”
Mr Randall continued: “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.”