Business owners said they felt business plans were unnecessary
The figures are taken from the latest Close Brothers Business Barometer – a quarterly survey by Close Brothers Asset Finance exploring the opinions of business owners from SMEs.
Over 700 respondents took part across a range of industries, and of those who admitted they didn't have a business plan 43 per cent said they didn't feel it was necessary. A fifth preferred to keep plans in their head, while a further 15 per cent admitted it just wasn't on their list of priorities.
Mike Randall, CEO of Close Brothers Asset Finance, said: “It's concerning that so many small and medium-sized firms do not have a business plan. Without clear direction, they may be missing out on opportunities for growth and not realising their full potential.”
He suggested that those who weren't prioritising it or "didn't feel it was necessary" should rethink their approach. “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,” Randall explained.
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The study also asked those who did have a plan, how often they reviewed it. Almost two fifths said they reviewed it at least once a year, while a fifth look over their plan every two years. Some 14 per cent reassess it once every two to five years. Randall said this was an area SMEs should be focusing on as, “a plan is only useful if it is reviewed regularly to ensure it meets the current and future needs of the business”.
Matt Hulett, CEO of online marketplace Clickbank, however, has suggested that “lately, scrappy and innovative entrepreneurs are bucking the trend and adopting new forms of growth hacking”. Writing on Venturebeat, the tech entrepreneur said these individuals are "changing the way businesses are born, grow, and thrive”. He cited the importance of being able to make adjustments and changes as you go, which is harder to do with a static business plan.
The majority of the owners and management who took part in the survey and said they did have a business plan believed the financial strategy to be the most important aspect of it. Randall added: "It's vital business owners 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."