According to recent findings by RSM Bird Cameron, the smaller the SME, the less likely they are to do a business plan.

Only 40% of sole ownerships complete a business plan. Business planning is critical for every organisation.  Statistics show that smaller companies that don’t take the time to develop a strategic plan are consistently outperformed by those that do.

Business planning is an opportunity for SME owners to set the direction of their business over time. Very much like a roadmap, it should guide the direction of the business to where the owners want it to go. In a recent study by RSM Bird Cameron, ThinkBIG 2014 released October 2014, approximately two thirds of SME owners (67 per cent) say they complete a business plan, and almost half (49 per cent) of respondents prepare one annually, up from 42 per cent in 2013. However, that does mean that one in three owners do not prepare a plan.

Business planning remains key for SME business owners. Many industries continue to face scrutiny from government and financial institutions. Having a solid business plan is critical in meeting financing requirements. More business owners are facing pressure from banks, which have become increasingly risk averse since the GFC. This means that SME owners need to spend more time developing business plans and creating debt management strategies.

There is no common format or inclusion list in business planning in the SME area. Business planning appears to be based on the particular need of the SME at that point in time. A good business plan can set a clear path towards growth that many smaller businesses are not taking. Regular updating of the plan also is an important factor in growth. SME owners who undertake formal planning tend to focus their attention on all areas of their business, with business goals and financial plans the most consistently-reported areas of focus.

If you want to know more about how to create a business plan for your company contact us.