Less Than Half of Small Businesses Have Formal Business Plan
A quarter of firms have no growth strategy at all in place
Less than half (47%) of small businesses have a formal business plan in place, according to the latest research from Barclays, with an additional 25% only having a verbal, informal, plan established.
The remaining (23%) of firms don’t have a growth strategy in place at all and only 49% have a succession plan, indicating that whilst small firms are growing (recent updates to the Government Growth Dashboard revealed small and mid-sized business turnover and profit increased in 2014) they could be impeding further progress by not focusing enough on growth plans.
The report found that small businesses in the South and the East, who usually perform better than the rest of the country, are more likely to have a business plan in place than any other region and more established firms (over 35 years old) had a plan compared to companies that were less than five years old (66% compared to 44%).
Barclays’ findings also highlighted the key factors that are attributed to the increase of revenues for small businesses; with updating current services and products, and entering new markets coming out top at 26% each.
Other influences listed were the launch of a new product or services (24%), recruiting staff (20%) buying new equipment (13%), acquiring a new website, supplier or premises (all 12%), and finally reducing the cost of debt or obtaining finance (both 10%) – many of which would be difficult to implement without a formal plan in place.
Managing director of Barclays’ Business Lending and Enterprise sector, Rebecca McNeil, commented on the findings:
“Having a business plan is fundamental for a small business. It defines exactly what you want to achieve, how you plan to achieve it across a set time period and is a sure fire way to ensure that growth targets and plans are being met.”
For more information on creating and implementing a business plan, have a look at our sister site Startups.co.uk’s section here Startups.co.uk’s section here.