Britain’s small firms could be missing out on some 25bn in revenue by not having a business plan to guide decision making, according to new research by the Centre for Economics and Business Research (Cebr).
The survey commissioned by npower Business found than some 26 per cent of small UK firms operated without a business plan in 2015.
Yet those owners who did have a blueprint for their company’s future direction were expecting to reap the rewards and predicting revenue growth almost two percentage points higher than the SME average.
Laura Holdgate, a senior economist at Cebr, said: The research suggests that more effective business planning among the UK’s SMEs is directly linked to better business performance. SMEs have the potential to experience higher turnover growth as a result of more effective business planning, in turn boosting UK plc.
Additional data from the Association of Accounting Technicians (AAT) published recently suggested that the proportion of micro firms without plans in place could be even higher with some 58 per cent of small business owners admitting they didnt have one.
“Having the necessary financial skills and a clearly defined business plan are essential tools to help firms expand successfully, said AAT chief executive Mark Farrar.
Phil Scholes, head of npower Business, commented: Effective planning is essential for small businesses who are the backbone of the UK economy. Being in better control of their finances and the risks and opportunities facing their business enables them to make better, more effective decisions.
Of those that the AAT asked, one in ten micro business leaders said that they wanted a business plan but didnt know how to put one together.
And some enterprise organisations have warned that not having a detailed plan should not deter would-be entrepreneurs from pursuing their business ambitions.
most people think you need a business plan and funding to get an idea off the ground, said Alan Donegan, a co-founder of the Pop-Up Business School. Our approach is to show people how to start with no money, be confident about their idea and then get out there and find some customers.