Small- to medium-sized enterprise owners are more focused on business planning in 2015 compared to last year, according to a new study by accounting firm RSM Bird Cameron.
The firm’s ThinkBig annual insights survey of 446 business owners revealed 82 per cent of respondents have completed a financial plan this year, up from 78 per cent in 2014.
Four out of five said they are focused on their business goals this year, against 64 per cent last year. Meanwhile, nearly three-quarters (73 per cent) have an action plan in place this year, compared to just over half (57 per cent) in 2014.
“RSM Bird Cameron’s experience suggests businesses that have a plan outperform those that do not plan,” the firm’s national head of business solutions, Andrew Graham, said. “This is also reflected when comparing business planning with revenue growth.”
Of those who completed a business plan, 56 per cent achieved growth while just 13 per cent experienced a decline in revenue, according to the survey.
By comparison, of companies that did not complete a business plan only 36 per cent reported growth, and 24 per cent reported a decline in revenue.
“This reinforces the need to complete a realistic business plan, since careful planning has been proven to be closely associated with revenue growth,” Mr Graham said.
“Therefore, business owners who complete a plan are more likely to both achieve growth and secure finance, which would justify an increase in optimism for those business owners.
“There is no single format or rigid template for a business plan. What is important is that SMEs give thought to their direction and focus, and that they do it on a regular basis.
“Furthermore, a solid and detailed business plan is essential when it comes to obtaining finance, particularly given the banks’ tight approach to lending. Reporting requirements may make it close to impossible to obtain finance without a clear business plan.”