While an increasing number of SME owners realise the value of a business plan in achieving their business goals RSM Bird Cameron’s thinkBIG 2014 study showed smaller SMEs are significantly less likely to undertake formal business planning.
The report showed that 63 per cent of businesses with 3–5 employees complete a business plan, while only 60 per cent of businesses with 1–2 employees and only 40 per cent in sole ownerships do likewise.
In contrast, 95 per cent of businesses with 50–99 employees say they have a business plan, with 77 per cent saying they complete a plan on a yearly basis.
Andrew Graham, national head of business solutions, RSM Bird Cameron, said a good business plan can set a clear path towards growth that many smaller businesses are not taking.
“This means that SME owners need to spend more time developing business plans and creating debt management strategies,” he said.
“Half of all SMEs surveyed do not have a disciplined approach to developing and updating their business plan. RSM Bird Cameron’s experience indicates that this reflects on the financial performance of the businesses, with those that plan outperforming those that don’t.”
The thinkBIG study benchmarks business growth and profitability, business planning, exit planning, and superannuation, with 504 business-owner participants taking part this year.