A fifth of West Midlands SMEs operate without a business plan
ALMOST a fifth of SMEs in the West Midlands do not have a business plan in place, according to a new study.
Close Brothers Asset Finance said its research had shown that of those firms that admitted they did not have a plan in place, the majority (60%) said they did not believe it was necessary.
In addition, almost a third said they preferred to keep plans in their head, while a further 10% claimed they did not have the time to create one.
The figures are drawn from the results of the latest Close Brothers Business Barometer, a quarterly survey that canvasses the views of SME business owners and senior management.
Commenting on the findings, Mike Randall, CEO of Close Brothers Asset Finance, said: “It is somewhat concerning that so many firms in the region do not have a business plan, as without clear direction they may be missing out on opportunities for growth and not realising their full potential.
“Planning is key to any business throughout its lifecycle. A formal plan can be an extremely valuable tool for managing and growing a business as it allows a company to recognise its strengths and weaknesses and ensure they have appropriate plans in place.”
The Business Barometer also showed that of those firms in the West Midlands that did rely on a business plan, a third reviewed it at least once a year while 28% review it once every two years. One in 10 only review it once every two to five years.
“Organisations of all shapes and sizes may benefit from a business plan however, a plan is only useful if it is reviewed regularly to ensure that it meets the current and future needs of the business. Therefore it’s sensible to review current performance on a regular basis and identify opportunities for improvement and growth,” added Randall.
“Of the companies we talked to that do have a business plan, the majority said they believe that financial strategy is the most important aspect of it.
“Indeed, it’s vital that business owners take the time to plan and regularly review their financial strategy to ensure they have the right funding in place to meet the needs of their business, at its current stage of the business lifecycle.”
