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Small businesses 'not planning for the future'

Published On 11 April 2007 at 09:00:48

Many of the country's small and medium-sized enterprises (SMEs) are risking their future operating efficiency by not having a written business plan, a new report suggests.

According to research carried out by advisers PKF, 54 per cent of the UK's SMEs operate with no fixed written business plan. The company has warned that this could be endangering future profitability and even survival.

Though 46 per cent of SMEs said that they had a long-term strategy but no formal plan, nine per cent revealed that they had no plan whatsoever.

The fact that the owner made all business decisions (25 per cent) and that there was no time to formulate a plan (17 per cent) were two of the main reasons SMEs said they had failed to formulate a formal business plan.

"Businesses need to balance their drive for growth with ensuring that strategies for tackling tougher times are in place," said PKF corporate finance partner Mark Lister.

"Recent interest rate rises should sound a warning that favourable economic conditions should not be taken for granted; managing directors need to plan for the future so that their businesses are capable of surviving and thriving during leaner periods too."

However, the research did show that the UK's SMEs are confident about the future - 65 per cent predicted growth more than 25 per cent in 2007. A third (31 per cent) said they expected to acquire a new business in the coming year.

 

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