Around one-quarter (23%) of small businesses have no strategy in place to support future growth, according to research by Barclays.
A poll of more than 500 senior decision-makers within SMEs revealed that only 47% claim to have a formal business plan written down or recorded. Exactly one-quarter say they have an informal, verbal plan in place but nothing official to refer to. Additionally only 49% have a succession plan in place to secure the future of their business.
Businesses based in the South-East (52%) are the most likely to have a formal business plan in place, while those in the Midlands (38%) are the least likely.
When asked to name the main factors that have helped their business grow in the past, enhancing existing products and entering new markets (26%) came out jointly on top. Barclays MD for business lending and enterprise Rebecca McNeil called business plans “fundamental” for small business.
“It defines exactly what you want to achieve, how you plan to achieve it across a set time period and is a sure fire way to ensure that growth targets and plans are being met,” she continued. “Business plans are dynamic documents – meaning they should be revisited and adjusted as the business develops. In addition, a strong plan can help applications for finance from a business loan to alternative forms of finance and investment.”
She added that SMEs have had to “adapt and survive” during a difficult period for UK businesses, but that now incomes have returned to pre-recession levels.
“Taking advantage of improved economic conditions can be one way to achieve growth, however for businesses that have made proactive steps such as improving their current model, exploring a new market, or adding a new product or service, the results can really pay off on the bottom line, as our research shows. A strategy or plan can help to focus these ideas and solutions and identify what support or finance may be needed,” she said.