Any financial advisor will tell you that putting together a business plan should be a priority for small businesses. A good business plan helps a company formulate its goals and objectives, map out how to achieve them, and measure success at the end of the year. It is therefore worrying that recent research commissioned by Exact found that over a third of UK small businesses don’t have a business plan in place.
Various reasons were given by business leaders as to why they didn’t have plans in place. These including not seeing the need for one, not having the time, and not knowing how to put one together in the first place. Here’s why they might want to reconsider:
I don’t need one!
For anyone that believes they don’t need a business plan, there are some compelling arguments to the contrary. Small businesses with a business plan are 20% more likely to be profitable and twice as likely to achieve their goals. If your company is struggling to reach one of its key targets – or even to define what these targets are – a well-considered business plan could be the thing to help.
I don’t have time!
Understandably, small business owners are busy people. When starting out they need to be the CEO, Sales Director, CMO and PA all rolled into one. This leaves little time to take stock and consider the company’s next steps. However, finding time to write a business plan now can save time in the long run. For example, looking at the state of the market now may prevent the need for a painful change of business direction six months down the line. Many banks won’t lend without seeing a business plan first. Suppose you urgently need a loan to fulfil a huge order that’s come in? It could be critically delayed if you don’t have a plan in place.
I’m not sure how to create a business plan!
There is plenty of help available for small businesses when it comes to writing a plan – not least from your accountant. Traditionally, accountants would only hear from their clients at the end of the year – however they can do much more than just help with tax returns. Many now offer a host of services and can provide advice and consultancy on all aspects of business and finance. Often they also have a network of other businesses and contacts you can tap into. If growing your customer base is one of your goals, this could be the way to do it. So if you’re not sure where to begin with your business plan, make your accountant the first port of call.
With research showing that small businesses with business plans are more profitable that those without, there really is no excuse not to get stuck in – what are you waiting for?
By Jonathan Pearson, Product Marketing Manager, Cloud Solutions at Exact