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Are You Risking Your Business by Failing to Plan Effectively?
 The
majority of Britain's small and medium-sized
businesses are operating without a written
business plan endangering their future
prosperity and survival, according to
research carried out by PKF Accountants and
business advisers.
While 45% of businesses claimed to be
working to a plan, 46% said they had a
strategy but no plan, and 9% described
themselves as having no plan at all. The
most common reason given for having no plan
was that the 'owner makes the decisions'
(25%), followed by 'no time to formulate a
plan', 'just moving the business forward'
and that 'the company is reactive' – each on
17%.
Encouragingly, 65% of the companies
interviewed said they were projecting growth
of up to 25% in 2007 while a further 23%
anticipate even greater growth. Nearly a
third of companies (31%) said they were
planning to make one or more acquisition in
the year ahead with the majority of these
(66%) looking to acquire a competitor.
PKF Corporate Finance Partner, Mark Lister
welcomed the level of confidence among SMEs
but sounded a note of caution. "The research
findings suggest that businesses are riding
the wave of relative economic prosperity in
the UK but many appear to be forgetting some
business basics", he said.
"Businesses need to balance their drive for
growth with ensuring that strategies for
tackling tougher times are in place. 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."
"Effective planning is critical when
building a successful business and, while
companies can succeed without proper
planning, the most effective are generally
those that are aware of the opportunities
and threats in the marketplace so that they
can plan how to achieve targets and monitor
their progress. Growth is generally good for
business but companies need to understand
the implications so that they don't create
'boom and bust' situations."
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