Majority of London founders starting without a business plan

It’s a fundamental document for new entrepreneurs – and one that many candidates on The Apprentice have fallen down on. But founders in London are shirking writing a business plan, new research suggests.

In a survey of 800 entrepreneurs, Grow London Local found that 59% of small businesses in the capital have no business plan. Among sole traders the figure rises to 77%.

When starting a business, particularly on your own, it can be tempting to skip the supportive materials and get straight into the weeds. But a business plan contains many important elements that are fundamental to keeping your new company on the right track.

Market research? Never heard of it

There are lots of stages involved in planning a new business. You don’t need to be Lord Sugar to guess most of them, such as designing a logo or choosing a business name.

But before you start mentally designing your restaurant menu or stocklist, there are some basic steps that entrepreneurs must take to set themselves up for a successful launch. Steps that, as the research indicates, a significant percentage of founders aren’t aware of.

Alongside not designing a business plan, 46% of entrepreneurs in London say they didn’t conduct any market research before launching.

It might feel like time saving. But by skipping this step, founders miss out on vital customer insights that can be used to develop key strategies like target marketing and pricing. This can have a knock-on effect on other materials down the line, such as marketing plans.

An important component of market research is competitor analysis. Analysis of your closest rivals is fundamental to ensure firms know the industry they are about to enter, and who their potential customers are currently shopping with.

Yet, according to the Grow London insights, 49% of founders surveyed haven’t reviewed their competition, meaning they will struggle to spot market trends and avoid common hurdles that their rivals might have fallen at.

Why do you need a business plan?

That nearly eight out of ten founders aren’t aware of the importance of a business plan, or perhaps see it as a hurdle to getting started, is cause for concern; particularly in 2025.

With Trump’s tariffs causing global trade chaos, high interest rates continuing to stymie cash flow, and AI disrupting traditional sectors, a well thought-out business plan is vital to ensure your company vision doesn’t get blown off course by market shifts.

Grow London Local didn’t ask founders about the other components in a company plan. But presumably, most entrepreneurs who skip this step are also ignoring the other stages in a business blueprint, such as cash forecasting and product planning.

In the majority of cases, this could lead to poor decision-making and continuity planning. In extreme examples, it could even result in business failure.

As Uto Patrick, Business & IP Centre London Network Project Manager, explains: “Many new founders take the plunge before ensuring that they have the fundamental information, advice, and networks that they need – causing up to 50% to fail in the first three years.”

Don’t want to miss a trick with your next venture? Our guide to how to start a business in 2025 offers a breakdown of all the key steps involved.