Poor planning could cost small businesses £25bn in 2016
26% of UK business owners don't have a business plan in place yet data shows that working to an effective business plan supports revenue growth
A failure to plan could end up costing UK small businesses up to £25bn in lost revenue over 2016, according to research carried out by the Centre for Economics and Business Research (CEBR).
Of the business owners surveyed, more than a quarter (26%) admitted they did not have a business plan in place explaining their objectives, revenue targets or cash flow strategy.
In contrast, the study found that more than half (51%) of the country’s best performing small and medium-sized enterprises did have a “detailed” business plan in place, with 70% expecting an increase in revenue growth in 2016 as a direct result of their business plan.
Respondents with an effective business plan expect to see an average revenue increase of 8.2% this year – 1.6% higher than that expected by the average small business owner.
Laura Holdgate, senior economist at Cebr, said: “The research suggests that more effective business planning among the UK’s small businesses is directly linked to better business performance.
“Small businesses have the potential to experience higher turnover growth as a result of more effective business planning, in turn boosting UK plc.”
For free advice and guides on writing a business plan, click here.