Small businesses with no business plan
Did you know that over a quarter (26%) of the UK’s small businesses face financial difficulties by failing to follow a structured business plan and subsequently putting their financial survival in serious jeopardy?
Research carried out by the Centre for Economics & Business Research (CEBR) concluded that by neglecting to set out a structured plan for the year ahead, small businesses could be missing out on potential revenue amounting to a colossal £25bn.
Without producing and following efficient plans, businesses risk underestimating costs and overestimating revenue streams, both of which could result in significant financial shortcomings.
It is estimated that approximately 60% of all business that fail do so because of monetary issues, a statistic that highlights the importance of planning, forecasting and understanding the potential challenges ahead and how they can be dealt with.
CEBR has calculated that effective business planners – those with a detailed and organised strategy for the next 12 months – expect to see revenue growth of 8.2% in 2016, which is 1.6% higher than the revenue growth anticipated by the average SME.
The study claims that small businesses could increase revenue by thousands of pounds simply by creating an effective business plan, while larger SMEs have the potential to earn additional millions.
These results follow on from a separate piece of research by Worldpay which suggests that 1 in 5 UK SMEs still rely on pen and paper to organise their business, meaning they are unable to effectively track financial outgoings, revenue or top-selling items, and are instead reliant on laborious and time-consuming manual processes.
Estimates suggest that businesses relying on pen and paper spend twice the amount of time on finance and admin than they do selling.
Here at Logic Wealth Planning we believe that it’s vital for every business to adequately prepare and plan for the future.
This is because successful businesses grow,and growing requires investment which in turn demands a healthy cash flow and budget. So it’s critical to ensure that as well as covering overheads, money is set aside regularly to invest in and improve the business.
A successful business owner needs to have an idea of how they want their business to look at a particular point in the future. Working backwards from that projected milestone makes goals much more achievable and far less daunting. So setting small goals and targets at fixed points in the future will certainly help many business owners achieve their ultimate objective, and possibly even surpass it.
If you’re a business owner and have concerns about managing your finances – or need help and advice on any other financial matters – we’ll be happy to help
As one of the leading IFA practices in Greater Manchester, Logic Wealth Planning has a team of experienced Financial Advisors specialising in Wealth Management. Working closely with clients in the Heywood, Rochdale, Bury and surrounding areas across the North West, we believe that however modest your income may be, when it comes to Pensions, Savings and Investments we provide the best financial advice, ensuring that your money is working hard for you and allowing you to enjoy a comfortable lifestyle right through to and including your Retirement years. For your first meeting with us – entirely free and without obligation – please call us now on 0808 1234 321. We look forward to hearing from you.