Britain’s small businesses are more likely to increase their revenue if they have a detailed business plan in place, according to a new report.
Just over a quarter of the small and medium-sized enterprises (SMEs) surveyed by the Centre for Economics and Business Research (Cebr) on behalf of npower Business said they didn’t have a business plan. They are entering 2016 without their objectives and targets for the year in place, which could have an effect on their earnings over the next 12 months.
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The Cebr report found that of the most successful small businesses, 51 per cent worked to a detailed business plan. Of these, seven out of 10 said they expected to grow their turnover as a result with an average 8.2 per cent increase in income expected.
The figure was 1.6 per cent greater than the revenue expectations of the average firm that took part in the research. For the smallest businesses, this could result in a difference of thousands of pounds in income.
Cebr senior economist, Laura Holdgate, said: “The research suggests that more effective business planning among the UK’s SMEs is directly linked to better business performance. SMEs have the potential to
experience higher turnover growth as a result of more effective business planning, in turn boosting UK plc.”
npower Business head, Phil Scholes, added: “Effective planning is essential for small businesses who are the backbone of the UK economy. Being in better control of their finances and the risks and opportunities facing their business enables them to make better, more effective decisions.”