Poor business planning ‘will lose SMEs £25 billion’ in extra revenue in 2016

Of the SMEs surveyed, 26 per cent said they did not have a business plan in place and so were likely to be operating without basic objectives, revenue targets or a plan to manage cash flow.

However, the Centre for Economics and Business Research, which was commissioned by energy group Npower, found that 51 per cent of the UK’s best performing SMEs are working to a detailed business plan.

Among all SMEs with a detailed plan, 70 per cent expect an increased revenue growth in 2016 as a direct result of developing a plan.

According to CEBR’s analysis, SMEs that are effective business planners expect to see revenue growth of

This is 1.6 percentage points higher than revenue growth expected by the average SME in 2016, which equates to a potential increase in revenue of £25 billion above what is currently expected.

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.

Image: Shutterstock