Micro SMEs missing out on growth

Micro businesses are missing out on growth opportunities being leveraged by other small to medium-sized (SME) businesses by failing to develop a business plan.

The latest RSM Bird Cameron’s thinkBIG 2014 survey into the Australian SME sector found smaller SMEs are significantly less likely to undertake formal business planning which sets outs strategic goals and identifies ways to get there.

Sixty three per cent of businesses with three to five employees complete a business plan, the study found, a figure that drops to 60 per cent in businesses with one to two employees. Only 40 per cent of sole ownership businesses have a business plan.

Unsurprisingly, larger businesses were more astute at strategic long-term planning, with 95 per cent of firms with 50 to 99 employees preparing a business plan. These businesses are also much more likely to complete a plan on a yearly basis, with 77 per cent reporting that they do so.

Andrew Graham, national head of business solutions at RSM Bird Cameron, said: “A good business plan can set a clear path towards growth that many smaller businesses are not taking. Regularly updating the plan is an important factor in growth.

“Business planning remains key for SME owners. Many industries continue to face scrutiny from various authorities and financial institutions. Having a solid business plan is critical in meeting financing requirements,” he said.

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