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Half of UK SMEs have no plan

Just 45% of British small to medium enterprises have a business plan opines PKF Accountants, the UK advisory firm.

In a survey 46% of respondents claimed to have a strategy but no plan and a further 9% say they have no plan at all, with 25% arguing that the owner makes the decisions and 17% saying they have no time to come up with a plan.

In the current economic environment, businesses are confident they don’t need a plan to survive and succeed. Sixty-five percent of companies interviewed were projecting growth of up to 25% this year with a further 23% expecting even greater growth. Almost a third of companies are planning to make at least one acquisition in 2007, with 66% looking to acquire a competitor.

PKF Corporate Finance Partner Mark Lister said: “The research findings suggest that businesses are riding the wave of relative economic prosperity in the UK but many appear to be forgetting some business basics. Businesses need to balance their drive for growth with ensuring that strategies for tackling tougher times are in place. Recent interest rate rises should sound a warning that favourable economic conditions should not be taken for granted; managing directors need to plan for the future so that their businesses are capable of surviving and thriving during leaner periods too.

“Effective planning is critical when building a successful business and, while companies can succeed without proper planning, the most effective are generally those that are aware of the opportunities and threats in the marketplace so that they can plan how to achieve targets and monitor their progress. Growth is generally good for business but companies need to understand the implications so that they don’t create ‘boom and bust’ situations.”