Will you miss the growth opportunities that other small to medium-sized (SME) businesses are leveraging?  

Business owners who don’t maintain a working business plan are in danger of slipping behind the competition and the latest survey from RSM Bird Cameron reveals that a surprising number of SMEs are not completing a business plan.

According to the findings of the thinkBIG 2014 study, there is a clear difference in the type of SME that develops a plan.

Smaller SMEs are significantly less likely to undertake formal business planning; 63 percent of firms with between three and five employees complete a business plan but this drops to 60 percent in smaller operations with just one or two employees and only 40 percent in sole ownerships.

However in organisations with 50 to 99 employees, 95 percent prepare a business plan. These businesses are also much more likely to complete a plan on a yearly basis, with 77 percent reporting that they do so.

Andrew Graham, national head of business solutions, 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.

“This means that SME owners need to spend more time developing business plans and creating debt management strategies.”

The study found that overall 67 percent of business owners say they complete a business plan but that means that 33 percent do not. Fewer than half the surveyed businesses prepare one annually, but this is up slightly from 42 percent in 2013.

Andrew Graham said, “Half of all SMEs surveyed do not have a disciplined approach to developing and updating their business plan. RSM Bird Cameron’s experience indicates that this reflects on the financial performance of the businesses, with those that plan outperforming those that don’t.

“SMEs that have made the important step of growing to employ more than 50 staff seem to have a more disciplined focus on business planning.”

The thinkBIG survey has measured the pulse of the Australian SME sector for nine years. It benchmarks business growth and profitability, business planning, exit planning, and superannuation. This year 504 business owners participated in the study, providing insights into how Australian SMEs feel about their business.

RSM Bird Cameron is the largest mid-tier accounting firm in Australia with national ownership and profit sharing and offers a full range of specialist advisory services, including business consulting and advisory, assurance and advisory, taxation consulting, corporate consulting and turnaround and insolvency.