Australian small and medium enterprises (SMEs) are optimistic about the coming year, despite many lacking a formal business plan.
Research from the Commonwealth Bank released in July 2014 found that 45 per cent of SMEs anticipated an increase in revenue, whereas only 28 per cent anticipated a decrease. Furthermore, 40 per cent expected an increase in profit and 33 per cent expected a decrease.
However, over half of the respondents (51 per cent) did not have a business plan in place for the coming financial year. 507 SMEs participated in the survey and all the businesses had an annual turnover of less than $10 million.
The survey also found that smaller businesses were less likely to have a business plan in place. Of the SMEs surveyed, 44 per cent with a turnover less than $1 million a year said they did not have a business plan in place, however only 22 per cent of SMEs with a turnover between $1 million and $10 million a year reported that they did not have a business plan in place.
The Commonwealth Bank's Executive General Manager of Local Business Banking Adam Bennett said that a well-planned business plan can help companies achieve their goals.
"While it's encouraging to see some small businesses have revised their new financial year business plans, many are not using this tool to better identify opportunities and understand future risks facing their business," Mr Bennett said.
Business Planning in Queensland
The Queensland Government business and industry portal defines a business plan as a document that outlines the important aspects of your business and how they will be addressed. A business plan should include a legal and risk management plan.
A legal and risk management plan should include information regarding the registration of your business name, the structure of the business and any necessary licences and permits. It should also identify opportunities and threats to your business and ways to minimise any possible damage.
A lawyer can talk you through commercial agreements and contracts that should be included in your business plan.