New research released as part of DBM Consultants’ Business Financial Services Monitor (BFSM) highlights that the majority of Australian companies* admit to not systematically assessing or formally preparing for the future of their business, with a staggering 77 per cent admitting to having no business plan let alone a marketing plan (86 per cent).
“Considering it is a strict requirement for businesses to secure a bank loan with a formal plan, these latest results are indeed surprising” said DBM Director Maria Claridad. “The majority of Australian businesses are very small and quite a few of these don’t borrow money. Still, we are finding that it’s not just about size of the business, with many Small and Medium businesses in Australia admitting to not having a business or marketing plan.”
The State Government of Victoria’s Business Victoria website states: When applying for a business loan, it’s essential to prepare a detailed business plan and fully inform the lender about your proposed venture. This information helps the lender to provide you with the right type of finance and advice.
Only a Minority of Small businesses have a business plan. Micros even less likely.
Four in ten Small businesses (40 per cent) have a business plan, while only one in five Micro businesses (20 per cent) have one. Even more interestingly, these figures are well short of the proportions which currently have a loan product (other than a credit card) from a bank – Small 65 per cent, Micro 45 per cent.
“It is possible that businesses don’t see or use the document they prepare when they are seeking a loan is a business plan,” said Claridad. “Rather it’s just a means to an end at a given moment in time, a compliance document. It is not something they use to guide their business in the medium or long term. It seems a missed opportunity to utilise an important business tool that should have practical use.”
Few Construction, Agri and Electricity, Gas, Water and Waste Services have business plans
Well under a fifth of Construction, Agribusiness and Electricity, Gas, Water and Waste Services companies have business plans. In contrast, around four in ten Mining companies and Education and Training organisations have one, making these two sectors the best prepared in this regard.
|Incidence of Business Plans by Sector|
|Mining||43%||Professional, Scientific and Technical Services||26%|
|Education and Training||41%||Transport, Postal and Warehousing||23%|
|Financial and Insurance Services||35%||Retail Trade||22%|
|Arts and Recreation Services||33%||Manufacturing||20%|
|Information, Media and Telecomms||29%||Administrative and Support Services||19%|
|Health Care and Social Assistance||28%||Construction||14%|
|Wholesale Trade||28%||Agriculture, Forestry and Fishing||12%|
|Rental, Hiring and Real Estate Services||27%||Electricity, Gas, Water and Waste Services||11%|
|Accommodation and Food Services||27%|
6-month rolled average – July 2015
Even fewer businesses have a marketing pan
Even having a business plan seems popular when comparing it with the number of Australian companies who have a marketing plan.
“In a day and age where communications is at the forefront of business KPIs, to hear that only 14 per cent of Australian businesses* have a marketing plan is quite surprising,” says Claridad.
“Australia’s business landscape is becoming increasingly competitive given the prevalence of imports and off-shoring, so having a clearly defined plan of how your business is going to communicate with target markets and potential customers is vital. It is possible that businesses could benefit from the support in this area.”