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%
		Other Services	17%
All industries	23%

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.”