Four out of every five businesses are increasing their chances of failure by not putting in place a robust business plan from the outset.
Leading Cheshire and Wirral accountant Phil Bates, Principal at Neston-based Phillip Bates & Co, says as few as 20 per cent of new businesses have a detailed plan in place when they start up.
Bates, who has been advising owners of SMEs for 30 years, said: “One of the impacts of the recession is that a greater number of people are considering going it alone, either because they have lost their jobs or have taken redundancy. Because the need is greater and more urgent, the result can sometimes be that serious planning falls by the wayside.
“Setting up a business is not something to be taken lightly. You need to understand your company, its competitors, the size of the market, potential customers, likely funding required and a whole host of other matters.
“A plan is critical to a business’s success. You need to monitor actual performance against budgets on a monthly basis. Looking at a business’s accounts once a year is not enough. By setting targets and monitoring financial performance on a regular basis, a business owner will be able to take corrective action before it is too late.”
Bates said that his firm provides prospective clients with a specially created outline business plan to assist in their preparation.
He added: “We will always tell people thinking about setting up a business what the downsides and risks are.
“Running your own business becomes your life. It can often mean a significant financial and personal investment and risk. It therefore makes sense to do as much homework as possible before starting out on the journey.
“We advise our clients to write down and review annually their business and life plans. Once they are committed to paper, they seem more realistic and you are more likely to challenge them in order to keep on track.”
NOTES TO EDITORS
- For more information or an interview with Phil Bates, please contact Nick Mason at MPG PR on 0151 239 5052 or 07903 237008 or email: email@example.com