The National Australia Bank is urging Western Australian business owners to not become complacent about the future after a survey found 87 per cent of owners did not have a business plan.
The National Australia Bank is urging Western Australian business owners to not become complacent about the future after a survey found 87 per cent of owners did not have a business plan.
The NAB Business Planning Survey revealed that 25 per cent of WA small to medium enterprises believed they were too small to warrant a business plan, 18 per cent lacked the time to write one and a further 18 per cent believed it was not necessary.
State general manager of NAB's Business & Private Banking for WA, Andrew Whitechurch, said it has never been more important for WA businesses to plan for what's ahead, warning that business owners are playing a potentially dangerous game without one.
"West Australian businesses are taking a big risk, if they enter 2009 without an up to date business plan. While in recent times a booming economy has meant many businesses have enjoyed success without a great deal of planning, as business conditions deteriorate and belts tighten, small businesses need to plan for uncertain times ahead," Mr Whitechurch said.
He stressed that smaller business were most at risk of succumbing to market volatility and that without a plan, they may not be adequately prepared for any further slow down in the economy.
"Smaller SMEs do not have the same buffer or protection as larger organisations. This is why it is critical that businesses of any size have a business plan, which will help them survive the tough times, as well as grow and succeed in their market," Mr Whitechurch said.
"A good business plan doesn't need to be long and complicated It should act as the basic blueprint for your business to provide you with a clear direction, taking into account the variables and external factors which may impact your business.
"The quieter Christmas holiday period is a perfect time for business owners to draw breath and take the time to put together their business plan for the next twelve months.
"A business plan should not be an afterthought. You should set achievable and measurable business goals and consider the economic, geographic and business environment you are working under."
"A strategy that incorporates financial planning and succession planning will help your business grow. Unexpected costs, business conditions and any pending crisis will have been planned for, making your business much more resilient and prepared for the challenges ahead."
Mr Whitechurch suggests the following for WA small businesses starting a business plan for 2009:
- Trading cycles, costs and expected cash-flow should be reviewed and reassessed. If you believe that the tightening market will affect one of these aspects record it in your business plan. There is no use planning for a best case scenario, as businesses needs to plan for the reality of their environment.
- Get support and advice from your business peers and experts who have an in-depth knowledge of finance and business. Planning around a changing business environment can be challenging, so utilise all resources available.
- Make your business goals clear, measurable and time specific. Ask yourself: What am I selling? Who will benefit from my service? What will make my business different? Where do I want to be in six months/ one year/ ten years?
- Undertake a SWOT analysis of your business. It is important to gain insights into the economic, geographic and business environment you are entering. This will also help you establish and refine your goals.
- Consider your market and who you are competing with for your customers' attention. At NAB we see many business owners who enter the market with no idea what they are up against. It pays to know about the business in the next suburb offering the same service only at a better price.
