Half of SMEs in the UK and Ireland say that ongoing uncertainty means they change their business plan at least once per year, according to research from the Close Brothers Business Barometer.
Considering how they forecast, 22% say they change their strategy more than once per year and 29% say they change it yearly due to ongoing uncertainty. A further 20% are unable to plan more than two or three years ahead, but 30% say their ability to do so is not impacted.
An interim approach to strategy has become more common. While a total 51% of firms now make changes regularly, just a third say their usual business plan looks a year or less ahead. That’s a 16% increase in short-term planning.
This disruption is significant as senior decision makers agree that having a robust business plan is key for several reasons. The most common include that it enables control over the business’ direction and that it allows aims to be prioritised.
The reasons that uncertainty is creating challenges regarding longer term planning are varied. One quarter of SMEs report that deal uncertainty means they are preparing for multiple scenarios, while a further quarter say forecasting sales in the current environment is difficult and 23% say it is hard to plan funding.
David Thomson, CEO of Close Brothers Invoice and Speciality Finance, said:
“The SMEs that we work with are incredibly ambitious and motivated, with a focus on both day-to-day trade and growth aspirations. Each business plan reflects these core aims, and while all kinds of situations can disrupt strategies, the key is often to remain focused and adaptable.
“As the deadline looms, SMEs must ensure they can respond to the challenges that ongoing uncertainty creates. While planning for different scenarios is time consuming in the short term, creating a high level of flexibility will strengthen your business and allow you to respond to changes positively.”