Planning can be exciting and fun to do. In 2019 around 38% of Australians made plans to renovate their homes. In June 2020, 2.2-million Australians were planning a post-pandemic overseas holiday.
If planning is enjoyable then why do so many Australian business owners fail to write or refine a formal business plan? One study showed 80% of Australian businesses don’t have a business plan, and of those who do, only one third update and refine it on a regular basis!
Winging it might seem like the natural course of action, but Australian Bureau of Statistics data shows 60% of Australian small businesses fail within three years, and 90% of Australian startups fail within the first year.
A 2018 Australian Centre for Business Growth study attributes Australian business failure to poor market research, bad financial management, lack of control over external factors and bad leadership skills.
Victorian businesses have enjoyed favourable economic conditions, but the pandemic has proven that good financial times can’t last forever. Insulating yourself against economic downturns, and gaining a competitive advantage are two of the chief reasons that mapping out a solid business plan is vital to success.
If you’ve devoted all your resources to working in your business rather than on it, you could find yourself in trouble at retirement age. Many business owners reach their late 50s and realise they don’t have enough personal investments to retire and need to build the value of their business for sale. The problem is at that stage energy and interest levels are likely depleted and building the business will feel like a battle. Adopting risky strategies won’t necessarily make quick gains.
Having a strategic plan is great, but implementing it, and being accountable are greater predictors of success. That’s where business advisory comes in.
A business advisor balances maximising business growth and minimizing business risk, provides ideas and analysis, streamlines processes, identifies government funding opportunities, and assists with goal setting and creates accountability.
Effective strategic planning offers clarity on next steps and the potential outcomes, helps you understand the value of your business, navigates the best possible position for retirement, providing peace of mind that you’ve done everything in your power to set yourself up for a secure and prosperous future.
By Adrian Misiano, Partner Business Advisory, Matthews Steer.
Partner and director at Matthews Steer Accountants & Advisors, Adrian sets the financial direction for our firm and heads up our transport and property divisions.
Adrian is passionate about assisting our clients with strategic planning, asset protection, tax structuring, and providing financial/business analysis to assist in wealth generation for business owners. He is a skilled coach and mentor, has a track record for resolving tax issues and overseeing property transactions and is an accomplished presenter at various industry body conferences.
The views expressed in this content are those of the author, who is also responsible for any errors and omissions. Family Business Association provides this article for your information only. The content of the article should not be taken as advice. If you wish to explore this topic, please consult an advisor who you consider to have the expertise to provide specific advice in relation to your family business.