As you can see below, sole traders are particularly vulnerable. And it doesn’t matter if it’s a new business or an existing one, the pressure to succeed is still high.

ASIC report that that 3 main causes of business failure are:

• Poor strategic management and planning
• Insufficient cash flow
• Trading losses i.e. not making a profit

When it comes to identifying more specifically where the problems lay, the following core points are commonly identified:

• In business for the wrong reasons
• Not doing enough market research
• Choosing the wrong business and sticking to it
• Insufficient capital
• Over-dependence on a single customer
• Lack of planning

One phrase I see often used is that “no business plans to fail, however, many fail to plan”. As ASIC points out, lacking of planning and business strategy is one of the most common reasons for business failure in Australia.

Estimates are that as little as 5% of small businesses prepare any sort of business plan.

But does doing a Business Plan actually make a difference?

Accordingly to a recent review of some scientific studies, yes it does. Noah Parsons and Jeff Gish from Oregon University recently posted an interesting summary, highlighting the following key statistics:

• Study of 11,046 companies showed planning benefitted existing companies more than startups
• 30% faster growth with planning in place
• 71% of fastest growing businesses had plans
• 92% of businesses with the greatest sales growth had plans
• Businesses with a plan are more likely to be funded for growth through grants or loans
• Planning before marketing reduces failure rates
• Study of 223 companies showed clearly that planning reduced failure rate
• Don’t necessarily need detailed plans – lean plans get updated more frequently

 So why don’t business owners prepare Business Plans as a matter of course? More often than not I’ve found it’s because business owners don’t know where to start and what to put in a plan.

So I’ve made the task easier.

Here is the framework I use when coaching business owners whether they are sole operators or employ staff. It generates the information for my One Page Business Plan – surely any business owner can work with a one-page plan?!

*KPI = key performance indicators CSF = critical success factors

By analysing your market thoroughly and honestly appraising your strengths and weaknesses, you will be in a much better position to succeed in business and a competitive market by matching your core strengths to the opportunities identified within the market.

Your likelihood of business success though is directly proportional to how thorough and comprehensive your attention and work on the plan is. This needs more than just a cursory approach.

You can download my SWOT analysis worksheet here to help you get started. And download my One Page Business Plan template here to guide you in creating your core strategies and action plan for the next 12 months.