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Many SMEs fail to plan more than a year ahead: ACCA survey
MORE than one in four of small and medium-sized enterprises (SMEs) – or 27 per cent – do not have a company vision that spans more than a year, according to a global survey by the Association of Chartered Certified Accountants (ACCA).
In addition, some 45 per cent of SMEs either do not have a strategy, or one which covers only the next 12 months or less, said the report “How vision and strategy helps small businesses succeed”.
The report said that it deliberately did not define “vision” or “strategy” so as not to influence respondents’ own ideas.
But ACCA said that responses and narratives from SMEs indicated that their ideas “corresponded with a standard definition”.
“A vision is linked with mission, value and purpose – something in the future that we envisage,” said the report. “In contrast, strategy is about setting out resources to optimise the impact.”
In the same survey, respondents across all firm sizes said that the owner-manager or CEO plays a major role in strategy setting.
But it was revealed that as the size of the organisation grows, the role of the senior management team becomes more significant.
This was recognised by 78 per cent of respondents working in the largest firms (between 50-250 employees), but only 29 per cent of respondents working in micro firms with 1-9 employees acknowledged this.
The research also found that half (49 per cent) of SMEs do not involve anyone external in their strategy discussions.
The survey also polled SMEs on the top critical factors for long-term prosperity.
The most frequently mentioned factor named by 39 per cent of SMEs was the importance of attracting, retaining, and investing in people and creating a strong team within the business.
The second most common factor by 30 per cent of businesses was having a robust strategy, and implementing and monitoring its execution.
Next was business resilience and agility in a rapidly changing environment (22 per cent), followed by having robust business processes (20 per cent) and providing incentives for the right kind of leadership (20 per cent).
The study included responses from 488 SMEs around the world, surveyed over a period from 11 June to 31 July 2018. Some 22 per cent, or 109 respondents, were from Asia-Pacific.