When it comes to planning for growth, most SMEs are disciplined in developing a plan however the day to day demands, both external and internal, can make it difficult to execute plans in the most effective manner.

KPMG recently released the ‘Growth Intentions Snapshot 2015’, which sought to understand how SMEs plan for and implement initiatives to grow their businesses. The SMEs surveyed certainly demonstrated some good approaches to planning, yet many indicated that while businesses have been busy formulating revenue growth plans, a significant proportion of these might not be as well developed or robust as they could be.

Many SMEs suffered from the well-known problem of being too busy working in the business to work on the business.

Of the SMEs surveyed, 76 percent said they were too focused on the operational aspects of the business – so they were very internally focused. A further 17 percent were focused on customers and suppliers so didn’t have the time to track revenue growth.  

As a result of these day-to-day pressures, although 90 percent of those surveyed reported that they are planning for growth, executing on their growth plans was proving problematic with a significant variation in the depth of their plans.

KPMG’s Growth Intentions Snapshot showed that more than 70 percent of SMEs surveyed have performed a SWOT analysis, defined customer segments and key objectives, yet only 60 percent had developed their value proposition.  Fewer than half – 47 percent of surveyed SMEs – had completed competitor analysis while 29 percent said they weren’t sure where they should invest their marketing and promotion efforts to generate new business.

KPMG’s National Managing Partner of Private Rob Bazzani, believes that a well-developed value proposition is a vital component of SME growth and success. “Without a clearly articulated market offering which includes customer benefits and ideally a Unique Selling Proposition (USP) it will be difficult for an SME to formulate their marketing strategy and develop campaigns to support it.”

Further, he  believes a lack of competitor analysis was also an issue for SMEs since understanding the market within which a business operates is a vital success factor.

“It’s notable – and a concern – that 24 percent or a quarter of surveyed SMEs admitted to concentrating effort on the wrong customers and market segments.  Knowing who you are up against in a market, and who is coming into your market, is a vital aspect of business planning especially in a world characterised by rapid change and disruptive technologies.”

The KPMG Growth Intentions Snapshot also highlighted the importance of marketing plans: 73 percent of respondents said that effective marketing strategies had been a key to their success.

Finally, in looking at the ‘right sizing’ indices, 50 percent of businesses reported wanting to grow and believed their business had the potential to expand at a rapid rate, but were simply not equipped with the right systems and practices to accommodate rapid growth.

When embarking on a growth strategy it is crucial that the underlying infrastructure of the business is ready to accommodate that growth.

If you’d like to discuss any of these findings and how they may relate to your business, KPMG’s experienced advisers would be happy to assist.

This article was prepared by KPMG and the advice is designed to be general in nature.