Iwoca: Almost half of SMEs fail to meet start-up objectives on time

45 per cent of small business owners do not achieve their initial goals within the timeframe and budget they planned when starting out, new research from Iwoca has found.

A survey from the alternative business lender also revealed that 26 per cent of business owners gained investment to help their business grow, with 88 per cent of these businesses now having a turnover of £500,000 or more.

Iwoca surveyed 550 small- and medium-sized enterprise (SME) owners and found that only 30 per cent achieved their short-term business goals within their intended time frame.

The survey revealed that 75 per cent of SME owners changed the direction of their business in some way compared with their original plan.

Read more: Iwoca broker survey reports rise in demand for recovery loan scheme

Moreover, when reflecting on their original business plans, 17 per cent decided to change the direction of their business entirely.

Of those that fully changed the direction of the business, 67 per cent said they had an annual turnover of £500,000 or more, and 18 per cent claimed to have an annual turnover of more than £1m, suggesting that being open to changing business plans could improve business’ potential.

More than two-fifths (44 per cent) of SME owners surveyed who said they needed extra time to complete their initial goals took on average seven to 12 months longer to do so.

Moreover, 26 per cent took 13 to 18 months and 11 per cent took between three and five years to meet their goals.

Read more: SMEs start looking for larger loans

“Focus in business is extremely important, but that doesn’t necessarily mean everything will go to plan or exactly how you set out as part of your original strategy,” said Sharon Pocock, founder of accountancy firm Kinder Pocock. “As accountants, our job is to help this process and make sure the business owners we work with continue to evolve and maintain their focus whilst remembering why they started in the first place.”

The survey also revealed that in 50 per cent of cases, long-term goals took at least 13 more months than expected to achieve.

To combat this, 17 per cent of business owners reduced their short-term goals to achieve them within their initial time frame and budget.

And 22 per cent said they had to increase their budget to achieve their goals.

Read more: Demand rises for business loans amid impending cash flow crisis