One in two SMEs apply for funding without a business plan

More than half of Australia’s small and medium enterprises (SMEs) are applying for funding without a business plan, writes Justin Morris

Not only are half applying for funding without a business plan, but two-thirds are applying without a prepared cash flow forecast, according to new research.

The State of SME Funding Report also reveals that SMEs believe funding will dramatically lift their business confidence, with 45 percent of business owners expecting more than 50 percent growth after receiving funding.

Mike Boorn Plener, the author of the report and founder of Business Connector, says it’s not uncommon for SMEs not to cover all bases and do their homework when seeking a capital raise.

They sit with businesses every week that are floating a proposal to the capital market or to a bank without having thought through fundamentals like revenue strategy, serviceability, return on equity, and many other essentials.