People 1st, the skills and workforce development charity, has released new research which shows that just 58% of hospitality companies have a business plan, despite there being a clear link between business planning and increased profit.
More revenue with a business plan
The research, which is based on a telephone survey with industry employers commissioned by People 1st, shows that 48% of organisations saw their sales and turnover increase if they had a business plan, while only 31% of businesses experienced an increase without one.
Martin-Christian Kent, executive director at People 1st, said that business planning was a key area where many organisations are not maximising either the opportunities or the support available.
Companies need help
“With such a clear link between increased sales and turnover and business planning, you would almost think that every business would be making sure they take part in an annual business planning process, yet that’s just not the case,” he said.
“It’s clear that a lot of companies need help in this area.
“In addition to the direct link between business planning and increased sales and turnover, our research also found that 31% of those without a business plan saw sales and revenue fall, compared to just 20% with a plan.”
Business planning and staff training
The research also found that there was a clear link between business planning and staff training, with 57% of organisations with a business plan investing in training and development, compared to 27% of those without one.
Martin-Christian was also keen to point out the link between training and seeing an increase in sales and turnover.
“Of those businesses that undertook, funded or arranged training in the last 12 months, 50% of businesses that offered training saw an increase in sales and turnover compared to 32% that didn’t. That’s quite significant and could make a big difference to a lot of businesses.”
“These businesses were also increasing their workforce more often than those that don’t take part in annual business planning and are probably also more effective in attracting excellent candidates by offering more competitive pay and conditions, along with great career opportunities.” said Martin-Christian.
Not the only solution
Martin-Christian was clear that while business planning is important, it’s not the only solution.
“The research isn’t saying that business planning will solve every problem a business faces, however it does show that it can help organisations make the most of opportunities, especially around recruitment and training.”
The full research report can be downloaded from People 1st’s website, www.people1st.co.uk