A quarter of small businesses are ignoring the need to set financial targets, according to new research.
The survey by online training group learndirect business claimed many firms were threatening their future by neglecting financial planning.
It found that assessing business cash flow and allocating money for staff training were being sidelined by owners.
A quarter of firms admitted to never setting financial targets, while 34 per cent confessed to not setting aside funds for employee development.
Almost one in five small firms admitted to beginning to plan when it was too late, with half blaming it on not having enough time.
Other reasons given for insufficient strategising included uncertainty over how to plan and the greater importance of other business priorities.
The report said good preparation could help to improve the financial performance of businesses as well as reducing staff turnover and increasing workforce productivity.
Patrick Bonnett, head of workforce development at learndirect business, said: “The development of small businesses is important for the country’s economy and it is concerning to see the planning process, an important tool for growth, sidelined.
“This survey highlights the need to develop core management and financial planning skills in a way that fits in with the time-poor business environment.
“Achieving this will not only help small firms survive, but also to grow."
Department of Trade and Industry (DTI) figures show poor financial management plays a major part in the closure of 100,000 small businesses each year.
