Small businesses fail to plan, survey finds

Ruapehu Bulletin, Volume 14, Issue 666, 10 December 1996, Page 16

Small businesses fail to plan, survey finds

A survey of small tourism business operators found only a small number investigated their business

idea before starting up. Almost 70 per cent of the operators who participated in a recent Deloitte Touche

Tohmatsu study had no previous experience in tourism, two-thirds prepared no formal business plan and

89 percent had no formal marketing plan. More than 50 percent of the businesses had started since 1989. One in five of the respondents who applied for a bank loan were refused, mainly because of lack of security followed by a belief that the project was not viable. Almost one in 10 were refused because of lack of information. Several operators cited their first few years in business as a valuable learning experience. The report says - this highlights the need for the industry's professional associations to make specific tourism information

available so that the trial and error process can be reduced. The report says recent research reveals that a high proportion of free independent travellers decide what to do after obtaining information from accommodation and information centres. And as one operator put it, "cost-effective marketing is the key to success for my business. Problems, like all small operators, where does the time and cash come from?"