Most NZ businesses plan 1-3 years into future: survey

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New Zealand privately owned businesses plan satisfactorily for the future but could do better, a global business accounting and advisory firm's annual survey indicates.

The survey, carried out by Grant Thornton International, ranked New Zealand businesses second equal with the United Kingdom in terms of planning 12 months to three years in advance. Sixty per cent of businesses surveyed worked on one-to-three year planning cycles, behind Denmark's 64 per cent.

However, businesses had to think more about what they would do in the future, said Pam Newlove, Grant Thornton's Auckland-based business advisory services director.

Only 11.5 per cent of the New Zealand sample of 150 businesses made longer-term plans of three to five years, she said.

Also, one third of South Island businesses planned less than a year in advance, compared to the North Island, where 26 per cent of businesses didn't look more than 12 months ahead.

Businesses were making shorter-term plans in response to economic conditions, but this did not remove the need to plan for what would happen when a new, more stable environment emerged, she told NZPA.

"Short term survival and longer term revival can go hand in hand. One needs to be balanced with the other -- in fixing the short term issues you have to be careful not to lose long-term vision."

Researchers found Chinese businesses planed the longest in advance -- understandable, given the huge growth and possibilities available to businesses in the country, Ms Newlove said.

"To sustain growth, they have to plan out for the longer term."

The survey, which the company began in 1992, collected and interpreted data from 7200 privately held businesses in 36 countries.

When making business plans for the future, Newlove recommended:

* Stress testing the plan with different scenarios to assess the effect of different market conditions;

* Analysing worst-case scenarios (and their profit and loss, balance sheet and cashflow impacts);

* Developing contingency plans;

* Examining competitors' strengths -- and thinking how to exploit their weaknesses;

* Communicating the plan to staff and connecting it to employee remuneration and incentives to make it happen.

- NZPA