Lynda Purser, the director of the Institute of Business Consulting, said that many newly established SMEs were more concerned with the day-to-day details of running their new business and failed to plan for future development.

"I think they probably think that they can do everything at once. They don't plan well enough - they tend to rush into everything," explained Purser.

"Thinking in a strategic way is a rare commodity and people tend to address the more day-to-day operational issues too readily without having thought through a really good plan for the business." Purser said that new SMEs often fail to achieve the goals they do set themselves because they find it hard to obtain finance.

"Quite often, the big bugbear with small businesses is that they don't have the funds to achieve the goals that they set themselves - so they just go round in circles," she added. PKF estimates that 54 percent of small business start ups are operating without any long term business plan putting their future survival at risk.

While 45 percent of businesses claimed to be working to a plan, 46 percent said a strategy was in place but no plan, and 9 percent described themselves as having no plan at all.

Of the companies interviewed 65 percent said they were projecting growth of up to 25 percent in 2007 while a further 23 percent anticipate even greater growth. Nearly a third of companies (31 percent) said they were planning to make one or more acquisition in the year ahead with the majority of these (66 percent) looking to acquire a competitor.

PKF corporate finance partner, Mark Lister cautioned SMEs to be more savvy about how wider economic factors can impact business planning.

“Businesses need to balance their drive for growth with ensuring that strategies for tackling tougher times are in place. Recent interest rate rises should sound a warning that favourable economic conditions should not be taken for granted; Managing directors need to plan for the future so that their businesses are capable of surviving and thriving during leaner periods too,” said Purser. She continued: "Equally, with so many companies planning acquisitions, it is important that any acquisition strategy is supported by a robust business plan identifying the criteria for target businesses and how they will be integrated into the existing business as well as covering the strategy for current operations going forward."