In quality firms, business plans are well structured, adhered to and developed. Often the badly run enterprise will not have a business plan. If it does, it is frequently blown off course and the plan is rapidly consigned to the bottom drawer in the desk or even the dustbin. Some companies, in fact, use business plans purely for the purpose of raising capital and have no intention of following a planned course of action. But the well structured plan will allow for changing environments and conditions, and those which do not are probably not worth the paper they are written on.
Cashflow management is a strong indicator of how well a firm is run.
Badly managed businesses are regularly unable to pay their debts if all outstanding bills due fall simultaneously. Also, they generally pay their debts later than good businesses. Creativity and originality are greatly valued qualities in any enterprise, but there should be a certain amount of structural and operational strength provided by reliability and consistency in performance. Our survey discovered many ACCA accountants were alarmed to find that many businesses do not measure performance against objectives. On the management side, some weak firms do not control their suppliers effectively.