Advancing Business Planning: From Planning to Entrepreneurial Learning

Abstract

The benefits of business planning and our abilities to teach it have recently been questioned from both practical and theoretical perspectives. Carrier (2005), claims that instead of conducting the traditional business planning, we should be more creative and, in teaching, too, focus more on inventing and developing business ideas. Hindle (1997) also criticises the standardised form of business planning and demands more flexibility and creativity instead of rigidity. The benefits of planning might actually rather be a myth than a fact, since planning does not necessarily improve performance. Tomas Karlsson (2005) argues that there is actually only a tenuous relationship between planning and performance. He also suggests that there is no evidence that the performance of a start-up business will improve or have more potential if the entrepreneur has made a business plan. The situation may even be the opposite, as Carter, Gartner and Reinold’s (1996) study indicated. Those having a business plan in their early start-up phase tended to stay in the intention phase longer than others. Thus, instead of helping to start the business, business planning seems rather to cause more or less delay in this process. Delmar and Shane (2004) also discovered that there was no significant relationship between the writing of a business plan and subsequent profitability. Regardless of these problems, recent Western reports indicate that the most popular approach to teaching entrepreneurship in universities is business planning (Menzies 2005).

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