The Value of Business Plans for New Ventures: Company and Entrepreneur Outcomes

Abstract

Writing business plans is often the first step for entrepreneurs in developing new venture ideas. Trade press publications support their value and include templates or even software for crafting the business plan. However, the academic literature supporting the value of a business plan is limited, particularly on how the plan directly affects entrepreneurs and their standard of living. This study polls a national cross section of owner/operators of small to mid-sized business start-ups in operation less than ten years to determine the value of the business plan for the business, its success and longevity, and even its value, separately, for the founding entrepreneur. Results indicate a relationship between the use of a business plan in start up and the age of the business, its financial success, strong company success, and the achievement of financial return goals. Findings support the link between a business plan and the achievement of an "excellent" overall organization.

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