Article

Pre-Startup Formal Business Plans and Post-Startup Performance: A Study of 116 New Ventures

Authors:
To read the full-text of this research, you can request a copy directly from the authors.

Abstract

This study examined whether writing a business plan before launching a new venture affects the subsequent performance of the venture. The data set comprised new ventures started by Babson College alums who graduated between 1985 and 2003. The analysis revealed that there was no difference between the performance of new businesses launched with or without written business plans. The findings suggest that unless a would-be entrepreneur needs to raise substantial startup capital from institutional investors or business angels, there is no compelling reason to write a detailed business plan before opening a new business.

No full-text available

Request Full-text Paper PDF

To read the full-text of this research,
you can request a copy directly from the authors.

... Business Plan Competitions as a practice is ubiquitous in most developed countries such as the USA (Crainer & Dearlove, 2000) and Europe (Riviezzo, De Nisco, & Napolitano, 2012), and is fast proliferating within developing nations in Asia (Wong, 2011) and Africa (House-Soremenkun & Falola, 2011). A Google search conducted by Lange, Mollov, Pearlmutter, Singh and Bygrave (2007) showed that there were 1.86 million hits for "business plan" and "competition" or "competitions", implying the extent of its proliferation globally. In countries such as China, BPCs are considered as an effective new way of obtaining practical knowledge compared to sitting and listening to professors in the old education system (Fayolle, 2004); and in some states in the USA, there are even prison entrepreneurship programs that provide in-prison BPCs targeting in-mates (Jaishankar, 2009). ...
... However, it is not clear from previous studies whether such cash awards translate into enterprise growth. For instance, Lange et al. (2007) in their research claimed that they even knew of students and alums that almost made a career of competing in BPCs; where in one case, the entrepreneur won more than $100,000 in at least four BPCs, but four years after the company was founded it had no significant revenue. ...
... In many ways, these findings consolidate the importance of a business plan as a planning tool and a roadmap to success as argued by many scholars including Fiore (2005), Skogen and Sjovoll (2010) and Barrow (2011). The findings however contradicts the results of a study by Lange et al. (2007) which found that writing a business plan before a business began operating made no difference to the subsequent revenue, net income and number of employees. While reasons for this may call for further empirical enquiry, perhaps the dynamics of enterprise development varied beyond the factors considered in this study. ...
Article
The purpose of the study was to establish the impact of business plan competitions (BPCs) on enterprise development as measured by number of new ventures created and sustained, number and value of jobs created, revenue turnover growth and value of assets. The BPC was dubbed “Chora Bizna Enablis LaunchPad”. The study used a quasi-experimental design. The target population was the top 100 national finalists who undertook a one week intensive training at Multimedia University. The accessible population was 52 finalists, of which 45 successfully responded. This number was used as the test group. A matched sample of non-participants was drawn from small business owners in Nairobi County. Data was analysed using SPSS. The results revealed that out of the 45 national finalists interviewed, 35 went ahead to implement their business plans, creating employment for 210 people who earned a total monthly salary of over 4 million Kenya shillings. Their enterprises were posting an aggregate of 13.8 million Kenya shillings in revenue every month, and the entrepreneurs reported an accumulated value of assets estimated at a total of 518 million Kenya shillings. On average, each participant in the BPC employed more than twice the number of employees reported by non-participants and disbursed nearly double the average total monthly salaries reported by non-participants. Similarly, the average revenue of BPC participants quadrupled that of non-participants. BPC participants also reported significantly higher average value of accumulated assets compared to non-participants. Therefore, such competitions are effective for fostering enterprise development and more should be held.
... But this statement is not as straightforward as it would seem, as other authors have consistently stated BP is undermining for the entrepreneurs' creativity, considering it a work of fiction that can lead to disaster if followed too strictly . Lange et al. (2007) argue that BP has little effect on the new ventures' success, unless there is a need for funding. ...
... Business plan/planning as a tool/activity is at the core of entrepreneurship education and training (Albornoz Pardo 2013;Hallam et al. 2014;Wei et al. 2018), enabling the evaluation of alternative actions and the improvement of strategies, being able to influence the exploration and exploitation of business (Garonne and Davidsson 2016). Despite the existing criticisms to the business plan method of teaching entrepreneurship (Bhide 2000;Delmar and Shane 2003;Honig 2004;Lange et al. 2007;Sarasvathy 2008;, Kuratko (2015) sustains that the writing of business plans should be taught because it is the starting point for business creation, and Chwolka and Raith (2012) assert that business plan is fundamental for the future success of startups. Moreover, several studies suggest that business plan is likely to instill appropriate entrepreneurial attitudes and motivations and is an expression of entrepreneurial intentions (Botha and Robertson 2013;Olokundun et al. 2017). ...
Article
Full-text available
The role of business plans and business planning (BP), and their importance for entrepreneurs, has been discussed in the literature, but its (perceived) usefulness is still subject to wide debate and controversy. The main aim of this work is to assess whether current teaching of BP in entrepreneurship education is actually useful for the professional lives of individuals. The empirical analysis focused on testimonies from graduates of eleven full editions (2004–2014) of a specialized master’s in entrepreneurship and combined qualitative and quantitative methodologies applied to all the master’s relevant stakeholders. The econometric estimations, based on 84 responses from former students/alumni, revealed that BP tools and dimensions are perceived as extremely useful for the professional lives of a large part of the alumni inquired, particularly those who created new business ventures after attending the course (the entrepreneurs). Moreover, entrepreneurs, when compared to non-entrepreneurs, tend to attribute greater importance to certain business plan financial tools, namely “Cash Flow Statements” and “Balance Sheet,” and business plan dimensions, most notably “Company and Product/Service Description,” “Marketing and Sales Plan,” and “Financial Analysis.”
... Different empirical samples were utilised in investigation whether planning is worth the time and effort for nascent entrepreneurs (Gruber et al., 2008); whether nascent entrepreneurs should "look before they leap" (Gruber et al., 2008) or "just do it" (Lange et al., 2007). Planning supporters consider the business plan an essential prerequisite for the new venture creation to be successful. ...
... Delmar and Shane (2003) show different streams where planning has a positive effect on the business venture (Armstrong, 1982;Castrogiovanni, 1996;Shane and Delmar, 2004;Gruber, 2007, and. On the other hand, Lange et al. (2007) pointed out arguments against planning, supporting the hypothesis that new ventures created with a written business plan do not outperform new ventures which did not have a written business plan. came to a conclusion from this debate, which is that the empirical research on the connection between planning and performance ...
Thesis
Full-text available
This research is carried out in order to be able to identify whether project management is used in the field of startups in certain geographical areas, whether it adds value to the start up, and which approach of project management is used, if any. It has been concluded from the literature that there are many ways of linking project management with startups since the two fields share parallels. Data are collected by means of online surveys with closed ended questions that give semi-quantitative results; which, although limiting, are appropriate as a primary source of information. The majority of the respondents apply project management methodologies during different phases of startups. The results showed that most of the entrepreneurs who apply project management methodologies use agile project management because of its flexibility and time efficiency.
... Business planning A business plan is a specific roadmap for entrepreneurs (Lange, Mollov, Pearlmutter, Singh, & Bygrave, 2007) that plays an important role in entrepreneurial success (Long, Geng, & Shakeel, 2016). Written business plans provide an overview for entrepreneurs, helping them to focus on their objectives, operational tasks, and strategies (Brinckmann, Grichnik, & Kapsa, 2010), as well as being an advantageous tool for planning their overall activities, enhancing performance (Hopp & Greene, 2018), and supporting the acquisition of funds from banking institutions (Lange et al., 2007). ...
... Business planning A business plan is a specific roadmap for entrepreneurs (Lange, Mollov, Pearlmutter, Singh, & Bygrave, 2007) that plays an important role in entrepreneurial success (Long, Geng, & Shakeel, 2016). Written business plans provide an overview for entrepreneurs, helping them to focus on their objectives, operational tasks, and strategies (Brinckmann, Grichnik, & Kapsa, 2010), as well as being an advantageous tool for planning their overall activities, enhancing performance (Hopp & Greene, 2018), and supporting the acquisition of funds from banking institutions (Lange et al., 2007). Numerous studies show that planning leads entrepreneurs towards superior performance with overall growth and success (Frederiksen & Brem, 2016;Honig & Samuelsson, 2020;McKenzie, 2017). ...
Article
Full-text available
Knowledge management tools and technology are the main factors bringing competitive advantage to organisations. This study extends the depth of study on small business entrepreneurs by examining the effect of knowledge acquisition, in particular financial knowledge that leads to the need for knowledge acquisition tools and technology. There is evidence to support that a lower level of existing financial knowledge in small business entrepreneurs encourages them to acquire more financial knowledge since they tend to be responsible for all tasks related to business survival. This finding is not consistent with several other previous studies. In addition, relevant knowledge on how to raise adequate capital to establish their business and the accurate calculation of cost are the two most important aspects of financial knowledge for encouraging small business entrepreneurs to seek effective knowledge acquisition tools and technology. The evidence provides insight for the government authorities supporting small businesses to provide financial knowledge to small business entrepreneurs during the pre-start-up phase and thereafter by providing the relevant knowledge on financing and cost calculation to strengthen and sustain these businesses. This will ultimately lead to an improvement in small business failure and increase the country’s economic growth.
... En effet, Ribourel (1979) considère que la rédaction du business plan lors de la phase de préparation du projet peut mener à l'échec. En revanche, Lange et al. (2007) remettent en cause la dimension trop formelle du plan d'affaires plutôt que son utilité. Selon Verstraete (1999), les anticipations au niveau du business plan permettent de faire face aux éventuelles difficultés de gestion du projet. ...
Article
Full-text available
La bonne conduite d’un projet entrepreneurial est une question qui suscite un débat houleux entre les acteurs économiques, politiques et sociaux à l’échelle tant nationale qu’internationale. En effet, la connaissance des facteurs facilitant le succès entrepreneurial est une condition indispensable afin de créer une dynamique entrepreneuriale au sein d’un territoire donné. Dans cet article, nous essayons d’analyser les différents facteurs permettant à l’entrepreneur d’assurer la continuité de son projet entrepreneurial et de participer au développement économique et social de son territoire. Pour ce faire, nous avons abordé une analyse de la littérature traitant la question des déterminants de la réussite entrepreneuriale, d’une part. D’autre part, nous avons conduit une enquête quantitative afin de confirmer les constatations théoriques par des résultats empiriques. L’étude confirmatoire a été menée auprès d’un échantillon de 150 entrepreneurs de la ville d’Er-Rachidia. Les données collectées ont réconforté les apports théoriques des auteurs ayant traité la question principale du présent travail. L’étude nous a ainsi permis de relever trois types de facteurs sont essentiels afin d’appréhender la problématique de la réussite entrepreneuriale à savoir : les facteurs personnels, les facteurs environnementaux et les facteurs managériaux. Par conséquent, la présente recherche pourra constituer une aide aux futurs entrepreneurs dans la mesure où elle propose les principaux déterminants auxquels ils doivent porter plus d’attention afin de réussir leurs projets entrepreneuriaux. Elle constituera aussi une référence à la disposition des chercheurs qui ambitionnent de mieux assimiler le comportement de l’entrepreneur face aux différents déterminants qui conditionnent son succès. La principale limite de notre recherche est liée au caractère temporal des résultats obtenus. D’où, l’importance des facteurs de réussite des entrepreneurs peut varier dans le futur. Par conséquent, d’autres études devront alors être lancées.
... In recent decades, there has consequently been a considerable growth in EE programmes worldwide at all education levels (Katz, 2003;Kuratko, 2005). The positive impact of EE on socio-economic development is said to have become conventional wisdom, and it is reported that it can increase entrepreneurial intention (Fayolle et al., 2006;Kolvereid and Moen, 1997), entrepreneurial self-efficacy (Wilson et al., 2007) and entrepreneurial behaviour (Elert et al., 2015;Lange et al., 2007). ...
Article
Full-text available
The purpose of this paper is to examine the impact of entrepreneurship education (EE) in the form of a business planning course on students' career intentions and preferences. While there is extensive research in which traditional survey scales have been applied to study students' entrepreneurial intentions, this study takes a novel approach by extending the construct of entrepreneurial intention to include preferences for intrapreneurship and team entrepreneurship. Furthermore, the use of conjoint analysis captures students' unconscious decision-making processes when presented with different career opportunity scenarios, thereby overcoming many of the limitations of self-reported survey measures. The study uses a quasi-experimental design with a novel application of conjoint analysis in EE research. A two-part survey combining a traditional questionnaire with conjoint analysis was distributed to students enrolled in a business planning course at two campuses of a Norwegian university, resulting in 99 matched pre-and post-test responses. Two main findings arise from the study. First, there is a significant decrease in entrepreneurial intention among students in the EE course. Second, the conjoint analysis contributes to a better understanding of this decrease by illustrating how students shift their career preferences from entrepreneurship to employment during the EE course. This suggests that EE provides a space for students' career reflections where they can explore, commit to and reconsider entrepreneurship as a career.
... 1.1 Environnement contraignant et théorie de l'effectuationDans le modèle classique de la création d'entreprise, l'entrepreneuriat a longtemps été caractérisé par plusieurs mythes, dont la découverte des opportunités(Shane, 2000) et la planification des actions. Cependant, dans une étude du Babson College,Lange et al. (2007) soutiennent que la rédaction d'un plan d'affaire n'augmente pas les chances de réussite et remettent en question son utilité. C'est là qu'intervient la théorie de l'effectuation, qui offre un cadre adapté à l'entrepreneur, ses moyens et son environnement, afin de lui permettre de surmonter les obstacles et limiter les défaillances ...
Conference Paper
En Guinée, malgré l’intérêt grandissant de l’Etat et des acteurs internationaux à l’égard de la promotion et du soutien de l’esprit d’entreprise, les projets d’auto-emploi créés restent précaires, voire en situation d’échec. L’objectif de cet article, est d’examiner et de comprendre les pratiques d’accompagnement des entrepreneurs motivés par la nécessité dans un environnement contraignant, et de saisir les mesures d’actions alternatives. Nous avons mobilisé un cadre théorique fondé sur une vision alternative de l’entrepreneuriat (effectuation et bricolage social) et réalisé une étude qualitative basée sur une étude de cas. Sur trois cas d’entrepreneurs contraints en zone urbaine, un incubateur et deux acteurs financiers, l’analyse montre d’abord un manque d’adaptation des dispositifs d’accompagnement aux besoins des accompagnés et des enjeux sociaux. Elle montre par la suite, l’importance du bricolage et des liens sociaux dans la conduite des projets crées et des incohérences dans les processus de financement. La recherche indique la nécessité d’associer un modèle stratégique adéquat aux discours encourageant l’auto-emploi, et plaide pour une intégration des approches expérientielles dans l’accompagnement des entrepreneurs contraints en milieu difficile.
... Pallavi did not prepare any formal business plan for TBS as she decided not to approach any financial institution in the early stages. Research literature also suggests that unless the entrepreneurs need to approach institutional investors or angel businesses, detailed business plans are not mandatory (Lange et al., 2007). Pallavi received the seed funding for her venture from her father approximating to few lakhs of rupees. ...
Article
Abstract: The innerwear industry is one of the less researched businesses in India and is dealt as niche vertical of apparel industry. For the yesteryear’s customers, buying innerwear was a covert and backroom affair but globalisation, internet and bright entrepreneurial ideas have changed the trajectory. Taking leverage of changing industry dynamics, a budding entrepreneur – Pallavi Khandelwal dared to step into this less explored territory. She banked upon her entrepreneurial skills and strategic decision-making for creating an identity through her internet-based startup to optimise the opportunity and defy the challenges of online business arena. The case serves as the setup to elaborate the aspirations and obstacles confronted by a budding entrepreneur. It provides perfect background to understand how strategic options, resource requirements and critical success factors (CSFs) undergo transformation with the different stages of business life cycle. Industry analysis conducted through references gathered from various reports by business consultancies, industry players, and whitepapers written on this field accompanied an in-depth personal interview with the protagonist Pallavi Khandelwal for establishing facts and data used in the case. Literature review and academic experience of authors are steered to establish the theoretical underpinning of the case.
... Public policy makers have come to recognize it as a strategy for enhancing local, regional and national economies, as a workforce development strategy that expands employment, and as a vehicle for solving stubborn social problems that neither government nor the private sector have historically addressed (Acs and Armington, 2004;Davidsson et al., 2006;Fritsch and Mueller, 2008;Kickul and Lyons, 2016;Hafer, 2013;Schulman and Lyons, 2014). Initial efforts to develop successful entrepreneurs has focused either on providing startup funding based on the review of a business plan (Lange et al., 2007) or identifying traits of the successful entrepreneur and trying to identify and support individuals with those traits (Brockhaus, 1982). More recently, there is awareness that entrepreneurship is best considered a set of learned skills (Lackeus, 2013;Neck et al., 2014Neck et al., , 2018. ...
Article
Full-text available
Purpose The purpose of this paper is to argue that defining, measuring and developing skills are crucial to successful entrepreneurship and that being able to do so can help to build strong rural entrepreneurial ecosystems. Design/methodology/approach The literature on entrepreneurship success and entrepreneurial skills is reviewed, and this knowledge is used to create and describe the Entrepreneurship Skill-building Framework (ESBF), which provides a scaffold for thinking about the identification, measurement and development of essential entrepreneurship skills. The same literature is used to develop a tool for effectuating the ESBF, called the Readiness Inventory for Successful Entrepreneurship (RISE), which assesses entrepreneurship skills using the communimetrics theory of measurement. Findings Both the ESBF and the RISE are detailed, and they are applied to the successful development and maintenance of rural entrepreneurial ecosystems, with an example from practice. Specific implications for rural entrepreneurship-focused economic development are also discussed. Originality/value The ESBF represents a new way of framing entrepreneurship skills and their development. The RISE is a skills assessment tool that is clinical, not predictive, utilizing an innovative theory of measurement. Together, they offer a fresh approach to thinking about the purpose and effective implementation of entrepreneurial ecosystems.
... Honig has identified that 78 of the 100 top business schools in the US offer courses on business plan preparation (Honig, 2004). A special form of business planning promotion is business plan competitions, which are now held in many countries to strengthen entrepreneurial thinking and promote regional development (Tipu, 2019;Lange et al., 2007). Individual entrepreneurs or teams compete against each other with their business plans to convince a jury of their business idea. ...
Article
Full-text available
Purpose This paper aims to describe an innovative approach of integrating sustainability into the structures and processes of a business school without creating resistance. Design/methodology/approach A sustainable entrepreneurship competition was embedded as an independent programme in an already existing business plan competition at the School of Business FHNW. The paper shows, which structural elements of the competition had to be adapted to the needs of sustainable entrepreneurs. Findings The paper outlines aspects that need to be considered and steps that need to be taken to run a sustainable entrepreneurship competition supporting as many high-quality projects as possible. It describes the importance of developing an independent instrument that meets the specific needs of sustainable entrepreneurs in project planning. The sustainable innovation plan is explained. Social implications The student projects are developed at the School of Business FHNW as part of the entrepreneurship competition, which has been successfully carried out twice. They have numerous measurable positive social and ecological effects, which are described by the students in their sustainable innovation plans and are subsequently reflected in the realization of the projects. Originality/value Using the example of the Swiss Student Sustainability Challenge, the paper demonstrates under which conditions a sustainability project can be successfully integrated into the existing structures of an institution of higher education and develop into a beacon project of the university. Other universities can make use of these findings to launch comparable projects at their institutions.
... In recent decades, there has consequently been a considerable growth in EE programmes worldwide at all education levels . The positive impact of EE on socio-economic development can be said to have become conventional wisdom, and it is reported that it can increase entrepreneurial intention , entrepreneurial self-efficacy and entrepreneurial behaviour Lange et al., 2007). ...
Thesis
Full-text available
The thesis aims to explore the impact entrepreneurship education (EE) has on students’ career reflections. EE has developed significantly in both scope and importance over recent decades and is now being taught worldwide at all education levels. Major stakeholders, such as educators, education institutions, funders, governments and policymakers, are investing heavily in terms of human and/or financial resources to create, implement and develop EE initiatives. With such exponential development, there is a need for more knowledge on the implications of EE. However, despite the substantial growth in EE impact studies over recent years, the empirical findings remain mixed, conflicting and inconclusive. Moreover, when career outcomes are addressed in impact studies, the focus is on entrepreneurship as a career, while EE’s broader career implications remain unexplored. Accordingly, the point of departure for the thesis is that present understanding of the impact of EE on career outcomes needs to be more comprehensive. There is a need to go beyond the narrow focus of ‘producing’ entrepreneurs and to take a broader perspective on the implications EE has for students’ careers. EE can be a space for career exploration that leads to career reflection, in which students discover more about themselves, about entrepreneurship, and about their career preferences. This is the background for focusing on students’ career reflections in the thesis and which led to the following overarching research question: How does participation in entrepreneurship education impact students’ career reflections? To address this, the thesis draws upon the literature on career development and investigates the potential of EE as a career exploration intervention that triggers students’ career reflection. The research question is examined through four sub-research questions, resulting in four papers; one systematic literature review, two quantitative impact studies and one exploratory case study. The empirical findings suggest that EE can in fact function as a career exploration intervention that triggers students’ career reflection. Furthermore, in line with career development theory, the findings indicate that career exploration and reflection lead to either continued career commitment, or to career reconsideration of entrepreneurship as a career choice. Overall, the thesis offers new insight into the complexity of EE career impact and demonstrates the relevance of the career development literature to EE research and its potential as a rewarding direction for further research. Besides theoretical development, the thesis also provides a number of important implications for students, entrepreneurship educators and policymakers.
... One of the basic, starting assumptions of this paper is that formal planning systems i.e. pro forma planning does not give the expected positive effects in business. This paper is an attempt to support such attitudes, through parallel assessment of the form and the purpose of planning process, as well as its further impact on business success (Lange et al, 2007). ...
Article
Full-text available
U radu se analizira stanje u oblasti poslovnog planiranja u malim i srednjim preduzećima u Srbiji, kao i stavovi menadžera prema sistemu poslovnog planiranja koji se uvodi u preduzeće. Cilj ovog rada je da utvrdi da li preduzeća koja su uvela takav sistem planiranja imaju to kao formalni proces, i ako to čine, da li se sprovodenje prati tokom godine, a takode, da li se preduzimaju sve mere u slučaju pogoršanja na poslovnom planu i lošim poslovnim rezultatima, kako bi se postiglo racionalnije poslovanje, odnosno da li se adekvatan monitoring primjenjuje u skladu sa sistemom povratnih informacija?.
... Building on the ''lean startup'' methods advocated by Blank (2013), I-Corps positions its approach as an improvement on conventional business planning for entrepreneurs. Traditional business plans often require a lengthy period of time to develop, require investments of human and other capital for planning, and make many assumptions about market, partner, and financial unknowns (Lange et al. 2007;Gately and Cunningham 2014). In contrast, the I-Corps approach operates on a shorter timeframe, uses a standardized methodology that academic researchers pursuing commercialization can apply, and provides data and insights from customer and partner feedback. ...
Conference Paper
Full-text available
Universities are important hubs and drivers of innovation and technology, but many inventions remain embryonic in nature: this implies that they need further development before their commercial value or potential can become imminent or evident, and one of the reasons why this has happened is a certain myopia in the governmental funds policies, that fund early stage products’ concept without focusing of the users’ insights as well as the creation if a stakeholders’ network to make the product more viable to commercialization. The I-Corps, with the Lean LaunchPad methodology and the customer discovery journey, represents a shift in this sense, since for the first time a governmental institution (the NSF) invests in the innovators’ education and networking outside the academia, and no more in the innovation. Therefore, based on the studies about the implementation of the network theory in the field of service ecosystem management, aim of this paper is analyze NSF I-CorpsTM case study in order to understand if its methodology (the LeanLaunchPad) and methods (customer discovery journey) can contribute to an innovation-oriented educational entrepreneurship, taking as reference the suggestions of the "Viable System Approach" (Gummesson, E. 2006), typical of the marketing management literature. The methodology provides a longitudinal analysis of the NSF I-Corps achievements in quantitative terms (n° of startups successfully funded, individuals trained), and the results show that its teaching methods allowed a successful go-to-market of many startups in the STEM field – a number higher than those reached through other US governmental grants programs.
... Ames (1989) refere que os planos de negócios consistem em documentos de 20 a 40 páginas ou mais, que descrevem um novo produto ou serviço proposto, a estratégia a ser seguida, atividades de marketing, produção e um exame das restrições competitivas e de recursos. Ele tornou-se tão popular que muitas universidades preparam equipas para entrarem em concursos de planos de negócios (Delmar e Shane 2003;Russell et al. 2008;Lange et al. 2007;Marques 2016). Além disso, muitas universidades oferecem educação em empreendedorismo com foco na criação de empresas (Rodrigues et al. 2012), bem como para desenvolver as capacidades dos alunos num processo de implementação multifuncional (Liñán 2004). ...
Conference Paper
Full-text available
Este artigo foca-se no ensino do plano de negócios como instrumento de educação para o empreendedorismo. O caso de estudo relata uma década de ensino do empreendedorismo e do plano de negócios através da estrutura dos princípios da pirâmide, procurando saber Como é que esta estrutura conceptual se tem utilizado como instrumento para ensinar a construção e comunicação do plano de negócios. O caso envolveu 332 alunos agrupados em 104 projetos de ideias e planos de negócio construídos no âmbito da licenciatura em gestão do Instituto Politécnico de Coimbra. O estudo é qualitativo, permitindo observar que 97,1% dos projetos se basearam em necessidades do cliente. Os princípios da pirâmide, baseados na formulação de uma grande ideia, de questões de suporte, de argumentos e evidências foi o método de ensino e aprendizagem dos alunos, orientando-os para a eficácia, significando uma aplicação do modelo contingencial de ensino do plano de negócios. No entanto, apenas 28,4% dos alunos da amostra indicaram um ganho de consciencialização para o empreendedorismo e 20,9% referiram que o ensino do plano teve utilidade futura. Palavras chave: educação para o empreendedorismo; plano de negócios; princípio da pirâmide; ensino superior; Portugal
... Some authors explain that the process of setting up a business entails the execution of a number of actions, with a high variation in the amount and sequence of activities [53]. Although some authors acknowledge this variation, they still discern the sub-phases in the pre-startup process [54,55]. Tiessen [56] argued that individualistic tendencies are conducive to intentions toward self-employment but interfere with the process of resource acquisition where active cooperation with other people is vital. ...
Article
Full-text available
Recent trends of new venture startups have paved the way for the expansion of the design industry and opened new windows of opportunity for the traditionally small and non-specialized design business. In this environment, design startups are rapidly growing in modern society, and thus meeting the needs of consumers through the development of innovative products, processes, and services. This study aims to determine the critical success factors affecting design startups. To this end, the concept and success variables of startup businesses were studied based on previous research, and then key success factors of design startups were identified. A total of 24 experts, from 12 design-based small venture startups and 12 technology-based small and medium startups, were surveyed regarding their priorities related to these factors, using the analytic hierarchy process (AHP). The results suggest that idea commercialization is the most important success factor as an innovation criterion among the four success criteria of design startups. Hence, entrepreneurial conditions, such as goal-orientation and entrepreneurs’ competence, are important success factors for design startups.
... Brinckmann et al., 2010;Burke et al., 2010;Delmar and Shane, 2004), others have shown no impact (e.g. Honig and Karlsson, 2004;Lange et al., 2007;Tornikoski and Newbert, 2007). Some authors oppose to business planning because it is time consuming and deviates the focus from activities that have a more direct contribution to the beginning of the new business (Karlsson and Honig, 2009;Shane and Delmar, 2004). ...
Article
Full-text available
Planear um negócio é visto por muitos autores como um passo importante no processo empreendedor, apoiando as empresas no seu desenvolvimento. No entanto, não há unanimidade sobre a importância do plano de negócios, uma vez que do planeamento surgem tanto benefícios como custos. Este artigo pretende contribuir para este debate, analisando o plano de negócios no contexto do empreendedorismo corporativo através de uma revisão da literatura. Dado que planear o negócio requer o uso de recursos, mas ajuda a empresa a obter financiamento, a nossa análise leva à conclusão de que o plano de negócios assemelha‑‑se a um investimento: é necessário despender recursos para obter mais recursos e, portanto, a escolha da empresa em planear dependerá da sua avaliação de que o financiamento obtido ultrapassará os recursos gastos.
... The recent empirical entrepreneurship literature sees a number of empirical studies that deals with the planning-performance relationship. The impact, however varies strongly, providing positive, negative and non-significant results (Lange et al. 2007;Burke et al. 2010;Liao and Gartner 2006;Honig 2004). Importantly, Honig andKarlsson (2004 andHonig (2009) discuss survival (institutional) and financial performance (rational) explanations, with most of the evidence suggesting that planning affects survival but not performance. ...
Article
The present paper re-analyzes and extends a study on institutional forces and the written business plan (Honig and Karlsson in J Manag 30(1):29–48, 2004). We attempt to examine to what extent critical decision making is evident in model and variable choice, and whether the implications provided by systematic replication efforts may serve to provide additional and perhaps unrecognized theoretical and/or empirical observations. We find that the key result—formal business planning does not affect performance, does not hold. In fact, we find evidence that formal business planning affects survival but not profitability. The re-analysis also reveals, that institutional antecedents to formal planning appear to be fragile and prone to researcher biases due to different coding and assumptions. Our study underscores the consequences of access to original data and coding material, and to rely upon current methodological explanations for subsequent analyses.
... Pallavi did not prepare any formal business plan for TBS as she decided not to approach any financial institution in the early stages. Research literature also suggests that unless the entrepreneurs need to approach institutional investors or angel businesses, detailed business plans are not mandatory (Lange et al., 2007). Pallavi received the seed funding for her venture from her father approximating to few lakhs of rupees. ...
Article
The innerwear industry is one of the less researched businesses in India and is dealt as niche vertical of apparel industry. For the yesteryear’s customers, buying innerwear was a covert and backroom affair but globalisation, internet and bright entrepreneurial ideas have changed the trajectory. Taking leverage of changing industry dynamics, a budding entrepreneur – Pallavi Khandelwal dared to step into this less explored territory. She banked upon her entrepreneurial skills and strategic decision-making for creating an identity through her internet-based startup to optimise the opportunity and defy the challenges of online business arena. The case serves as the setup to elaborate the aspirations and obstacles confronted by a budding entrepreneur. It provides perfect background to understand how strategic options, resource requirements and critical success factors (CSFs) undergo transformation with the different stages of business life cycle. Industry analysis conducted through references gathered from various reports by business consultancies, industry players, and whitepapers written on this field accompanied an in-depth personal interview with the protagonist Pallavi Khandelwal for establishing facts and data used in the case. Literature review and academic experience of authors are steered to establish the theoretical underpinning of the case.
... Other studies repudiate the relationship between planning and performance, arguing that due to the contingent and volatile nature of entrepreneurship, systematic planning primarily serves to enhance external legitimacy. However, plans may also serve to lock entrepreneurs into preconceived paths that limit their agility or perceptual range (Bhidé, 2000;Gumpert, 2003;Honig and Karlsson, 2004;Karlsson and Honig, 2009;Tornikoski and Newbert, 2007;Lange et al., 2007;Van Gelderen, Thurik & Bosma, 2005). Despite extensive research on planning and entrepreneurship, we know of no other study that systematically compares the planning activities or survival outcomes between nascent entrepreneurs and intrapreneurs. ...
Article
We examine business planning for new firms created in the digital age, knowledge-intensive organizations that may rely primarily on adapting to dynamic environments with little predictability. This study compares the prevalence of planning for entrepreneurial versus intrapreneurial ventures, as well as for those in highly dynamic environments versus those in more mature and less dynamic environments. We study 623 venture opportunities in Sweden over a 10-year period, comparing entrepreneurial and intrapreneurial ventures, adding empirical results to theoretical discussions examining environmental uncertainty with firms that might pursue sensory activities versus those focusing on systematic analysis.
... Bisnis yang ada akan memanfaatkan banyak sekali aplikasi Internetmulai dari layanan pelanggan hingga pemrosesan pesanan hingga hubungan investor. Bagi banyak wirausahawan, tantangan yang ditimbulkan oleh Internet adalah "peluang untuk menyenangkan pelanggan dan menciptakan usaha wirausaha yang menarik"(Lange et al., 2007). Beli server atau kontrak dengan penyedia layanan Internet untuk meng-host situs Web. ...
... Las nuevas firmas pueden alterar sus procesos por no estar encerradas en procesos estandarizados, lo que implica que el modelo fundacional lógicamente sufra cambios a lo largo del tiempo [21]. Esto no quita que las alteraciones lleven al fracaso rotundo, pero al menos permite generar modificaciones de modo rápido y mitigar los errores más burdos. ...
Article
Full-text available
I. Status quo. II. Promotores del cambio. III. Startups. IV. Jugadores existentes. V. Búsqueda de problemas. VI. Definición de valor. VII. Desarrollo digital. VIII. Capital humano. IX. Conclusiones.
... To achieve this, like every other activity, they need to follow a planned process to form the underpinnings for a new business. This will provide entrepreneurs with the opportunity to bring together all aspects of a new business, evaluate the implications of different tactics and strategies, and find out the tangible and intangible prerequisites for developing an idea into a manageable business (Lange et al., 2007). Start-up formation tends to be iterative and not linear as individuals try to manage emerging situations, many of which are stressful and challenging. ...
Article
Full-text available
The influence of family support and psychological capital (PsyCap) is a topical discourse in entrepreneurship studies due to the unsupportive and turbulent environments most entrepreneurs operate in. However, studies concluding on the nature and direction of family support and PsyCap effects on start-up formation appear scant. This study aims to empirically examine family support effects on start-up formation with psychological capital (PsyCap) as a mediation factor. Specific emphasis was given to extended family support. The study utilized the partial least square (PLS) method for hypotheses testing with cross-sectional data collected from 261 randomly sampled trainees in an entrepreneurship training program organized by the Delta State Ministry of Youth Development. The PLS analysis showed that family support (β = 0.317, p = 0.000) and PsyCap (β = 0.202, p = 0.000) have a significant positive effect on start-up formation. The results proved that family support and PsyCap are valuable antecedent factors for positioning entrepreneurs to engage and thrive productively in the start-up formation process. Furthermore, PsyCap did not mediate the significant positive effect of family support on start-up formation (β = 0.235, p = 0.000; β = 0.103, p = 0.052). This result demonstrates that family support may not be enough for PsyCap to transmit its significant positive effect on start-up formation. Hence, there is a need to procure other alternate support from formal or informal settings.
... Only a few studies have considered the role of post-emergence organizing (i.e., early-stage ventures), generally focusing on business planning as the activity. These studies link planning to early-stage venture performance with mixed findings (Brinckmann et al., 2010;Gruber, 2007;Lange et al., 2007;Schwenk & Shrader, 1993). While there may be many reasons for the equivocal results, we advance that activities such as "preparing a business plan" (Carter et al., 1996) tend to fade to the background post-founding as planning gives way to organizing. ...
Article
Full-text available
This research provides an improved understanding of how ventures successfully organize via resource allocations. Conceptually, we apply elements of action theory to account for resource trade-offs that occur as entrepreneurs make decisions about adding staff members to boundary spanning, technical core, and management functions. We then model how these allocation decisions differentially impact nascent venture performance. Empirically, we test our model with a sample of 2484 entrepreneurs captured in the Kauffman Firm Survey, a longitudinal dataset that tracks a random sample of US startups over an 8-year period. Results from dynamic panel estimation reveal evidence of both performance penalties and performance boosts as the result of entrepreneurs adding staff to specific areas, revealing optimality in specific configurations of entrepreneurial organizing elements.
... Moreover, business plans enhance business process modelling Le Loarne-Lemaire and Maalaoui (2015) by providing "a valid template to form a conceptual representation of the firm's business processes" (Le Loarne-Lemaire and Maalaoui, 2015, p. 154). Finally, business plans are considered a highly practical tool (Ferreras-Garcia et al., 2019, p. 854) that forces entrepreneurs to formalise their knowledge in a structured VJIKMS document (Kraus and Schwarz, 2007;Lange et al., 2007;Shane and Delmar, 2004). Therefore, business plans can be considered as a knowledge translation tool that allows translating knowledge from different settings (marketing, finance, production) in a fine-tuning process that increases the likelihood of success of new ventures (Hormozi et al., 2002), with the need to keep them updated according to the business development (Karlsson and Honig, 2009). ...
Article
Purpose: The paper aims at analysing the role of business plan development as a knowledge translation tool, especially for the creation of start-ups. In a complex knowledge ecosystem populated by multiple diverse and autonomous actors (like potential entrepreneurs, local companies, local public entities, and business consultants) bonded together by a joint search for valuable knowledge, business plan development can work as a powerful enabler for the translation of knowledge. Design/methodology/approach: The study employs a qualitative multi-case study approach by examining the results of a public program devoted to the creation of new entrepreneurial ventures. We analysed 418 complete business plans and followed up all the participants with an interview. 40 cases were investigated more in detail. Findings: Results show how business plan development can function as a bridge between academic, theoretical and general knowledge on start-up creation on the one hand, and practical contextualised activities of potential entrepreneurs on the other. Originality/Value: The paper contributes to knowledge management and knowledge translation literature by demonstrating the role of business plan development as an effective knowledge translation enabler. It also adds to the understanding of innovation management and entrepreneurial education by proving the relevance of the translation of knowledge for the creation of new business ventures. Practical implications: The process of knowledge translation is crucial to ensure that relevant knowledge coming from both the inside (the entrepreneur) and outside (the stakeholders) of the organization is effectively applied. To facilitate the translation process, key knowledge users should be supported in contextualising and making sense of the research knowledge. Initiatives carried out by local entities and other actors, gathering several stakeholders to develop business plans, can become valuable opportunities to facilitate the translation process for start-up development.
... In addition, the criteria led to the exclusion of three studies that measured none of the experience variables (e.g., Bygrave et al., 2007;Englis et al., 2012;Zwerus, 2013). The studies we included had to report on the relationship between business planning and at least one type of experience or one of the two dimensions (formal business plan or degree of planning sophistication) and one type of experience. ...
Article
Full-text available
The question of why entrepreneurs undertake business planning activities differently, ranging from planning "in the head" to generating formal written documents, is still impenetrable. Aggregating data on 11,064 observations from 32 independent data set, this study meta-analyzed how business experience and gender influence entrepreneurs' disposition to business planning behaviors. Surprisingly, contradictory to some extant views that entrepreneurs without prior experience are more likely to make business plans, we found that both managerial experience and entrepreneurial experience positively influence entrepreneurs' subsequent business planning behaviors. Drawing insight from the effectuation and institutional perspectives, this study showed that, rather than entrepreneurial experience, managerial experience motivates entrepreneurs to generate formal business plans. For entrepreneurs who create formal business plans, both entrepreneurial experience and managerial experience enhance their business planning sophistication. In addition, we examined the moderating effects of gender on the relationship between business experience and business planning. The results suggested that female entrepreneurs with entrepreneurial experience are more likely to undertake business planning behaviors and create formal business plans than their male counterparts.
... Unfortunately, there is very little evidence that having a (good) business plan improves the performance of a startup [97]. Although there is some evidence that a business plan assists in raising external funds, there is virtua lly no correlation between the quality/quantity of a plan and performance [98]. In fact, entrepreneurs report they rarely review or update their plans once they have been written and the majority of founders on the Inc 500 list of fastest growing companies report spending more time on informal than formal plans [99]. ...
Preprint
Full-text available
Innovation teams formed in incubators, research accelerators, hackathon weekends, and within organizations need to quickly align on narrative, workflow, and objectives in order to achieve success. Many of these teams disintegrate or fail to perform due to lack of alignment. Operations orders, such as those in use by the military, have demonstrable impact on organizational efficacy and success. This paper summarizes the history, development, and impact of military operations orders, discusses the history and development of their business counterparts, and presents the "The Innovator's Catechism", a catechism-styled operations order for use by early-stage innovation teams. This operations order is built from the "Facilitator's Catechism", an operations order for rapidly formed research teams, with acknowledgment for the special information requirements present for emergent and early-stage teams that are market-facing.
... 1.1 Environnement contraignant et théorie de l'effectuationDans le modèle classique de la création d'entreprise, l'entrepreneuriat a longtemps été caractérisé par plusieurs mythes, dont la découverte des opportunités(Shane, 2000) et la planification des actions. Cependant, dans une étude du Babson College,Lange et al. (2007) soutiennent que la rédaction d'un plan d'affaire n'augmente pas les chances de réussite et remettent en question son utilité. C'est là qu'intervient la théorie de l'effectuation, qui offre un cadre adapté à l'entrepreneur, ses moyens et son environnement, afin de lui permettre de surmonter les obstacles et limiter les défaillances ...
... t-up firms suggests that firms which complete business plans are less likely to fail (Shane & Delmar, 2004) and more likely to launch (Liao & Gartner, 2006). Studies on business planning and survival that have found no association tend to focus on the reasons for writing the plans such as institutional forces (Honig & Karlsson, 2004). In addition, Lange, et. al. (2007) suggest that unless start-up firms need a lot of start-up capital from business angels or VCs (venture capitalists), there is no need to write a detailed business plan. While there is no consensus on the findings, one thing all the studies agree upon is that business planning is a heterogeneous task. Dynamism and environmental complexit ...
... Salah satu dari banyak topik yang dipelajari dalam mata kuliah kewirausahaan adalah rencana bisnis. Sebuah rencana bisnis didefinisikan sebagai dokumen formal yang ditulis oleh pengusaha yang menggambarkan seluruh aspek dari bisnis secara komprehensif (Guta 2014;Lange et al. 2007; Rijal, Chowdhury & Lanichhane 2010;Schaper & Volery 2004). Sebuah pertanyaan dapat diangkat apakah menulis rencana bisnis merupakan keharusan atau tidak untuk para pengusaha. ...
Article
Artikel ini akan mereview lima artikel yang ditulis by Davidson (2015), Delmar (2015), Delmar and Shane (2003), Honing and Karlsson (2004), dan Honig and Samuelsson (2014) menyangkut pendapat yang berbeda mengenai penggunaan rencana bisnis. Metode yang digunakan dalam artikel ini adalah sebuah analisis konten dengan menggunakan metode deskripsi. Hasil penelitian menunjukkan bahwa kelima artikel rencana bisnis yang dibahas memiliki sudut pandang yang berbeda mengenai penggunaan metodologi. Walaupun ada yang setuju dan tidak setuju terhadap penggunan dokumen rencana bisnis dalam artikel ini, kami menyarankan bahwa sangat penting untuk menunjuk seorang ahli dalam penelitian rencana bisnis untuk mengurangi kemungkinan perdebatan terus-menerus dalam topik rencana bisnis.
Article
Purpose This paper aims to review the academic literature on business plan competitions in developed and emerging economies to assess the contribution to the knowledge so far and identify research gaps. Design/methodology/approach A variety of databases (such as ABI/Inform Global, Academic Search Complete, Business Source Premier and Emerald Full Text) were used to find peer-reviewed journal articles. Regardless of time, different search terms were used to find relevant journal articles such as business plan competitions, business plan contests, business plan teams, business plan judges, business plan development and business plan scores. After a careful review of the identified articles, a total of 22 articles were included in the final review. The articles in the final set were manually coded using the thematic codes. Findings Despite the popularity of business plan competitions, limited academic literature exists, particularly in the context of emerging economies. A total of 16 out of 22 studies are conducted in developed economies. The findings suggest that the literature on business plan competitions is largely centered on the structure of business plan competitions, the characteristics of the participating teams and the benefits of business plan competitions. The individual level benefits of business plan competitions include the development of entrepreneurial skills, opportunity for networking and access to mentors. Business plan competitions can be better aligned with public policy, particularly in case of emerging economies. Therefore, a more focused and integrated approach among industry, academia and government in encouraging business plan competitions could potentially make a far-reaching impact in establishing an enterprising society. While much is known about the structure and the benefits of business plan competitions, there are various research gaps which need to be addressed. Originality/value The current paper is the first identifiable review of the literature on business plan competitions. The proposed questions for future research will potentially help in addressing the identified research gaps.
Article
The study investigated the use of formal business plans by new immigrant entrepreneurs during the start-up stage. In addition, the study examined the drivers and barriers to business planning by new immigrant entrepreneurs. The study used the qualitative research technique. The in-depth interview method was used for data collection. Thematic analysis was used for data analysis. Out of the thirty new immigrant entrepreneurs that participated in the study, only four prepared formal business plans. The major drivers of formal business planning were to get external finance and to gain direction for the business. The barriers included lack of skills and financial constraints. Recommendations to improve the level of business planning by new immigrant entrepreneurs were suggested.
Article
Business planning is a popular managerial practice, especially in the SME context. Yet, literature presents diverging perspectives regarding business planning and the role it fulfills for the individuals leading these organizations. To advance research, we focus on evidence regarding factors that determine whether and how individuals engage in business planning. Drawing on human capital concepts and the theory of planned behavior, we scrutinize how education and different prominent work experience types influence business planning behaviors. We use meta-analysis to aggregate data on 8095 observations leading SMEs from 31 independent data sets. We find critical differences in planning behaviors relating to human capital types, as well as to whether individuals engage in substantive planning processes or the specific preparation of a formal business plan. Implications of our findings for research on business planning are discussed.
Article
Resumo: O objetivo do estudo foi identificar fatores antecedentes, necessidade de apoio e consequências da formalização e implementação de planos de negócios em micro e pequenas empresas (MPE). A pesquisa em gestão de MPE tem crescido e aponta, dentre outros interesses, para o processo de formalização de planos de negócios antes do lançamento de novos empreendimentos. Os dados são originados de uma survey em empresas do estado do Maranhão, Brasil, e analisados por meio de regressões logística e linear. Argumenta-se que o processo de elaboração formal do plano de negócios deriva de fontes e pressões institucionais e de restrições de recursos. Os resultados indicam que a necessidade de financiamento aumenta a probabilidade da formalização de planos de negócios pelas MPE. A educação empresarial exerce impacto na elaboração de planos de negócios e o apoio de terceiros às MPE gera um impacto positivo na formalização e implementação de plano de negócio. Além disso, planos de negócios implementados pelas MPE contribuem positivamente para a gestão, aumentando a propensão à sobrevivência e à lucratividade das empresas. Palavras-chave: gestão de micro e pequenas empresas; plano de negócios; sobrevivência; lucratividade.
Article
Purpose The purpose of this paper is to understand women’s approaches to acquiring financial and other resources is essential for closing the entrepreneurship gender gap. In nearly 40% of economies, women’s early-stage entrepreneurial activity is half or less than half of that of men’s. Design/methodology/approach Even when there is extensive literature on female entrepreneurs, the authors review the findings through a Coronavirus Disease 2019 (COVID-1)9 crisis lens, trying to find new perspectives and solutions. With the approach of a systematic review of 4,520 publications on financing topics related to female entrepreneurs, various sources of financing available to female entrepreneurs are considered: bootstrapping, banks, business angels, venture capital and crowdfunding. Findings Identifying potential gender bias both on the supply and the demand side of financing, this research highlights new directions in encouraging female entrepreneurship and gives guidelines to public organisations on how to foster advanced forms of financing for female entrepreneurs in COVID-19 times. Social implications The COVID-19 pandemic has posed an unprecedented challenge for economies and companies. Female entrepreneurs are the ones who have been hit harder, as they overcome pre-existing barriers, such as lack of access to finance, lack of networks and mentors and gendered priorities, among others. Without ensuring gender policies to counter these incremental negative effects, the authors face the risk of widening the gender gap. Originality/value Regarding previous systematic reviews of literature, this paper focusses on a specific challenge, how women entrepreneurs finance their activity, with a double vision: supply and demand of money.
Chapter
Full-text available
Strategic planning and entrepreneurial leadership are needed for effective navigation into the volatile business environment in an era of the knowledge intensive and fast-changing business eco-system. The growing volatile and competitive business climate demands a new sort of “leadership” different from the conventional form of leadership. As a result, having either management or entrepreneurial traits in venture leaders is insufficient for business success. Leaders must be capable of both entrepreneurship and management skills to excel. This study emphasizes the notion of venture leadership that refers to entrepreneurial leadership combining leadership characteristics with an entrepreneurial mindset. In addition, venture leadership involves developing new business processes, new products and prospects for growth in established businesses, collaborating with other social institutions to combat neglected social issues, engaging in political and social movements, and contributing to the modification of prevailing policies and schemes executed by the government and civil organizations. Venture leadership is an emerging concept in business management that challenges the status quo. As a result, the relevance of venture leadership is addressed in this paper by investigating the idea of venture leadership, leadership skills, and ethics in the emerging country context of Thailand.
Chapter
The opening up of new markets, foreign or domestic, and the organizational development from the craft shop to such concerns as U.S. Steel illustrate the same process of industrial mutation—if the author may use that biological term—that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism. This chapter addresses disruptive innovation in the 21st century and how new ventures that might produce such innovation in Oceania and Asia can obtain the funds they need to survive and prosper.
Article
Purpose The purpose of this paper is to build a research model to examine the effects of business planning on the new venture emergence, as well as to examine the moderating effects of innovativeness of products. Design/methodology/approach Four hypotheses are put forward and examined by hierarchical binary logistic regression. The data of this paper are based on the first two waves of data from Chinese Panel Study of Entrepreneurial Dynamics project. Findings Results show that engaging in business planning has a positive effect on the new venture emergence, and the timing of business planning does not affect the new venture emergence significantly. This study also finds that the innovativeness of products has a positive moderating effect on the relationship between the timing of business planning and the new venture emergence. Research limitations/implications This study has some limitations. The innovativeness of products is measured by a single indicator, which may not completely reflect the meaning of the attribute. Moreover, this study explores new ventures only in the nascent stage. Practical implications The study is useful for entrepreneurs to realize the importance of business planning. First, engaging in business planning in early start-up stage is a very valuable activity, because business planning can help new ventures reduce the loss caused by trial and error learning. Second, engaging in business planning is more likely to ensure high innovative products quickly be accepted by the market. Because in the process of new venture emergence, the legitimacy signal to stakeholders can be transmitted and new products can be promoted to get support and recognition from stakeholder through the business plan. Originality/value This paper focuses on the early stage of new venture life cycle and the contextual factors to explore the influence of business planning on the new venture emergence under the logic of legitimacy. This paper could enrich business planning research from the perspective of legitimacy theory by inspiring scholars to focus on the differences between new ventures and mature enterprises and to offer proposals of legitimation strategies suitable for new ventures. Meanwhile, this study contributes to the understanding of the contextual factors of business planning. And it discusses the impact of the attribute in business planning on the new venture emergence, which helps scholars to get a deep thought about the value of business planning in entrepreneurial process.
Article
This article focuses on the teaching of the business plan as a tool for entrepreneurship education through the structure of the pyramid principle, seeking to find out how this framework was used to teach the preparation and communication of the business plan. The case study involved 332 students grouped into 104 projects developed as part of the degree in management at the Polytechnic Institute of Coimbra during ten years. The study is qualitative and quantitative and shows that 97.1% of the projects were based on customer needs. The method of teaching students was to guide them to effectuation, implying the application of the contingency model to teach the business plan. However, only 28.4% of the students in the sample indicated an increase in awareness for entrepreneurship and 20.9% stated that learning how to prepare the plan would be useful in the future.
Chapter
This chapter takes into account both the fintechers that supply business analytics and high-tech services to supervised entities and the ones that unbundle banking and finance to supply alternative solutions for savers, lenders, borrowers or investors (such as the management of web-based platforms supporting individuals in trading credits or sharing financial opportunities). It highlights the fact that the policymaker has to contemplate the regulation of both. By providing a review of the risks arising from the business of fintech banks and a background for understanding the option for strengthening oversight and control over fintechers, programmers and coders considered as relevant ancillary service undertakers, this chapter concludes that supervisory authorities will require authorization from high-tech service providers for dealing with supervised entities.
Chapter
This article focuses on the teaching of a business plan as a tool for entrepreneurship education through the structure of the pyramid principle, seeking to find out how this framework was used to teach the preparation and communication of the business plan. The case study involved 332 students grouped into 104 projects, developed as a part of the degree in management at the Polytechnic Institute of Coimbra for ten years. The study is qualitative and quantitative and shows that 97.1% of the projects were based on customer needs. The method of teaching students was to guide them to effectuation, implying the application of the contingency model to teach the business plan. However, only 28.4% of the students in the sample indicated an increase in awareness for entrepreneurship and 20.9% stated that learning how to prepare the plan would be useful in the future.
Purpose The purpose of this paper is to examine how nascent entrepreneur perspectives towards the utility of the formal written business plan (BP) change before and after start-up competition (SUC) participation. Such focus is pertinent and timely given the enduringly contentious matter of BP creation for nascent entrepreneurs. Despite mounting criticisms, considerable resources continue to be expended on promoting the BP within educative and start-up support provision; the globally ubiquitous SUC phenomenon provides a prominent example of such promotion. Design/methodology/approach In-depth open-ended interviews were undertaken with nascent entrepreneurs at the start, end and six months after participation in a UK university-based SUC. An inductive thematic content analytical approach was taken to identify patterns across participant accounts at each wave of data collection. Findings Upon entering the competition, the nascent entrepreneurs held highly positive views towards the BP, believing that it provided legitimacy and served as a means of sense-making. Immediately after the competition, views were more ambivalent, with the BP viewed as secondary to action but remaining an external expectation. Six months after the competition, the BP was viewed as underutilised and internally irrelevant; an unnecessary feature of an action-led approach and only useful when needed by external parties. Originality/value Contributing to the limited body of SUC research, the enduring centrality of formal BP production within competition provision is challenged given its limited relevance to the nascent entrepreneur beyond the competition context. Emphasis on BPning within a competition need not automatically require BP creation; this has implications for business competition organisers.
Chapter
This chapter presents a new philosophy of startup management—Lean Startup—in the context of management culture. Particular attention is placed on the development of management in Poland, including historical and social factors. The technocratic spirit of large manufacturing industry and the tradition of family businesses and small-scale artisan production clash with the startup culture which is open, egalitarian, and dynamic, but also nomadic and volatile. These attributes of startup culture are a source of its strength and potential, but they can be a barrier to its rapid adaptation in Poland and other countries with similar experiences. The second part of the chapter is devoted to education for startups in the context of education in the field of management and entrepreneurship. The chapter also presents examples of the author’s own courses programmes educating for startup entrepreneurship based on her knowledge and experience conducting classes and training for students and entrepreneurs.
Article
Full-text available
Au cours de ces dernières années, la promotion de l’entrepreneuriat a représenté un vecteur fondamental dans toutes les politiques de développement économique. Dans ce sens, plusieurs pays ont déployé des efforts considérables afin d’inciter la création et la promotion des entreprises (réduction des contraintes réglementaires et administratives, encouragement de la formation, renforcement de l’accompagnement...). Au Maroc, Différents programmes ont été lancé dans ce domaine afin de soutenir les jeunes entrepreneurs (le programme jeunes promoteurs, Moukawalati, etc). Sans oublier les Centres Régionaux d’Investissement qui interviennent dans la phase de création. Cet article a pour objectif principal d’identifier les déterminants clés de la réussite de l’entrepreneuriat dans la région du Grand Casablanca. Pour ce faire, nous allons nous appuyer sur les modèles théoriques de Hannu Littunen (2000), Lasch et al. (2005), Kessler (2007) et Ahmad et Hoffman (2007). Notre modèle explique le succès entrepreneurial en se basant sur trois principales dimensions: le profil de l’entrepreneur, l’environnement de l’entreprise et la préparation à la création. Pour analyser cette problématique, notre démarche consiste à présenter dans un premier lieu une classification théorique et exhaustive des déterminants potentiels de la performance entrepreneuriale. Deuxièmement, nous allons présenter notre modèle et les principaux résultats de notre étude empirique qui va porter sur un échantillon de 124 PME dans la région du Grand Casablanca. Pour terminer, Nous essayerons de formuler des axes d’améliorations au profit des entrepreneurs marocains.
Article
While management accounting (MA) implies potential benefits for large established companies, its usefulness for young and small companies is less clear. This review analyzes and partially resolves the paradox and provides a structured overview of present knowledge. A systematic literature search yielded 67 empirical papers in 25 journals. Drawing on the results of a two‐step coding process, this study proposes 20 novel second‐level constructs expressing the types of MA, their antecedents and their consequences in young and small companies. The main results show that, in discussing MA, the literature refers mainly to business planning, accounting‐based management control activities and financial accounting. Most studies find MA to be helpful for young and small companies because it provides tools to overcome difficulties arising from company growth and reduces information asymmetry with external partners. Overall, however, the empirical literature on this topic is highly concentrated, offers theoretical construct definitions of poor quality, and lacks a clear statement of what MA really does in young and small companies. Therefore, future research and theory development are warranted.
Article
Full-text available
Social entrepreneurship is a topic of much debate in the academic environment. Much recent research has highlighted the supporting role of social entrepreneurs in solving social problems that public sectors and business environments have demonstrated their incapacity to solve. However, the identification of the social enterprise's characteristics in emerging countries has not yet been thoroughly examined. This article focuses on social enterprises; its aim is to identify the profile of social enterprises in the Moroccan context. Beyond the motivations and passions that drive social entrepreneurs in their quest to create value, we highlight the different characteristics of social enterprises in a developing country. The research question is: What are the characteristics of Moroccan social enterprises? In order to answer the study's main objective and research question, an approach based on an exploratory quantitative study was adopted with 37 Moroccan social entrepreneurs. This article revealed specific challenges faced by Moroccan social enterprises which aim to achieve economic and social performance. The results made it possible to discuss two essential points: the need to create a legal status for social enterprises and the nature of the process mobilized in the creation of social enterprises. Considering the limitations and future research directions, this article opens the way to clarify a growing ambiguity of the Moroccan social enterprise, but it does not represent in any way a complete and definitive identification of the Moroccan social enterprise's profile. Rather, it represents a first step towards more profound and effective research on social enterprises in Morocco.
Article
Purpose The purpose of this paper is to focus with the university-based business plan competition (BPC) and proposes how the theory of effectuation might inform a new model. Such a purpose is timely given the under-challenged nature of the BPC methodology. Design/methodology/approach Extant literature pertaining to business planning and the business plan within entrepreneurship education and effectuation is reviewed; numerous conceptual issues which undermine BPC provision in its traditional form are then identified. In response to these identified issues, a series of principles which could underpin the introduction of an effectuation-led business coopetition (EBC) are outlined. Findings Strong emphasis on business plan production within a conventional BPC model raises questions about its capacity to release the entrepreneurial potential of the higher education institution student and provide them with an authentic and relevant entrepreneurial learning experience. Through using the ideas of effectuation to rethink provision, the action of business plan production can usefully be replaced with the action of business implementation. As well as facilitate a beneficial shift from competition to coopetition-based entrepreneurship education. Originality/value This paper valuably critiques the efficacy of a commonly employed yet under-challenged methodology for entrepreneurship education; the BPC. The propositions offered can guide competition provision in a more authentic, realistic and relevant way that is potentially better suited to inspiring and supporting entrepreneurial new venturing amongst students and graduates now rather than in the future. The paper thus has practical value to those designing and delivering competition-based entrepreneurship education.
Thesis
Full-text available
The overarching question this dissertation addresses is: How are effectual and causal behaviors developed among entrepreneurs in the tourism industry? To address this question, I have approached the context with different methods, including qualitative case studies as well as different rounds of quantitative testing. This has resulted in a dissertation that consists of an introduction chapter and four papers. The first paper is a systematic literature review of tourism entrepreneurship. In the second paper, I have discussed how novice entrepreneurs approach the new venture creation process and what triggers changes in behavior. In the third paper, my co-authors and I have developed a new scale for measuring effectuation and causation. Last, the fourth paper, empirically tests antecedents to effectuation and causation among entrepreneurs that recently have started a new venture in the tourism industry in Norway. This thesis explores factors both in relation to the entrepreneur, his or her perception of the environment in which the business is started, and the learning that takes place during the new venture creation process. It examines how these factors intertwine and influence each other over time. From the discussion of the research questions, I have highlighted several key factors for the alternation of effectual and causal behavior during new venture creation in this context. This thesis makes several contributions to the literature both on effectuation and new venture creation. Most importantly, it provides a better understanding of how novice entrepreneurs develop different types of entrepreneurial behavior. The findings also have implications for practitioners, educators, and policy makers.
Article
Full-text available
We used the techniques of event-history analysis to examine the speed with which newly founded organizations ship their first products for revenues, an important entrepreneurial event. In a longitudinal study of new ventures in the U.S. semiconductor industry, we found that substantial technological innovation lengthens development times and reduces the speed with which first products reach the marketplace. Organizations that undertook lower levels of technological innovation, had relatively lower monthly expenditures, whose founding organization structures included both a manufacturing and a marketing position, that had more competitors in the marketplace, and were founded in the Silicon Valley region of the U.S. shipped their first product for revenues significantly faster than other new ventures. Since several theoretical perspectives were utilized, results indicate that it is worthwhile to synthesize from several perspectives in order to understand the timing of entrepreneurial events. Implications for theory and future research on new organizations are discussed.
Article
Full-text available
Building on previous contingency frameworks, we developed an encompassing contingency model that might explain the inconsistent planning-performance findings reported in previous research. The model was empirically tested using meta-analytic data drawn from 26 previously published studies. Results suggest that strategic planning positively influences firm performance and that methods factors are primarily responsible for the inconsistencies reported in the literature. The substantive contingency factors that we examined, some of which have been frequently cited as important by previous researchers, did not have a large impact.
Article
Full-text available
Despite the ubiquity of business planning education in entrepreneurship, there is little evidence that planning leads to success. Following a discussion of the theoretical and historical underpinnings, three pedagogical models are compared, including two alternative experiential methods: simulations and the contingency approach. The contingency model, as introduced, utilizes Piaget's concept of equilibration, and is asserted to provide both cognitive tools and flexibility in accommodating unanticipated environmental factors faced by future entrepreneurs.
Article
Full-text available
Most potential funders wish to see a business plan as a first step in deciding whether or not to invest. However, much of the literature on how to write a business plan fails to emphasize that different types of funder look at business plans from different perspectives. Using a real time methodology this article highlights the different investment criteria of bankers, venture capital fund managers and business angels. Bankers stress the financial aspects of the proposal and give little emphasis to market, entrepreneur or other issues. As equity investors, venture capital fund managers and business angels have a very different approach, emphasizing both market and finance issues. Business angels give more emphasis than venture capital fund managers to the entrepreneur and ‘investor fit’ considerations. The implication for entrepreneurs is that they must customize their business plan according to whether they are seeking funding from a bank, venture capital fund or business angel.
Article
Full-text available
After two decades of research, the effect of strategic planning on a firm's performance is still unclear. While some studies have found significant benefits from planning, others have found no relationship, or even small negative effects. Interpretation of these findings is confounded by the fact that many of these studies base their findings on a small number of firms. This article uses meta-analysis to aggregate the results of 29 samples on a total of 2496 organizations. Cumulation of previous studies found modest correlations between planning and nine performance measures. Extensive measurement problems suggest that these findings underestimate the true relationship between planning and performance.
Article
Full-text available
The relationship between formality of planning procedures and financial performance was examined for a sample of small U.S. banks. Small banks without formal planning systems performed equally with small, formal planners. Regardless of formality, each set of banks placed equal emphasis on all aspects of strategic decision-making except formalized goals and objectives. Results suggest that managers responsible for strategic planning activity in smaller organizations do not appear to benefit from a highly formalized planning process, extensive written documentation, or the use of mission and goal identification as the beginning of a strategic planning process.
Article
Full-text available
Considers structural inertia in organizational populations as an outcome of an ecological-evolutionary process. Structural inertia is considered to be a consequence of selection as opposed to a precondition. The focus of this analysis is on the timing of organizational change. Structural inertia is defined to be a correspondence between a class of organizations and their environments. Reliably producing collective action and accounting rationally for their activities are identified as important organizational competencies. This reliability and accountability are achieved when the organization has the capacity to reproduce structure with high fidelity. Organizations are composed of various hierarchical layers that vary in their ability to respond and change. Organizational goals, forms of authority, core technology, and marketing strategy are the four organizational properties used to classify organizations in the proposed theory. Older organizations are found to have more inertia than younger ones. The effect of size on inertia is more difficult to determine. The variance in inertia with respect to the complexity of organizational arrangements is also explored. (SRD)
Article
Full-text available
Uses human capital theory and organizational ecology to explore the success of newly formed firms. Human capital focuses on the firm's founder and his/her background whereas organizational ecology considers the characteristics of the organization and its environmental conditions. Data used in the analysis were collected from 1,849 firm founders in Germany whose firms were formed in 1985-1986. Variables used were survival time, general and specific human capital of the founder, newness of the firm, initial size, organizational strategies, location, branch of industry, and market conditions. Of the firms considered, almost one-fourth had failed in the first two years, and 37% had failed within five years. The firms with founders who had more work experience and schooling improved their chances of survival. Those businesses that were novel were more likely to survive than those firms that were considered followers. Overall, the results show that all human capital variables considered have strong selection effects. (SRD)
Article
Full-text available
The factors leading nascent entrepreneurs to expend effort writing business plans are examined and the effect such planning has on new organizations is considered. This is part of a larger consideration within institutional theory about whether or not conformity leads to profitability or survival. There were 396 nascent Swedish entrepreneurs investigated over a four consecutive six-month periods. Both the production of the plan and the outcomes were examined. New organizations are subject to institutional pressure to produce written business plans - they are expected to plan, they imitate other successful organizations, or they are told to plan. The findings show that institutional variables (such as coercion and imitation) predict the likelihood for new organizations to write business plans. The study's results are more in line with institutional predictions and are contrary to rationalist predictions of planning-performance. Conclusions indicate that writing a business plan has no significant effect on the survival or profitability of the new organization. (TNM)
Article
Full-text available
The "network approach to entrepreneurship" is a prominent theoretical perspective within the literature on entrepreneurship. This literature assumes that network resources, networking activities and network support are heavily used to establish new firms (network founding hypothesis). Further, those entrepreneurs, who can refer to a broad and diverse social network and who receive much support from their network are more successful (network success hypothesis). Based on a study of 1,700 new business ventures in Upper Bavaria (Germany), the article gives an empirical test of the network success hypothesis. It is argued that one reason, why previous studies did not consistently find positive network effects, may be that social capital (network support) is used to compensate shortfalls of other types of capital (human capital and financial capital). This compensation hypothesis, however, does not find empirical confirmation. On the other hand, however, the network success hypothesis proves to be valid in our analyses, i.e. network support increases the probability of survival and growth of newly founded businesses.
Article
Full-text available
The authors examine survival rates of entrepreneurial enterprises and their growth, conditional on surviving. Their focus is on whether liquidity constraints increase the likelihood of entrepreneurial failure. The empirical strategy is based on the following logic: If entrepreneurs cannot borrow to attain their profit-maximizing levels of capital, then entrepreneurs with substantial personal financial resources will be more successful than those without. The authors examine the behavior of a group of sole proprietors who received substantial inheritances. The results are consistent with the notion that liquidity constraints exert a noticeable influence on the viability of entrepreneurial enterprises. Copyright 1994 by University of Chicago Press.
Article
Full-text available
This research analyzed new venture start-up activities undertaken by 71 nascent entrepreneurs. Nascent entrepreneurs are individuals who were identified as taking steps to found a new business but who had not yet succeeded in making the transition to new business ownership. Longitudinal data for the study comes from a secondary data analysis of two representative samples, one of 683 adult residents in Wisconsin (Reynolds and White 1993) and the other of 1016 adult residents of the United States (Curtin 1982). These surveys were conducted between 1992 and 1993, and the nascent entrepreneurs were reinterviewed six to 18 months after their initial interview.
Article
Researchers have been examining the effects of formal strategic planning on small firm financial performance for more than twenty years. Reviewers of prior studies have drawn differing conclusions as to whether formal planning improves small firm performance. We have applied meta-analysis for the first time to the results of previous studies on formal strategic planning and small firm performance. The results suggest that even though the size of the effects for planning for individual studies Is not large, the overall relationship between formal planning and performance across studies Is positive and significant. Much of the variance in the size of the effects, however, Is not explained by sampling error, Indicating the potential for other variables to moderate the effects of planning on the performance of small firms. It is concluded, in general, that strategic planning is a beneficial activity for small firms.
Article
This study explores organizational growth in technology-based ventures. We relate characteristics of the founding top-management team, strategy, and environment to the sales growth of newly founded U.S. semiconductor firms. The results indicate significant main and interaction effects for the founding top-management team and market stage on firm growth. In contrast, the technical innovation of firm strategy and marketplace competition were not significant. Finally, the founding top-management team and market-stage effects were increasingly large over time. Overall, these results indicate that both environmental determinism and strategic choice operate on young firms. These findings also suggest chaos-theory linkages to positive-feedback models and sensitive dependence of organizational growth on founding conditions.
Article
The research reported in this article is based on a study of the strategic planning practices of the 500 fastest growing privately held smaller companies in the United States ranked according to percentage of sales increases from 1978 to 1982.p1 Based on the information provided, a clear picture emerges regarding the actual role of strategic planning in rapid growth companies.
Article
The general topic of this chapter is the relation of the society outside organizations to the internal life of organizations. Part of the specific topics have to do with the effect of society on organizations, and part of them concern the effects of organizational variables on the surrounding social environment. I intend to interpret the term “social structure” in the title in a very general sense, to include groups, institutions, laws, population characteristics, and sets of social relations that form the environment of the organization. That is, I interpret “social structure” to mean any variables which are stable characteristics of the society outside the organization. By an “organization” I mean a set of stable social relations deliberately created, with the explicit intention of continuously accomplishing some specific goals or purposes. These goals or purposes are generally functions performed for some larger structure. For example, armies have the goal of winning possible military engagements. The fulfillment of this goal is a function performed for the larger political structure, which has functional requirements of defense and conquest. I exclude from organizations many types of groups which have multiple purposes (or which perform multiple functions for larger systems, whether these are anyone's purposes or not), such as families, geographical communities, ethnic groups, or total societies. 1 also exclude social arrangements built up on the spur of the moment to achieve some specific short-run purpose. For instance, I will not consider a campaign committee for some political candidate as an “organization,” although a political party would definitely meet the criterion of continuous functioning and relatively specific purposes.
Article
Although eyidence is equivocal and often contradictory, prospective business founders are generally advised to develop formal plans of their proposed ventures. Consistent with this advice, some scholars have suggested that the high mortality of new small businesses could be reduced through greater pre-startup planning. However, there is an emerging view that the value of planning is context-dependent. This view is elaborated here as it applies to new small businesses. First, ways in which pre-startup planning can facilitate survival are delineated. Then, contextual conditions that can limit these impacts are described. Finally, suggestions are offered which show how this view can be used to guide future research and extend the body of knowledge.
Article
Venture capitalists (VCs) are considered experts in identifying high-potential new ventures—gazelles. VC-backed ventures survive at a much higher rate than those ventures backed by other sources Kunkel and Hofer 1991, Sandberg 1986 and Timmons 1994. Thus, the VC decision process has received tremendous attention within the entrepreneurship literature. Nonetheless, VC-backed firms still fail at a surprisingly high rate (20%). Moreover, another 20% of the VC's portfolio fails to provide any return to the VC. Therefore, there is room for improvement in the VC investment process.
Article
Entrepreneurs can be differentiated fromnon-entrepreneurs on the basis of intention, but intention is not alwaystranslated into performance that produces entrepreneurial outcomes. It isproposed that an alternative basis for differentiation is cognitive style(preferred approach to information processing). The present study hypothesizesthat those owner managers who are, in practice, successful at identifying andexploiting opportunities for growth and capital accumulation (i.e., successfulentrepreneurs) are: (1) more intuitive in their cognitive style than thegeneral population of managers; (2) no different in cognitive style from seniormanagers and executives; and (3) more intuitive than middle and juniormanagers. A questionnaire containing the Cognitive Style Index (CSI), a measure of theintuitive-analytic dimension, was distributed to the 437 founders of highgrowth companies listed in the latest edition of the publication Local Heroes(Scottish Enterprise, 1997). The 156 replies (representing a response rate of35%) were compared with those of 546 managers from various organizations whohad completed the questionnaire previously. Results showed that all three hypotheses were upheld. Although the study wasessentially exploratory, the findings are encouraging. They suggest fertileground for further research by highlighting the importance of cognitive aspectsof entrepreneurial behaviour. (Publication abstract)
Article
The outcomes of the entrepreneurial organization process are based on three factors, which include the attributes of the entrepreneur/founders, the nature of the opportunity, and the organizing process.The organizing activities of Swedish entrepreneurs and how these activities impact the organizing process are examined. In addition, the antecedents of venture disbandment, the reasons behind disbandment, and the outcome of becoming operational are investigated. The theoretical development of this research is discussed in a lengthy literature review, which resulted in the creation of five hypotheses.The data for this longitudinal study were garnered from Swedish entrepreneurs over a two-year period.The data analysis indicate several findings. Within this study, new firm survival and establishment were more likely to occur when founders participated in activities associated with planning and creating legitimacy in the first 30 months of existence. These activities decreased the likelihood of firm disbandment.Significant differences were also found between voluntary and involuntary firm termination.No support was found on behalf of market relations and resource transformation.The theoretical and methodological implications of these findings are discussed, as are the limitations of the research. (AKP)
Article
This paper examines the relationship between planning process sophistication and the financial performance of a select group of small firms in a growth industry. Multivariate analysis of variance is used to identify statistically significant differences between firms that employ sophisticated plans and those that do not. The results support previous research on strategic planning and financial performance.
Article
Measuring the performance of new ventures is of interest because they are a major source of job creation and because improvement in performance is critical to their survival and growth. However, collecting data on the performance of new ventures is often difficult due to a lack of historical information and accessibility. This article presents conclusions from a literature review of 34 current empirical studies from the entrepreneurship field that measured some aspect of performance and describes the results of an exploratory study that tested empirical variation across two methods of data collection and three sources of information used in measuring the performance of new ventures.
Article
University entrepreneurship education is in the embryonic stage, still a new venture in itself. Recent years have shown unabated growth in the number of universities offering entrepreneurship courses, but the subject is still considered suspect by many faculty and administrators.Effectively meeting university resistance to entrepreneurship course-work first requires an appreciation of the perceptions and misperceptions of the faculty and administration. Once the viewpoints are understood, counteractive communication strategies can be developed. Perceptions may include the following: (a) “small business” (vs. entrepreneurship) is a low-status realm associated with poor-quality research, and small is by connotation less worthwhile than large; (b) sophisticated management practices reside in larger firms and these practices coincide well with the functional organization in business colleges; and (c) entrepreneurship is a fad. More important, however, is the perception that “non-industry, non-stage-of-the-business-life-cycle, non-size truths apply to all,” and that entrepreneurship is therefore too specialized an area for scholarly endeavor. Yet a hard sciences scholar recently pondered, “How could the business discipline ever hope to develop comprehensive theories of business behavior without the equivalent in biology of developmental biology? How do organisms grow and mature into Fortune 500 firms?”With this backdrop an in-depth survey of expert opinion is presented, based on the beliefs and experiences of 15 highly regarded university entrepreneurship educators. These peer-identified respondents reacted to a wide variety of factors that were hypothesized to affect the outcomes of entrepreneurship education efforts. They included (a) educational objectives, (b) administrative and program development issues, and (c) course attributes.Although there were a variety of educational objectives cited by the respondents, most important was to “increase awareness and understanding of the process involving in initiating and managing a new business enterprise.” Other important objectives included attention to entrepreneurship as a career option, contributing to understanding functional business interrelationships, and attention to the characteristics of the entrepreneur. Other objectives concerned building students' selfconfidence, opportunity sensitivity, and analytical skills. Attention to the role of new and smaller firms in the economy was not rated as important.Organizationally, it was viewed as critical to have the support of the college administration. It was not universally agreed that an entrepreneurship major is desirable, with a bimodal response distribution. For universities with multiple courses, there appear to be three conceptual bases, sometimes interspersed, including the business functions, the business plan, and the business life cycle. It was agreed that entrepreneurship coursework should be more experientally oriented than other business school coursework, that the involvement of adjunct faculty should not be minimized, and that faculty research is important to an entrepreneurship education program. There was lukewarm support for business outreach programs and disagreement over the desirability of a student entrepreneurship club.Entrepreneurship course features considered most important were development of a business plan project and entrepreneurs as speakers and role models. Cases ranked next in importance followed by lectures and assigned readings.The future will bring experimentation with various program and course attributes, more research on pedagogy with the measurement of learning outcomes, the increased entree of entrepreneurship Ph.D.'s, and the maturation of this early-stage venture into entrepreneurship education.
Article
Drawing on goal setting theory, we argue that writing business plans before undertaking marketing activities should enhance the continuation of venture-organizing efforts. We examine 223 new venture-organizing efforts initiated in the first 9 months of 1998 by a random sample of Swedish entrepreneurs and show that those organizing efforts in which entrepreneurs completed business plans before talking to customers and beginning marketing or promotion had a lower hazard of termination than other organizing efforts.
Article
Several authors have suggested the founding period as a critical time in the development of a firm, arguing that the resource and decision choices made at this point have a substantive impact on the firm's future. Yet, historically, most studies have measured new venture choices considerably after the founding period. We suggest that the uniqueness of the founding event is important and test its validity through the examination of two implicit assertions. These implicit assertions are those of temporal stability and temporal locus of growth determinants.
Article
Many prior researchers have criticized business planning, arguing that it interferes with the efforts of firm founders to undertake more valuable actions to develop their fledgling enterprises. In this paper, we challenge this negative view of business planning, arguing that business planning is an important precursor to action in new ventures. By helping firm founders to make decisions, to balance resource supply and demand, and to turn abstract goals into concrete operational steps, business planning reduces the likelihood of venture disbanding and accelerates product development and venture organizing activity. Empirically, we examine 223 new ventures initiated in the first 9 months of 1998 by a random sample of Swedish firm founders and provide support for our hypotheses.
Article
Small business longevity is investigated utilizing a nationwide random sample of males who entered self-employment between 1976 and 1982. Highly educated entrepreneurs are most likely to create firms that remained in operation through 1986. Owner educational background, further, is a major determinant of the financial capital structure of small business startups. Financial capital endogeneity notwithstanding, firms with the larger financial investments at startup are consistently overrepresented in the survivor column. Firm leverage, finally, is trivial for delineating active from discontinued businesses. Reliance upon debt capital to finance business startup is clearly not associated with heightened risk of failure. Copyright 1990 by MIT Press.
Article
Every seasoned investor knows that detailed financial projections for a new company are an act of imagination. Nevertheless, most business plans pour far too much ink on the numbers - and far too little on the information that really matters. Why? William Sahlman suggests that a great business plan is one that focuses on a series of questions. These questions relate to the four factors critical to the success of every new venture: the people, the opportunity, the context, and the possibilities for both risk and reward. The questions about people revolve around three issues: What do they know? Whom do they know? and How well are they known? As for opportunity, the plan should focus on two questions: Is the market for the venture's product or service large or rapidly growing (or preferably both)? and Is the industry structurally attractive? Then, in addition to demonstrating an understanding of the context in which their venture will operate, entrepreneurs should make clear how they will respond when that context inevitably changes. Finally, the plan should look unflinchingly at the risks the new venture faces, giving would-be backers a realistic idea of what magnitude of reward they can expect and when they can expect it. A great business plan is not easy to compose, Sahlman acknowledges, largely because most entrepreneurs are wild-eyed optimists. But one that asks the right questions is a powerful tool. A better deal, not to mention a better shot at success, awaits entrepreneurs who use it.
Article
Liquidity constraints can prohibit potential entrepreneurs from starting up in business, can restrict the growth of existing entrepreneurial activities and, in the extreme, can result in small business failure. This paper uses British panel data to investigate the effects of relaxing liquidity constraints on self-employment through the unanticipated receipt of windfall gains. It discusses the different impacts the receipt of a windfall payment may have on self-employment. The results suggest that the size of the payment received has a positive and concave effect on the probability of entering self-employment and on the performance of an existing self-employment enterprise, consistent with the liquidity constraint hypothesis. Copyright 2001 by The London School of Economics and Political Science
The role of risk orientation on financing expectations in new venture creation: does sex matter?
  • N M W D Carter
  • C G Bygrave
  • P Brush
  • J Davidson
  • P G Fiet
  • R T Greene
  • M Harrison
  • G D Lerner
  • Meyer
Carter, N. M. (2002) The role of risk orientation on financing expectations in new venture creation: does sex matter?, in: W. D. Bygrave, C. G. Brush, P. Davidson, J. Fiet, P. G. Greene, R. T. Harrison, M. Lerner, G. D. Meyer, J. Sohl and A. Zacharakis (Eds) Frontiers of Entrepreneurship Research 2002, pp. 170 – 181 (
Business Plans that Win $$$: Lessons from the MIT Enterprise Forum
  • D E Gumpert
  • S And Rich
Gumpert, D. E. and Rich, S. (1987) Business Plans that Win $$$: Lessons from the MIT Enterprise Forum (New York: Perennial/Harper).
Downloaded by [University of Otago
  • J E Lange
J. E. Lange et al. Downloaded by [University of Otago] at 08:40 08 September 2014
New Venture Growth: The Role of Strategy and Industry Structure
  • W R Sandberg
Sandberg, W. R. (1986) New Venture Growth: The Role of Strategy and Industry Structure (Lexington, MA: Lexington Books).
To plan or not to plan: is that really the question?
  • M W Ford
  • C H Matthews
  • M S Baucus
Ford, M. W., Matthews, C. H. and Baucus, M. S. (2003) To plan or not to plan: is that really the question?, in: W. D. Bygrave, C. G. Brush, P. Davidson, J. Fiet, P. G. Greene, R. T. Harrison, M. Lerner, G. D. Meyer, J. Sohl and A. Zacharakis (Eds) Frontiers of Entrepreneurship Research 2003, p. 677 (Wellesley, MA: Babson College).
StudentCity.com, Case study available from the author
  • W D Bygrave
  • W D Bygrave
  • S A Hunt
Bygrave, W. D. (2005) StudentCity.com, Case study available from the author. Bygrave, W. D. and Hunt, S. A. (2004) GEM 2004 Financing Report, available at www.gemconsortium.org (accessed 10 August 2007).
Burn Your Business Plan! What Investors Really Want from Entrepreneurs
  • D E Gumpert
Gumpert, D. E. (2003b) Burn Your Business Plan! What Investors Really Want from Entrepreneurs (Needham, MA: Lauson Publishing Co).
Do business plan competitions produce winning businesses?, summary
  • W D Bygrave
  • J E Lange
  • T Evans
Bygrave, W. D., Lange, J. E. and Evans, T. (2004) Do business plan competitions produce winning businesses?, summary, in: S. A. Zahra, C. G. Brush, P. Davidson, J. Fiet, P. G. Greene, R. T. Harrison, M. Lerner, J. Sohl and A. Zacharakis (Eds) Frontiers of Entrepreneurship Research 2004, p. 275 (Wellesley, MA: Babson College).
An enhanced paradigm of entrepreneurial business planning: development, case applications and general implications
  • K Hindle
Hindle, K. (1997). An Enhanced Paradigm of Entrepreneurial Business Planning: Development, Case Applications and General Implications. Unpublished dissertation, Swinburne University of Technology Melbourne Australia.
Founding conditions and business performance: 'high performers' vs. small venture-capital-backed start-ups
  • R H Keeley
  • R Kapp
Keeley, R. H. and Kapp, R. (1994) Founding conditions and business performance: 'high performers' vs. small venture-capital-backed start-ups, in: W. D. Bygrave, S. Birley, N. C. Churchill, E. Gatewood, F.
Entrepreneurs, process of funding, and new firm growth
  • A C Cooper
  • F J Gimeno-Gascon
Cooper, A. C. and Gimeno-Gascon, F. J. (1994) Entrepreneurs, process of funding, and new firm growth, in: D. Sexton and J. Kasarda (Eds) The State of the Art in Entrepreneurship, pp. 301 – 340 (Boston, MA: PWS Kent Publishing).
Seat of the pants, Inc. Magazine, October
  • S Bartlett
Bartlett, S. (2002) Seat of the pants, Inc. Magazine, October. Available at http://www.inc.com/magazine/ 20021015/24772.html (accessed 10 August 2007).
The Zen of business plans
  • G Kawasaki
Kawasaki, G. (2006) The Zen of business plans, available at http://blog.guykawasaki.com/2006/01/ the_zen_of_busi.html (accessed 10 August 2007).
Cents and sensemaking in pre-venture business planning: evidence from the panel study of entrepreneurial dynamics
  • W B Gartner
  • J Liao
Gartner, W. B. and Liao, J. (2005) Cents and sensemaking in pre-venture business planning: evidence from the panel study of entrepreneurial dynamics, in: S. A. Zahra, C. G. Brush, P. Davidsson, J. Fiet, P. G.
Factors related to venture feasibility analysis and business plan preparation
  • R G Wyckham
  • W C Wedley
Wyckham, R. G. and Wedley, W. C. (1990) Factors related to venture feasibility analysis and business plan preparation, Journal of Small Business Management, 28(4), pp. 48 – 59.
The Global Entrepreneurship Monitor: 2003 Executive Report, available at www.gemconsortium.org (accessed 10
  • P D Reynolds
  • W D Bygrave
  • E Autio
Reynolds, P. D., Bygrave, W. D. and Autio, E. (2003) The Global Entrepreneurship Monitor: 2003 Executive Report, available at www.gemconsortium.org (accessed 10 August 2007).
New Venture Creation: A Guide to Entrepreneurship
  • J A Timmons
  • L E Smollen
  • A L M Dingee
  • Jr
Timmons, J. A., Smollen, L. E. and Dingee, A. L. M., Jr (1977) New Venture Creation: A Guide to Entrepreneurship (Homewood, IL: Richard D. Irwin, Inc.).