Do Business Plans Make No Difference in the Real World? A Study of 117 New Ventures

Babson College Entrepreneurship Research Conference (BCERC) 2005

Frontiers of Entrepreneurship Research 2005

15 Pages Posted: 21 Dec 2009

See all articles by Julian Lange

Julian Lange

Babson College - Arthur M. Blank Center for Entrepreneurship

William D. Bygrave

Babson College - Arthur M. Blank Center for Entrepreneurship

Aleksandar Mollov

Babson College - Arthur M. Blank Center for Entrepreneurship

Michael Pearlmutter

Babson College - Arthur M. Blank Center for Entrepreneurship

Sunil Singh

Babson College - Arthur M. Blank Center for Entrepreneurship

Abstract

This pioneering 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 busi-ness plans. It also showed that businesses with male founders outperformed those with females, and that businesses started by alums with only BS degrees outperformed those with MBA degrees. The á¼€ndings 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.

Keywords: Entrepreneurship

JEL Classification: M13

Suggested Citation

Lange, Julian and Bygrave, William D. and Mollov, Aleksandar and Pearlmutter, Michael and Singh, Sunil, Do Business Plans Make No Difference in the Real World? A Study of 117 New Ventures. Babson College Entrepreneurship Research Conference (BCERC) 2005. Available at SSRN: https://ssrn.com/abstract=1499395

Julian Lange (Contact Author)

Babson College - Arthur M. Blank Center for Entrepreneurship ( email )

231 Forest Street
Babson Park, MA 02457-0310
United States

William D. Bygrave

Babson College - Arthur M. Blank Center for Entrepreneurship ( email )

231 Forest Street
Babson Park, MA 02457-0310
United States

Aleksandar Mollov

Babson College - Arthur M. Blank Center for Entrepreneurship ( email )

231 Forest Street
Babson Park, MA 02457-0310
United States

Michael Pearlmutter

Babson College - Arthur M. Blank Center for Entrepreneurship ( email )

231 Forest Street
Babson Park, MA 02457-0310
United States

Sunil Singh

Babson College - Arthur M. Blank Center for Entrepreneurship ( email )

231 Forest Street
Babson Park, MA 02457-0310
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
307
rank
92,621
Abstract Views
1,691
PlumX Metrics