Extensiveness of Business Planning and Firm Performance: An Examination into the Drivers of Success and Survival for Startup Firms

Abstract

There is much debate about the role of business planning and new venture creation and success (i.e., Gruber, 2007; Karlsson & Honig, 2007). In this paper, we extend this debate and advance our understanding of the potential role of the extensiveness of business planning. Specifically, we investigate the extensiveness of business planning as it affects firm performance and survival using data from a sample of incubator spin off firms. Extensiveness of business planning is concerned with if the firm has a plan and if it is written down (what Liao & Gartner [2006] refer to as presence and formality), but also the number of sections and the extensiveness each section.