Business Plan Survival Study: Why It Cannot Grade You.
No business plan survival study can grade your preparation, because the research disagrees with itself. Two Swedish studies one year apart reached opposite answers, and a 2018 replication moved only half the disagreement. So instead, check whether tonight's activity has a door in it.
Two Swedish studies, opposite answers.
In the Delmar and Shane planning study, the researchers followed 223 new ventures for thirty months and published in 2003. Planning reduced the likelihood of disbanding and sped up product development and organising. However, Benson Honig and Tomas Karlsson studied 396 nascent entrepreneurs in 2004. They found no better profitability and no significant effect on survival.
What the 2018 business plan survival study changed.
In 2018 Hopp, Greene, Honig, Karlsson and Samuelsson published a replication in Management Review Quarterly. It found that formal planning does affect survival, though still not profitability. As a result, this business plan survival study moved one half of the disagreement. This conflicting research on business plans is still arguing with its own earlier answers.
The door in tonight's activity.
Since professional researchers cannot answer whether anybody prepared properly, you will not answer it in the bath. Also, none of these abstracts says when the preparing stopped or what stopped it. Therefore, no business plan survival study can tell you whether your work should end. Instead, ask whether tonight's specific activity has a door in it.
Replace the business plan survival study with one check.
Name the exact file you already know you will open tonight.
Write whether that file's work has a door, meaning a clear point where it ends.
From the book.
So what are you supposed to do with a literature like that? Less than you would hope, and it is still worth the two minutes it took you. It tells you that the question you have been asking yourself for four years, which is whether you have prepared properly, is a question professional researchers cannot answer about anybody, working with better data than you will ever have. You were never going to answer it in the bath.
I Want to Start a Business but I Never Actually Start, chapter 5: Preparation and its stop condition
Questions about business plan survival study.
What did the business plan survival study by Delmar and Shane find?
Their study, published in 2003, followed 223 Swedish ventures and found that planning reduced disbanding. It also sped up product development and organising.
Why do the Swedish studies seem to contradict each other?
One found planning helped and the other found no effect. However, disbanding and profitability are different measurements, so they may partly talk past each other.
What should I check instead of grading my preparation?
Check whether tonight's specific activity has a door in it. That is smaller, duller and much harder to argue with.
Read the whole chapter.
This lesson covers one section of chapter 5, “Preparation and its stop condition”. The book goes further, with the full evidence, the stories and every exercise.
Lessons in this chapter.
- 01 Preparation Without a Finish Line: Spot It Tonight.
- 02 Does Business Planning Help: What 46 Studies Say.
- 03 Business Plan Survival Study: Why It Cannot Grade You.
- 04 Set a Stop Rule in Advance: Thirty-One Days to a Sale.
- 05 Side Project That Never Ends: Why Nobody Is Waiting.
- 06 Write a Stop Condition: What Arrives, From Whom.
- 07 Waiting for Permission to Start: Name Who You Need.