After Receiving Financing, Do INC. 500 Companies Continue to Utilize Their Business Plan?

Anthony T. Allred, H. Lon Addams

Abstract


Small, successful companies included on the INC. 500 list were surveyed to determine whether these companies use a business plan once financing has been obtained. The responding CEOs indicated that the business plan is a document of substantial importance in obtaining funding and in managing operations. Additionally, these CEOs were questioned regarding the importance of specific sections of their business plan when using the business plan to: (1) obtain funding and (2) manage their business. When it comes to obtaining funding, INC. 500 CEOs rank the Executive Summary and the Financial Section as the top two most important sections of the business plan. When it comes to managing the company, the Finance Section of a business plan was ranked first in importance over all other sections. CEOs and top management of small companies should take appropriate steps to craft an effective business plan, revise it periodically to reflect a changing environment, and refer to it often to assist their company in achieving even greater success in their operations.

Full Text:

PDF

References


Bhide, A. (1994, March/April). How entrepreneurs craft strategies that work. Harvard Business Review, 150- 161.

Burmeister, P. (2003, March). Breaking the code: What to present to venture capitalists. Strategic Finance, 84(9), 36-39.

Fulmer, R. M. & Rue. L.W. (1974, May/June). The practice and profitability of long-range planning. Managerial Planning, 22, 1-7.

Herter,G. (1995). Business planning boosts your chances. Accounting Technology, 11(4), 20-30.

Hormozi, A. M., Sutton, G.S., & McMinn, R.D. (2002). Business plans for new or small businesses: paving the path to success. Management Decision, 40(7/8), 755-764.

Ibrahim, N. A., Angelidis, J. P., & Parsa, F. (2004). The status of planning in small businesses. American Business Review, 22(2), 52.

Kuratko, D. F. & Hodgetts, R. M. (2001). Entrepreneurship: A contemporary approach (5th ed.). Mason, OH: Southwestern/Thomson Learning.

Latham, G. P. and Saarim L.M.. (1979). Importance of supportive relationships in goal setting. Journal of Applied Psychology, 64, 151-156.

Mason, C., and Stark, M.. (2004). What do investors look for in a business plan? A comparison of the investment criteria of bankers, venture capitalists and business angels. International Small Business Journal, 22(3), 227.

Orser, B. J., Hogarth-Scott, S., & Riding, A. L. (2000). Performance, firm size, and management problem solving. Journal of Small Business Management, 38(4), 42.

Perry, S. C. (2001). The relationship between written business plans and the failure of small businesses in the U.S. Journal of Small Business Management, 39(3), 201-209.

Sahlman, W. A. (1997). How to write a great business plan. Harvard Business Review, 75(4), 98-108.

Sanberg, W. R., Robinson, R. & Pearce, J.A. Jr. (2001, April). One more time ... Should small companies attempt strategic planning? The Entrepreneurial Executive, 46-48.

Schermerhorn, J. R. Jr. (2006) Management (8th ed.). Hoboken, NJ: John Wiley & Sons, Inc.

Schneider, T. W. (1998). Building a business plan. Journal of Property Management, 63(6), 30-33.

Thune, S. S. & House, RJ. (1970, August). Where long-range planning pays off. Business Horizon, 13, 81-87.

Timmons, J. A. & Spinelli, S. (2004) New Venture Creation: Entrepreneurship for the 21st Century (6th ed.). New York, NY: McGraw-Hill Irwin.


Refbacks

  • There are currently no refbacks.


sbi-web_120