The Influence of Pre-Venture Planning on New Venture Creation
AbstractWe use a sample of nascent entrepreneurs from the Panel Study of Entrepreneurial Dynamics (PSED) to explore whether engaging in business planning and the degree of planning formalization, combined with other activities, was more likely to result in the creation of new businesses. A review of longitudinal studies of nascent entrepreneur planning behaviors is provided and hypotheses are suggested about the relationship of pre-venture planning and planning formalization to success when starting new ventures. Findings from our study suggest that nascent entrepreneurs who completed a business plan were six times more likely to start a business than individuals who did not complete a business plan. In addition, nascent entrepreneurs who contacted and participated in government-sponsored entrepreneurship programs were five times more likely to start a business than entrepreneurs who did not seekgovernment assistance.
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