Aquila Network Blog

A recent study suggests that the traditional business plan might not be as useful as once thought…

Spending months and months researching and writing “the perfect plan” doesn’t necessary improve your start-up’s chance of success. William Bygrave, an entrepreneurship professor from Babson College, suggests that entrepreneurs stick to a more “informal” plan that will push them formulate their thoughts while still remaining nimble:

A study recently released by Babson College analyzed 116 businesses started by alumni who graduated between 1985 and 2003. Comparing success measures such as annual revenue, employee numbers and net income, the study found no statistical difference in success between those businesses started with formal written plans and those without them. The study concludes that “unless you need to raise external start-up capital from institutional sources or business angels, you do not need to write a formal business plan.”

This in no way means you can get out of doing the research and analysis necessary to determine if the business idea is even viable.

For a large number Business as Missions start-ups, the founders will have little to no on-the-ground experience before they head overseas to launch their venture. In these instances, having a business plan that is both well researched and flexible is critically important. The plan will need to adjust as the entrepreneur gains experience in their new business environment.

LINK - Do Start-Ups Really Need Formal Business Plans? in WSJ