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Research on the Importance of Business Plans

I have come across references to three research projects that all show the importance of having a business plan.

1. Paul Barrow in his book The Best-Laid Business Plans quotes a study by Cranfield University in 1990 which showed that only 25% of businesses in in their first year of existence had a business plan.

Those businesses that didn't have a plan had a failure rate about 40%. The study also showed that 95% of businesses which had survived for longer than five years had a business plan. The lesson couldn't be clearer.

2. Jan B. King's book Business Plans to Game Plans quotes a survey commissioned by AT&T in 1993 which showed that, while only about 40% of small businesses started up with a formal business plan, 59% of the businesses that grew over 2 years had a business plan that they used to manage their business.

And of these, 70% put their success down primarily to having a plan.

3. Paul Tiffany and Steven Peterson in their book Business Plans for Dummies quote a study in 1996 of almost 1,000 small companies which found that companies with strategic plans have 50% greater revenue and profit growth than companies that don't have one.

 

If you know about any other research, please e-mail me.

References
The Best-Laid Business Plans - How to Write Them, How To Pitch Them by Paul Barrow (Virgin Publishing, London - 2001)
Business Plans to Game Plans by Jan B. King (Silver Lake Publishing, Los Angeles - 2000)
Business Plans for Dummies by Paul Tiffany and Steven Peterson (IDG Books, California - 1997)

© Francis Miller 2001-2008