Date of Award

2000

Document Type

Thesis

Degree Name

Master of Business Administration

Department

Business

First Advisor

Daniel W. Kemper

Second Advisor

Joseph Silverio

Third Advisor

Jan Kniffen

Abstract

This thesis will focus on the discussion of business planning and the impact it bas on business owners and investors in today's business climate. Business planning is defined as how organizations utilize internal thought processes to execute a form of a plan of action to compete in a marketplace that offers similar products and services.

One debate about business planning involves big business that develop planning "systems" as compared to entrepreneurs that often times operate with little or no planning. Another debate involves the timing and use of planning. A survey of 220 INC 500 businesses revealed that 51 % did not have formal business plans when they started. Of the 49% that did have plans, an overwhelming majority (70%) generated them simply to get external financing. The final debate centers around the impact of planning- does it lead to business success? On study reveals that 20% of non-planners failed within three years whereas the rate was only 8% for businesses engaged in planning.

While to evidence could not suggest that business planning does lead to business success, benefits were described for those who employed their efforts in the business planning process. Much discussion involves the planning function of pre-startup planning by which the entrepreneur creates a vision of the future and develops the necessary objectives, resources, and procedures to achieve that vision. Consequently, pre-startup planning is likely to generate symbolism in that(1) it legitimizes the new venture proposal, and (2) improves communication with various stockholders, particularly potential investors or other financiers.

To some extent, therefore, pre-startup planning tends to occur because, despite its mixed evidence previously noted, successful businesses are perceived as doing it, and financiers are unlikely to provide funding simply because someone discusses a "hot idea". Financiers want to see specific details, and want to be able to study these details in order to decide whether they feel the proposed venture has a good chance of success. Consequently, they want to see a business plan.

Because this "need" by investors and financiers to study the details of a business idea has been shown in this study, a business planning guide (QUJCKSTART) bas been written for the purpose of helping startup entrepreneurs write their business plan prior to owning and operating their own business. To help validate its effectiveness in achieving this stated objective, three business professionals from the banking and accountancy field were asked to critique this guide for its effectiveness in helping potential business owners write their own business plan prior to seeking investors and/or financiers for their project. The results of the critique show that QUICK.START received a 94% approval rating as a tool (manual) covering the topic/subject on how to develop a business plan for investors/owners: formulation and implementation.

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