Increased Business Success Probabilities Advertised by Recent Survey Findings
A recent analysis by Ding and Hursey, assessed by the University of Oregon Department of Economics, has highlighted the positive correlation between writing a business plan and achieving success for a variety of business goals. While the survey was conducted among users of Palo Alto Software's Business Plan Pro software, the findings underscore the general importance of business planning for entrepreneurs.
The survey, which questioned 2,877 respondents about their businesses, goals, and business planning, found that 995 of them had completed a business plan. Among those who had written a plan, 64% reported growing their business, while 36% secured investment capital. Intriguingly, 36% of the respondents who completed a business plan also secured a loan.
Remarkably, the survey also revealed that 43% of the respondents who had not yet completed their plan had also grown their business. However, the authors' analysis did not claim that completing a business plan guarantees success, but it does indicate a higher likelihood of success for entrepreneurs who write a business plan.
The correlation between business planning and success was found to be consistent regardless of the type of company, the growth stage, and the intent for the business plan. The business goals that showed a positive correlation with a business plan include obtaining a loan, getting investment capital, making a major purchase, recruiting a new team member, thinking more strategically, and growing the company.
The authors concluded that the type of entrepreneur who completes a business plan is more likely to run a successful business. The act of going through the business planning process may make you a better entrepreneur, providing clarity and focus, enabling realistic financial forecasting, guiding strategic decision-making, and allowing for flexibility and adaptability in response to changing market conditions.
Tools like LivePlan can assist entrepreneurs in creating dynamic business plans, which can help in securing funding, growing businesses, and maintaining focus on strategic goals. While there isn't a specific survey by Palo Alto Software mentioned that directly correlates writing a business plan with business success, the general benefits of business planning can be inferred from the support and resources provided by companies like Palo Alto Software through platforms like LivePlan.
Writing a business plan appears to significantly benefit small-business entrepreneurs, as evidenced by the survey which found that among those who had written one, 64% reported growing their business and 36% secured investment capital. Furthermore, the authors indicated that completeness of a business plan may increase the likelihood of success, even for those intending to pursue diverse business goals such as obtaining a loan or making a major purchase.
