A change of plan

FEB 2010

Queensland University of Technology (QUT) has made some surprising findings halfway through its record study of new SME’s.

In the largest ever study of its type, QUT’s Comprehensive Australian Study of Entrepreneurial Emergence (CAUSEE) is tracking the development of 1400 new and young firms in Australia.

The million-dollar, four year study aims to provide advice for all budding entrepreneurs; its first major conclusion questioning the value of business plans.

Associate Professor Paul Steffens, from QUT’s Faculty of Business says the research has found rigid business plans did not benefit start-up businesses.

“The study found that a written plan, whether informal or formal, has a negative effect on getting operational and achieving a positive cash flow, which is a surprising result,” says Steffens.

“Using the business plan as an action plan to follow step by step tends to be particularly counter-productive, whereas revision of the business plan is associated with positive performance.”

Steffens says this finding is likely to reflect how start-up businesses face a high degree of uncertainty and require adaptability to survive.

“Our research shows that start-ups must be prepared to adapt their venture in light of customer reactions,” he says.

“The first version of the business might not be the one that flies. Plans that lock the business too firmly into a pre-determined path will prevent it from taking new opportunities, while regular revision of a business plan will help the start-up to be flexible.”

The CAUSEE project is funded by Australian Research Council grants ($718,000) and further sponsorships with BDO and the National Australia Bank.

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

From pandemic side hustle to multi-million dollar business: Meet Ling Fung
Partner Content
Ask any parent, and they’ll tell you: preparing for a new baby is no easy task.&n...
Metro Baby
Advertisement

Related Stories

ACCC gives Compare the Market operator green light for iSelect takeover

ACCC gives Compare the Market operator green light for iSelect takeover

The Australian Competition & Consumer Commission (ACCC) has ann...

How Sourci made it: Meet the founders behind Australia’s new e-commerce wave

How Sourci made it: Meet the founders behind Australia’s new e-commerce wave

In just four short years the co-founders of product development con...

Competition watchdog sniffs at Cochlear-Oticon acquisition

Competition watchdog sniffs at Cochlear-Oticon acquisition

The management at Cochlear (ASX: COH) are hoping to add an extra 75...

Domino’s raising $165m to buy out German partner after settling deal for two new Asian territories

Domino’s raising $165m to buy out German partner after settling deal for two new Asian territories

A day after wrapping up two new Asian territories as part of the bi...