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.

Enjoyed this article?

Don't miss out on the knowledge and insights to be gained from our daily news and features.

Subscribe today to unlock unlimited access to in-depth business coverage, expert analysis, and exclusive content across all devices.

Support independent journalism and stay informed with stories that matter to you.

Subscribe now and get 50% off your first year!

Four time-saving tips for automating your investment portfolio
Partner Content
In today's fast-paced investment landscape, time is a valuable commodity. Fortunately, w...
Etoro
Advertisement

Related Stories

GreenFort, Gaw Capital join forces on $800m joint venture

GreenFort, Gaw Capital join forces on $800m joint venture

Brisbane-based alternative real estate fund manager GreenFort Capit...

Riverside backs Wollongong IT powerhouse VITG as M&A opportunities beckon

Riverside backs Wollongong IT powerhouse VITG as M&A opportunities beckon

Virtual IT Group (VITG), a Wollongong-based managed service provide...

Booktopia extends share trading suspension as critical funding announcement looms

Booktopia extends share trading suspension as critical funding announcement looms

Just as so many Booktopia (ASX: BKG) customers had to wait longer t...

Seafarms sells two farms to Barramundi group MainStream for $13.5m to fund prawn mega-project

Seafarms sells two farms to Barramundi group MainStream for $13.5m to fund prawn mega-project

Darwin-headquartered prawn producer Seafarms (ASX: SFG) is selling ...