In Pursuit of Time: Business Plan Sequencing, Duration and Intraentrainment Effects on New Venture Viability

Abstract

AbstractIn this study, we examine three under‐explored dimensions of the temporal relationship between formal written business plans and the achievement of new venture viability. First, we theorize and investigate the effects of plan sequencing; arguing that a business plan written early on in new venture development increases the prospects of venture viability. Second, we examine plan duration effects, and argue that there is a curvilinear relationship between spending time on a plan and achieving venture viability. Finally, we investigate plan intraentrainment effects (synchronization with other gestation activities). We theorize that if plans are synchronized with other gestation activities, venture viability is more likely. Using longitudinal data and controlling for truncation and endogeneity issues, we find that it is beneficial to plan early but that this is contingent on how long a founder spent on a plan and whether or not a plan is intraentrained with other gestation activities.