Judgment Performance in Business Planning

Abstract

This paper investigates factors that influence the effectiveness of entrepreneurial managers’ decisions to prepare business plans, operationalized as adequacy of financing obtained, including confidence in the managers’ financial knowledge and characteristics of the business. Data is obtained from a survey administered to clients of a small business development center to access various aspects of financing options. Regression analysis is used to develop a descriptive model that indicates the adequacy of capital resources acquired from business financing is related to the interaction of entrepreneurial manager’s decision to prepare a business plan with his/her financial self-efficacy. These findings have implications for research related to the preparation of business plans and organizational performance. Mixed results in prior studies may be attributed to failure to control for context and person factors that may influence both performance and the decision to prepare a business plan.