Small Business Economics

, Volume 27, Issue 1, pp 23–40

The Effects of Pre-venture Plan Timing and Perceived Environmental Uncertainty on the Persistence of Emerging Firms

Research article

DOI: 10.1007/s11187-006-0020-0

Cite this article as:
Liao, J. & Gartner, W.B. Small Bus Econ (2006) 27: 23. doi:10.1007/s11187-006-0020-0

Abstract

This paper explores the effects of when pre-venture planning occurs (early or late) in the sequence of activities accomplished during the process of new business emergence, and the moderating effects of environmental context (the degree of perceived financial, competitive and operational uncertainty), on the persistence of emerging business startup efforts. Using data from the U.S. Panel Study of Entrepreneurial Dynamics (PSED), our analyses found a strong main effect for business planning: Nascent entrepreneurs who completed a business plan were 2.6 times more likely to persist in the process of business emergence than those who did not complete a plan. In addition, the likelihood of venture persistence increased when nascent entrepreneurs engaged in planning early in the sequence of start-up activities in perceived uncertain financial and competitive environments, while venture persistence increased when nascent entrepreneurs engaged in planning late in a sequence of activities in perceived certain financial and competitive environments.

Keywords

nascent entrepreneurs Panel Study of Entrepreneurial Dynamics pre-venture planning 

Copyright information

© Springer 2006

Authors and Affiliations

  1. 1.Northeastern Illinois UniversityChicagoUSA
  2. 2.Spiro Center for Entrepreneurial LeadershipClemson UniversityClemsonUSA

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