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The Relationship between Written Business Plans and the Failure of Small Businesses in the U.S

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  • Stephen C. Perry

Abstract

The objective of this study was to investigate the influence of planning on U.S. small business failures. A “failure” was defined as a bankruptcy with losses to creditors; firms with fewer than 500 employees were considered “small.” Recently failed firms were selected randomly and matched with non‐failed firms on the basis of age, size, industry, and location. The sampling frame was businesses listed in the Dun & Bradstreet credit reporting database. A paired‐sample t‐test was used to investigate differences between the failed firms and matched non‐failed firms. The main conclusion was that very little formal planning goes on in U.S. small businesses; however, non‐failed firms do more planning than similar failed firms did prior to failure.

Suggested Citation

  • Stephen C. Perry, 2001. "The Relationship between Written Business Plans and the Failure of Small Businesses in the U.S," Journal of Small Business Management, Taylor & Francis Journals, vol. 39(3), pages 201-208, July.
    • Handle: RePEc:taf:ujbmxx:v:39:y:2001:i:3:p:201-208
    DOI: 10.1111/1540-627X.00019
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    Cited by:

    1. Costa, Paula L. & Ferreira, João J. & Torres de Oliveira, Rui, 2023. "From entrepreneurial failure to re-entry," Journal of Business Research, Elsevier, vol. 158(C).
    2. Desalegn Berhane Asgedom, 2025. "Strategic planning and organizational performance: evidence from tigray," SN Business & Economics, Springer, vol. 5(12), pages 1-26, December.
    3. Aleksandra Wasowska, 2014. "Myslenie strategiczne w malych i srednich organizacjach (Strategic thinking in small and medium organizations)," Problemy Zarzadzania, University of Warsaw, Faculty of Management, vol. 12(45), pages 156-174.
    4. Monika Maříková & Ladislav Rolínek & Jaroslav Vrchota & Petr Řehoř, 2022. "Determination of the Level of Strategic Management in SMEs," Central European Business Review, Prague University of Economics and Business, vol. 2022(3), pages 55-78.
    5. Liliana Pérez-Nordtvedt & Susanna Khavul & David A. Harrison & Jeffrey E. McGee, 2014. "Adaptation to Temporal Shocks: Influences of Strategic Interpretation and Spatial Distance," Journal of Management Studies, Wiley Blackwell, vol. 51(6), pages 869-897, September.
    6. Robert J. Pidduck & Daniel R. Clark, 2025. "Alert during what? Beyond the “Big O” to a culturally-cognizant, process view of entrepreneurial alertness," Asia Pacific Journal of Management, Springer, vol. 42(1), pages 137-165, March.
    7. Alexander Kücher & Stefan Mayr & Christine Mitter & Christine Duller & Birgit Feldbauer-Durstmüller, 2020. "Firm age dynamics and causes of corporate bankruptcy: age dependent explanations for business failure," Review of Managerial Science, Springer, vol. 14(3), pages 633-661, June.
    8. Andrew Burke & Stuart Fraser & Francis J. Greene, 2010. "The Multiple Effects of Business Planning on New Venture Performance," Journal of Management Studies, Wiley Blackwell, vol. 47(3), pages 391-415, May.

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