The Business Plan As A Learning-Oriented Tool For Small/Medium Enterprises: A Business Simulation Approach

Authors: Carmine Bianchi, Graham Winch, Colin Grey

The philosophies and policies put in place during the early stages of a new business venture will have alasting influence on the future growth of the firm. In recent times there has been a growing trend ofsmall firms utilizing formal business plans, particularly in start-up and growth phases. A major reasonfor this phenomenon is likely to be that such documents are pre-requisite to receiving state financialgrants or as part of commercial loan applications. Quite often, however, entrepreneurs have viewedwriting their business plans as a bureaucratic constraint (i.e. as a duty to be fulfilled), rather than as alearning tool which may help them to be aware of the business formula that is going to be adoptedwithin their firms. The outcome of such a mechanistic perspective is a static and non-systemic documentemerging from the aggregation of disparate data that does not assist entrepreneurs in understanding thedynamic system the firm will comprise.This paper identifies the main issues of a joint research project whose focus is on opening up to the newentrepreneur the process of developing and using a business plan as a learning tool, adopting a systemdynamics perspective. This will help make their business ideas more explicit and facilitate theiroperationalization. Preliminary results of a first fieldwork stage are summarized in this paper, andinitial conclusions suggest that there is a need to support planning/learning in this way, and from thisan emerging full research program is thus identified.

Paper presented: International System Dynamics Conference, 1998, Quebec City