A survey of entrepreneurs who started companies last year shows that while virtually all did substantial preparatory research and planning, only half used that work to produce a formal business plan. Since, on average, the entrepreneurs without formal plans secured the capital they needed in half the time of those with plans, these survey results indicate that, in general, formal plans did not help the entrepreneurs who produced them to secure the capital they needed.
Among the entrepreneurs surveyed, those who did not produce formal business plans sought and received a much larger proportion of their capital from investors with whom they had a long-standing business relationship most seriously weakens the argument.