Block and Petty 2020

Journal of Small Business Management
ISSN: (Print) (Online) Journal homepage: https://www.tandfonline.com/loi/ujbm20
How knowledge shapes the scope of early

business planning
Joern Block & Jeffrey S. Petty
To cite this article: Joern Block & Jeffrey S. Petty (2020): How knowledge shapes
the scope of early business planning, Journal of Small Business Management, DOI:
10.1080/00472778.2020.1794655
To link to this article: https://doi.org/10.1080/00472778.2020.1794655
Published online: 24 Aug 2020.
Submit your article to this journal
Article views: 34
View related articles
View Crossmark data
Full Terms & Conditions of access and use can be found at

https://www.tandfonline.com/action/journalInformation?journalCode=ujbm20
JOURNAL OF SMALL BUSINESS MANAGEMENT
https://doi.org/10.1080/00472778.2020.1794655
How knowledge shapes the scope of early business

planning
a,b,c d
Joern Block and Jeffrey S. Petty
a
Department of Management, Universität Trier, Germany; bDepartment of Applied Economics, Erasmus
University of Rotterdam, The Netherlands; cWittener Institut für Familienunternehmen, Universität
Witten/Herdecke, Germany; dUniversity of Lausanne, Switzerland
ABSTRACT KEYWORDS
Business planning is one of the most studied topics in manage Early business planning;
ment, capturing the interest of researchers focused on new ven founder knowledge;
tures, small enterprises, and large companies alike. However, little cognition; entrepreneurship
education
research exists that examines the cognitive antecedents of early
planning. Analyzing a unique data set that was obtained from
2,535 individuals residing in the Netherlands and that is represen
tative of the whole population of the country, our empirical
evidence reveals that individual’s firsthand entrepreneurial experi
ence, education level, general life experience, and exposure to
entrepreneurship education influence the scope of early business
planning. More generally, our findings advance understanding as
to why we see differences in how individuals engage in early
business planning, thereby, also providing new insights into the
core question of how firm heterogeneity arises. Furthermore, our
insights on the effects of formal learning raise important questions
about the actual effects of entrepreneurship education.
Business planning is arguably one of the core topics investigated by scholars,

and questions regarding the effectiveness of different approaches to business
planning have not only been the subject of longstanding research interest but
also of major debate in the entrepreneurship literature (e.g., Brinckmann
et al., 2019, 2010; Castrogiovanni, 1996; Chrisman et al., 2005; Dencker et al.,
2009; Gruber, 2007). While some research points out that an incremental
approach leads to greater startup success (e.g., Bhidé, 2000; Bird, 1988), other
studies suggest that comprehensive planning is key to achieving strong
performance (e.g., Brüderl et al., 1996; Shane & Delmar, 2004).1
Although the existing literature has offered many insights into the business
planning–performance relationship, the ongoing debate about business-
planning effectiveness has led to key shortcomings concerning the earliest
stage in the planning process. Specifically, much of the attention on planning
has centered on formal activities or outcomes such as the development of
CONTACT Joern Block block@uni-trier.de Universität Trier, Trier D-54296, Germany

1
This line of research is also supported by decision-making research indicating that satisficing or simplistic
approach performed as well as or better than more comprehensive or complex approaches in terms of accuracy
(Gigerenzer & Goldstein, 1996; Todd & Gigerenzer, 2000).
© 2020 International Council for Small Business
2 J. BLOCK AND J. S. PETTY
a business plan and firm formation (e.g., Burke et al., 2010; Delmar & Shane,
2003, 2004; Hopp & Greene, 2018; Hopp et al., 2018) whereas other studies
have highlighted the merits of considering the substantive process dimension
of business planning (Castrogiovanni, 1996; Dimov 2010; Gruber, 2007).
Despite the potential importance of each activity, many founders do not
ultimately engage in formal planning to produce a business plan or engage in
a detailed iterative planning process. However, no matter which form of
planning an individual may choose or how informal or detailed it may be, the
one aspect of planning that everyone considering an opportunity is faced
with is the initial identification of the potentially important elements. Thus,
to advance our understanding of the complete planning process, it is impor
tant to move up the causal chain to investigate how business planners may
differ in terms of their initial approach to planning at the earliest stage.
Judging from the more general research on (strategic) decision-making in
organizations, we can expect interesting variation in the early business plan
ning approaches across individuals.2 Yet, although strong links exist between
founders’ cognition and their decisions in new firm creation (e.g., Fern et al.,
2012), the role of the founder’s cognition in shaping her or his early business
planning activity has received surprisingly little scholarly attention. In effect,
to the best of our knowledge, Brinckmann and Kim (2015) and Brinckmann
et al. (2019) are among the only studies that expressly focus on this topic. In
particular, these authors find that entrepreneurial self-efficacy and advanced
education leads founders to engage in formal business planning and that
prior work experience has a marginal effect on early business planning
formality (i.e., whether a written plan is developed).
Thus, the purpose of this study is to delve further into the antecedents of
early business planning at the individual level, prior to engaging in any form
of business plan development or planning process. Specifically, we seek to
advance knowledge of the cognition–business planning link by building on
the fundamental idea that the type of knowledge a person has acquired affects
how he or she engages in early business planning. Although one could
conceptualize the business planning task in a number of ways, we focus
our examination on a core dimension of early business planning that has
attracted significant interest by strategy scholars, who have long distin
guished an incremental approach to early planning from a comprehensive,
synoptic approach (Andrews, 1971; Lindblom, 1959; Mintzberg, 1994;
Wheelwright, 1984). We adopt this important measure (i.e., the scope of
the early business planning activity: focused versus broad) for our research.
2
For instance, prior research in this vein has identified systematic heterogeneity between different groups of
organizational actors (managers versus entrepreneurs) and within similar groups (management teams or
entrepreneurs) across a range of decision-making activities (Bantel & Jackson, 1989; Wiersema & Bantel, 1992).
Looking at populations of founders, studies have shown that cognitive differences among entrepreneurs will
affect their respective perceptions and entrepreneurial actions (Baron, 1998; Busenitz & Barney, 1997; Mitchell
et al., 2007).
JOURNAL OF SMALL BUSINESS MANAGEMENT 3
Because our research seeks to uncover how a person’s knowledge affects

the early planning of a potential new venture, we sought to maximize
heterogeneity in individuals’ knowledge endowments; that is, we not only
wanted to be able to study different ways in which people may obtain
knowledge about entrepreneurship (for example, observation, classroom,
engaging in new firm creation) but also required variation in the depth
with which individuals engaged in these learning activities. Specifically, we
collected unusually rich survey data from 2,535 individuals residing in the
Netherlands that fulfills these conditions. Because our data set is representa
tive of the population at large, it comprises individuals with heterogeneous
modes of knowledge acquisition and, thus, enables us to assess several
fundamental but commonly elusive relationships between the human capital
of people and their approach to the initial business planning activity.
Theory and hypothesis development

To address the potential influence of knowledge on early business planning, we
draw on a growing body of research focused on entrepreneurial cognition
(Busenitz & Arthurs, 2007; Mitchell et al., 2002; Westhead et al., 2005). In
particular, the notion that a person’s knowledge endowments can help to
explain and predict firm-level phenomena has been appealing to entrepreneur
ship scholars, because the founder typically spearheads the emerging firm’s
decision-making and, thus, has a relatively strong (imprinting) effect on the
firm’s core features (Boeker, 1988; Burton & Beckman, 2007; Helfat &
Lieberman, 2002). For instance, research by Baron et al. (1999) documents
how the employment experience of founders shapes their logics of organizing
when setting up their firms; whereas, Fern et al. (2012) show how a founder’s
knowledge affects market-entry choices in new firms. However, although there
is an extensive body of literature focused on the team and organizational level
dynamics, there is a need to delve further into the more-subjective–individual-
level knowledge stores and preferences that serve as the basis of the mental
models of entrepreneurs and managers (Foss et al., 2008; Gartner, 1985).
Research on managerial cognition suggests that a primary activity of
a business planner is to absorb, process, and disseminate information related
to their organization and its environment (Grant, 1996; March & Simon,
1958). To meet this information challenge, people employ knowledge struc
tures that not only represent their information worlds but facilitate their
information processing and decision-making (Fiske & Taylor, 2007; Walsh,
1995). A person’s knowledge structures pertain to particular concepts (such as
opportunity exploration, venture exploitation, and business planning) and are
developed through exposure to a given domain. These structures, also referred
to as cognitive schemata, encode information about a concept, including its
components and the relationships among those components. Thus, people
with experience in a domain will differ in their cognitive representations of

particular concepts (Fiske & Taylor, 2007).
More specifically, research on entrepreneurial cognition focuses on ques
tions related to how entrepreneurs think and behave (differently from non
entrepreneurs) and researchers have adopted several approaches to address
these questions. A heuristics-based logic, which centers on an individual’s
reliance upon simplified decision-making strategies or shortcuts (Busenitz &
Barney, 1997; Kahneman & Tversky, 1973; Tversky & Kahneman, 1974),
allows an entrepreneur facing an uncertain setting to make decisions more
quickly. The entrepreneurial-expertise perspective focuses on how entrepre
neurs process information and make decisions differently from nonentrepre
neurs (Mitchell et al., 2007). Due to their more refined knowledge structures,
experienced people encode information and process pieces of information in
a more abstract, complex way than people who lack experience in a given
domain (Baron & Ensley, 2006; Gagné & Glaser, 1987). A more encompass
ing and dynamic effectuation logic features an entrepreneur who leverages
his or her available expertise or means to develop an evolving venture with
out regard for a specific desired outcome (Sarasvathy, 2001). Unlike the other
approaches, effectual logic or processes have been utilized more commonly
during the early stages of a new venture (Perry et al., 2012).
Knowing that individual knowledge and experience differences across indi
viduals have an influence on entrepreneurial action, especially during the early
stages of the process (Dimov, 2010; Fiet, 1996; Haber & Reichel, 2007; Hopp &
Greene, 2018; Shane, 2000; Venkataraman, 1997), we believe that it is important
to consider the effect of one’s accumulated knowledge on the earliest planning
stage of a potential new venture. We build upon the notion that an important
relationship exists between knowledge and entrepreneurial action and that this
linkage may result in variation across actors (Brinckmann et al., 2019; Cope,
2005; Corbett, 2005, 2007; Holcomb et al., 2009). From a more general perspec
tive, our approach is embedded in a research tradition that has examined the role
of an individual’s background characteristics in shaping firms, which Hambrick
and Mason (1984, p. 195) aptly summarize when they state that, “(t)he decision
maker brings a cognitive base and values to a decision, which creates a screen
between the situation and his/her eventual perception of it”.
However, rather than focusing solely on the content or knowledge that
constitutes this cognitive base, our examination draws on the entrepre
neurship and cognition literatures (Boyd & Vozikis, 1994; Cope, 2005;
Davidsson & Honig, 2003; Kolb et al., 2001) to develop a set of hypotheses
that investigate fundamental relationships between specific aspects of an
individual’s human capital and the scope of early business planning.
Prior entrepreneurial experience

There is extensive research exploring the potential impact of learning from
direct experience as an entrepreneur on a variety of entrepreneurial actions
and outcomes ranging from information search to firm formation and
venture performance (e.g., Baron & Ensley, 2006; Corbett, 2007; Delmar
& Shane, 2003; Dimov, 2010; Kaish & Gilad, 1991; Shane & Delmar, 2004).
The overarching argument and general findings across these studies is that
experienced entrepreneurs, having previously gone through the entrepre
neurial process, will have accumulated unique knowledge and developed
a script or schema (Gioia & Manz, 1985; Minniti & Bygrave, 2001; Mitchell
et al., 2007) that enables them to process information differently from non-
entrepreneurs. For example, research on entrepreneurial cognition has
shown that individuals previously involved in the founding of a venture
develop more-nuanced mental schemas than nascent entrepreneurs (Baron
& Ensley, 2006; Mitchell et al., 2002).
When viewed from the perspective of entrepreneurial cognition, we contend
that potentially subtle, yet important, factors would lead an individual who has
previous direct entrepreneurship experience to focus on fewer elements in early
business planning. Specifically, each of the approaches that result in the distinctive
ways an entrepreneur thinks or behaves are based upon cognitive shortcuts
(Mitchell et al., 2007), which may result in more-parsimonious strategies when
planning. For instance, an entrepreneur employing a heuristic-based logic will be
able to make decisions more quickly and fall prey to classic cognitive biases
including the illusion of control and confirmation bias (Bazerman & Moore,
2008; Langer, 1975) as they discount factors that they believe that they can control
or that are not important. Similarly, entrepreneurs who default to effectuation logic
will focus on the means available to them when considering potential outcomes
rather than including a wider set of factors that would be required to achieve an
expected outcome. Several studies in cognitive psychology also reveal that indivi
duals with an existing belief or hypothesis are prone to exhibit a confirmation bias
such that they interpret or recall information in a manner that enhances the
apparent validity of their belief and thus follow a preestablished course of
action without questioning the validity or accuracy of the information in the
current context (Nickerson, 1998). Hence, although entrepreneurs will have an
understanding of the actual process and be more aware of what is required when
planning to exploit a subsequent opportunity (McGrath & MacMillan, 2000;
Minniti & Bygrave, 2001; Westhead et al., 2005), their “proven” strategy or schema
may ultimately lead to being more focused only on the key elements that they
believe are important. We propose the following hypothesis (H):
Hypothesis 1. Firsthand entrepreneurial experience is associated with a more

focused scope of early business planning.
Observing other entrepreneurs

Many founders do not have firsthand entrepreneurial experience but may rely
on the knowledge and experience of others when embarking on the early
planning process. The potential influence of others in an individual’s network
in terms of learning from the actions and performance of those who have
experience in a function, industry, or market is well documented (McFadyen &
Cannella, 2004; Nahapiet & Ghoshal, 1998). Even without firsthand experience,
close interaction with another person who shares his or her account of an
experience or observing his or her actions and decisions allows the less
experienced entrepreneur to learn through indirect engagement with an activ
ity or a process. The cognitive frameworks that these individuals employ when
making decisions in an entrepreneurial setting are shaped by observations they
have made about entrepreneurship more generally.
Studies on individual learning suggest that knowledge structures are
developed in stages—that is, people first learn about different components
of a concept and, with continued exposure to the domain, will establish
stronger links between the components (e.g., Fiske & Dyer, 1985; Kolb,
1976). Accumulating knowledge via observation of and interaction with
entrepreneurs in one’s personal network (Cope, 2005; Dubini & Aldrich,
1991) may provide a useful reference. However, owing to the informal
nature of knowledge transfer that takes place through observation, an
individual is likely to remain more objective when recalling information
as they lack a direct link to the experience. These individuals will likely
have different perspectives on what is important in new-firm creation
(Dixon, 2000; Fern et al., 2012) as a result of their differing exposure to
individualized representations of the entrepreneurship process in this
informal setting. The individual’s detachment from the actual experience,
the lack of a scripted normative model, and the difference in environ
ments would allow for greater personal interpretation by the observer.
This would reduce the potential of direct imitation of an action or the
exact replication of a given process (Bandura, 1977; Gioia & Manz, 1985;
Levitt & March, 1988). We therefore propose the following:
Hypothesis 2. Exposure to entrepreneurship by means of observing others is

associated with a broader scope of early business planning.
Level of education
Beyond an individual’s exposure to entrepreneurship, we also expect her or
his level of education to influence early business planning. In terms of
knowledge accumulation, formal institutionalized education is perhaps one
of the most widely available sources for the vast majority of people in most
societies. The general education received during the years of compulsory

schooling may provide the broader population with a relatively equal knowl
edge base but as an individual progresses to more-advanced levels of educa
tion their cognitive base becomes more heterogeneous. Several studies have
investigated the potential influence of education on the entrepreneurial
process, especially planning (Brinckmann et al., 2019; Brinckmann & Kim,
2015; Davidsson & Honig, 2003; Greene & Hopp, 2017; Hopp et al., 2018).
The potential effects of education level on formal planning are subject to
debate, with some studies proposing that less educated individuals will
produce business plans (Burke et al., 2010); whereas, other studies provide
support for the view that a greater level of education will increase the chances
that an individual will engage in formal planning (Greene & Hopp, 2017).
Building on the fundamental notion that, independent of the field of an
individual’s studies, the attained level of education is generally considered an
indicator of an individual’s cognitive abilities (e.g., Pelled, 1996; Wiersema &
Bantel, 1992), we argue that the entrepreneur’s level of education will have
two potential effects with respect to early business planning.
First, individuals who pursue a higher level of education specialize on
more-specific subjects and domains over time. These specialists may pre
scribe to normative views and rely on scripted models within a specific
industry or domain (DiMaggio & Powell, 1983) when making decisions or
approaching a process. The resulting effect on the scope of early planning
would, in part, depend on the level of complexity or comprehensiveness of
the specific norms within each field but the individual’s perspective would be
bounded by being anchored in a specific discipline. Second, higher levels of
education are also indicative of more-abstract ways of thinking and problem
solving (Gibbons & Johnston, 1974; Wiersema & Bantel, 1992) that will
facilitate more nuanced approaches to early planning. Notably, this difference
seems to be associated less with the specific knowledge or techniques learned
during formal education than with a more general ability to consider a larger
number of knowledge components and make assumptions. Against the back
drop of these arguments, we thus expect the following ceteris paribus rela
tionship between an individual’s education level and the scope of her or his
early business planning:
Hypothesis 3: A higher level of education is associated with a more focused

scope of early business planning.
Entrepreneurship education
Entrepreneurship education, regardless of its design, will typically cover the
many activities, challenges, and risks associated with the launch of a new
venture, so the participants in these courses obtain a more comprehensive
view of the entrepreneurial process or field (Honig, 2004; Souitaris et al.,

2007; Vesper & Gartner, 1997). Kuratko (2005) conducted an extensive
review of the trends and practices associated with entrepreneurship educa
tion and determined that it is common for students in an entrepreneurship
course to engage in a range of learning techniques and tools and that the
study includes topics such as, but not limited to, venture financing, entre
preneurial strategy and the assessment of new ventures. In addition, students
in a classroom setting are able to assimilate a multitude of concepts in a more
concentrated manner (all at once) and in a shorter period than individuals in
the actual entrepreneurial context.
More specifically, the classroom setting facilitates a more structured learn
ing process. The level of engagement on the part of the student required in
the learning process, which may include classroom activities, projects, and
homework should reduce the propensity for an individual to negate or not
realize the need to consider or assess the relevance of a selected activity in the
entrepreneurial process. As such, individuals that have participated in an
entrepreneurship course are thus more aware of the perceived importance of
planning and of the breadth of activities and multitude of elements that may
need to be considered when planning to exploit an opportunity (Honig &
Karlsson, 2004; Hopp et al., 2018; Karlsson & Honig, 2009). However, even
though students may be taught to test ideas and challenge beliefs this does
not mean that learning in a classroom environment will automatically elim
inate the effects of selected biases and heuristics.
Just as managers that have experience in a certain situation may over
estimate the representativeness of a piece of information and draw inaccurate
conclusions because of the availability of the information (Bazerman &
Moore, 2008), students may overestimate the salience of the many factors
they have learned about in an entrepreneurship class. Hence, students in an
entrepreneurship course may attempt to apply and integrate all of the
information taught when deciding on elements to include when planning.
One could argue that, in the most-extreme cases, their early planning beha
vior is driven by mimetic isomorphism as they simply imitate the entirety of
what is taught in the classroom. Thus, we propose the following hypothesis:
Hypothesis 4: Participation in an entrepreneurship course is associated with

a broader scope of early business planning.
General life experience

As a person grows older, he or she develops a richer human capital base from
which to draw when making strategic decisions thanks to a greater accumu
lation of both explicit and tacit knowledge (Nonaka, 1994; Polanyi, 1967).
Research in strategy and entrepreneurship provides further support for the
widely held view that an individual’s age matters when it comes to (entre
preneurial) decision-making processes and outcomes (Azoulay et al., 2018;
Hitt & Tyler, 1991; Levesque & Minniti, 2006).
However, even though the types and amount of knowledge an individual
possesses may continually increase over time, this does not necessarily mean
that all of the information will be accurate or even relevant when engaging in
early business planning. The inherent subjectivity associated with entrepre
neurial cognition, regardless of the processes being employed (Mitchell et al.,
2007), is likely to affect anyone’s business planning decisions and this effect
may increase over time for a number of reasons. Unfortunately, with age and
experience also comes greater potential for bias (Deese, 1959; Pohl, 2004) and
deficiencies in memory performance (Mather & Johnson, 2000; Reder et al.,
1986), which influences how an individual draws upon and interprets their
knowledge base (Weber & Johnson, 2009). Accordingly, the probability of
associative memory illusions, which may entail confusing or even remember
ing details or events that never really occurred (Pohl, 2004; Roediger &
McDermott, 2000) and the availability heuristic wherein people will more
easily remember details or events they have experienced personally (Pohl,
2004; Tversky & Kahneman, 1974) are enhanced. In terms of the potential
effect on the early business planning activity, as an person grows older he or
she may be prone to include more items within the scope of the initial
planning as the person’s exposure to a greater number and more-varied
types of experiences, whether direct or indirect, increases.
As such, we argue that, when faced with the initial planning decision, an
older individual is likely to consider a broader range of issues as a result of
their combined larger knowledge base and susceptibility to errors of memory.
We therefore predict the following:
Hypothesis 5: The greater the general life experience of an individual, the

broader is the scope of early business planning.
Data and methods

Given that we want to understand the cognitive antecedents of early business
planning activities, we had to acquire data on how people possessing differ
ent types of knowledge and experience engage in early business planning. As
no such data are available from existing databases, we set out to collect the
required data ourselves by securing access to a large, representative sample of
individuals residing in the Netherlands. Specifically, through the LISS
(Longitudinal Internet Studies for the Social Sciences) panel managed by
CentERdata3 from Tilburg University we gained access to more than 3,000
3
See http://www.centerdata.nl/en/databank/liss-panel-data (accessed May 24, 2020).
individuals, ranging in age from 16 to 90 years and representing all socio

economic and educational subgroups. The LISS panel is a representative
sample of Dutch individuals regularly participating in Internet-based surveys
(Scherpenzeel, 2011). To establish the LISS panel, CentERdata together with
Statistics Netherlands (Centraal Bureau voor de Statistiek [CBS]) drew
a random sample from the Dutch population registers (Scherpenzeel &
Das, 2010). LISS uses the same individuals or respondents over the years,
which can be identified with a unique identifying number. This way,
responses from different LISS surveys can be matched. The collaboration
with CentERdata and the use of the LISS panel thus allowed us to benefit
from data that were collected in prior surveys.
Research setting
To examine the influence of heterogeneous knowledge and experience on
early business planning it is important to provide respondents with
a research setting that is equally accessible to all of them. For instance,
we had to employ a research setting that can be understood by young and
old respondents, by respondents with different education attainments, by
respondents with and without entrepreneurial experience, and so on. For
this reason, we chose the restaurant business as our research setting: Not
only do restaurants account for a large share of new firm creation, they also
represent an important industry in economies worldwide. Furthermore,
because the restaurant business is a context that is well researched for
example, several higher education institutions are dedicated to this industry
such as the Cornell University School of Hotel Administration or the Ecole
Hôtelière de Lausanne), we could base the design of our survey instrument
on prior research (e.g., Fullen, 2005; Parsa et al., 2005).
Data collection
We conducted several qualitative interviews with industry experts to develop
and pretest our questionnaire. We administered a quantitative pretest of our
survey with 62 individuals from various professional backgrounds and
a second quantitative pretest with 80 participants from the LISS panel.
These two pretests allowed us to ascertain that the questionnaire was under
standable and could be answered by individuals from all ranges of the
population. After implementing several modifications based on the feedback
received from the pretests, we arrived at the final questionnaire, which
included 25 closed-ended and three open-ended questions.4 The data from
4
Our survey is available in the Internet at https://www.dataarchive.lissdata.nl/study_units/view/150 (accessed
May 24, 2020).
our survey was combined with data, which has been collected by LISS in
earlier surveys.
Our questionnaire was sent to 3,310 individuals, of which 2,709 provided
responses (response rate: 81.8%). This high response rate ensures that all
important subgroups of the Dutch population are present in our data set and
reduces the likelihood of selection bias. In a next step, we combined our
survey data with data obtained in prior LISS surveys. In particular, we
obtained information about the respondent’s sociodemographic characteris
tics, level and type of education.
Due to some missing values in our own and in the earlier LISS surveys, our
effective sample includes 2,532 individuals (observations). Note that many of
our variables rely on objective information (for example, prior entrepreneur
ship experience) and that we combine our survey with prior LISS surveys
collected at earlier points in time to create our estimation data set.
Nonetheless, we tested for common method variance (Podsakoff et al.,
2003) and ran an exploratory factor analysis using the variables included in
our regressions. The unrotated factor solution yielded three factors with an
Eigenvalue greater than one. The largest factor (Eigenvalue = 1.64) explained
36% of the interitem covariance, indicating that common method bias should
not be a concern in the present study.
Measures
Our survey presented respondents with the following situation: “Imagine that
you inherit sufficient funds to establish a full-service mid-level restaurant (for
example, eetcafe5). Once established, you are going to be the owner and
manager of this restaurant, so all of the decisions will be yours (for example,
the size of the restaurant and the type of food that is served). There is no
“ideal” way to set-up a restaurant; there are actually many ways of doing it
successfully. We are interested in the decisions that you would make to
establish your restaurant.”
Dependent variable
We measured the scope of the content of the early business planning activity
with the following question: “Think about the restaurant that you would estab
lish. In your opinion, which of the following items are the most important to
consider? (Please select all items that are the most important in your opinion).”
The respondents were then given a list of 26 items, which was developed from
Fullen (2005) and Parsa et al. (2005) and verified by industry experts. The items
captured the main managerial elements that could potentially be considered in
a business plan for a new restaurant, such as sales and marketing (product,
5
Eetcafe is a Dutch colloquial word for restaurant.
pricing, and so on), operations, legal provisions, competition, and human

resources.6 More specifically, adapted to the restaurant setting, items addressed
issues such as location, staff, menu selection, and the branding/logo of the
restaurant.7 Because we are interested in the breadth of business planning
elements that our respondents consider at the earliest stage of planning, we
used this information to calculate our dependent variable scope of the content
considered in early business planning as the number of items that the respondent
selected. The variable ranges from 1 to 26 (median = 11).
Independent variables
Our hypotheses investigate the effects of knowledge acquisition on the scope
of early business planning.
The variable first-hand entrepreneurial experience indicates whether the
respondent has ever engaged in entrepreneurship. The variable entrepreneur
ship—observing others indicates whether the respondents interacted with and
observed entrepreneurs who were members of their families or close friends.
The variable education level measures the number of years of education
required to obtain the highest educational degree of the respondent
(Davidsson & Honig, 2003; Greene & Hopp, 2017). The variable entrepre
neurship course captures whether the respondent has taken part or currently
takes part in an entrepreneurship course. Finally, an individual’s general life
experience is measured by the respondent’s age (in years). All independent
variables except education level were constructed from our own survey.
Control variables
We account for the importance attached to (formal) planning by asking the
respondent whether writing a business plan is an important activity to pursue
when setting up a business. The scale ranges from 1 (not at all important) to 7
(very important). Next, we control for a number of sociodemographic charac
teristics of the respondents: gender, marital status, nationality, number of
children, and religion. Furthermore, we control for the respondents’ personality
by including variables referring to the Big 5 personality traits: introversion,
agreeableness, conscientiousness, emotional stability, and intellect. We also
control for the respondents’ risk attitude by asking whether the respondent is
“generally a person who is fully prepared to take risks” (value of 10) or “tries to
avoid taking risks” (value of 1) (Block et al., 2015). We further control for the
6
Note that financial resources were not part of this consideration set, as such resources represent a bottleneck
factor that could potentially affect the scope of elements considered and, thus, would prohibit us from getting
a clean view on the “knowledge—scope of elements considered” relationship.
7
The full list of items pertains to location, interior decor, parking lot, staff, opening hours, menu selection, kitchen
layout, suppliers, restaurant name, brand and logo, a tobacco-vending machine, food price level, seating capacity,
bar facilities, take-away counter, music and entertainment, storage room, website, insurance, legal permission,
unused food disposal, a back office, legal structure, hardware/software used in restaurants, food-safety regula
tions, employee hygiene, and a slot machine.
respondents’ field of education in four main categories (social, general, technical,

economics/law). The variable education: catering indicates whether the respon
dent has been educated in the catering business. The variable experience: catering
measures whether the respondent has work experience in catering. We further
controlled for the frequency of restaurant visits by asking respondents how often,
among the several response choices, they had lunch or dinner at a restaurant: 1 =
never, 2 = once a year, 3 = several times a year, 4 = once a month, 5 = once
a week, and 6 = several times a week. Finally, to account for the respondent’s
ambition, we asked how many hours per week (1 = < 10 to 8 = > 70) respondents
would work on setting up the new firm.
Analysis
As the dependent measure in our main analysis is a count variable, we used
count data regressions to test our hypotheses. We preferred the negative
binomial model to a Poisson regression because of overdispersion. As robust
ness checks, we estimated a propensity score matching model and a treatment
effects regression to account for potential endogeneities of the entrepreneurship
course and firsthand entrepreneurial experience variables.
Results
Descriptive statistics
Table 1 shows descriptive statistics and correlations. Notably, they offer insight
into the heterogeneity of individuals in our sample. The age of the respondents
ranges from 16 to 90 years (mean of 49.78 years), 46% of the respondents are
male, and 98% are of Dutch nationality. The mean number of years of
education is 13. The percentage of married respondents is 59%, and the
mean number of children living at home is 0.80. With regard to exposure to
entrepreneurship, 14% of the respondents reported having founded a business;
7% reported having participated in an entrepreneurship course. Most respon
dents reported that they visit a restaurant several times a year. Our dependent
variable scope of the content considered in early business planning has a mean of
11.34 and ranges from 1 to 26 planning elements.
Independence of independent variables

Correlations between our independent and control variables are generally low
(Table 1). The highest correlation between our independent variables is
between the variables entrepreneurship course and firsthand entrepreneurial
experience (r = 0.21, p <.01). The maximum variance inflation factor (VIF) is
1.83 (variable general life experience), indicating that multicollinearity should
14
Table 1. Descriptive statistics and correlation matrix (N = 2,532).

M SD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
1 Scope of the content of 11.34 5.62
the early planning
activity
2 Male 0.46 −0.11
3 Married 0.59 0.02 0.04
4 Dutch 0.98 −0.04 0.00 −0.04
5 Number of children 0.80 1.12 −0.14 −0.02 0.05 −0.04
6 Religion dummy 0.41 0.02 −0.06 0.19 −0.05 −0.05
J. BLOCK AND J. S. PETTY
7 Ambition 4.77 1.78 0.11 0.10 −0.01 −0.03 0.00 −0.05

8 Risk attitude 4.78 2.29 0.01 0.15 −0.11 0.00 0.07 −0.12 0.14
9 Introversion 2.74 0.63 −0.02 0.00 0.01 0.02 −0.02 0.05 −0.10 −0.23
10 Agreeableness 3.90 0.48 0.17 −0.30 0.05 0.00 −0.05 0.10 0.00 −0.04 −0.31
11 Conscientiousness 3.72 0.53 0.13 −0.06 0.16 0.01 −0.12 0.10 0.01 −0.06 −0.10 0.29
12 Emotional stability 3.42 0.66 0.05 0.18 0.10 0.00 0.01 0.04 0.11 0.17 −0.25 0.05 0.22
13 Intellect 3.49 0.49 −0.02 0.08 −0.08 −0.00 0.01 −0.09 0.07 0.23 −0.31 0.23 0.20 0.17
14 Education: social 0.07 0.03 −0.06 −0.07 0.02 −0.03 −0.05 −0.01 0.06 −0.02 0.06 0.00 −0.00 0.14
15 Education: general 0.34 0.04 −0.16 −0.02 0.01 −0.03 −0.00 −0.01 −0.09 0.03 0.03 −0.05 −0.08 0.14 0.17
16 Education: technical 0.18 −0.03 0.40 0.03 −0.02 −0.05 −0.03 0.04 0.07 0.02 −0.16 −0.01 0.08 0.05 −0.10 −0.30
17 Education: 0.18 −0.02 0.08 0.02 −0.04 0.05 −0.03 0.03 0.05 −0.05 −0.02 0.02 0.04 0.06 −0.10 −0.27 −0.15
economeconomics/law
18 Education: catering 0.03 −0.02 −0.05 −0.02 −0.01 0.03 −0.01 0.04 −0.02 −0.01 −0.02 −0.01 −0.05 −0.01 −0.04 −0.10 −0.04 −0.05
19 Experience: catering 0.15 −0.00 −0.08 −0.16 −0.04 0.06 −0.06 0.08 0.13 −0.11 0.04 −0.11 −0.04 0.08 0.02 0.02 −0.07 −0.02 0.22
20 Freq. of restaurant visits 3.38 1.02 −0.06 0.00 −0.08 0.03 −0.04 −0.08 0.09 0.18 −0.18 0.04 −0.01 0.06 0.18 0.10 −0.12 −0.01 0.08 0.04 0.11
212 Imp. of formal planning 5.96 1.17 0.21 −0.08 0.09 −0.03 −0.06 0.05 0.12 −0.02 −0.02 0.16 0.15 0.05 0.07 0.03 −0.06 −0.04 0.07 0.00 0.02 −0.02
22 Firsthand ent. 0.14 −0.02 0.14 0.02 −0.01 −0.01 −0.04 0.09 0.23 −0.07 −0.03 0.02 0.06 0.12 0.04 −0.03 0.06 0.02 −0.01 0.08 0.11 −0.06
experience
23 Entrepreneurship— 0.81 0.05 −0.01 0.05 0.01 0.01 0.04 0.09 0.14 −0.10 0.05 0.04 0.07 0.10 0.03 −0.06 −0.02 0.06 −0.01 0.04 0.15 0.09 0.20
observing others
24 Education level 13.00 3.45 −0.10 0.07 0.02 0.01 0.06 −0.03 0.02 0.10 −0.06 0.02 0.02 0.10 0.29 0.22 −0.48 −0.48 0.18 0.01 −0.02 0.23 0.07 0.06 0.11
25 Entrepreneurship 0.07 0.04 0.09 −0.04 0.00 −0.00 0.00 0.10 0.15 −0.05 −0.02 0.01 0.05 0.03 −0.01 −0.01 −0.01 0.07 0.05 0.07 0.06 0.01 0.21 0.12 0.05
course
26 General life experience 49.78 16.888 0.19 0.07 0.35 0.04 −0.46 0.22 −0.04 −0.16 0.09 0.08 0.20 0.10 −0.13 −0.02 0.07 0.07 −0.07 −0.09 −0.23 −0.12 0.07 0.09 0.05 −0.13 −0.02
Note: M = mean; SD = standard deviation.

not be an important concern. Nevertheless, we entered our independent vari

ables stepwise so that potential multicollinearity concerns become transparent.
Multivariate results
Results of the negative binomial regressions are summarized in Table 2.
Model 1 is used as a benchmark model and includes only the control
variables. In Models 2 to 6, we enter the independent variables separately,
and Model 7 provides the results for the full model. We now report the
results of the full model.
We first examine Hypotheses 1 and 2. The regression results show that
respondents with firsthand entrepreneurial experience (β = −.06, p < .1) apply
a less comprehensive approach to early business planning. The effect should,
however, be treated with great caution as the variable becomes significant
only in the full model. Hence, we can claim only partial support for
Hypothesis 1. The variable entrepreneurship—observing others does not
show a statistically significant effect (β = .02, p > .1). Hypothesis 2 is there
fore not supported. Our regressions show that education level has a negative
effect leading to a more focused approach to early business planning
(β = −.01, p < .01) whereas taking a course in entrepreneurship has a positive
effect (β = .09, p < .05) leading to a more comprehensive scope of elements
considered in early business planning. Hypothesis 3 and 4 are supported.
Finally, our results show that general life experience leads to a more compre
hensive approach to early business planning (β = .005, p > .01). Hypothesis 5
is supported.
We note that some control variables have strong effects. The importance
attached to business planning has a very strong effect on the comprehensive
ness of early business planning (β = .06, p < .01). The variable frequency of
restaurant visits has a negative effect (β = − .02, p < .01). Among the Big
5 personality traits, we find that agreeableness (β = .12, p < .01), conscien
tiousness (β = .05, p < .01), and intellect (β = −.04, p < .1) show significant
effects. Risk attitude has a positive effect and increases the scope of early
business planning (β = .01, p < .01). As one may expect, ambition, measured
as the number of hours worked, leads to more comprehensive early business
planning (β = .03, p < .01). Being educated in a social field of education also
leads to more comprehensive early business planning (β = .09, p < .05).
Results from robustness checks and post hoc analyses

We did several robustness analyses to check the robustness of our main
results and ran several post hoc regressions to explore possible nonlinearities
and interaction effects. Finally, we calculated effect sizes to understand the
magnitude of the effects.
16
Table 2. Negative binomial regressions of scope of content of early business planning activity.
Model 1 Model 2 Model 3 Model 4 Model 5 Model 6 Model 7 Model 8 (IRRs)
Male −0.08*** −0.08*** −0.08*** −0.08*** −0.08*** −0.09*** −0.09*** 0.91***
(0.02) (0.02) (0.02) (0.02) (0.02) (0.02) (0.02) (0.02)
Married −0.01 −0.01 −0.01 −0.00 −0.01 −0.06*** −0.05** 0.95**
(0.02) (0.02) (0.02) (0.02) (0.02) (0.02) (0.02) (0.02)
Dutch −0.12** −0.12** −0.12** −0.11** −0.12** −0.13** −0.14** 0.87***
(0.06) (0.06) (0.06) (0.06) (0.06) (0.06) (0.06) (0.05)
Number of children −0.05*** −0.05*** −0.05*** −0.05*** −0.05*** −0.02* −0.02* 0.98*
(0.01) (0.01) (0.01) (0.01) (0.01) (0.01) (0.01) (0.01)
Religion dummy −0.02 −0.02 −0.02 −0.02 −0.02 −0.03* −0.04* 0.96*
J. BLOCK AND J. S. PETTY
(0.02) (0.02) (0.02) (0.02) (0.02) (0.02) (0.02) (0.02)

Ambition 0.03*** 0.03*** 0.03*** 0.03*** 0.03*** 0.03*** 0.03*** 1.03***
(0.01) (0.01) (0.01) (0.01) (0.01) (0.01) (0.01) (0.01)
Risk attitude 0.01** 0.01** 0.01** 0.01** 0.01** 0.01*** 0.01*** 1.01***
(0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00)
Introversion 0.02 0.02 0.02 0.02 0.02 0.01 0.02 1.02
(0.02) (0.02) (0.02) (0.02) (0.02) (0.02) (0.02) (0.02)
Agreeableness 0.13*** 0.13*** 0.13*** 0.13*** 0.13*** 0.12*** 0.12*** 1.13***
(0.03) (0.02) (0.02) (0.02) (0.02) (0.02) (0.02) (0.02)
Conscientiousness 0.06*** 0.06*** 0.06*** 0.06*** 0.06*** 0.05*** 0.05*** 1.05***
(0.02) (0.02) (0.02) (0.02) (0.02) (0.02) (0.02) (0.02)
Emotional stability 0.03** 0.03** 0.03** 0.03** 0.03** 0.02 0.02 1.02
(0.02) (0.02) (0.02) (0.02) (0.02) (0.02) (0.02) (0.02)
Intellect −0.08*** −0.08*** −0.08*** −0.06*** −0.08*** −0.07*** −0.04* 0.96*
(0.02) (0.02) (0.02) (0.02) (0.02) (0.02) (0.02) (0.02)
Education: social 0.07** 0.07** 0.07*** 0.09** 0.07** 0.07* 0.09** 1.10**
(0.04) (0.04) (0.04) (0.04) (0.04) (0.04) (0.04) (0.04)
Education: general 0.03 0.03 0.03 −0.01 0.03 0.03 −0.01 0.99
(0.03) (0.02) (0.02) (0.03) (0.02) (0.02) (0.02) (0.02)
Education: technical 0.04 0.04 0.04 0.04 0.04 0.04 0.04 1.05
(0.03) (0.03) (0.03) (0.03) (0.03) (0.03) (0.03) (0.03)
Education: economics/law −0.00 −0.00 −0.00 0.00 0.01 0.01 0.01 1.01
(0.03) (0.03) (0.03) (0.03) (0.03) (0.03) (0.03) (0.03)
(Continued )
Table 2. (Continued).
Model 1 Model 2 Model 3 Model 4 Model 5 Model 6 Model 7 Model 8 (IRRs)
Education: catering −0.03 −0.03 −0.02 −0.03 −0.03 −0.01 −0.02 0.98
(0.06) (0.06) (0.06) (0.06) (0.06) (0.06) (0.06) (0.06)
Experience: catering 0.00 0.00 0.00 −0.00 −0.00 0.03 0.02 1.02
(0.03) (0.03) (0.03) (0.03) (0.02) (0.02) (0.03) (0.03)
Frequency of restaurant visits −0.03*** −0.03*** −0.03*** −0.03*** −0.03*** −0.03*** −0.02** 0.98**
(0.01) (0.01) (0.01) (0.01) (0.01) (0.01) (0.01) (0.01)
Importance attached to formal 0.07*** 0.07*** 0.06*** 0.07*** 0.07*** 0.06*** 0.06*** 1.07***
planning
(0.01) (0.01) (0.01) (0.01) (0.01) (0.01) (0.01) (0.01)
H1: Firsthand ent. experience −0.01 −0.06* 0.95*
(0.03) (0.03) (0.03)
H2: Entrepreneurship – 0.02* 0.02 1.02
observing others
(0.01) (0.01) (0.01)
H3: Education level −0.01*** −0.01*** 0.99***
(0.00) (0.01) (0.01)
H4: Entrepreneurship course 0.08** 0.09** 1.09**
(0.04) (0.04) (0.04)
H5: General life experience 0.005*** 0.005*** 1.005***
(0.00) (0.00) (0.00)
Constant 1.51*** 1.51*** 1.51*** 1.60*** 1.52*** 1.35*** 1.44*** 4.24***
(0.17) (0.17) (0.17) (0.17) (0.17) (0.17) (0.17) (0.73)
Alpha 0.14 (0.01) 0.14 (0.01) 0.14 (0.01) 0.14 (0.01) 0.14 (0.01) 0.14 (0.01) 0.14 (0.01) 0.14 (0.01)
N observations 2,532 2,532 2,532 2,532 2,532 2,532 2,532 2,532
Wald chi2 (df) 283.18 (20) 285.39 (21) 285.92 (21) 314.57 (21) 292.63 (21) 330.51 (21) 378.30 (25) 378.30 (25)
Log pseudolikelihood −7,745.81 −7,745.77 −7,744.18 −7,736.41 −7,743.62 −7,723.27 −7,711.09 −7,711.09
JOURNAL OF SMALL BUSINESS MANAGEMENT
IRR = incidence rate ratios

* p <.10, ** p <.05, *** p <.01
17
Separate analyses for subsamples of men and women

Our main results show that there is a persistent negative relationship between
male and the scope of early business planning. This could be due to gender
stereotypes present in the Dutch society (“women do most of the cooking”
and “women think, men just do”). To see whether our main results hold
irrespective of such stereotypes, we ran separate analyses for subsamples of
men and women. The subsample regressions support the results regarding
education level and general life experience. Yet, the results for entrepreneur
ship course and firsthand entrepreneurial experience are supported only in the
subsample of male respondents.
Endogeneity concerns
To account for a potential endogeneity of the variables entrepreneurship
course and firsthand entrepreneurial experience, we estimated propensity
score matching models and treatment effects regressions. The results show
that endogeneity exists and the results of our main models should be inter
preted with great caution. The statistically significant effects of taking
a course in entrepreneurship and having firsthand entrepreneurial experience
on the scope of the content of the early business planning activity from the
negative binomial regression (Table 2) can very well arise due to selection.
The results regarding education level and general life experience, however,
were similar as in the main analysis.
Interaction effects
We explored several interaction effects as post hoc investigations. These
investigations show that having more general life experience reduces the
negative effect of education level (p < .10). That is, the effect that higher
education leads to a less comprehensive approach to early business planning
lessens when individuals grow older.
Nonlinearities
The two independent variables education level and general life experience are
continuous. For these variables, we tested the existence of nonlinear effects
by splitting up the continuous variables into sets of dummy variables. The
results show that the negative effect of education level is mostly attributable
to those individuals having a very high education level of more than 18 year.
The differences between respondents with a low versus a medium level of
education were statistically not significant. Regarding the effect of general life
experience, we find tentative evidence for a U-shaped effect. Ceteris paribus,
the age group between 30 and 40 years had the least comprehensive approach
to early business planning whereas the age group older than 60 years had the
most comprehensive approach.
Effect sizes
As we have a very large sample of respondents, it is not surprising that many
effects are statistically significant. Hence, we calculate effect sizes for all of our
independent and control variables. The result is shown in Model 8, wherein we
calculated incidence rate ratios (IRRs) from our regression coefficients.
A qualitative interpretation of effect sizes is provided in Table 3 below. These
IRRs allow us to interpret the magnitude of the effects of the independent
variables. Being 10 years older increases the number of items considered in
early business planning by a factor of 1.05. The scope of early business planning
of a 20- versus 40-year-old individual increases by one additional item. Having
taken an entrepreneurship course increases the scope of early business planning
by a factor of 1.10 (scope increases by one additional item) whereas observing
other entrepreneurs does so only by a factor of 1.03. Firsthand entrepreneurial
experience decreases the number of items by a factor of 0.93. These effects can
accumulate. For example, a 40-year-old who has just taken an entrepreneurship
course but has no firsthand entrepreneurial experience will on average consider
about three additional items as compared with a 20-year-old with firsthand
entrepreneurial experience and having taken no entrepreneurship course.
Table 3 summarizes our main findings; both the results from our main
analyses and the results from our post hoc investigations are shown.
Discussion
Within the entrepreneurship domain there is hardly a topic that polarizes
scholars to the extent observed in “business planning,” as some argue for
comprehensive approaches to business planning whereas other see minimal
or incremental planning efforts as sufficient for the creation of new firms (as
suggested, for example, by the “lean startup approach” (cf. Blank, 2012; Ries,
2011). Because business planning is one of the primary research topics in
entrepreneurship (Baker et al., 1993; Brinckmann et al., 2019; Brinckmann &
Kim, 2015; Castrogiovanni, 1996; Gruber, 2007; Shane & Delmar, 2004), the
present research has moved the focus from the outcomes of the planning
process to the initial planning decisions and has investigated how a business
planner’s knowledge and experience shapes early business planning. Drawing
on entrepreneurship and cognition research (e.g., Cope, 2005; Kolb et al.,
2001) and analyzing a unique, representative sample of the population of an
entire country (The Netherlands), our study makes a rare distinction between
types of knowledge and impact on early business planning at the level of the
individual.
Given the largely novel focus of the present study, our findings offer
a number of key insights for the entrepreneurship literature and related
research areas.
Table 3. Summary of findings.

Level of statistical
Hypothesis support (two-sided
number Direction of the effect significance tests)
Economic effect size Post hoc findings
1 Firsthand Weak support; effectThe effect size is
entrepreneurial becomes statistically
small; having
experience is significant only at the
firsthand
associated with 10% level when all entrepreneurial
a more focused scope independent experience decreases
of early business variables are entered
the number of items
planning. simultaneously into considered by
the model. a factor of 0.95.
2 Exposure to No support; effect is
The effect size is very
entrepreneurship by far away from small; having
means of observing reaching statistical exposure to
others is associated significance. entrepreneurship by
with a broader scope means of observing
of early business others increases the
planning. number of items
considered by
a factor of 1.02.
3 A higher level of Strong support; effect The effect size is The negative effect
education is is statistically large; having the of education level is
associated with significant at the 1% highest level of mostly attributable
a more focused scope level. education versus the to those individuals
of early business lowest level of having a very high
planning. education decreases education level of
the number of items more than 18 years
considered by of education; having
a factor of 0.78. more general life
experience reduces
the negative effect
of education level.
4 Participation in an Medium support; The effect size is
entrepreneurship effect is statistically
medium; having
course is associated significant at the 5%
participated in an
with a broader scope level. entrepreneurship
of early business course increases the
planning. number of items
considered by
a factor of 1.09.
5 The greater the Strong support; effect The effect size is We find tentative
general life is statistically large; being in the evidence for
experience of an significant at the 1% age group between a U-shaped effect.
individual, the level. 30 and 40 years Ceteris paribus, the
broader the scope of versus being in the age group between
early business age group older than 30 and 40 years had
planning. 60 years increases the the least
number of items by comprehensive
a factor of 1.24. approach to early
business planning
whereas the age
group older than
60 years had the
most comprehensive
approach.
Implications for theory development

First, although business planning is an important area of research in entre
preneurship, Brinckmann and Kim (2015) recently pointed out that we
possess hardly any knowledge of the antecedents of early business planning
in new-firm creation. Because knowledge structures affect information pro
cessing in predictable ways (Walsh, 1995), the present research has been able
to identify an important causal thread between the individual’s knowledge
and experience and the scope of content considered in the early business
planning stage. This is an important finding, as it offers novel insights into
how “broad” or “lean/focused” a fashion business planners engage in the
initial early planning of a new business.
Next, our findings help to advance an important body of work examining
founder knowledge—new firm creation link, which is key given that the
founder typically spearheads the emerging firm’s decision-making and,
thus, has a relatively strong (imprinting) effect on the firm’s core features
(Boeker, 1988; Burton & Beckman, 2007; Fern et al., 2012; Gartner, 1985;
Helfat & Lieberman, 2002). In particular, it is important to note that while
our results provide further support for studies that have shown how the
effects of different types of experience on planning differ, our study design
allowed us to examine the impact of knowledge at the individual level and at
the earliest stage of the planning process, as opposed to analyzing the out
come of a process that may have been influenced by other actors and
executed over various time periods. Additionally, unlike previous studies,
the business planners were presented with the same situation at the same
time, thereby, effectively eliminating the impact of the context on their
decision-making process (Bryson & Bromiley, 1993; Papadakis et al., 1998).
Hence, one of the main ways in which we advance theory involves our
findings concerning the contrasting effects of different forms of knowledge
and experience on early business planning scope.
Next, this causal thread from the cognitive antecedents to early business
planning indicates critical path dependencies, as our findings show that an
individual’s knowledge has a systematic impact on this key activity in entre
preneurship. Thus, although one would like to think that new ventures are
less constrained by path dependencies than more-established firms, one
needs to recognize that the path dependencies created by a founder’s cogni
tive base has a systematic effect on the decision-making that underlies early
business planning. Our results also provide support for a key concept asso
ciated with Kolb’s (1976) learning model, which proposes that experiential
learning will facilitate greater focus owing to the individual’s shift from being
a detached observer to actively involvement in a given setting, which affords
the individual the chance to test his or her own reflections about critical
concepts.
Along these lines, our findings offer insights that contribute to a more
complete understanding of one of the key questions in strategy and organi
zational research—that is, “Why are firms different?” (Rumelt et al., 1994).
Our findings indicate that such differences can be traced back to the knowl
edge that a founder possesses, as this influences how early business planning
is conducted and how the new organization may look like when it emerges.
Additionally, because entrepreneurial ventures are being pursued by peo
ple spanning all ages, our results, which are based on a representative sample
of the population, highlight the need to further investigate the differences
existing among individuals in various demographic dimensions (Forbes,
2005; Minniti & Nardone, 2007; Shane et al., 2003). To this end, we show
that age and experience are not one in the same in terms of their effects on
entrepreneurial decision-making.
Implications for entrepreneurs and educators

Our research has implications for entrepreneurship education and practice.
In terms of educational offerings, we initially found that people who had
attended an entrepreneurship course engage in early business planning
differently from people who have already created a business. However,
once selection is taken into account, this effect vanishes, which means
that the course as such does not have the impact we presumed it would
have—rather, students who chose to take an entrepreneurship course differ
in key ways from other students, and their idiosyncratic knowledge and
experience generates the findings we have observed. In other words, this
raises the important question whether such outcomes are produced by our
entrepreneurship teaching or by the selection of students into such courses.
Given the importance of entrepreneurship studies at many institutions of
higher education across the world, this question is not only of theoretical
interest but, in particular, of far-reaching practical relevance for founders as
well as program designers.
In terms of entrepreneurship practice, our results indicate that potential
founders need to be alert about the effects of their preexisting knowledge, as
they may not be aware how strongly their knowledge shapes their efforts
when initially planning. For instance, to overcome one’s blind spots, indivi
duals may want to look for “sparring partners,” who will challenge early
planning decisions and designs before significant efforts have been expended
in the exploitation of a business opportunity. Even though an individual may
possess past entrepreneurial experience, he or she may benefit from inter
acting with other entrepreneurs, managers, or companies prior to embarking
on business planning to avoid adopting a biased, potentially overly narrow,
approach. This is especially relevant for younger individuals who have yet to
benefit from many years of life experience.
Limitations
When interpreting the results of the present study, several limitations must be
kept in mind. In particular, our findings relate to one key feature of early
business planning: the scope of content considered in the early stage. Although
our research assessed a fairly large number of items related to initially planning
the launch of a new restaurant, this is not an exhaustive list of items that every
entrepreneur might consider. Yet, given that our main results are fairly strong,
we believe that any additional considerations (for example, the firm’s organi
zational structure, macroeconomic risk assessment) are likely to corroborate
the findings of the present study. Furthermore, we note that our examination
of early business planning was related to the context of the restaurant industry,
as we needed to make sure that respondents with heterogeneous backgrounds
(in particular, people in different age categories) would be able to understand
the study context; the restaurant context has been used in previous entrepre
neurship studies (Sarasvathy, 2001). Because the level of complexity inherent in
a new restaurant business is likely to be similar to many other types of start-up
activities in economies (for example, starting a new retail business, opening
a consulting business), our findings are likely to generalize across a wide range
of new businesses that are typically launched by the majority of entrepreneurs
each year. This said, however, future research should assess the generalizability
of our results to more unique settings, such as high-technology ventures that
often appear in emerging, unstructured organizational fields. Finally, we note
that this study uses representative data obtained only from people residing in
the Netherlands. Whereas such a sample has many benefits and addresses
a geographical area that is infrequently encountered in empirical strategy
research, the generalizability of our findings to other geographical areas may
be limited beyond this region.
Conclusions and outlook on future research

This study has shown in detail that the knowledge individuals have accumulated
significantly affects how they approach early business planning prior to formal
planning or new-firm creation. In and of itself, this is a major finding, as we can
now begin to understand why people engage in different planning approaches
and, thus, why we see large heterogeneity in the characteristics of new ventures.
Our findings complement the results of previous studies that investigate the
antecedents to business planning in important ways (Brinckmann et al., 2019;
Brinckmann & Kim, 2015).
Building on the encouraging findings of the present study, we see
a number of fruitful avenues for future research on the cognitive antece
dents of business planning, whether it takes place within the context of
new-firm creation or an existing organization. In particular, it would be
interesting to understand in greater detail how people with or without

industry experience, or with different types of industry experience, engage
in business planning at different stages of the venture’s lifecycle. It would
also be useful to examine whether a focused or broad strategy at the outset
of the planning process has a material impact on subsequent planning
activities and, ultimately, performance. Does early planning even create
a path dependency where the level of formal planning in later stages is
dependent on the breath of early planning activities? Alternatively, a broad
early planning might substitute for a more detailed formal planning in later
stages. To summarize, it would be fruitful to investigate the level and type of
planning in a longitudinal way along the venture gestation process. A
particular focus could be a comparison of failed and non-failed entrepre
neurs, which could be achieved with social media data (Fisch & Block, in
press). Furthermore, in a logical next step, research could move from the
individual to the team-level and examine how different types of teams (for
example, homogeneous versus diverse teams, teams with or without indus
try experience) engage in planning, at both early and advanced stages.
Additional exploration of the effects of an individual’s knowledge endow
ments may be extended to include the interplay between different forms of
knowledge acquisition in terms of the timing or sequencing of the learning
events (Bingham & Davis, 2012) at the individual level.
Acknowledgments
Research support provided by the CentERdata research institute is gratefully acknowledged.
The LISS panel data were collected by CentERdata (Tilburg University, The Netherlands)
through its MESS project funded by the Netherlands Organization for Scientific Research. We
also acknowledge many helpful comments from Marc Gruber and several anonymous
reviewers at JSBM and the USASBE conference 2016. An earlier version of the paper won
the USASBE Best Empirical Paper Award 2016.
ORCID
Joern Block http://orcid.org/0000-0003-4564-0346
Jeffrey S. Petty http://orcid.org/0000-0002-1449-9100
References
Andrews, K. R. (1971). The concept of corporate strategy. Dow Jones-Irwin.
Azoulay, P., Jones, B., Kim, J. D., & Miranda, J. (2018). Age and high-growth entrepreneurship
[No. w24489]. National Bureau of Economic Research.
Baker, W. H., Addams, H. L., & Davis, B. (1993). Business planning in successful small firms.
Long Range Planning, 26(6), 82–88. https://doi.org/10.1016/0024-6301(93)90209-X
Bandura, A. (1977). Social learning theory. Prentice-Hall.

Bantel, K. A., & Jackson, S. E. (1989). Top management and innovations in banking: Does the
composition of the top team make a difference? Strategic Management Journal, 10(S1),
107–124. https://doi.org/10.1002/smj.4250100709
Baron, J. N., Burton, M. D., & Hannan, M. T. (1999). The road taken: Origins and evolution
of employment systems in emerging companies. Industrial and Corporate Change, 5(2),
239–275. https://doi.org/10.1093/icc/5.2.239
Baron, R. A. (1998). Cognitive mechanisms in entrepreneurship: Why and when entrepre
neurs think differently than other people. Journal of Business Venturing, 13(4), 275–294.
https://doi.org/10.1016/S0883-9026(97)00031-1
Baron, R. A., & Ensley, M. D. (2006). Opportunity recognition as the detection of meaningful
patterns: Evidence from comparisons of novice and experienced entrepreneurs.
Management Science, 52(9), 1331–1344. https://doi.org/10.1287/mnsc.1060.0538
Bazerman, M. H., & Moore, D. A. (2008). Judgment in managerial decision making. John
Wiley and Sons.
Bhidé, A. (2000). The origin and evolution of new businesses. Oxford University Press.
Bingham, C. B., & Davis, J. P. (2012). Learning Sequences: Their Existence, Effect, and
Evolution. Academy of Management Journal, 55(3),611-641. doi:https://doi.org/10.5465/
amj.2009.0331
Bird, B. (1988). Implementing entrepreneurial ideas: The case for intention. Academy of
Management Review, 13(3), 442–453. https://doi.org/10.5465/amr.1988.4306970
Blank, S. (2012). The four steps to the epiphany. K&S Ranch.
Block, J., Sandner, P., & Spiegel, F. (2015). How do risk attitudes differ within the group of
entrepreneurs? The role of motivation and procedural utility. Journal of Small Business
Management, 53(1), 183–206. https://doi.org/10.1111/jsbm.12060
Boeker, W. (1988). Organizational origins: Entrepreneurial and environmental imprinting at
the time of founding. In G. Carroll (Ed.), Ecological models of organizations (pp. 33–51).
Ballinger Publishing.
Boyd, N. G., & Vozikis, G. S. (1994). The influence of self-efficacy on the development of
entrepreneurial intentions and actions. Entrepreneurship Theory and Practice, 18(4), 63.
https://doi.org/10.1177/104225879401800404
Brinckmann, J., Dew, N., Read, S., Mayer-Haug, K., & Grichnik, D. (2019). Of those who
plan: A meta-analysis of the relationship between human capital and business planning.
Long Range Planning, 52(2), 173–188. https://doi.org/10.1016/j.lrp.2018.01.003
Brinckmann, J., Grichnik, D., & Kapsa, D. (2010). Should entrepreneurs plan or just storm
the castle? A meta-analysis of contextual factors impacting the business planning perfor
mance relationship in small firms. Journal of Business Venturing, 25(1), 24–40. https://doi.
org/10.1016/j.jbusvent.2008.10.007
Brinckmann, J., & Kim, S. M. (2015). Why we plan: The impact of nascent entrepreneurs’
cognitive characteristics and human capital on business planning. Strategic
Entrepreneurship Journal, 9(2), 153–166. https://doi.org/10.1002/sej.1197
Brüderl, J., Preisendörfer, P., & Ziegler, R. (1996). Der Erfolg neugegründeter Betriebe—Eine
empirische Studie zuden Chancen und Risiken von Unternehmensgründungen. Duncker and
Humblot.
Bryson, J. M., & Bromiley, P. (1993). Critical factors affecting the planning and implementa
tion of major projects. Strategic Management Journal, 14(5), 319–337. https://doi.org/10.
1002/smj.4250140502
Burke, A., Fraser, S., & Greene, F. J. (2010). The multiple effects of business planning on new
venture performance. Journal of Management Studies, 47(3), 391–415. https://doi.org/10.
1111/j.1467-6486.2009.00857.x
Burton, M. D., & Beckman, C. M. (2007). Leaving a legacy: Position imprints and successor
turnover in young firms. American Sociological Review, 72(2), 239–266. https://doi.org/10.
1177/000312240707200206
Busenitz, L. W., & Arthurs, J. D. (2007). Cognition and capabilities in entrepreneurial
ventures. In J. R. Baum, M. Frese, & R. A. Baron (Eds.), The psychology of entrepreneurship
(pp. 131–150). Psychology Press.
Busenitz, L. W., & Barney, J. B. (1997). Differences between entrepreneurs and managers in
large organizations: Biases and heuristics in strategic decision-making. Journal of Business
Venturing, 12(1), 9–30. https://doi.org/10.1016/S0883-9026(96)00003-1
Castrogiovanni, G. J. (1996). Pre-startup planning and the survival of new small businesses:
Theoretical linkages. Journal of Management, 22(6), 801–822. https://doi.org/10.1177/
014920639602200601
Chrisman, J. J., McMullan, E., & Hall, J. (2005). The influence of guided preparation on the
long-term performance of new ventures. Journal of Business Venturing, 20(6), 769–791.
https://doi.org/10.1016/j.jbusvent.2004.10.001
Cope, J. (2005). Toward a dynamic learning perspective of entrepreneurship. Entrepreneurship
Theory and Practice, 29(4), 373–397. https://doi.org/10.1111/j.1540-6520.2005.00090.x
Corbett, A. C. (2005). Experiential learning within the process of opportunity identification
and exploitation. Entrepreneurship Theory and Practice, 29(4), 473–491. https://doi.org/10.
1111/j.1540-6520.2005.00094.x
Corbett, A. C. (2007). Learning asymmetries and the discovery of entrepreneurial opportunities.
Journal of Business Venturing, 22(1), 97–118. https://doi.org/10.1016/j.jbusvent.2005.10.001
Davidsson, P., & Honig, B. (2003). The role of social and human capital among nascent
entrepreneurs. Journal of Business Venturing, 18(3), 301–331. https://doi.org/10.1016/
S0883-9026(02)00097-6
Deese, J. (1959). Influence of inter-item associative strength upon immediate free recall.
Psychological Reports, 5(3), 305–312. https://doi.org/10.2466/pr0.1959.5.3.305
Delmar, F., & Shane, S. (2003). Does business planning facilitate the development of new
ventures? Strategic Management Journal, 24(12), 1165–1185. https://doi.org/10.1002/smj.349
Delmar, F., & Shane, S. (2004). Legitimating first: Organizing activities and the survival of
new ventures. Journal of Business Venturing, 19(3), 385–410. https://doi.org/10.1016/
S0883-9026(03)00037-5
Dencker, J. C., Gruber, M., & Shah, S. K. (2009). Pre-entry knowledge, learning, and the
survival of new firms. Organization Science, 20(3), 516–537. https://doi.org/10.1287/orsc.
1080.0387
DiMaggio, P. J., & Powell, W. W. (1983). The iron cage revisited: Institutional isomorphism
and collective rationality in organizational fields. American Sociological Review, 48(2),
147–160. https://doi.org/10.2307/2095101
Dimov, D. (2010). Nascent entrepreneurs and venture emergence: Opportunity confidence,
human capital, and early planning. Journal of Management Studies, 47(6), 1123–1153.
https://doi.org/10.1111/j.1467-6486.2009.00874.x
Dixon, N. M. (2000). Common knowledge: How companies thrive by sharing what they know.
Harvard Business School Press.
Dubini, P., & Aldrich, H. (1991). Personal and extended networks are central to the
entrepreneurial process. Journal of Business Venturing, 6(5), 305–313. https://doi.org/10.
1016/0883-9026(91)90021-5
Fern, M. J., Cardinal, L., & O’Neill, H. M. (2012). The genesis of strategy in new ventures:
Escaping the constraints of founder and team knowledge. Strategic Management Journal,
33(4), 427–447. https://doi.org/10.1002/smj.1944
Fiet, J. O. (1996). The informational basis of entrepreneurial discovery. Small Business

Economics, 8(6), 419–430. https://doi.org/10.1007/BF00390028
Fisch, C. & Block, J. (in press). How does entrepreneurial failure change an entrepreneur’s
digital identity? Evidence from Twitter data. Journal of Business Venturing. https://doi.org/
10.1016/j.jbusvent.2020.106015
Fiske, S. T., & Dyer, L. M. (1985). Structure and development of social schemata: Evidence
from positive and negative transfer effects. Journal of Personality and Social Psychology, 48
(4), 839–852. https://doi.org/10.1037/0022-3514.48.4.839
Fiske, S. T., & Taylor, S. E. (2007). Social cognition: From brains to culture. McGraw Hill.
Forbes, D. P. (2005). Are some entrepreneurs more overconfident than others? Journal of
Business Venturing, 20(5), 623–640. https://doi.org/10.1016/j.jbusvent.2004.05.001
Foss, N. J., Klein, P. G., Kor, Y. Y., & Mahoney, J. T. (2008). Entrepreneurship, subjectivism,
and the resource-based view: Toward a new synthesis. Strategic Entrepreneurship Journal, 2
(1), 73–94. https://doi.org/10.1002/sej.41
Fullen, S. (2005). Opening a restaurant or other food business starter kit: How to prepare
a restaurant business plan and feasibility study. Atlantic Publishing Corp.
Gagné, R. M., & Glaser, R. (1987). Foundations in learning research. In R. M. Gagné (Ed.),
Instructional technology: Foundations (pp. 49–84). Lawrence Erlbaum.
Gartner, W. B. (1985). A conceptual framework for describing the phenomenon of new
venture creation. Academy of Management Review, 10(4), 696–706. https://doi.org/10.5465/
amr.1985.4279094
Gibbons, M., & Johnston, R. (1974). The roles of science in technological innovation.
Research Policy, 3(3), 220–242. https://doi.org/10.1016/0048-7333(74)90008-0
Gigerenzer, G., & Goldstein, D. G. (1996). Reasoning the fast and frugal way: Models of
bounded rationality. Psychological Review, 103(4), 650. https://doi.org/10.1037/0033-295X.
103.4.650
Gioia, D. A., & Manz, C. C. (1985). Linking cognition and behavior: A script processing
interpretation of vicarious learning. Academy of Management Review, 10(3), 527–539.
https://doi.org/10.5465/amr.1985.4278987
Grant, R. M. (1996). Prospering in dynamically-competitive environments: Organizational
capability as knowledge integration. Organization Science, 7(4), 375–387. https://doi.org/
10.1287/orsc.7.4.375
Greene, F. J., & Hopp, C. (2017). Are formal planners more likely to achieve new venture
viability? A counterfactual model and analysis. Strategic Entrepreneurship Journal, 11(1),
36–60. https://doi.org/10.1002/sej.1245
Gruber, M. (2007). Uncovering the value of planning in new venture creation: A process and
contingency perspective. Journal of Business Venturing, 22(6), 782–807. https://doi.org/10.
1016/j.jbusvent.2006.07.001
Haber, S., & Reichel, A. (2007). The cumulative nature of the entrepreneurial process: The
contribution of human capital, planning and environment resources to small venture
performance. Journal of Business Venturing, 22(1),119-145. doi:
Hambrick, D. C., & Mason, P. A. (1984). Upper echelons: The organization as a reflection of
its top managers. Academy of Management Review, 9(2), 193–206. https://doi.org/10.5465/
amr.1984.4277628
Helfat, C. E., & Lieberman, M. B. (2002). The birth of capabilities: Market entry and the
importance of pre-history. Industrial and Corporate Change, 11(4), 725–760. https://doi.
org/10.1093/icc/11.4.725
Hitt, M. A., & Tyler, B. B. (1991). Strategic decision models: Integrating different perspectives.
Strategic Management Journal, 12(5), 327–351. https://doi.org/10.1002/smj.4250120502
Holcomb, T. R., Ireland, R. D., Holmes Jr., R. M., Jr, & Hitt, M. A. (2009). Architecture of
entrepreneurial learning: Exploring the link among heuristics, knowledge, and action.
Entrepreneurship Theory and Practice, 33(1), 167–192. https://doi.org/10.1111/j.1540-
6520.2008.00285.x
Honig, B. (2004). Entrepreneurship education: Toward a model of contingency-based busi
ness planning. Academy of Management Learning & Education, 3(3), 258–273. https://doi.
org/10.5465/amle.2004.14242112
Honig, B., & Karlsson, T. (2004). Institutional forces and the written business plan. Journal of
Management, 30(1), 29–48. https://doi.org/10.1016/j.jm.2002.11.002
Hopp, C., & Greene, F. J. (2018). In pursuit of time: Business plan sequencing, duration and
intraentrainment effects on new venture viability. Journal of Management Studies, 55(2),
320–351. https://doi.org/10.1111/joms.12251
Hopp, C., Greene, F. J., Honig, B., Karlsson, T., & Samuelsson, M. (2018). Revisiting the
influence of institutional forces on the written business plan: A replication study.
Management Review Quarterly, 68(4), 361–398. https://doi.org/10.1007/s11301-018-0143-9
Kahneman, D., & Tversky, A. (1973). On the psychology of prediction. Psychological Review,
80(4), 237. https://doi.org/10.1037/h0034747
Kaish, S., & Gilad, B. (1991). Characteristics of opportunities search of entrepreneurs versus
executives: Sources, interests, general alertness. Journal of Business Venturing, 6(1), 45–61.
https://doi.org/10.1016/0883-9026(91)90005-X
Karlsson, T., & Honig, B. (2009). Judging a business by its cover: An institutional perspective
on new ventures and the business plan. Journal of Business Venturing, 24(1), 27–45. https://
doi.org/10.1016/j.jbusvent.2007.10.003
Kolb, D. A. (1976). Management and the learning process. California Management Review, 18
(3), 21–31. https://doi.org/10.2307/41164649
Kolb, D. A., Boyatzis, R. E., & Mainemelis, C. (2001). Experiential learning theory: Previous
research and new directions. In R. J. Sternberg & L-f. Zhang (Eds.), Perspectives on
thinking, learning, and cognitive styles, (pp. 227–247). Routledge.
Kuratko, D. F. (2005). The emergence of entrepreneurship education: Development, trends,
and challenges. Entrepreneurship Theory and Practice, 29(5), 577–598. https://doi.org/10.
1111/j.1540-6520.2005.00099.x
Langer, E. J. (1975). The illusion of control. Journal of Personality and Social Psychology, 32
(2), 311–328. https://doi.org/10.1037/0022-3514.32.2.311
Levesque, M., & Minniti, M. (2006). The effect of aging on entrepreneurial behavior. Journal
of Business Venturing, 21(2), 177–194. https://doi.org/10.1016/j.jbusvent.2005.04.003
Levitt, B., & March, J. G. (1988). Organizational learning. Annual Review of Sociology, 14(1),
319–340. https://doi.org/10.1146/annurev.so.14.080188.001535
Lindblom, C. E. (1959). The science of muddling through. Public Administration Review, 19
(2), 79–88. https://doi.org/10.2307/973677
March, J. G., & Simon, H. A. (1958). Organizations. Wiley.
Mather, M., & Johnson, M. K. (2000). Choice-supportive source monitoring: Do our deci
sions seem better to us as we age? Psychology and Aging, 15(4), 596–606. https://doi.org/10.
1037/0882-7974.15.4.596
McFadyen, M. A., & Cannella, A. A., Jr. (2004). Social capital and knowledge creation:
Diminishing returns of the number and strength of exchange relationships. Academy of
Management Journal, 47(5), 735–746. https://doi.org/10.5465/20159615
McGrath, R. G., & MacMillan, I. C. (2000). The entrepreneurial mindset: Strategies for
continuously creating opportunity in an age of uncertainty. Harvard Business School Press.
Minniti, M., & Bygrave, W. (2001). A dynamic model of entrepreneurial learning. Entrepreneurship:
Theory and Practice, 25(3), 5–17. https://doi.org/10.1177/104225870102500301
Minniti, M., & Nardone, C. (2007). Being in someone else’s shoes: The role of gender in
nascent entrepreneurship. Small Business Economics, 28(2–3), 223–238. https://doi.org/10.
1007/s11187-006-9017-y
Mintzberg, H. (1994). Rethinking strategic planning part II: New roles for planners. Long
Range Planning, 27(3), 22–30. https://doi.org/10.1016/0024-6301(94)90186-4
Mitchell, R. K., Busenitz, L., Lant, T., McDougall, P. P., Morse, E. A., & Smith, J. B. (2002).
Toward a theory of entrepreneurial cognition: Rethinking the people side of entrepreneur
ship research. Entrepreneurship Theory and Practice, 27(2), 93–104. https://doi.org/10.
1111/1540-8520.00001
Mitchell, R. K., Busenitz, L. W., Bird, B., Marie Gaglio, C., McMullen, J. S., Morse, E. A., & Smith, J. B.
(2007). The central question in entrepreneurial cognition research. Entrepreneurship Theory and
Practice, 31(1), 1–27. https://doi.org/10.1111/j.1540-6520.2007.00161.x
Nahapiet, J., & Ghoshal, S. (1998). Social capital, intellectual capital and the organizational
advantage. Academy of Management Review, 23(2), 242–266. https://doi.org/10.5465/amr.
1998.533225
Nickerson, R. S. (1998). Confirmation bias: A ubiquitous phenomenon in many guises.
Review of General Psychology, 2(2), 175–220. https://doi.org/10.1037/1089-2680.2.2.175
Nonaka, I. (1994). A dynamic theory of organizational knowledge creation. Organization
Science, 5(1), 14–37. https://doi.org/10.1287/orsc.5.1.14
Papadakis, V. M., Lioukas, S., & Chambers, D. (1998). Strategic decision-making processes:
The role of management and context. Strategic Management Journal, 19(2), 115–147.
https://doi.org/10.1002/(SICI)1097-0266(199802)19:2<115::AID-SMJ941>3.0.CO;2-5
Parsa, H. G., Self, J. T., Njite, D., & King, T. (2005). Why restaurants fail. Cornell Hotel and
Restaurant Administration Quarterly, 46(3), 304–322. https://doi.org/10.1177/
0010880405275598
Pelled, L. H. (1996). Demographic diversity, conflict, and work group outcomes: An inter
vening process theory. Organization Science, 7(6), 615–631. https://doi.org/10.1287/orsc.7.
6.615
Perry, J. T., Chandler, G. N., & Markova, G. (2012). Entrepreneurial effectuation: A review
and suggestions for future research. Entrepreneurship Theory and Practice, 36(4), 837–861.
https://doi.org/10.1111/j.1540-6520.2010.00435.x
Podsakoff, P. M., MacKenzie, S. B., Lee, J. Y., & Podsakoff, N. P. (2003). Common method
biases in behavioral research: A critical review of the literature and recommended
remedies. Journal of Applied Psychology, 88(5), 879–903. https://doi.org/10.1037/0021-
9010.88.5.879
Pohl, R. (Eds.). (2004). Cognitive illusions: A handbook on fallacies and biases in thinking,
judgement and memory. Psychology Press.
Polanyi, M. (1967). The tacit dimension. Anchor Books.
Reder, L. M., Wible, C., & Martin, J. (1986). Differential memory changes with age: Exact
retrieval versus plausible inference. Journal of Experimental Psychology: Learning, Memory,
and Cognition, 12(1), 72–81.
Ries, E. (2011). The lean startup: How today’s entrepreneurs use continuous innovation to
create radically successful businesses. Crown Business.
Roediger, H. L., III, & McDermott, K. B. (2000). Tricks of memory. Current Directions in
Psychological Science, 9(4), 123–127. https://doi.org/10.1111/1467-8721.00075
Rumelt, R. P., Schendel, D., & Teece, D. J. (1994). Fundamental issues in strategy: A research
agenda. Harvard Business School Press.
Sarasvathy, S. D. (2001). Causation and effectuation: Toward a theoretical shift from eco
nomic inevitability to entrepreneurial contingency. Academy of Management Review, 26(2),
243–263. https://doi.org/10.5465/amr.2001.4378020
Scherpenzeel, A. (2011). Data collection in a probability-based internet panel: How the LISS
panel was built and how it can be used. Bulletin of Sociological Methodology/Bulletin De
Méthodologie Sociologique, 109(1), 56–61. https://doi.org/10.1177/0759106310387713
Scherpenzeel, A. C., & Das, M. (2010). “True” longitudinal and probability-based internet
panels: Evidence from the Netherlands. In M. Das, P. Ester, & L. Kaczmirek (Eds.), Social
and behavioral research and the internet: Advances in applied methods and research
strategies (pp. 77–104). Taylor & Francis.
Shane, S. (2000). Prior knowledge and the discovery of entrepreneurial opportunities.
Organization Science, 11(4), 448–469. https://doi.org/10.1287/orsc.11.4.448.14602
Shane, S., & Delmar, F. (2004). Planning for the market: Business planning before marketing
and the continuation of organizing efforts. Journal of Business Venturing, 19(6), 767–785.
https://doi.org/10.1016/j.jbusvent.2003.11.001
Shane, S., Locke, E. A., & Collins, C. J. (2003). Entrepreneurial motivation. Human Resource
Management Review, 13(6), 257–279. https://doi.org/10.1016/S1053-4822(03)00017-2
Souitaris, V., Zerbinati, S., & Al-Laham, A. (2007). Do entrepreneurship programmes raise
entrepreneurial intention of science and engineering students? The effect of learning,
inspiration and resources. Journal of Business Venturing, 22(4), 566–591. https://doi.org/
10.1016/j.jbusvent.2006.05.002
Todd, P. M., & Gigerenzer, G. (2000). Précis of simple heuristics that make us smart.
Behavioral and Brain Sciences, 23(5), 727–741. https://doi.org/10.1017/S0140525X00003447
Tversky, A., & Kahneman, D. (1974). Judgment under uncertainty: Heuristics and biases.
Science, 185(4157), 1124–1131. https://doi.org/10.1126/science.185.4157.1124
Venkataraman, S. (1997). The distinctive domain of entrepreneurship research: An editor’s
perspective. In J. Katz & R. Brockhaus (Eds.), Advances in entrepreneurship, firm emer
gence, and growth (pp. 119-138). JAI Press.
Vesper, K. H., & Gartner, W. B. (1997). Measuring progress in entrepreneurship education.
Journal of Business Venturing, 12(5), 403–421. https://doi.org/10.1016/S0883-9026(97)
00009-8
Walsh, J. P. (1995). Managerial and organizational cognition: Notes from a trip down
memory lane. Organization Science, 6(3), 280–321. https://doi.org/10.1287/orsc.6.3.280
Weber, E. U., & Johnson, E. J. (2009). Mindful judgment and decision making. Annual Review
of Psychology, 60(1), 53–85. https://doi.org/10.1146/annurev.psych.60.110707.163633
Westhead, P., Ucbasaran, D., & Wright, M. (2005). Decisions, actions, and performance: Do
novice, serial, and portfolio entrepreneurs differ? Journal of Small Business Management,
43(4), 393–417. https://doi.org/10.1111/j.1540-627X.2005.00144.x
Wheelwright, S. C. (1984). Strategy, management, and strategic planning approaches.
Interfaces, 14(1), 19–33. https://doi.org/10.1287/inte.14.1.19
Wiersema, M. F., & Bantel, K. A. (1992). Top management team demography and corporate
strategic change. Academy of Management Journal, 35(1), 91–121. https://doi.org/10.5465/
256474

Block and Petty 2020

Uploaded by

Copyright:

Available Formats

Block and Petty 2020

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Block and Petty 2020

Uploaded by

Copyright:

Available Formats

Journal of Small Business Management

ISSN: (Print) (Online) Journal homepage: https://www.tandfonline.com/loi/ujbm20

How knowledge shapes the scope of early

Joern Block & Jeffrey S. Petty

To link to this article: https://doi.org/10.1080/00472778.2020.1794655

Published online: 24 Aug 2020.

Submit your article to this journal

View related articles

View Crossmark data

Full Terms & Conditions of access and use can be found at

How knowledge shapes the scope of early business

Business planning is arguably one of the core topics investigated by scholars,

CONTACT Joern Block block@uni-trier.de Universität Trier, Trier D-54296, Germany

Because our research seeks to uncover how a person’s knowledge affects

Theory and hypothesis development

with experience in a domain will differ in their cognitive representations of

Prior entrepreneurial experience

Hypothesis 1. Firsthand entrepreneurial experience is associated with a more

Observing other entrepreneurs

Hypothesis 2. Exposure to entrepreneurship by means of observing others is

societies. The general education received during the years of compulsory

Hypothesis 3: A higher level of education is associated with a more focused

view of the entrepreneurial process or field (Honig, 2004; Souitaris et al.,

Hypothesis 4: Participation in an entrepreneurship course is associated with

General life experience

Hypothesis 5: The greater the general life experience of an individual, the

Data and methods

individuals, ranging in age from 16 to 90 years and representing all socio­

pricing, and so on), operations, legal provisions, competition, and human

respondents’ field of education in four main categories (social, general, technical,

Independence of independent variables

Table 1. Descriptive statistics and correlation matrix (N = 2,532).

7 Ambition 4.77 1.78 0.11 0.10 −0.01 −0.03 0.00 −0.05

Note: M = mean; SD = standard deviation.

not be an important concern. Nevertheless, we entered our independent vari­

Results from robustness checks and post hoc analyses

(0.02) (0.02) (0.02) (0.02) (0.02) (0.02) (0.02) (0.02)

IRR = incidence rate ratios

Separate analyses for subsamples of men and women

Table 3. Summary of findings.

Implications for theory development

Implications for entrepreneurs and educators

Conclusions and outlook on future research

interesting to understand in greater detail how people with or without

Bandura, A. (1977). Social learning theory. Prentice-Hall.

Fiet, J. O. (1996). The informational basis of entrepreneurial discovery. Small Business

You might also like

individuals, ranging in age from 16 to 90 years and representing all socio

not be an important concern. Nevertheless, we entered our independent vari