Recent developments in entrepreneurship studies have achieved considerable complexity in understanding the social, economic, and technical aspects of this phenomenon. Entrepreneurial activity in general has been redefined: from the entrepreneur as (usually an individual) risk-bearing (Cantillon 1730/1959), innovating (Schumpeter 2000), making judgments on opportunities (Casson 2010), acting as arbitrageur (Kirzner 1997), directing the resource flow replacing the market price mechanism (Coase 1988), or acting under incalculable uncertainty (Kinght 1957/2002), sociological interventions have shifted the focus to the various social structures conditioning entrepreneurial activities. In particular, the social environment, articulated in terms of institutional regulations (Meyer and Rowan 1977), social networks (Granovetter 1985), parameters of organizational populations (Hannan and Freeman 1977) and fields (DiMaggio and Powell 1983) have been recognized as crucial factors of entrepreneurship and creation of new business ventures. The social aspects of entrepreneurial activity have been highlighted as well: described as brokerage, the exploitation of the “structural holes” in the surrounding social networks (Burt 1992), the strategic use of “social skill” to induce cooperation in others (Fligstein 2001), and the exploitation of ambiguity created by different evaluative frames (Stark 2000, 2009). Other authors have emphasized different aspects of entrepreneurial action as the art of interessment, or enrollment of different groups and agencies in the supporting actor-network, as well as crossing between the boundaries of different practical fields (sciences, economy, government etc), and political engineering (Latour 1988, Giraudeau 2010). The complexity of the actual entrepreneurial process, recognition of the role of mediating instruments (Miller and O’Leary 2007), mobilization of allies, as well as the inherently collective, emergent, and distributed character of entrepreneurial agency, make the old distinction between work and entrepreneurship increasingly obsolete.
Planning has always been going together with entrepreneurial action, and so did the business plan, although not in its contemporary form. The first instances of business planning can be traced back to the activities of merchants in Renaissance Venice, who “prepared anticipated balance sheets to assess their chances of success and discuss them with fellow merchants and bankers” (Braudel 1993, quoted in: Giraudeau 2012a: 214). The transatlantic venture of Cristopher Columbus, often referred to as an early instance of venture capital-like investment, could be equally seen as an example of (proto)business planning. In this case, “the plan” served to convince the Spanish crown and raise the money necessary to fund the journey. More importantly, historically speaking, the emergence of the modern notion of entrepreneur in the late 17th century coincided with the proliferation of risky projects that were proposing reorganization of social orders, state reforms, human improvement and creation of wealth (Giraudeau 2012b, Hirschman 1977, 1982). «…The modern sense of the word ‘entrepreneur’ arose precisely when ‘enterprise’ stopped meaning a “random adventure”— of love or war, for instance—as it had been throughout the middle-ages. Rather, it started referring to activities where “a decisive place is given to the preliminary evaluation of the means that are to be put to uncertainty […] in order to maximize the odds of success” (Giraudeau 2012b: 61).
“Interests”, and first the “moderate passion” of economic calculation, have replaced “passion” as the driving force of human behavior (Hirschman 1977). Over the course of the century, these projects, originally involving such diverse practical fields as politics, administration, and civil engineering etc, gradually shifted towards the “economic” field. Many representatives of the early generation of political economists were among these enterprising projecteurs and proposed their own projects with different degrees of success (Anikin 1985). According to Giraudeau, the case of Pierre-Samuel Du Pont de Nemour is a more adequate example of entrepreneurial planning: Du Pont has “written projects of 1797 and 1798, designed to secure funding from European merchants and bankers before settling in the newly born United States, where his son would end up founding the DuPont Company” (Giraudeau 2012a: 2014; Giraudeau 2010). This difference between the two Du Ponts and their business plans could be seen as an indicator of the differentiation of entrepreneurial function from the other activities previously embodied in one person, as Schumpeter would have put it (Schumpeter 2000). In other words, planning as a conscious and reflexive activity of creating projects, oriented to some future endeavors, and involving a certain degree of risk, has been at the stage very early on, with the emergence of the entrepreneur as an important social figure of modernity. Arguably, these developments were reflected in the one of the first systematic treatises of political economy, Essay on the Nature of Trade in General (Cantillon 1730/1959) written by the 18th century Irish-French banker Richard Cantillon. This work is usually referred to as an outline of the risk-based theory of entrepreneurship.
With the rapid and extensive development of the wage-based employment system during the European Industrial Revolution of the 19th century (Castel 2003), the notion of entrepreneur has been replaced with the neutral picture of the economic man, or the homo oeconomicus (Giraudeau 2012b). Interestingly enough, this anthropological concept has been accepted as an appropriate description of the both sides of the classical industrial conflict: both the workers, and the employers, came to be depicted as rational utility-maximizing agents (as in the classical analysis of Herbert Simon, see: Simon 1951). “Across the period of the mid-19th century to the mid-20th century... employers also fell into the wage system: they be-came managers rather than entrepreneurs, following the growing separations of ownership and control at the head of large companies. …Business entrepreneurs remained not only invisible, but also a relatively small, disorganized, and somehow marginal social category” (Giraudeau 2012b: 43; see also: Fligstein 2001, ch. 6; for an early classical statement see: Berle and Means 1932). Since then, the recovery of entrepreneurial version of economic anthropology, as well as entrepreneurs as a sizeable social group, coincided with the crisis of the wage labor. For example, in the U.S., the shock of the Great Depression, along with the Keynsean employment policies, spurred the debate on the introduction of governmental measures to support mass entrepreneurship and small business activities. These discussions also concerned the issue of venture capital investing as a systematic activity of funding promising entrepreneurial projects developed by the “laymen”, i.e. ordinary people without massive capital resources or business skills. However, according to Giraudeau, the crucial turning point in this story happened in the decades that followed World War II, “when entrepreneurship not only grew considerably in numbers and visibility, but also... changed its forms” (Giraudeau 2012b: 44). Giraudeau argues that the state played a rather nontrivial role in spurring the rise of popular entrepreneurship. The central role in this process is attributed to the progressive policies associated with the “New Deal” of 1930s, lifetime employment programmes enacted during the war times of the 1940s, as well as governmental measures in support of the popular education and against poverty and segregation. In sum, the entire complex of policies that came to be known as the “welfare state” has “directly favored the emergence and proliferation of entrepreneurial behavior and attitudes” (Ibid.: 65). Particularly in the U.S. the programmes against unemployment have been designed to educate the masses and teach the basic business skills in order to foster the creation of new enterprises. Short after the war the government started to issue a series of popular didactic literature on how to became an entrepreneur, create, manage and run a small business etc. The activity of business planning gradually became central in the governmental programmes of entrepreneurial education. Sample business plans were used in the literature as specific teaching technologies. Tinkering with these samples and guidelines, the would-be businessmen were supposed to learn the basic disciplines and modes of conduct, as well as necessary practical skills, needed to successfully manage an enterprise, deal with accounting techniques, calculation of risks and other routines of business. Tracing the development of entrepreneurial guidebooks and manuals published in the post-war U.S., Giraudeau argues that their central theme was the future – this literature thought its readers how to be entrepreneurs by teaching them how they should behave facing the uncertainties of the future and how they should projectively plan their businesses towards it (Giraudeau 2012b). The key watershed happened in the 1950s, when the concept of the future put forward in the literature changed, as well as the didactic purposes of business plans used in entrepreneurial education. While in the 1940s and early 1950s the readers were asked to assess their skills and personal traits by looking at a checklist with the characteristics of an appropriate entrepreneur, and make a self-examination of their ability to deal with the uncertainties of the future business, after the 1950s the future became a methodical project, and creation of a business venture – an object of methodological reflection; attempts were made at systematizing entrepreneurship, helping readers envision their future more clearly, standardize the form of the business plan. Moreover, this increasing usage of a sample business plan as a tool in the entrepreneurial education also went in parallel with the stabilization of the form of the business plan proposal in the venture capital industry, as well as with the start of institutionalization of entrepreneurial education both in the academia and industry: the establishment of the academic disciplines of Entrepreneurship and Small Business Management, and organization of the first business “incubators” – nowadays one of the key elements of technological entrepreneurship ecosystems – began in the late 1950s. More importantly, in the didactic literature on entrepreneurship the future was transformed from an object of meditation to an object of conscious planning, and the would-be entrepreneur was not simply assessing her personal qualities to join the risky world of business, but reflexively planning, engineering her own future. “The new entrepreneur was therefore not necessarily one that possessed all the required entrepreneurial characteristics: he could now acquire some of them in interaction with his business plan” (Giraudeau 2012b: 63).
Being established as an important tool of entrepreneurial (self-)education, business plan soon became central to the industry of venture capital as a key source of finance for the new ventures. The introduction of the SBIC programme by the 1970s has been crucial for the development of the venture capital industry, as it was discussed in the previous section, but also for the evolution of the business plan as an entrepreneurial tool. Early professional venture capital firms were small and risky companies – in fact, being very close to the entrepreneurs they aimed to fund – and didn't possess enough resources to afford a thorough screening of all the projects they received. This lack of personnel and capital forced them to rationalize the screening procedures: they started to ask for business plans from those firms who asked them for funding. Dealing with dozens proposals everyday, they invented the requirement of a written proposal, which was a “helpful and obvious option” (Giraudeau 2012a: 215). The exact expectations concerning the form and content of the business plans varied among different venture capital firms, but soon started to stabilize with the ongoing institutionalization of the venture capital activity and publications such as the Business Plan Package issued in 1973 by Technimetrics Inc. (NY), which included a brief information on the expectations of venture capitalists in terms of different financial indicators. “Today's format of business plan was starting to appear” (Giraudeau ibid.). Later on, in the 1980s, business plan left the domain of venture capital finance and entered many other areas of economic life, not directly connected with entrepreneurship. It became a symbol of the “new economy” with its celebration of entrepreneurial attitudes and skills, emphasis on personal responsibility, risk, independence that reached the realm of the wage labor with the rise of the “new spirit of capitalism”. On the other hand, business plan guidebook publications proliferated in the 1980s-1990s, and business plan itself started to become a universalized tool for many business practices, such as corporate “scenario-based” planning nowadays adopted by many big corporations. A real market for business planning tools and methods had developed, that gave birth to a whole generation of newly equipped entrepreneurs (Giraudeau 2012a: 219-220).