Budgeting in Start-up Companies: European Survey-based Evidence

The aim of this chapter is to investigate the relationship between the uses of budgets with financial performance in start-ups’ business environment. For this reason, an empirical survey was carried out, using a questionnaire in 134 start-up companies, which are based in 10 different European countries. Results show that there is a positive association between the use of budgets for planning, resource allocation and performance evaluation with financial performance. The CEO’s business educational background, as well as CEO’s beliefs about planning, has a strong influence in the use of budgets in start-up firms. We also concluded that there is a positive association between perceived environmental uncertainty (PEU) and the use of budgets for planning and resource allocation and a negative association between PEU and the use of budgets for performance evaluation.