Do we know what is important when establishing new business?

Most of new businesses fail to succeed and one of the main reasons is inferior knowledge about business characteristics (like profitability) and their predictive validity when analyzing and setting initial business plan. Four groups (students without experience, students with administrative experience, managers with less than 12 years of experience and managers with more than 12 years of experience) were tested for their knowledge about predictive validity of business characteristics (profitability, price, etc.). This knowledge is not taught at Slovakian business universities, but it is expected that it will be acquired by practice. Although with rising practical experience, knowledge about predictive validity also rose, the comparison of all groups showed no significant difference. In four most predictive business characteristics (profitability, payback period, potential sales, and size of investment) we also did not find significant difference. Therefore, we conclude that years in business have positive effects on knowledge, though not sufficiently enough. Special care has to be invested to teach students and practicing managers what is important and what not. (C) 2015 The authors Published by Elsevier Ltd.