The literature documenting the implementation and use of the Balanced Scorecard in startups is scarce. However, few ideas put together by Andersen et al (2001) describe how Balanced Scorecard can add value to the case of a startup.


Benefits of adopting BSC for startups

 According to the researchers, adopting the Balanced Scorecard framework during the planning stages of a business venture can lead to the creation of several advantages for the newly created entity: 

  • It gives a clear sense of direction for the business articulating its strategic direction and the activities that will realize the goals
  • Highlight the areas with the greatest need for change
  • Sustains the cause of the entrepreneur when requesting financial support from business angels (investors)
  • Facilitate the development of  logical and clear articulated business plans based on the Balanced Scorecard structure
  • Provides with a sound and structured framework for implementing and monitoring the business plan


A study realized by Ernst & Young (2000) cited in Andersen et al (2001) shows that 35% of investor decisions are influenced by non financial issues, among which strategy and quality of strategy came first in their preferences. Thus, having a sound managing system based on the Balanced Scorecard in place can add value both to the development of the startup overall, but also whenever the entrepreneurs will need to make their case in front of investors.


Challenges in adopting BSC for startups

Despite the advantages the Balanced Scorecard can bring for the management and development of startups, there still can be cases in which some entrepreneurs might say that adopting the Balanced Scorecard is neither a major priority nor a need. This might come as a result of the fast changing development pace of the startups which doesn’t provide with a stable platform for monitoring an improving organizational performance, or because of more critical issues startups have to overcome first, such as break through and survival.


However, in such cases, where the Balanced Scorecard implementation is limited by the fast development pace of the startup or other priorities of the business, a lighter approach to the Balanced Scorecard can be adopted. Strategic objectives and measures can be set initially only for the current startups realities and in those dimensions where performance measurement can be enacted. As one of the Balanced Scorecard characteristics is its flexible nature, the framework can be at any point improved and completed, according with the needs and the environmental conditions in which the startup activates.


Overall, Balanced Scorecard can prove to be an efficient and effective tool for startups, in meeting the challenges posed by their continuously changing internal and external environment conditions, while retaining the advantage of having in place a clear and logical performance management structure.



  • Andersen, H., Cobbold, I. & Lawrie, G. (2001), Balanced Scorecard implementation in SMEs: reflection in literature and practice, 2GC conference paper.

BSC in practice : By company type


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