From personal to business, planning is always necessary for survival. In the case of starting entrepreneurs, a business plan summarizes the different facets of your business from mission/vision, long-term directions, and financial estimates.

While this is a serious requirement among MBA students, Guy Kawasaki showed a study to validate if there is really a need to do formal business plans.

The analysis revealed that there was no difference between the performance of new businesses launched with or without written business plans. The findings suggest that unless a would-be entrepreneur needs to raise substantial startup capital from institutional investors or business angels, there is no compelling reason to write a detailed business plan before opening a new business.

Despite these recent findings, drafting a business plan remains a very important exercise particularly for starting businessmen. It gives you a checklist of things you need to cover before you can formally start your own business.

There are many things you need to know before you embark in any business undertaking. This includes the nature of your industry, target market, scope of operations, level of technology, intensity of competition, marketing strategy, investments needed, and many more. Using a simple business plan, you can organize all information to serve as a good foundation for your decisions.

Just do not take too much time preparing your business plan. Instead, focus your efforts in the running the daily operations.