Recent trends in the tech world have buoyed the popularity of a lean, “anything that sticks” approach to establishing a business. According to this philosophy, a business plan is largely unnecessary, because the time spent developing it takes away from time spent creating the product, pushing it, and adjusting it to customer demands. Although this approach may yield limited success in very specialized sectors of the industry, the fact remains that taking the time to create a basic business plan produces more advantages than disadvantages in the vast majority of markets.
Investors—even crowd funders or informal investors like family and friends—usually want to have an idea of the route an entrepreneur intends to take toward establishing a successful business. A well-organized business plan provides this information in a neatly understandable format.
Even for entrepreneurs who are not seeking capital right away, a business plan is still extremely useful. Above all, it serves as a road map. When created before investing substantial time and money, a business plan provides a concrete reference that helps an entrepreneur maintain objectivity and points to obvious mistakes early on. Moreover, by defining explicit milestones, a plan provides a convenient reminder to the small business person to periodically evaluate progress.
It is also important to understand that, unless seeking formal support from a financial institution, a business plan does not have to be especially in-depth. For the purposes of a small start-up, it can be relatively simple. As long as it provides a clear game plan, the small amount of time spent developing it will pay off in the long run.