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The necessity of a business plan upon starting up a new business venture

You should write a business plan--even if you're not raising money any time soon. You can create a plan in under a month, working part time. Use a presentation format like PowerPoint or Keynote to save time, and make it easier to share your plan.

Not all founders or start-ups are the same, of course. You'll want to plan in more detail if you're raising capital or taking on a lot of risk—like investing your savings, leaving a job, or supporting a family.

Less detail is fine if you aren't raising money or taking on much risk. For example, if you are writing code in your dorm room, you can experiment to find out what consumers will latch onto before thinking about implementation or financing. But either way, you need a plan, and here's why: To avoid big mistakes: The last thing you want to do is work on your start-up for a year, only to realize you were doomed to fail from the start.

Many founders learn the hard way that they didn't set aside enough capital to reach their goals, took on partners with the wrong skills and resources, or don't have a viable way to make money.

Developing and sharing a business plan can help ensure that you're sprinting down the right path. To counterbalance your emotions: At times during your start-up experience, you'll be manic—so passionate about your ideas you lose sight of reality.

At other times, you'll be overwhelmed by doubt, fear, or exhaustion. When your emotions get the best of you, having a business plan lets you step back, and take an objective look at what you are doing and why, what you know for a fact and what you are trying to figure out.

To make sure everyone's on the same page: Chances are, you are not building a company by yourself. Ideally, you'll have partners, so you can launch faster, smarter, and with less need to pay employees or suppliers.

The Importance Of A Business Plan When Starting A New Venture

Even if you don't have partners, you'll have family, friends, and advisers involved. A business plan helps get everyone involved in your start-up heading in the same direction. To develop a game plan: At a start-up, execution is everything.

That means you have to set priorities, establish goals, and measure performance. You also need to identify the key questions to answer, like "What features do customers really want? If you raise or borrow money—even from friends and family—you'll need to communicate your vision in a clear, compelling way.

A good business plan will help you do just that.

Clarify Your Direction

David Ronick and Jenn Houser are serial entrepreneurs and start-up advisers. They partnered with Inc. To learn more about business planning, take UpStart's on-demand course. Or get a free reality check to find out if your plan is ready for action. Jul 12, 2011 More from Inc.