We all hear how important it is to write a business plan when launching a startup. By creating a map to how and why our startups function and make profit, a business plan sets us up for success.
However some argue that the ‘lean startup’ model is the way to go. Basically, startups that take this approach learn along the way. They don’t “waste their time” creating a business plan, but rather, figure out what works and what doesn’t by trial and error.
Although this model can be appealing, it is not the most effective according to a recent study.
Researchers analyzed data collected on entrepreneurs, including their background, type of startup, and the conditions surrounding their startups. The research boiled down to two types of entrepreneurs — those that planned and those that didn’t. So what did the study find out about these opposite types of entrepreneurs. Well for starters, it pays to plan. In fact, entrepreneurs who plan are 16% more likely to be successful than their counterparts who do not.
Moral of the story, writing a plan can make a significant difference on a startup’s road to success. They put vision and direction into words, which can prove extremely helpful for entrepreneurs who sift through thousands of ideas and thoughts every day.
Regardless of what you choose to do as a startup, plans pay off in the long run. So start formulating your thoughts into words, seek the advice of others who have created business plans, research, and start writing. You’ll be setting yourself up for a successful startup.
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