Do startup's really need a business plan?

[duncan drennan]

Guy Kawasaki is reporting on an article in the Wall Street Journal, "Enterprise: Do Start-ups Really Need Formal Business Plans"

A study recently released by Babson College analyzed 116 businesses started by alumni who graduated between 1985 and 2003. Comparing success measures such as annual revenue, employee numbers and net income, the study found no statistical difference in success between those businesses started with formal written plans and those without them...

"What we really don't want to do is literally spend a year or more essentially writing a business plan without knowing we have actual customers," says William Bygrave, an entrepreneurship professor at Babson College in Wellesley, Mass., who says he generally advocates "just do it." Entrepreneurs must be nimble, and will be more apt to stick with a flawed concept they spent months drafting, he adds.

Read the full blog post, "Is a Business Plan Necessary?" by Guy Kawasaki

I think there are a couple of important points Guy raises, here is one I like,

A great plan won't make a lousy idea successful, and a lousy plan won't necessarily stop a great idea.

I think that sometimes the process of going through a business plan (formal or not) is important as it helps you to work through the issues in your mind (I'm not one to speak, I don't have a formal business plan )

What do you guys think? To business plan, or not to business plan?

(just a note, they are referring particularly to a formal business plan)