One of the worst pieces of business advice on the internet is only two words long.

“Just start.”

They say it because some people spend years thinking about a business they never launch.

It might be counterintuitive, but a study cited in Entrepreneur.com, suggests that those that write a business plan are 2.5x more likely to actually launch.

So “just start” is really just a faster ticket to failure.

It is the kind of advice that sounds exciting on social media but is expensive in real life.

The businesses that last are usually built by people who took the time to think before they acted.

Today I want to show you why planning matters and why I believe a business plan is one of the best investments you can make before spending a dollar on your idea.

Planning is one of the highest-return investments you can make before launching.

There is an old saying:

“A failure to plan is a plan to fail.”

People repeat it so often that it almost sounds cliché.

The problem is that clichés usually become clichés because they’re true.

Proverbs 21:5 says:

“The plans of the diligent lead surely to abundance, but everyone who is hasty comes only to poverty.”

That verse wasn’t written about startups, but it describes entrepreneurship surprisingly well.

Real businesses require investment.

Sometimes that investment is money.

Almost every time it includes your time, your energy, your reputation, your evenings, your weekends, and often the support of your family.

Those are valuable resources.

You should protect them.

A business plan is simply a tool for deciding whether those resources are being invested wisely.

Unfortunately, internet business culture has convinced people that planning somehow gets in the way of action.

It doesn’t.

Good planning makes action more effective.

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One of the advantages of teaching entrepreneurship and practicing business law is that I get to see businesses before they open.

People often ask if I can predict whether a business will succeed.

Obviously no one can know for certain, but after working with well over 1,600 entrepreneurs, I can usually identify which businesses will survive.

The biggest warning sign usually isn’t the business idea.

It’s the founder.

When someone isn’t willing to slow down long enough to understand how their business will make money, who their customers are, how much it will cost to operate, or whether there is actual demand, that lack of preparation usually shows up later in much more expensive ways.

The business plan itself doesn’t create success.

The thinking that goes into writing it often does.

The research backs this up.

Businesses with written plans consistently outperform businesses without them.

Across multiple studies:

• Only about one-third of small businesses have a formal business plan.
• Around 70% of businesses that survive at least five years followed a strategic business plan.
• Businesses with plans grow significantly faster.
• Companies with business plans are much more likely to secure outside investment and bank financing.
• Fast-growing companies are substantially more likely to have a written plan than slower-growing companies.

The pattern is difficult to ignore.

People who invest time thinking carefully about their business also tend to make better decisions after they launch.

That shouldn’t surprise anyone.

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One of the biggest misconceptions I see is that people think the only reason to write a business plan is if the bank requires one.

Banks sometimes ask for them.

Investors do.

Those aren’t the primary reasons I recommend writing one.

I recommend it because YOU need one.

A business plan forces you to answer questions that many entrepreneurs avoid:

• Who is your customer?
• Why will they buy from you?
• How will you make money?
• How much money do you need to start?
• What happens if sales are half of what you expect?
• What would convince you that the idea isn’t working?

Notice that none of those questions involve legal paperwork.

None involve logos.

Those are the fun parts.

Planning deals with the hard questions first.

Those questions determine whether the fun parts are worth doing.

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Entrepreneurship has never been about finding shortcuts.

Every successful business owner I know works incredibly hard.

They learn constantly.

They solve problems every day.

They adjust when they’re wrong.

None of that begins by skipping the planning stage.

The goal isn’t to delay forever.

The goal is to move forward with confidence because you’ve done enough homework to believe your idea has a legitimate chance.

That isn’t exciting advice.

It also happens to be the advice that gives you the best odds.
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Weekend Exercise

This weekend, start your first business plan.

Don’t worry about making it perfect. Don’t worry about formatting. Just get your thoughts on paper.

Create a document with these headings:

• Executive Summary
• Business Description
• Products or Services
• Target Customer
• Market and Competitors
• Marketing and Sales Strategy
• Operations
• Financial Plan

Now spend an hour writing everything you already know.

If you don’t know your target customer yet, write your best guess.

If you don’t know your pricing yet, make an educated estimate.

If you don’t know your startup costs, leave yourself a note to research them.

The goal is not to finish your business plan this weekend.

The goal is to build the framework.

Once the framework exists, your job becomes filling in the gaps with real information. Research your market. Price your competitors. Figure out your startup costs. Talk to potential customers. Replace assumptions with evidence.

A business plan isn’t something you write once. It’s something you improve as you learn.

By Monday, you’ll have something far more valuable than another business idea floating around in your head. You’ll have the beginning of a real business plan.