How important is the business plan?

I think the analogy of a war plan is enlightening. Going to war without a plan, a strategy, is leaving its success to pure luck. There is no canonical way to make a plan. It can be kept in your head, but when many people are involved, writing it down, exposing it to critics ensure that we didn't miss something and reduce risks of mistakes.

As people know by now, even the best plan can fail with bad execution. Having a good plan reduces risk of failure, it does not provide a garantee of success.

A plan is no more than a guideline. Things rarely happen as planned, especially in war. (consider a chess game if you prefer). So anticipation in what can go wrong, plan B and plan C, are as important as predicting the success. Making plans by pure guessing of the ennemi forces, position, and reaction possibilities is not better than attacking without a plan. A plan reduces risk of failure due to mistakes.

I think that a formal (classic) business plan is not a priori needed for a start-up company. Nevertheless, it may be completed for external needs (to get a loan or an equity investment). For the start-up team, though, an optimal solution would be to agree on the business model, road map and some financial targets for the next 12-24 months or so.

The value of a business plan is to force you to do the research and strategic thinking around the opportunity you are pursuing. This includes some testing of the market. It will also help you define your broad goals, especially to understand and articulate what the problem is that you are trying to solve. Of course it is out of date when you have finished it, but if you haven't gone through the rigor of this type of thinking I think you have little hope of implementing successfully.

And of course its other value is as a communications tool for investors, potential key employees and other stakeholders.

A start up, as any project, do requires some basic elements as goals, strategy, etc. These are not only valuable, but fundamental for you to manage your company. Otherwise, its like driving a car without knowing the city streets or even what's your destiny.

The business plan itself is not as important as MBA-types say, but creating a business plan is quite useful, because you outline your goals and how you pretend to reach them, your strategy. Indeed, if you just outline these topics, you'll get most of what you need from a BP.

Its values starts to fade when you go too deep in the how-you-pretend-to-reach-them part. Generally, you end up spending too much time planning what you're going to do in a future that probably won't arrive. Its like to study a city map for half-hour, planning your route and then picking your car, reach the streets and, after five minutes, discovery that part of your route is blocked by a car crash. You'll have now to get some alternative, very different route, but your goal/destiny remains the same.

As a side note: Other things in a business plan, like marketing research, have a lot of value also, but when you're writing the BP you're too far from the moment when they are going to be useful. You may risk yourself spending time in something that isn't going to be necessary, as your start up may change its direction after some time. A better option is to wait the need for this kind of thing to finally do it.