What is a business plan, and why do you need one?

From Investopedia:

A business plan is a written document that details how a company will achieve its goals. Few good companies last long without one. Business plans give direction to new companies, while established ones use them to determine new ventures.

A business plan should paint a clear picture of the costs and drawbacks that come with each important decision.

Rarely are two business plans identical. But most will include the following elements:

• A summary of the products or services provided
• Market analysis
• Marketing strategy
• Financial planning
• Budget, projected revenues, operating costs
• A projection of expected performance

Operating a business without a plan is like swinging on a trapeze without a net. It might work, but the benefits a plan provides are abundant. They include the chance to test a product or service, plus the opportunity to think through an idea before sinking too much money into it.