You can't do anything in business without taking time to plan ahead. This is particularly important if you are making a major move such as starting your own company. Going on a whim may not necessarily result in failure, but it will be significantly harder for you to succeed. You have to formulate a manageable business plan before leaving your current job and starting your own company for a number of reasons.
First, it allows you to stick to a strategy, which will be incredibly important in the early days of your new business. Second, if you need to borrow resources or receive funding for your venture, you must describe your business plan in a way that makes sense, or else no one will be willing to take a risk on you. This doesn't just mean explaining what your company will do or what it will sell. You must lay out the groundwork for how you will make your business succeed. How will you get it off the ground? What are your first year projections? When do you expect to turn a profit? How will you grow?
An article in the Standard Examiner addressed this issue and says coming up with a solid business plan is one of the most crucial things you can do as you start your company.
"Write down the goals of your company, calculate all of your expenses, and find a target market, or the type of people you plan on selling to," writes Arianna Rackham, the article's author. "This is also a great place to include a mission statement, which defines the goals and purposes of your business in a short paragraph. Try to include important details and be specific. A written business plan will make it easier to achieve your goals. It is also a great tool to show to possible future investors."
Having a strong business plan will help you with incorporating your business. Once you identify the products and services you are going to sell, who you are going to sell to and how you are going to successfully manage sales for the first year as you grow as an organization, you can learn how to incorporate your new business, which will only help you get set up to succeed.