Some say it is essential, others believe that you should just go and start your business. I think a business plan is essential, yet I have started all my businesses without a business plan. At some point I always did end up writing a business plan, either for funding purposes or just as a planning tool. There is huge difference between the business plan you give to your banker and the one you write for yourself (as a planning tool). David Gumpert does a great job in this article explaining all the different forms of business plans you might encounter. Pick the one you need and go for it. http://www.inc.com/articles/write_biz_plan/17400-print.html
David does not mention anything about the business plan as a planning tool. I think that is the most important one. Everyone thinks a lot about their business. Next time you think about your business, write down your thoughts. On paper napkins, post it notes or toilet paper, wherever you are whatever you are doing…write it down. Then pick a place where you collect all these random pieces.
After doing this for a few months, go through all your little pieces of paper and sort and organize them like you would a business plan. There will be many different sections and your business plan (as a planning tool) is on its way to completion. Or maybe it is already done… Just make sure you throw it into a word document, before giving it to your banker.