Correctly timing your startup's launch is critical to success. Here's exactly when you should develop your plan if you want to increase your odds of making a profit.

• Entrepreneurs who plan have a better shot at success than those who don't. But creating a formal business plan requires time and resources that could be used elsewhere.
• The same researchers, Francis Greene and Christian Hopp, who discovered the planners' advantage also found that timing is critical in the success of otherwise similar startups.
• Professor Francis Greene told Business Insider that the key moment is roughly seven to 12 months after you've started the planning process.
• Green also said that synchronizing your strategic planning with your business development helps you stand a better chance of avoiding a stressful situation when it's time to seek financing.
• Visit BI Prime for more stories.

A formal business plan can be a valuable tool in the entrepreneur's toolkit, but writing one is hard work.

Beyond the mental challenge, producing a detailed plan consumes valuable time and resources that could otherwise be used to bring your new product or service to market.

Like any investment in your startup, you want to be sure there is some measurable return. So what is the ROI of a business plan?

A study in the Strategic Entrepreneurship Journal of more than 1,000 entrepreneurs showed that planners see an advantage over nonplanners, even after controlling for all observable variables like founders' age and experience. Among pairs of otherwise identical founders, planners were 16% more likely to be profitable for at least six months out of the preceding year, the study found.

"It's pretty clear that if you plan, it pays," said Professor Francis Greene in an interview with Business Insider.

But that comes with an important caveat: the planner's advantage is linked to a specific stage in the startup sequence.

Greene and coauthor Christian Hopp found the ideal moment to get the most reward for your effort - roughly seven to 12 months after starting the initial business idea, and a little over a year before launching the product or service in the market.

Here's exactly what you need to know about how to sequence your startup strategy.

Before you write a single word

Greene said that business plans are "romantic fiction," in the sense that they paint an idealistic picture of something that hasn't (yet) happened. On that point, entrepreneurship professor and startup guru Steve Blank agreed.

"I always say they should teach business plans in the English department because it's the best example of creative writing that you'll ever do," Blank told Business Insider.

One thing that makes some of the greatest novels so compelling is adherence to reality, and the same goes for a good plan. The best plans are rooted in a credible reality and have had their assumptions as thoroughly fact-checked as possible.

"Writing a plan first is a bad idea," Greene said. "You have no real idea of the market or competition."

Instead, spend your first six months on a rigorous fact-finding process to gather the evidence that will eventually form the basis of your startup's core strategy.

One such process is the Lean Startup method that Blank helped create, which he describes as a transition "from belief-based business to evidence-based entrepreneurship."

But don't take Greene and Blank's literary comparisons as being dismissive of plans. Both experts are staunch advocates of thoughtful planning. They just know that plans need to be made at the right time, and for the right length of time.

The right timing also applies to time spent

Greene's research found a similar sweet spot for how long to spend writing your plan: about eight weeks. Spend too much or too little time, and you may just be wasting your effort.

But there are some extreme examples of plans written over very short periods of time that have been successful. When asked about the experience of Cate Luzio, the founder of the collaboration space Luminary who wrote her successful startup's plan in a week, Greene said her example would be hard for others to replicate.

To be fair, Luzio did have decades of practice from her career as a commercial banking executive, but her story goes to show that you don't need to spend six months drafting an epic tome. Get it done, and get on with building the business.

One critical reason you need a plan is so that you can better understand your financing requirements before you tie up your own cash in the business or begin asking other people for money.

"You don't want to under-ask or over-commit," Greene said.

Synchronizing saves you money and stress

Green said that synchronizing your strategic planning with your business development helps you stand a better chance of avoiding stressful pitfalls. If you're inadequately prepared, you run the risk of taking on too much capital or the embarrassment of having to go back to ask for more.

For the overwhelming majority of startups - more than 99%, in fact - venture equity investors will never be a source of financing. And most founders don't have access to deep-pocketed friends and family.

That leaves banks and other sources of debt as the best option for entrepreneurs who need cash, and banks will want to see estimated cash flows and income statements, as well as your rationale for your projection.

Whether your approaching a relative, a banker, or a VC, "if someone asks to look at your financials, that means they want to see your plan," Green said.

"Pitch decks are there to get you through the door," he continued. "A business plan is how you get the check."