How Lean Business Plans Can Make Your Startup a Success

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Lean thinking is about eliminating waste and improving efficiency. The methodology has applications such as lean manufacturing, lean product development and, of course, lean startups. The “lean” concept can also be applied to reduce the length of documentation such as contracts, CVs of job seekers or company policies.

Lean thinking offers a useful approach to business planning. This is great news for all parties involved because:

  • business owners (and especially startup owners) don’t have time for an expensive multi-page planning document, and
  • the intended readers of business plans are often also pressed for time and appreciate a straight-to-the-point document.

According B-planstraditional business plans:

  • Takes too long to write.
  • Will never be read in its entirety.
  • May be outdated by the time you finish writing them.
  • Cannot be updated frequently with ease.

Create an outline on a page

Ideally, a lean business plan should:

  • Fit on one page.
  • Just be simple enough (but not too easy).
  • Take about 20 minutes to write.
  • Help you measure progress towards your goals.
  • Be easy to continually update and refine.

Find a model or create your plan

Googling “Lean business plan template” or “lean canvas” will bring up dozens of free templates to download and fill out. The US Small Business Administration (SBA) recommends the Business Model Canvas developed by Alex Osterwalder.

Elements

life plan suggests a one-page template with 12 sections, each of which can be filled with bullet points. Keep in mind that a reader (like a lender) may request more details on any of these sections.

  1. Identify: What does your company do? (Summarize in one sentence.)
  2. Problem: What customer problem do you intend to solve?
  3. The solution: How do you plan to address or resolve the customer issue?
  4. Target market: Who will buy your product or service?
  5. Competition: Who are your competitors and how are they solving the problem identified in Section 2?
  6. Sales channels: Will you be selling in physical stores, online, through a larger distributor, or other channels?
  7. Marketing activities: Such as partnerships with marketing agencies, advertising in trade publications, social media, trade shows.
  8. Revenue: How will your business make money?
  9. Expenses: May include payroll, rent, insurance, etc.
  10. Milestones: Briefly summarize your roadmap for the short and medium term.
  11. Team and key roles: Who are the key players in your current team and what key roles are needed?
  12. Partners and Resources: Who are your suppliers? What other companies will you need to work with to be successful?

Validate, review and revise

Lean business plans are meant to be living documents. This means that instead of creating a long business plan that will only be used once and then never referred to again, the lean plan should be used over and over again. This means:

  1. Validation of plan assumptions – is your target market correct? Do customers want to pay for the solution you offer?
  2. Exam – Take time in your calendar to review the plan to see if it’s still relevant and correct it three, six and twelve months later.
  3. Revise – This is a live document. Some sections (such as Identity) will remain the same, but other parts such as Milestones, Team, Competition, and Partners will need to be updated regularly.

Having a business plan helps business owners secure outside financing, maintain strategic direction, and track milestones. Have a lean The business plan has the added benefits of being easily updatable, saving time, and helping you grow faster. Having a one-page plan also forces business owners to be clear and concise in their planning.

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Image Credit: GaudiLab/Shutterstock.com

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