Do you have a business plan? If not, you’ll be happy to hear that there is a “lean” alternative to creating an in-depth small business plan. A lean business plan is a hybrid between the classic business plan that can be too large and fixed, and the kind of small steps and analysis that can help business owners focus and pivot if needed.
What is lean planning?
A lean business plan steers a business toward its goals while tracking and managing progress, expectations, and accountability. This important document helps you take small steps and calculate results on a regular basis. It is helpful for both established businesses, start-ups and those pivoting to adjust for the current economic climate.
The traditional business plan is typically made of around eight sections: an executive summary, company summary, products and services, market analysis summary, strategy and implantation summary, management summary, financial plan and an appendix -- all of which have somewhere between three and 10 subsections. A lean business plan, outlined below, is much shorter.
What are the benefits of lean planning?
Lean planning helps teams avoid inefficiency, clearing the way for each to do their best work. Here are a few benefits of lean planning:
Accurately monitor cash flow:
Staying on top of cash flow helps business owners determine what is and what is not working at the time. This creates the opportunity to pivot and improve operations. Set yourself up for success with a solid plan for cash flow management on a regular schedule.
Lean in on the important:
A lean plan can help a business owner identify the areas of the business that need energy, attention, and resources.
Set goals that make sense:
Set realistic goals in light of the still-struggling economic climate with obstacles of epic proportions. So, the goals that they may have had one month can derail the next. Be realistic about your goals and if it is possible to actually reach them in the “new post-pandemic normal.”
Establish S.M.A.R.T. Plans:
Being Specific, Measurable, Achievable, Relevant, and Time-oriented are the elements of a thorough and well-thought-out plan. The SmartBiz Loans Small Business Blog has an article to help you get started with this goal-setting method: How to Set Smart Goals
What to include in a lean plan
Here are the elements of a lean business plan to help you craft your own unique document:
- Business overview: Basically, this is a brief synopsis of your business strategy.
- Value proposition: Write one sentence describing the value you offer your customers. The goal is to communicate to your customers the value that you provide in a way that’s easy to understand.
- Market need: In what way does your business solve your customer’s problem? If it doesn’t solve anything, then you could have a long road ahead to building your business. If you are unsure, ask potential customers what they like about your services or products and why they choose to use you.
- Sales and marketing: What channels do you use to reach and convert shoppers? Where will you sell your goods/services? How will you market your business?
- Budget and sales goals: Calculate the cost to create your product or deliver your service.
- Milestones: What targets have been planned for the next few months or years and what has been achieved so far?
- Solution: How will you solve customer’s problems? Why is your solution the best?
- Competition: Who is your competition. How are you similar and how are you different. Why will customers choose your business over another?
- Target Market: Describe your perfect customer in detail. Who are they and what are their shopping habits?
If you’re a startup
Your next step is to get out from behind your desk and use your strategy to achieve your goals whether it be angel investments, development, or attracting talent. You might include elements like customer interviews, surveys, physical location research, interviews with potential suppliers, etc.
If you’re an established business
Your lean plan will probably be focused on specific business milestones. Accountability is critical here. Your plan should have timelines and specific strategies for how resources and manpower will be used to reach your goals.
Lean planning follow up
It's about continuous planning, not just the plan! With lean planning, the plan itself will not be helpful if you don't track results and follow it up regularly to see where you stand. Make a monthly commitment to review and edit your plan so you can stay on track and meet your goals.
Evan Singer, CEO of SmartBiz Loans has words of encouragement for business owners:
“It can be tough for a multitasking business owner to step away from day-to-day tasks and focus on the future. However, I believe taking the time to formulate a strategic plan is one of the best ways to reach short- and long-term goals.”
