Having a lean startup plan, or lean business plan, is an excellent way to understand exactly how your startup or small business will work, what market it will fit in, and how it will grow. It can also help you if you’re looking for outside investment. Investors field a lot of applications, and having a one page business plan is a perfect way to present only the most necessary information to someone constantly analyzing new businesses.
But why write a lean business plan? Writing a more traditional business plan may take longer than you would like, and could end up being less useful than you had imagined. It can often contain more information than you’ll need internally to achieve initial goals and milestones, and may not be worth the effort if you can’t convince investors to meet using your executive summary or one page plan.
A lean startup plan is an excellent choice for startup founders who want create a clean and concise roadmap, get a clear idea of their business needs, and continuously review and revise their company as it grows. Iterating as you grow allows you to adjust for issues you may encounter or successes you want to lean into along the way.
To help you prepare for writing a lean startup plan we’ll review:
This article is informative. It is not meant to represent legal advice. If you need to make any legal decisions, such as incorporating your business, it is recommended that you speak with a legal advisor with expertise in that area.
Having a business plan is, well, good planning! A lean startup plan should highlight the key elements of a business concept instead of providing comprehensive details of each and every aspect of the company.
It can help you sidestep many of the hurdles business plans often pose, such as complexity, time to assemble, and a static nature. No business plan should be static—whether traditional or lean—as both are evolving documents and should be reviewed and updated regularly.
By simplifying the entire process, yet still providing the essentials, lean startup plans enable founders to quickly create an actionable business plan that can be used to manage strategy, tactics, cash flow, and dates and milestones.
It is faster and easier to put together than a formal business plan, as it doesn’t include summaries, descriptions, or background details that you and your partners or employees might already know.
Firstly, writing a great business plan—regardless of whether it falls under the traditional or lean category—is a fundamental part of starting and running a business.
And although it is not guaranteed you will succeed if you simply write a business plan, there are scientific studies that show successful businesses are ones whose founders planned ahead by writing a business plan. It’s even more important if you plan on seeking out investors.
Now, although traditional business plans are still an excellent choice, every business owner should be aware of lean startup plans, as well as lean business planning (and its benefits) in general. In short, lean business plans are used to:
Because this method gives you the ability to move quickly and regularly change your plan as needed, it is a great alternative to the traditional business plan. However, it is important to note that investors or lenders may require more documentation if they’re serious about investing in your business.
In fact, it may be smarter to think of your lean startup plan as an excellent first draft of your traditional business plan—or standard business plan—if you’re expecting to present to a prospective investor or lender.
Unlike a traditional business plan, a lean startup plan focuses only on a limited number of key metrics.
This can include lists, tables, and bullet points that convey your company’s value proposition, infrastructure, customers, finances, and overall strategy to accomplish everything you’ve laid out. It’s also useful for visualizing tradeoffs and fundamental facts about your business.
While there are different ways to put together a lean startup plan, there are recurring components that you should consider including, ones that comprise a well-crafted model business plan.
Together, these components deliver three things founders need when planning for their business: focus, simplicity, and flexibility.
By being able to write—without previous business experience or training—a cohesive and easy-to-read plan that focuses on strategy and key drivers for the business, entrepreneurs can quickly get their business plan in place to act on and regularly revisit and revise as time goes on.
Let’s take a look at what a lean startup plan typically includes. Remember that this information is often written out as bullet points.
Like a traditional business plan, a lean startup plan should have a well-written and clear executive summary.
It should have bullet points that highlight for readers what’s to come in the rest of your plan, pulling your readers in and getting them interested in your business, as well as the information that is included to detail your overall goals and strategy for achieving them. Remember to call out the most exciting or surprising bits of information, which will instantly establish your business idea’s uniqueness.
Include a concise and compelling summary of the value your company will offer to your target market and customer.
Think customer relationships and segments. It’s important that you identify who exactly your product or service is for.
Lean into defining your uniqueness and establish your competitive advantage. Include your overall business identity—who you are and what you do—as well as what problem you are solving and how you are solving it. Consider including your competitors and how you differentiate yourself from them as well.
How will you gain a competitive edge? Use this section to outline (for internal parties) and explain (to external evaluators) how your business will beat out the competition.
Consider highlighting the specific activities, such as marketing activities, you will undertake that set you apart. This can also include mentioning how you are utilizing a new technology or providing a service that is sorely needed. Show how you are uniquely positioned to compete in your target market.
If you’re working with or planning to work with other businesses/partners, list them in this section and describe how that partnership will work. This could include the manufacturers or suppliers you’ll be working with. What activities will they be performing, and how will those activities help your business?
Use this section to list out your key resources. Describe how you will leverage those resources to create value for your target customers/market. Key resources can include your team or capital, but it can also include your intellectual property, which is incredibly important in the life sciences industry.
Perform market analysis and explain who your target market and ideal customer is. It’s important to have a clear idea of who you are creating value for because it’s more than likely your product or service won’t be for everyone.
Defining your market through market research, and establishing a marketing strategy, will help you and others understand who your most important customers are and how you will get in front of them.
What type of relationship do you expect you to establish and maintain with your target market or customer segment? Will it be automated? Will it be online or in-person? How costly are these relationships going to be? Consider the customer experience from start to finish.
If you’re planning on being a business-to-business (B2B) company, how will you interact with your clients?
In this section, you’ll list the most important ways you’ll interact with your customers. This can include how you’ll reach your target customers now and in the future.
Are the channels standalone, or are they integrated? Which ones are more effective? Are you integrating them with your customers’ or clients’ routines as of now?
The “Cost Structure” section of your lean startup plan will describe the most important costs of your business model. Will you be focused on reducing costs or, instead, maximizing value? Define your strategy and explain how much it will cost to accomplish it.
Explain how you plan on actually making money. If your business has multiple streams, make sure to include them. Some examples include direct sales, advertising space, or subscription or membership fees.
What are your customers or clients paying for your product or service? How are they paying for it? Is there another way they would prefer to pay? As well, if you have multiple revenue streams, you can include how much each brings in.
Business plan templates can help you write effective and concise lean startup plans. We’ve taken the time to collect a few of our favorite resources and include them here for you:
A lean startup plan will quickly describe your business idea, strategy, execution, essential business numbers, and concrete specifics like tasks, responsibilities, projections, milestones, and performance measurements in a single page.
If you don’t end up needing the document for investor purposes, it will still be useful for your planning process. Use it to review your new business and any assumptions that need to be tested and validated in order to refine your overall strategy.
As time goes on, you will be able to revise your business plan. Take that time to paint a clearer picture of what it will take to keep your business going and determine whether or not your current plan is a viable one.
Lastly, your lean startup plan can also be used as a starting point for a more detailed, traditional business plan should you be interested in pitching your idea to potential investors or lenders.
They may ask to see a full business plan or require a detailed plan alongside your loan application. If that’s the case, use your lean startup plan to build a detailed business plan in a more formal document that you’ll use to present to bankers, business partners, and investors.
This traditional business plan will expand on your strategy and include additional details on your marketing, sales, and product strategy, as well as projections for sales and cash flow.
These articles are designed to be informational and do not represent legal advice. Before making any legal or financial business decisions, you should consult with a professional who can advise you based on your individual situation.
