A business plan is a written document that describes in detail how a business — usually a startup — defines its objectives and how it is to go about achieving its goals.((Adam Hayes, ‘Business Plan’, https://www.investopedia.com/terms/b/business-plan.asp)) It is important for every business to have a business plan because it gives an insight into what the business is all about and the expectations from it.((Business Plans: A Step-by-Step Guide, https://www.entrepreneur.com/article/247574)) As a founder, it also helps you to plan the future of your business in a relatable manner. There are different types of business plans but prominent among them are traditional and lean.((Tim Berry, ‘The Different Types of Business Plans’, https://articles.bplans.com/the-different-types-of-business-plans/#))
Why Do You Need a Lean Business Plan?
A lean business plan is a simple and concise summary of your business. It defines the entire scope of your enterprise and it majorly contains the key business elements like funding, competition, market, etc.
A lot of founders and executives are steering away from making a traditional business plan for many reasons, one of which is the many details that go into it.((Geoffrey James, The secret to a great business plan: Don’t write one’, https://www.inc.com/geoffrey-james/the-secret-to-a-great-business-plan-dont-write-one.html)) However, a lean plan comes in as a solution in this regard. This is because it does not require all the details but the important ones.
Here are a few reasons to get a lean business plan;
It gives an insight into your business: A lean business plan gives outsiders an insight into what your business is all about. It gives a bullet and concise idea of what you seek to achieve with the business.
Ease of execution: It breaks down the goal of the business into implementable bullet points.((Tim Berry, ‘5 Management Benefits of Lean Business Planning’, https://timberry.bplans.com/5-things-lean-business-planning/)) It makes execution easy because it sets a timeline for every goal of the business. It further divides the goal into short-term, medium-term, and long-term, which aids the implementation of the business plans.
Easy to write: It does not require any special skill to write. Any founder can draft a lean business plan without wasting valuable time.
Flexibility: If for one reason or another, you decide to change the direction of your business, you can easily amend your lean business plan to fit into the new business focus.
How To Prepare Your Lean Business Plan
Preparing a lean business plan is quite easy. All you need to do is to follow a simple process below.((Lean Planning – A Better Way to Write a Business Plan – https://www.liveplan.com/blog/an-introduction-to-lean-planning/))
Identity: This is the first stage in drawing a lean business plan. Here, all you do is discuss what your business is all about. This part has to be precise about what the business does or plans to do. For example;
“We deliver pharmaceutical products to households in the Silicon Valley area”.
The problem your business is solving: In this part of the business plan, you discuss the exact problem your business identified and is seeking to solve. For example,
“It is hard for hospitals and pharmacies to deliver drugs to houses around Silicon Valley, which is due to the unavailability of a proper pharmaceutical logistics team”.
The solution your business provides: This is where you discuss the solution your business offers to the problems you have identified. The solution could be in form of a service or product.
Market: A business is nothing without a market. So, this section of your plan discusses the target market and the people who might be interested in your business solutions. For instance, it could be hospitals, low and medium income households. This part of the plan is integral because it gives investors and other third parties an insight into your target audience and you plan to get across to them.
Competition: You need to have a concise list of some of your present and potential business competitors. This would make everyone have a sense of the possible challenges your business might encounter.
Business marketing plans: Marketing can be likened to the soul of a business. Hence, this part of your lean plan should focus on how you intend to reach your target audience so as to drive sales to your services or products. It could be through internet ads, local advertisement, or other means.
Financial projections: This deals with the finances of the business. It explains the current financial obligations, expected revenue and expenditure of the business. It also focuses on how you plan to finance your business, if you are still at the initial stage, and the operating cost involved in running it.
Timeline: The timeline section breaks down what you seek to achieve and at what point. It is an important part of the business because it divides the business plans into short-term and long-term goals while also focusing on when each goal will be achieved. It could be in weeks, months, or even years.
Team members and partners: The workforce is an important aspect of any business. So, in this section, you list all your team members and their roles in the business. It gives everyone clarity of their role in the team. It will also include the external business partners and investors (if available).
What Else To Include
Apart from the above, there are still important aspects that must be included in your lean business plan.((Fundamentals of Lean Planning: How to Plan Less and Grow Faster – https://articles.bplans.com/introducing-lean-planning-how-to-plan-less-and-grow-faster/))
Business model: The model business founders want to adopt in their enterprise must also be included in the plan.
Business strategy: The business strategy discussing how the business goals will be achieved should be discussed. This could be in bullet points or in short and readable sentences.
The importance of a lean business plan is endless. The good thing is that it can be used by all kinds of businesses regardless of the size and structure.
