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Fundamentals of Lean Planning Explained

Male entrepreneur in workshop standing at a table reviewing his lean business plan.

Noah Parsons

11 min. read

Updated April 15, 2024

Download Now: Free Business Plan Template →

Let’s face facts: Writing a traditional business plan is a hassle.

A traditional business plan takes too long to write.
Most people won’t even read it from cover-to-cover.
It’s often outdated by the time you finish writing it.
It doesn’t lend itself to frequent and easy updating—and that’s the core of the problem.

Historically, entrepreneurs have taken months to craft detailed plans without even gathering feedback from potential customers. They’ve viewed business planning as a single hurdle to get their business up and running or a thick wad of paper to shove across a banker’s desk in order to get the funding they need.

These business plans end up as just a collection of guesses and assumptions, instead of a proven roadmap for growth.

But planning is still critical, even if the business plan might be broken. Studies have shown that businesses that set goals and track their progress grow 30 percent faster than those who “just wing it.” Furthermore, even established businesses grow faster when they have a plan .

So what if I told you there was a better way to do business planning? One that lets you adjust and refine your plan as you gather more information about your business and customers.

A method known as Lean Planning.

Welcome to the Lean Planning method

Lean Planning is a 4-step process that helps you discover a business model that works and manage your company successfully.

Here’s the Lean Planning process:

Create a one-page plan
Test the plan
Review your results
Revise your plan

These 4-steps replace the traditionally lengthy business plan with a 20-minute planning process. This ensures that you are taking small steps, reviewing your results, and creating incremental improvements—all while reducing your risk of failure.

It’s also simpler and faster than writing a traditional business plan. And, possibly, the greatest benefit is that this method can benefit both startups and established businesses.

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If you’re a startup

Lean Planning helps you quickly figure out if your idea is any good and what you need to change to build a viable business.

If you’re an established business

Lean Planning works even if you’re already up and running. It helps you continually refine and tweak your strategy while measuring your progress toward your goals. After all, planning is about making better management decisions, not about producing a thick document that sits in a drawer.

Read on to learn how to make the lean model work by creating your own one-page business plan .

Step 1: Create a one-page plan

The Lean Planning methodology starts with a one-page plan you can create in 20 minutes .

That’s right—one page. Lean Planning is a simple methodology and your one-page plan should be simple, too. You can download a lean planning template and fill it in as you follow the steps below.

What to include in your one-page plan

Strategy: What you’re going to do
Tactics: How you’re going to do it
Business model: How you’re going to make money
Schedule: Who is doing what and when

Let’s dive into each section.

Your business strategy

Your business strategy is simply an overview of what you want to do and who your customers and competitors are. Start by identifying the problem you are solving for people and follow up by explaining your solution to this problem.

The problem you’re solving

Businesses exist to solve problems for customers. Their products and services fill a need or satiate a desire. If all you have is a solution that is in search of a problem, you’re going to have a hard time building a successful business. So, start with the other side of the equation and focus on how you can help your customers solve a problem.

Start small with just one or two sentences or a few bullet points to identify the problem you are solving. Do the same thing to describe your solution.

Your ideal customer

Now, quickly describe your target market. Who is your ideal customer? If you know how many potential customers are out there, great. If you’re in the early stages of fleshing out your business idea, don’t worry too much about detailed market research . Instead, focus on defining your ideal customer —who are they, and what are their key attributes?

Your competition

Finally, create a shortlist of your competition . How do your potential customers solve their problems today?

That’s it. A business strategy doesn’t have to be complicated with Lean Planning. It’s just a few bullets points that describe the essence of your business: what you’re doing and who you’re doing it for.

The next section of your one-page plan is a short outline of your business tactics. This is just an outline of how you will make your strategy happen. You’ll be thinking about sales, marketing, the team you might need , and any partners or outside resources you’ll need to leverage.

Your sales strategy

Start by thinking through your sales strategy. Are you selling online or building a physical store? Maybe both? Or, perhaps your product will be sold in stores owned by other companies.

Your marketing strategy

Next comes your marketing strategy. How are you going to reach your customers? How do they find out that you exist and that you solve their problem?

If you need to build a team to grow your business, who are the key people that you’ll need to hire? If you’re an existing business, who are the critical employees that run the company and execute your strategy?

Key partners and resources

Finally, think about other businesses that you might need to work with to make your strategy happen. Are their key suppliers or distributors that you’ll need to have relationships with?

Remember, this is on a single page, so each of these sections should just be three to five bullet points each.

Now it’s time to build a schedule. Lean Planning is all about getting things done, so you need a timeline to follow.

Your next step is to get out from behind your desk and go talk to your potential customers (I’ll go into more detail on this in a moment). Your goal will be to verify that you’ve defined a solid strategy . To that end, a startup’s schedule should include things like conducting customer interviews, sending out surveys, researching physical locations, interviewing potential suppliers, and so on.

Your schedule will probably be focused on specific business milestones that are related to executing your strategy and implementing your tactics.

It’s critical to have accountability here. Your schedule should have dates and people responsible for completing each task.

Finally, make sure to include a time to regularly review your plan. You’ll want to review and revise this plan frequently, so having a regular review point is critical. I recommend a monthly review cycle, but reviewing more frequently is fine, too.

Business model

Even if you have a problem that’s worth solving, a solid solution to the problem, and a target market that needs your solution, you don’t have a business unless the numbers work out. You need a business model that works. The last component of your one-page plan is a basic forecast and budget to ensure that a great idea can actually lead to a great business.

Yes, forecasting and budgeting do mean looking into the future, and no one knows the future (at least I don’t!). But, it doesn’t have to be as difficult as it sounds.

Putting together some basic, bottom-up sales forecasts and a basic budget for expenses will quickly tell you if you have a business model that works—one that can create a viable business that will pay the bills.

At this stage, it’s important not to paint an incredibly rosy picture of your financial prospects. Instead, the sales forecasts should be as realistic as possible. Assume that not nearly as many people as you think will show up in your store. Assume that your website won’t get mainstream press coverage.

With this “realistic” forecast, do you still have a viable business? Can you turn a profit ? If you can only be successful with incredibly high volumes of customers, you may need to take a second look at your pricing, expenses, and other aspects of your business model. Or, make sure that you get the kind of funding that’s needed for large marketing and PR campaigns.

You can get started on your one-page plan right away by downloading our free template . You should be able to complete an initial draft in under an hour—that’s much faster than writing a traditional business plan.

Step 2: Test the plan

Now that you have your one-page plan in hand, you’re ready to start putting the plan into action to see if your ideas will work.

Depending on your business stage, you’ll do this in different ways. If you’re a startup with an unproven idea or an existing business that’s considering a new strategic direction—your next step is to validate them.

Your one-page plan is just a set of assumptions about a business. Ask yourself:

Do the target customers actually have the problem that you think they have?
Does the solution you’re proposing actually solve their problem?
Do your target customers want to pay for your solution? How much?

Reducing risk is your goal in the early stages of starting a business

Starting a business is full of risks . There are just so many unknowns, and it’s incredibly risky to just build your business based on a set of assumptions about your target market, their problems, and how they’ll react to your solution.

Your plan is a really just a set of educated guesses that need to be answered and then revised on a continuous basis until most unknowns are removed. That’s how you reduce risk.

So, you need to take the very simple, but very challenging step of actually talking to your potential customers .

Look at your first version of your plan as a set of assumptions that need to be proven true or false and then go back and revise your assumptions as you go. Refining your plan so that it’s a collection of facts instead of guesses can be the difference between a successful business and a failure.

If your business is up and running, focus on implementation

For more mature businesses that already know a lot about their target customers, the goal of the plan is to help guide implementation. In this situation, use a one-page plan to get everyone on the same page, set goals, and manage the business.

Step 3: Review your results

Both Silicon Valley startups and Main Street small businesses need to know how they are doing. Which means Are they growing according to plan? Why or why not? If not, what changes need to be made? Should the plan change?

For new startups

If you’re just getting started and don’t have many (or any) metrics to track yet, you should be reviewing the results of your customer interviews and any other information that you’ve gathered that would change your strategy. Perhaps you’ll be refining your solution or even tweaking the definition of the problem you are solving. Perhaps you’ll refine your marketing and sales strategy.

For established businesses

Beyond tracking key financial metrics such as cash , sales, expenses, accounts receivable, and accounts payable, businesses must track the other key metrics that are critical to their success. These other key metrics might be website visits, foot traffic in the store, tables turned in a restaurant or any other core number that drives business success.

Reviewing your results regularly is key to better management and success. These metrics should be reviewed at least monthly in a regular plan review meeting with key business partners and employees. This is when you refine your plan and your pitch if necessary and track your ongoing action plan.

Step 4: Revise your plan

Lean Planning is a process, not just a document. It’s is all about continuous improvement. You’re quickly defining a strategy, experimenting to see if that strategy works, reviewing the results, and revising the plan before you start again.

Lean Planning is never finished. It’s simply a process for running your business better, more efficiently, and setting you and your team up for success.

What if you need a more detailed business plan?

There may be a time when you need a more detailed business plan. There’s nothing wrong with that. Some people might want to read it, you may need to submit a full plan for funding and you might even want to document your strategy in more detail.

Your detailed business plan will be born from your one-page plan. The ideas will transfer from bulleted lists to sentences and paragraphs. You’ll add more detail to your sales and marketing strategy, your pricing strategy, and perhaps your manufacturing plans and distribution strategy.

For a step-by-step guide to creating a detailed business plan, check out our guide .

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

Table of Contents

7 Min. Read

8 Steps to Write a Useful Internal Business Plan

8 Min. Read

What Type of Business Plan Do You Need?

6 Min. Read

Differences Between Single-Use and Standing Plans Explained

5 Min. Read

How to Write a Growth-Oriented Business Plan

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How to Write a Lean Business Plan (With Template and Examples)

A lean business plan is a concise summary of your business’ key details. Here’s how they differ from traditional plans, and how to write one.

A lean business plan vs. a traditional business plan

A lean business plan gives someone the idea of what your business looks like and how it works, but unlike a traditional business plan, it’s not designed to convey all of the nuts and bolts of your operations. It may be the only business plan you ever create, or it may be a placeholder or building block you develop into a more detailed business plan down the road.

A lean business plan is a brief overview, not a comprehensive guide

A traditional business plan should contain everything you need to preemptively answer basic questions potential investors and/or cofounders would have, especially regarding your financial information, relevant expertise, market research, and operational details. Investors want to know how their money will get spent, the potential market share, and the founders’ experience. Hence, traditional business plans tend to be loaded with numbers, graphs, and charts, and can take months to create.

You can still use a lean business plan to court investors, but the greater the stakes, and the less familiar people are with you, the more thorough they’ll expect you to be. For major investment pitches, a lean business plan should be considered more of an at-a-glance overview that supplements other resources, while a traditional plan is more of a tome covering everything about your business.

Thanks to its condensed and informal format, a lean business plan is far more approachable than a traditional plan, which can make it extremely helpful in the onboarding process for new hires and keeping employees on the same page about the company’s direction, purpose, and goals.

A lean business plan helps you get started faster

The main person a lean business plan will help is you, the entrepreneur. This is especially true if you’re bootstrapping . You don’t need to spend months doing exhaustive research on competition, ad budgeting, market demographics, and financial projections. A lean business plan strips this process down to the bare bones and gives you something lightweight to work with and adjust as you progress.

You’ll distill the main components into a plan that outlines your business idea, what market problem you’re solving, how you’ll solve it, how much money you need, and when you’ll break even. This makes your idea feel concrete and tangible, giving you steps to get your business idea out of the “someday, maybe” phase.

This accelerated planning process helps you validate your idea before you spend a great deal of time and resources. It’s easier to get mentors, friends, family, and potential collaborators to review a one- or two-page overview of your business idea than it is to get them to read a 40-page business document. And when they’re done, it’s a lot easier to address feedback, too.

A lean business plan tends to focus on smaller milestones

Depending on your intended use, a lean business plan may also involve smaller, more short-term goals and milestones, whereas a traditional business plan should specify all of the milestones you need to achieve in order to become profitable, including a timeline for reaching them.

Mature businesses tend to have more traditional business plans

A business plan for a small niche tech startup is going to look very different from a business plan for an international retailer expanding into new countries. The more mature your business is, the greater the stakes are, and the more complex your business plan will inherently be.

Traditional business plans require far more work

With a greater level of detail, a traditional business plan is clearly going to be significantly longer than a lean business plan. You may dedicate entire paragraphs (or even pages) to describing how various aspects of your business will work, while a lean business plan will usually be more of a summary of each component.

There are no hard-and-fast rules about lengths for either of these documents. The goal is just to convey all of the information necessary for its intended audience and purpose. But a traditional business plan can easily amount to dozens of pages, while a lean business plan may require as little as a single page of writing.

Now let’s dig into the process of actually writing your lean business plan.

How to write a lean business plan

Writing a lean business plan is a lot less intimidating than spending weeks on a traditional plan. And it doesn’t have to be nearly as formal — it can be as simple as a basic Word document, a slide deck, or a spreadsheet. Whatever format you choose, the point is that your lean business plan needs to succinctly describe what your business is, how it will make money, and how you’ll make it work.

You’ll cover a lot of the same information as a traditional business plan, but you don’t need to be nearly as thorough. Similar breadth, far less depth. Here’s what the writing process looks like:

Identify your audience and use case

Summarize essential business components, add additional elements as useful and relevant, plan to make adjustments.

A lean business plan that you write for your cofounder may look different than a plan you share with employees, mentors, or peers. While there are some pretty standardized components, like your business concept, product or service, and target market, what you decide to include will likely depend on your intended audience.

A cofounder or partner, for example, will need to see the big picture, clearly and succinctly communicated, with goals and next steps that align with your shared vision. Employees, however, will get the most from a lean business plan that includes details related to their roles. Depending on what they do, that might look like more focus on marketing plans, sales channels, or product development. Your scale may also affect how specific or generalized your plan is. If you have a small team (or intend to have one), your plan may name specific roles or even individuals. But with a larger company, it may refer more broadly to the types of work that needs to be done.You don’t necessarily need different business plans for different audiences, but your plan should be informed by who will see it and what you intend for them to gain from it.

Generally speaking, a lean business plan should include the same (or similar) components you would provide in a traditional business plan, but with far less detail. What would be pages and paragraphs in a comprehensive plan may be reduced to a sentence or two — just enough to communicate the main point.

Here are some of the elements you may want to include, but note that this isn’t an exhaustive list, and some of these components have enough overlap that you don’t need them all. Just pick the ones that best convey what your business does, how it works, and what you intend to accomplish.

Business concept

This should be a brief overview of your idea. What is your business? A specialty shoe store? A niche social app? A commercial plumbing service? In a sentence or two, describe what your business does.

Business model

Your business model is essentially how you plan to make money. Are you manufacturing a product you’ll sell in bulk to resellers and wholesalers? Is it a retail business? Direct-to-consumer, or business-to-business? Are you generating a user base that you’ll sell advertising to?

Business goals

These are specific milestones you intend to achieve. Before you start listing goals, consider the scope of your plan and how long you intend this document to be current. With a lean business plan, you’ll likely include some smaller, more incremental steps you intend to accomplish in the short term. This might look like starting operations in the next six months, hiring particular roles within a year, reaching production or sales targets, becoming profitable, or accumulating a certain number of users.

Whatever goals you include in your lean business plan, make sure they’re measurable and connected to a schedule.

Target market

Who are your customers? Defining your target market helps clarify your focus and the size of the opportunity. Identify the specific segments of businesses, consumers, or organizations your business will serve or appeal to.

Competitive landscape

Understanding your competition is vital to evaluating the opportunity your business represents. Name specific competitors and the categories of businesses you’ll be up against, and describe any competitive advantages you plan to leverage.

Go-to-market strategy

Your go-to-market strategy describes how you’ll solve a problem or address a need within your target market. What actions will you take to engage and acquire customers? What resources will you utilize?

Financial state

Your current financial state and projections will be most valuable to investors, but it’s important that your lean business plan includes some details about your income and expenses so employees, partners, and other stakeholders can get a broad understanding of your financial position and what you’re expecting in the near future. What assets do you currently have? What are you spending on payroll, leases, utilities, and materials? What does your budget look like?

Sometimes adding components to your lean business plan can help convey useful information without requiring significantly more work. You may cover some of these details in other components, but if it feels appropriate, you may want to dedicate a couple sentences to one or more of these as well. Note: These are all optional in a lean business plan, but may be more expected in a traditional business plan.

Mission and vision statements

Mission and vision statements distill your company’s purpose and broad, long-term plan into a couple succinct sentences. Your mission is why you exist, and your vision is what you want your business to become. While you don’t have to include these in your lean business plan, they can be useful components to help give employees and other stakeholders an overview of your company.

Product or service description

Your lean business plan should clearly articulate what you actually offer your customers or users. If your business concept and other overview information doesn’t already cover this, it’s worth writing a couple sentences about what differentiates your product or service from competitors.

Sales channels

Depending on your business and how you intend to use your lean business plan, it may be worth specifying the channels you’ll use to actually sell your product or service. Will you have a direct-to-consumer online store? Will you send sales people door to door? Are events a major sales opportunity? This may be covered by your strategy or business model, but adding specificity will help people understand more about your operations and organizational structure.

Marketing plan

Similarly, including a marketing plan shows where you’ll focus your efforts to grow awareness and acquire leads. What marketing channels and tactics will you use? How will people hear about your business and learn about your offerings?

This may appear to be a lot of components, but remember that you won’t use all of these. You’ll likely only choose about five or six total, including optional ones. Going beyond that will run the risk of creating redundancy, and you want every component of your lean business plan to feel like it makes a unique contribution.

Lean business plans aren’t set in stone, and as your goals change, you reach new milestones, and your financial state changes, this document will need to be updated. You may also find that you want to add new sections, or expand on existing ones over time. Since a lean business plan doesn’t have the same scope and level of detail as a traditional plan, it’s easier to modify as needed, and making changes is a much smaller commitment.

Lean business plan template

Here’s a template you can use to create your own lean business plan. You can download a PDF version below.

[Insert company name]

Business Concept or Business Model [One or two sentences summarizing your business idea and/or how your business will generate revenue.]

Business Goals [One sentence per goal or milestone you intend to achieve, with each goal attached to a timeline.]

Target Market [One sentence describing who your customers are.]

Competitive Landscape [One to three sentences naming specific businesses your company will compete against and describing the competitive advantages you will leverage.]

Go-to-Market Strategy [Three to five sentences explaining the actions you will take and resources you will use to acquire customers and grow your business.]

Financial State [One to three sentences describing your current financial position, including income, revenue, and expenses. One to three sentences describing your financial projections for 12 months from now.]

Lean business plan example

Here’s a fictional example of what a lean business plan might look like using our above template.

Topher’s Loafers

Topher’s Loafers is an online marketplace for consumers to buy and sell lightly used slip-on shoes. TL provides templated product pages for sellers to list their shoes, facilitates the transaction, and coordinates shipping with a third-party carrier. TL receives 15% of every sale made on TophersLoafers.com.

By the end of 2024, Topher’s Loafers will have 6,000 established sellers (with complete selling profiles and at least one sale) distributed across 40 states. By June of 2025, we will have developed partnerships with three additional major retailers.

Topher’s Loafers primarily targets men aged 25–50 with a household income of <$100,000 living in the continental United States.

Competition

Topher’s Loafers’ main competitors are online marketplaces including eBay, Facebook Marketplace, Etsy, and Poshmark. TL will take on these established marketplaces by offering built-in rewards for repeat purchases, creating a more relevant in-store search experience, and enabling top sellers to earn better margins.

Topher’s Loafers is licensed to sell in 49 states and currently has sellers established in 17 of them. The business will primarily increase penetration in these states with a combination of digital and print advertising, and will expand into new states by partnering with national shoe influencers (we have deals with three of them already). We’re also working to secure slots at local loafer conventions. Most importantly, we’ve established a relationship with a major apparel store to sell shoes returned in an “unsellable” state, which occurs often due to their generous return policy.

To date, Topher’s Loafers has generated $50,000 in revenue and just over 5,000 sales. Our expenses include $2,000 per month in ad spend, $4,000 for slots at loafer conventions, $1,000 per year on software subscriptions, and $200,000 on compensation for five employees. By the end of H1 in 2025, we'll be on track to generate $100,000 per year. We expect to break even by the end of 2026 and reach profitability by 2027.

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Lean Business Planning: The Modern approach to Business Plan Writing

Free Lean Canvas Template

Ayush Jalan

December 12, 2023
10 Min Read

Planning is essential for any business to attain success and sustain itself in the market. Traditionally, the goal was to formulate a lean business plan that lasts and works in the long run. However, this conventional way of creating a business plan isn’t flexible and doesn’t provide much room for improvement over time.

In an ever-changing business environment, you need a plan that can adapt to your changing needs and not hold you back with its rigidity. This is true especially when immediate actions are needed.

To facilitate the convenience to make modifications, a new method of planning has surfaced. This is called a lean business plan. This simple yet effective method of planning a business reduces the hassle of dealing with complicated documents—all while increasing efficiency and productivity.

What is Lean Business Planning?

A lean business plan is essentially a one-page business plan for companies to kickstart their businesses. Contrary to traditional business plans which are often bulky and complex documents, a lean business plan is a simple, reader-friendly, and easy-to-make document.

It is a streamlined core plan that acts as a basis for a more elaborate one.

If you want to skip the trouble of creating a plan from scratch, a lean business plan template can help you save a couple of hours. If done right, a lean business plan can guide you to reach your goals, keep track of your progress, and manage cash flow .

Why Choose Lean Business Planning?

A lean business plan is similar to creating a map with steps laid out to run your business. It is favorable compared to a traditional plan because:

It’s faster: It contains summaries rather than detailed processes in each section of the plan. Consequently, making it a simple process that you can complete within minutes—saves you time.
It lets you stay up-to-date: It’s flexible and hence easier to update. As your business starts to expand, your goals and strategies need to be modified accordingly.
It’s concise: Conventional business plans are often too detailed for their own good—making it hard to interpret them and draw out actionable results. A lean business plan is simpler, shorter, and smarter.

traditional business plan vs lean business plan

Steps to Create a Lean Business Plan

Now that we have the ‘what’ and the ‘why’ out of the way, let’s take a look at the ‘how’. Here are the 5 key steps to creating the perfect lean business plan for your company:

Lay the foundation for your business plan
Put your ideas to test
Review your results
Revise your plan
Set to launch

For your reference, we’ve created a simple one-page business plan for a barbershop business:

We have used a lean canvas to fit your plan on one page.

Step 1: Lay the foundation for your business plan

The first step is perhaps the most important one. It includes jotting down everything that your business is and does. Here, you summarize who you are, what you do, and how you do it. The plan can also include your target customer base, your goals, your team, and how you schedule tasks.

The foundational aspects of your business plan include:

Strategy: Define the actions you will take to achieve your long-term and short-term goals
Tactics: Describe how you use the resources available to implement your actions
Execution: Specify how you will implement them
Business model: Explain how you will generate sales and profits

1. Strategy

A strategy is the brain of your business. It encompasses the core identity of your business and the steps you take to run it. Here, you write your plans of action in simple and precise statements. This includes:

Business identity: Here, you need to describe who you are and how you want your customers to identify you. This can include your business philosophy, company history, and mission and vision statement .
Problem: Specify the problem that your customers are facing. Try to be as specific as possible with the claims you make. It is vital to understand that a business’s success depends on its reliability to solve its customers’ problems.
Solution: Mention the solution to the problems you are tackling with your product. It’s important to note that your ultimate offering to the customer is not the product itself, but the benefit that it gives.
Market: Your brand identity determines which market you operate in and who your target audience is. To get a clear idea of who your ideal customer is, you must understand their values and priorities. To do so, it is advisable to create a solid customer profile first before you think about allocating resources to marketing.
Competition: It is necessary to keep a close eye on your competitors. In this step, you list down your top competitors, their USPs, their market share, and most importantly, how you are different than them.

Tactics are the key to implementing your strategies. They’re primarily all your plans and marketing techniques to steer your business toward growth.

Sales channels: Simply making a great product isn’t enough. You need to make sure that it’s actually reaching your customers. For this, you need robust sales channels. This can include walk-in stores, online retail outlets, and even both. You may also list down whether you want to work with distributors or go solo.
Marketing activities: Marketing is non-negotiable for any business. After all, what is seen is sold. This is where you will list down your marketing strategies to draw customers in and inform them about your product and persuade them to buy.
Partners and resources: If you have business partners that manage or finance the business, mention them in this step. You can also add any key resources that you use for running the business.
Team: Mention the key team members in this step and their respective roles. If you don’t have a team yet, you can write down the primary roles crucial for your business and later recruit relevant talents.

3. Execution

Strategies and tactics are wasted efforts without well-defined execution. Everything you have learned in the previous sections will not convert into growth unless you have a systematic assigning of tasks and deadlines.

Schedule: It is essential to keep a timeline of all the events taking place in your business, along with a roadmap of all future activities. Review your schedule regularly to keep track of what’s working and what’s not. Making changes ensures that you don’t deviate from your goals.
Assumptions: Assumptions are needed so you have some ground to make decisions. Without them, your team will have a hard time figuring out new strategies. Listing the assumptions you’ve made about your business ensures that everyone is on the same page.
Milestones: Milestones are the achievements you aim to make with your business plan. They act as indicators that a plan is working. On paper, they might look like just to-do lists with deadlines, but they help track your progress and tackle standstills.
Metric: There are several metrics through which businesses measure their success. Some of the fundamental metrics are sales, costs, expenses, and more. You can tailor this to your company and write how you want to judge your business’s performance.

4. Business model

A business model is a description of how your business will make money. The clearer this description is, the better. A sloppy business model is a recipe for wasted resources, and time, and can lead to liquidation .

Forecast sales: Forecasting your sales means making educated guesses about your sales performance. It need not be 100% accurate. Here, you write how your business will create sales in the future. As hard as it may sound to play the guessing game, forecasting is important to compare expected sales to actual sales.
Budget expenses: Estimating your future expenses and costs is essential to good management. Budgeting and regularly reviewing it helps you understand where you need to cut costs or increase investments to reach your milestones.
Cash flow: Cash flow refers to the net inflow and outflow of cash in your business. Keeping track of it helps you foresee when you might run into a cash deficit or a cash surplus. You want to stay away from extremes. This assists you to manage your sales and expenses accordingly to maintain a good ratio.

Step 2: Put your ideas to test

After having your strategies made, milestones set, schedules in place, and a tactical plan to get your business up and running, it is time to test their utility. This helps reduce risks, gain insight, and avoid inefficient use of resources.

In this step, you verify the integrity of your business methodologies via extensive research. One of the best ways to do so is by surveying your target customers directly. Record their responses and compare them with your assumptions.

Is the problem you are solving synonymous with the problem your target customers are facing?
Does the solution you provide align with their expectations?
Is there a solution you can provide that your customers don’t yet know they want?
Are the sales channels you decided apt for your potential customers?
Are your marketing techniques persuasive enough?

Asking all the above questions will give you a detailed view of what should be revised and what needs to stick.

Step 3: Review your results

The next step is to examine your results. After having put your ideas to test, you must have received some significant outcomes of your decisions. This is your data. You will use this data to figure out what went wrong with the last plan and come to conclusions.

You can review your results by using the same measuring metrics that we talked about earlier. It is important to choose reliable metrics that suit well with your business model. Opting for metrics incompatible with your business can give inaccurate results—making it harder to evaluate your performance.

Step 4: Revise your plan

One of the best things about a lean business plan is that it’s not set in stone. In other words, it’s a flexible plan and is open to continuous refinements as you go along with your business activities. Considering everything you have learned so far, this step is where you revise your lean business plan.

It includes making changes to your assumptions, sales channels, marketing techniques, schedules, budgets, and even your target customers as your business continues to evolve over time. The more mistakes you detect and revisions you make, the more reliable your lean business plan becomes.

Step 5: Set your business to launch

Now that you have a complete lean business plan in hand, one that is tested and refined, all you need to do is set your business in motion. Keep in mind to come back, revise, and keep updating your business plan as and when required. Usually, for most businesses, a lean business plan is all you need to get started.

However, sometimes a more detailed business plan is more suitable for large-scale businesses. This could include specific steps and instructions for your team to undertake complex operations and perhaps even comments for your investors. In case that’s your requirement, this business plan checklist might help you stay on track.

Creating a business plan is often a difficult and tedious task, but it doesn’t have to be. With the above-mentioned steps and guidelines, you can create a lean business plan that’s right for your company. This compact, tailored, streamlined, targeted, and easy-to-revise document is sure to get your business up and running in no time.

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About the Author

Ayush is a writer with an academic background in business and marketing. Being a tech-enthusiast, he likes to keep a sharp eye on the latest tech gadgets and innovations. When he's not working, you can find him writing poetry, gaming, playing the ukulele, catching up with friends, and indulging in creative philosophies.

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Lean Startup Business Plan: Definition and How to Create One

19 Aug, 2024

Developing a lean startup plan prioritizes efficiency and adaptability. Craft a streamlined strategy targeting market needs while optimizing resources. Learn to distill your vision into a viable, agile business model for startup success.

What is a Lean Business Plan?

A lean business plan is a streamlined approach to planning, focusing on the essentials of your business idea while eliminating any excess. Unlike traditional business plans, a lean plan is concise, often fitting on just one page, and emphasizes adaptability and direct strategy. It's about knowing your target market, defining your value proposition , and outlining key resources and activities needed to make your business idea a reality.

This type of planning doesn't involve long, detailed documents or an extensive list of untested assumptions. Instead, lean startup plans are living documents that focus on the core aspects of your business model , including customer segments , revenue streams, and cost structures. They are designed to change and evolve as you gain customer feedback and learn more about what works and what doesn't.

In essence, a lean business plan is a clear, straightforward guide that helps you navigate the startup process, making it easier to test assumptions and adjust your strategy as you go.

Benefits of a Lean Business Plan

The benefits of a lean business plan are numerous, particularly for new businesses and entrepreneurs looking to enter the market efficiently. First and foremost, lean business plans save time and resources. Because they focus on the essentials like your value proposition, target customers, and key metrics, you spend less time writing and more time doing. This approach is especially beneficial for startups and small businesses where resources are often limited.

A lean business plan also promotes flexibility and agility. In the fast-paced business world, conditions change rapidly, and a detailed plan can become obsolete quickly. Lean plans are designed to be updated and adjusted easily, allowing you to pivot and adapt as you gather customer feedback and learn more about your market. This adaptability is a competitive advantage, enabling you to respond quickly to opportunities or threats.

Another benefit is the focus on customer relationships and feedback. Lean planning encourages continuous testing and iteration of your business idea, ensuring that the product or service you're developing meets the needs and wants of your target market. This customer-centric approach can lead to a more successful business and a stronger market position.

Finally, a lean business plan simplifies the process of communicating your vision to business partners, investors , and employees. A clear, concise plan is easier to understand and follow, making it more likely that others will be on board with your vision and strategy. This clarity can be invaluable when seeking investment, as investors prefer business plans that get straight to the point and clearly articulate how the business will make money and achieve its goals.

What to Include in a Lean Startup Business Plan

When constructing a lean startup business plan, it's crucial to include specific, targeted sections that encapsulate the essential aspects of your business. Despite its concise nature, a lean plan must comprehensively cover the key components of your startup's strategy and operations.

Executive Summary : This is a brief overview of your business idea, touching on your vision, what you're offering, and why it's needed. Include your value proposition and a snapshot of your target market.
Business Description : Provide a succinct description of your business. What do you do, and what makes your business unique? This section should reflect your business strategy and the problem you're solving in the market.
Market Research and Analysis : Understanding your market is critical. Highlight the results of any market research and analysis you've done. Who are your target customers, and what does the competitive landscape look like?
Marketing Strategy : How do you plan to reach your target market? Outline your marketing and sales strategy, including any advertising space you plan to use or direct sales tactics.
Product or Service Line : Describe your product or service in detail. What is the minimum viable product you will start with, and how does it benefit your customers?
Revenue Streams : Explain how your business will make money. Detail your cost structure and outline the multiple revenue streams you anticipate, whether from direct sales, subscriptions, advertising, or other sources.
Business Model Canvas : Instead of a detailed business plan, lean startup plans often use a business model canvas. This one-page document covers key elements of your business, like customer segments, key activities, and your value proposition.
Financial Projections : While lean plans don't require detailed documents, including some financial projections can help you and potential investors understand the potential growth of your business. This might include income statements , cash flow forecasts, and a brief outline of your funding request if applicable.
Key Metrics : Identify the key metrics that will measure the success of your business. This might include customer acquisition costs, lifetime value, churn rate, and other relevant data points.
Legal Documents and Supporting Documents : Finally, list any legal documents, intellectual property, and other supporting documents essential to your business. While you don't need to include these in the plan, knowing what is needed and having a plan to obtain them is important.

Each section should be concise, clear, and directly related to the core of your business, ensuring that readers can quickly understand your business model, strategy, and goals. Remember, the idea of a lean business plan is to get started on executing your idea quickly while allowing room for adaptation as you learn more about your market and customers.

How to Create a Lean Startup Business Plan

Creating a lean startup business plan is about focusing on what's essential and cutting out the rest. It's a streamlined approach to planning, designed to help you start your business quickly and adapt as you learn. Here's how to create one:

Start with a Vision : Clearly define your business idea and vision. What problem are you solving, and who are you solving it for? This should be a clear and concise statement that guides the rest of your plan.
Draft the Executive Summary : This is a brief outline of your business, including your value proposition and a glimpse of your market analysis. It should quickly tell readers what your business is and what it hopes to achieve.
Use a Lean Business Plan Template : A template can guide you through the necessary components of a lean plan. This typically includes sections like the company description, the product or service, market analysis, strategy, and more, all condensed into a brief, readable format.
Conduct Market Analysis : Understand your target market and competitive landscape. Identify your target customers, their needs, and how your product meets those needs. Look at competitors and how you differ from them.
Outline Your Business Model : Describe how your business will operate. What is your cost structure? How will you make money? Use a business model canvas for a clear, one-page overview of your business strategy.
Clarify Your Value Proposition : What makes your product or service unique? Why should customers choose you? This should be a concise statement highlighting the unique benefits of your offering.
Detail Key Activities : List the essential activities that need to happen for your business to succeed. This includes product development , marketing, sales , and any other crucial operations.
Develop Financial Projections : Even a lean plan needs some financial forecast. Outline your expected revenue streams, cost structure, and any initial funding needs. Keep it high-level but realistic.
Keep It to One Page : The beauty of a lean startup plan is its brevity. Try to keep your plan to one page, focusing only on what's absolutely essential. This makes it easy to share, understand, and revise as needed.
Review and Revise Regularly : A lean business plan is a living document. As you learn more about your market, customers, and own operations, revisit and revise your plan. This keeps it relevant and useful as a guide for your business.

Creating a lean startup business plan doesn't have to be time-consuming or overwhelming. By focusing on the most critical aspects of your business and avoiding unnecessary details, you can quickly start your entrepreneurial journey and adapt your plan as your business grows and evolves. Keep it concise, clear, and flexible for the best results.

Lean Startup Business Plan Example

Let's look at a hypothetical example of a lean startup business plan to illustrate what one might look like in practice. Imagine a new business named "EcoClean," aiming to disrupt the home cleaning industry with environmentally friendly products and practices.

Company Description : EcoClean offers eco-friendly home cleaning services to urban homeowners. Our mission is to provide effective, sustainable cleaning solutions that are good for our customers and the planet.

Business Model : Our business model revolves around direct sales to homeowners in urban areas. We offer subscription-based services that provide regular cleaning with our line of proprietary, eco-friendly cleaning products.

Value Proposition : EcoClean's value proposition is offering a premium, environmentally conscious cleaning service that doesn't compromise on quality. Our services appeal to health-conscious homeowners looking to reduce their environmental footprint without sacrificing the cleanliness and comfort of their homes.

Target Customers : Our primary customers are eco-conscious homeowners living in urban areas, who are typically between 30-50 years old, value sustainability, and are willing to pay a premium for environmentally friendly services.

Lean Business Plan Overview :

Executive Summary : EcoClean uses innovative, eco-friendly cleaning solutions to provide superior home cleaning services. Our unique value proposition targets the growing market of environmentally conscious consumers.
Market Analysis : The demand for green products and services is growing, with an increasing number of consumers looking for ways to live sustainably. Urban areas, with their high concentration of environmentally aware residents, represent a significant market opportunity.
Business Strategy : EcoClean's strategy involves leveraging green marketing tactics, establishing partnerships with eco-friendly product suppliers, and building a strong online presence to reach our target customers. Our flexible service plans and commitment to quality will help us stand out in the busy home cleaning market.
Financial Projections : We anticipate steady growth with the rise in consumer awareness about environmental issues. Initial funding will be directed towards marketing and establishing a strong brand presence. We project to break even within the first year and then move towards profitability as we expand our customer base.
Lean Plan Summary : Our lean startup business plan focuses on establishing EcoClean as a trusted, eco-friendly solution in the home cleaning industry. We aim to grow our customer base through targeted marketing, exceptional service, and a strong commitment to our eco-friendly mission.

This example provides a snapshot of what a lean startup business plan might include, focusing on the most critical aspects of the business, like the company description, value proposition, target market, and business strategy. It's concise, clear, and continually adaptable to reflect the dynamic nature of the startup environment.

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Lean Business Plan Template & How-To Guide

Written by Dave Lavinsky

Historically, business owners have devoted months to constructing a detailed plan to establish strategy, executive, and financial numbers for their business. Although a strategic plan is often created, these entrepreneurs often miss a big piece: gathering feedback from potential customers.

Without collecting data and insight from target customers, the detailed business plan becomes a document of assumptions and guesses rather than a proven success blueprint.

Download our Ultimate Business Plan Template here

Lean business planning allows you to more quickly and accurately develop your business plan based on actual customer feedback and interactions.

Review Your Results & Revise Your Plan

Lean business plan faqs, other helpful business plan articles & templates.

lean business plan template vs. traditional business plan

The lean startup business model is supported by a one-page business plan that does not require extensive financial forecasting or long-term market research and development plans. While the traditional business plan details every aspect of your company’s operations, the lean business plan focuses on key factors that present immediate opportunities for new companies to gain a competitive advantage over their competitors. This approach allows you to maintain company focus on your core mission and avoid adding unnecessary information that can weigh down your final document.

The lean startup movement has encouraged entrepreneurs to shorten their plans down from hundreds of pages to a one-page business plan or less – essentially eliminating the need for small businesses to create traditional plans at all. Rather than spending time creating lengthy reports, owners can simply list their core values, mission statement, market analysis, marketing strategies, and projected financial statements – all on one page.

Some companies even document their entire value proposition on a single sheet of paper which serves as both the foundation for further market research and development to improve its product or service offering. By having this type of information readily available to share with investors or clients, your company will appear more professional and prepared without taking up too much time creating unnecessary documentation.

Developing a lean business plan is a critical step in launching or growing your business. However, it’s important to note that if you’re seeking VC funding , bank funding, or angel investors , a traditional business plan is required. Such a plan includes additional research, strategy, and financial forecasts to give investors and lenders the information they need to determine whether they will receive an adequate ROI (return on investment) if they provide funding to you.

Below are nine key elements of a lean business plan example:

Business overview

Describe what the business does.

Value propositions

Detail the value your business brings to the market and the industry.

Key partnerships

List the key partners, including suppliers, manufacturers, distributors, vendors, or software firms, with whom your business will work.

Key activities

List the key activities your business will perform to gain a competitive advantage, grow market share, and fuel profits.

Key resources

List the resources that your business has at its disposal to create maximum value. This could include human capital (your own experience or that of your core team), intellectual property, patents, funding, etc.

Customer relationships

Describe how your customers will interact with your business. Will you have personal or automated channels of communication available? Chart out the end-to-end customer experience journey and how you intend on building customer relationships.

Customer segments and channels

Specify your target audience, what requirements of theirs you cater to, how you reach out to them, and, most importantly, the steps you are taking to generate a customer experience that will result in long-term loyalty.

Cost structure

Define your key costs and variable costs, and how they represent a competitive advantage if applicable. A lean startup business plan (versus a lean business plan for an existing company), needs to also include key startup costs you anticipate in launching your company.

Revenue streams

Describe how your business generates money. What are your revenue streams or sources, for example, selling advertising space on your app or publication, membership fees, direct sales, etc.? List all your revenue sources in this section, starting with the source that delivers the largest revenue.

Download Your Free Lean Business Plan Template

Lean Business Planning Process

To create your lean business plan, follow these 4 steps:

Create the Plan

Your lean business plan will start with you, your business idea, and one sheet of paper. Yes, one sheet is all you will need.

Business Strategy

You will first begin by explaining your business strategy. This is simply a summary of what you are planning to do, who your customers are, and who your competitors are.

Identify the problem you are trying to solve along with your solution and potential alternative solutions. Then, describe your target customers. Focus on defining and describing the audience you expect to serve, who they are, where they live, etc. Lastly, explain who your competitors are. Describe what they’re doing and how they’re doing it.

Easy enough, that is all you need for your plan. With lean business planning, you simply create a business strategy that focuses on the essence and function of your business: what you’re doing and who it’s for.

Course of Action

The next piece of your lean business plan is laying out an outline of your course of action. This section will illustrate how you’re going to make your strategy happen. Here, you will focus on sales, marketing, your team members, and any potential key partners or future relationships in the business world.

Sales Strategy

It is important to first begin creating your course of action by establishing just what your sales strategy is. Will you be selling in a physical store or online? Or both? Consider whether or not your product will be sold in stores owned by other companies, and who these companies would be.

Marketing Strategy

Next up is creating your marketing strategy. Think about how you will effectively and attractively reach your potential customers. Here, consider the following:

Target market
Online presence
Advertising
Public relations
Special promotions

Team Members

The success of your course of action will be dependent on the team members who execute it. If you need to build a team, think about who the key people are that you will need to hire. What are their qualifications and characteristics? If you already have an existing business, highlight the key members that help run your company and accomplish strategy and success.

Partners and Business Resources

Begin to think of the other businesses that you might want to work with. Most likely there are other companies that you will have to work with to make your strategy work. Brainstorm all key resources, business partners, distributors, and key suppliers that you will need to have relationships with.

After constructing your Course of Action, it’s time to create your schedule. Since lean business planning is centered around efficiency, designing an organized schedule is key.

For startups:

If you’re starting a new business, you should begin with getting to know your customers. For you to grow a viable business, you must understand your customers’ views, wants, and needs. Your goal here will be to ensure that you’ve developed a strategic, organized strategy. A startup’s schedule will often include sending out surveys, interviewing customers, and researching locations.

For established businesses:

For most businesses that have been around, your schedule should be focused on achieving the business goals you have identified. Your schedule should have specific actions with names, dates, and even times. The schedule you create should hold your business and its employees accountable for their work and progress.

The final part of scheduling is to make time to regularly review your Lean Business Plan. As your business progresses, so will your Lean Business Plan. Setting a regular review time is critical to get your business moving in the right direction and your team members on board.

Forecast and Budget

Even if you have the best business idea in the world, if the numbers aren’t there, it won’t work out. The final section of your Lean Business Plan should depict a business model that forecasts and budgets for the future.

Here, all you have to do is create basic bottom-up sales forecasts and a basic budget for expenses. Do not try to sugarcoat here, these numbers should be as practical as possible. With this, you will be able to identify just what will and won’t work for your business.

By taking on this pragmatic sense, you may begin to feel like your business will not be able to succeed unless you are flooding with customers or getting daily news coverage. You may need to alter your business model here and adjust your pricing and expenses to ensure that you can turn a profit. Also, keep in mind any funding options for large-scale marketing and PR campaigns. Keep a realistic view, but also be sure to acknowledge offers that may be available to help you out.

Putting The Lean Business Plan Into Action

After you have completed your lean business plan, it’s time to put it into action. Your main goal here should be to get a deeper understanding of your customers. Is your product solving their problem? Are they willing to pay for it? Do they want something else?

Reaching out to your customers early on will help you get a grasp on their wants and needs to make the necessary alterations to your Lean Business Plan for ultimate success. It will also provide you with some insight as to what products you may want to produce in the future.

analyze results and create a new lean plan

As earlier mentioned, your lean plan should be reviewed regularly to discern just what is working and what isn’t. Compare your results with your lean plan. Are sales growing according to plan? Does the plan need to be changed?

For startups who have little to no metrics to track, review your customer interviews, surveys, or any other information that you have gathered about the industry. Here, you can begin to continually refine your plan and strategy if necessary.

If you are an established business, review your recent results with those from the past. Take note of your key metrics as well as foot traffic in stores, website visits, and any other critical units of measure for your business success.

After analyzing your results, it’s time to revise your plan. Remember that your Lean Business Plan is a process rather than a finalized document, and it is made for continuous improvements. Don’t be afraid to make any necessary changes to aid in your business’s success.

Lean business planning might just be the key to your company’s ultimate success. This simple method of business planning has helped many startups and existing businesses advance and flourish such as Google, Facebook, YouTube, and Amazon. By focusing on reviewing, revising, and business management, lean planning allows you to test out different strategies to find the best one to create a successful business.

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What is a lean business plan?

A lean business plan is a compact, single-page document typically for internal use. Lean planning is a short-term business plan strategy for making small changes and measuring the results to improve the efficiency of the business. This compares to the formal business plan which is typically very detailed, includes 10 key components , and can be up to 15-25 pages in length.

What is the purpose of a lean business plan?

The lean business plan is primarily for internal use, so it doesn’t have to be a fancy document. The purpose of this plan is for you to document the changes you’ve made to your business so that you can analyze their effectiveness in improving business operations, marketing, and/or sales over a short period.

How long is a lean business plan?

The lean business plan is typically a one-page document to describe your business strategy including your goals, targeted audience, your business model, and how your sales and marketing strategies work to support your business goals.

How do you create a lean business plan?

Refer to our article on ‘ Lean Business Plan: How-To Guide & Template ’ for the 4 steps in creating a lean business plan or a lean startup business plan template . You can also download our free lean plan template to help you get started.

Business Plan Template & Guide for Small Businesses

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The Ultimate Guide to Creating a Lean Startup Business Plan

Starting a business can be both thrilling and terrifying. On one hand, you have this brilliant idea and can’t wait to bring it into the world. But there’s also the nagging fear that your amazing concept might fall flat or fail to gain traction.

So how do you make sure your startup succeeds? The answer is charting out a solid business plan.

I know, I know. Just hearing the phrase “business plan” brings back bad memories of dry, long-winded documents from business school. But for startups, there’s a better way to plan out your venture – something called the lean startup business plan.

The lean startup approach focuses on streamlining the business planning process so you can start testing your idea faster, without getting bogged down with lengthy sections and financial projections you can’t possibly predict accurately at such an early stage.

In this beginner’s guide, I’ll walk you through exactly how to create a lean startup business plan template that helps you quickly validate your business idea with real-life customers.

What is a Lean Startup Business Plan?

First things first – let’s define what exactly the lean methodology means when applied to an entrepreneur’s business plan.

Put simply, a lean startup business plan is a streamlined, no-fluff version of a traditional business plan. It’s designed for speed and adaptability rather than comprehensiveness.

The lean startup movement first became popular around 2008. It emphasizes testing a product or service idea quickly, using a minimum viable product (MVP), and getting real user feedback before committing to long development and release cycles.

The key principles of lean startup are:

Rapid build-test-learn loops
Scientific testing with real customers from day one
Iterating based on validated learning

Most new companies that take the lean approach never reach an official launch stage. Instead, they continuously test with and adapt to real customers – refining their MVP and pivoting directions based on evidence of what does or doesn’t get market traction.

So how does that tie in with writing a business plan?

Well, the traditional business plan model doesn’t fit the lean paradigm shift.

Lengthy, complex, intricate business plans take too much time to write. Attempting to project multiple years of expenses, sales, hiring, growth rates etc…..it’s all just guesswork when you haven’t started selling anything yet.

The lean startup business plan tosses unnecessary details out the window and instead focuses only on critical hypotheses and assumptions that must be tested as quickly as possible.

Investors like this approach because it shows you:

Know what assumptions make or break your business
Can test them quickly at low cost
Will adapt based on real data

So if you’re an early stage startup looking for funding or entering an accelerator program like Y Combinator, a lean business plan is likely your best bet to showcase your entrepreneurial abilities.

Now the big question….

What Does a Lean Startup Business Plan Include?

The lean startup template pares down the typical business plan format to just the essential elements early-stage investors care about:

Problem – What pain points will your product address? Why are those needs not being met?
Solution – How will your product alleviate that pain better than alternatives? Why will customers buy from you over other options?
Target market — Who has that specific problem and will buy your solution? ( Note: Be specific! “Everyone” is never the right answer.)
Competition — Who else is tackling that customer problem? How is your solution fundamentally better or different?
Key features – What’s the minimum feature set to address target customers’ needs on day one and provide value?
Marketing & sales – What tactics will you use to reach early adopters? ( Note: For most startups, digital sales & marketing channels rule supreme. )
Operations – Outline your core business processes. Don’t go into granular detail, just highlight how you’ll deliver value to customers.
Milestones – What big assumptions will you test? Include timelines + costs to conduct experiments so you can demonstrate a logical thought process.
Financials – Optional Breakdown high-level estimates only if useful. For the lean startup plan, elaborate projections are unnecessary and speculative. Focus everything on testing key assumptions.

You may have noticed one conspicuously absent item – the Executive Summary. We’re skipping it because unlike traditional business plans sent to various stakeholders, your lean startup plan has just one audience – startup investors.

And remember, the lean methodology is all about using real-life data instead of guesses and best-case scenarios. So even if some assumptions in your original lean business plan don’t pan out, that’s actually great news! It gives you hard evidence to adapt intelligently while developing your MVP.

Now that you know what the lean startup template includes at a high-level, let’s go through each of the core sections in more detail.

First and foremost, you need to spell out exactly what customer problem your startup aims to solve. (And yes, it needs to be an actual must-solve problem, not a nice-to-have).

Start by broadly describing the pain points your target customers face. Get tactical by including stats, data or quotes that showcase why this issue is so urgent for them.

Then explain how the problem ties into a larger trend in your target industry. Paint a big picture view of why common solutions up until now have failed to address this pain sufficiently.

Essentially, convincingly convey that there’s a pressing customer need ready for innovation.

You need to display beyond any doubt that you:

Deeply understand your target customers’ challenges
Can explain why those problems exist in the first place
Will provide a compelling solution tailored to fix them

This sets the stage for why launching a startup to address this issue makes so much sense.

2. Solution

Now that you’ve framed the problem, shift gears into explaining your startup’s solution. Start by providing an overview of your product and how it alleviates target customer pains better than alternatives already on the market.

Then embellish with details on:

Product Benefits

How specifically will your product make customers’ lives easier? Don’t just describe product features or functionality. Speak directly to how you’ll empower them to achieve something that’s currently difficult, inconvenient or even impossible for them to accomplish on their own.

Competitive Advantage

What specifically sets your solution apart from potential competitor offerings and substitutes? Is it higher quality, better convenience, lower cost, less hassle, faster performance – or perhaps an innovative model that’s never been seen before in the market?

Highlight your startup’s special sauce that no one else can easily replicate. Explain barriers to entry that will hinder copycats.

Customer Incentive

Why will target users’ purchase from your brand over chasing other options? It usually comes down to believing you can deliver significantly MORE value than alternatives or solve an urgent pain nothing else currently satisfies. Make your case for why you fit one or both scenarios.

Scalability

Particularly if you are pursuing venture capital investors, explain how your business can rapidly scale up to tap a very large global market with your solution. Outline a blueprint for how you realistically grow from thousands to millions of customers in the coming years.

Remember, don’t drown potential investors in intricate details about every single product feature and technical specification. They care most about how your solution nails the value proposition trifecta:

Targets an urgent customer problem
Provides 10x+ better value over existing options
Can scale to a very large market long term

If you can compellingly check all three boxes, you’ll spark investor interest even with limited hard evidence at such an early phase.

Of course, that doesn’t mean you won’t eventually need to back up your claims. However, the lean startup plan is more about framing hypotheses than definitive proof. We’ll cover how to demonstrate enough evidence to warrant launching experiments soon.

For now, stick to crafting an intriguing startup story that sets you up to start testing fundamental assumptions very soon after funding. There will be plenty of time to figure out minor product details once you validate solving a pressing problem for real paying customers.

3. Target Market

Up until now, I’ve used the term “target customer” quite loosely. But it’s time to get very specific on who those real-world people actually are for your startup.

Venture capital investors want to quantify the population size and traits of target buyer personas in precise detail. So you need to describe exact psychographic and demographic qualities of your beachhead market – the subset of overall customers you tackle first to gain a foothold quickly.

Start by explaining your total addressable market (TAM) – the entire population who could plausibly need and want your solution for the core problem it tackles. Depending on the ubiquity of that issue for consumers and/or businesses, the TAM could be very narrow or encompass hundreds of millions globally.

Then segment down from that full market to identify your specific beachhead target customer population. The ideal beachhead often has these characteristics:

Suffers from the problem much more painfully than casual groups
Has already tried existing solutions without sufficient success
Has disposable income to purchase a premium solution for relief
Is easy to access and serve operationally in early phases
Isn’t incredibly price sensitive
Can provide extensive feedback on the product
Has influencer qualities to attract wider market segments

Nail down quantifiable population size estimates for this core beachhead subset. Combine publicly accessible data from existing market research reports with reasonable inferences or assumptions from adjacent industries.

But resist the founder’s tendency towards magical thinking – “If we nailed even just 1% of the market…!” Generic hypotheticals don’t sway experienced investors focused on tangible traction signals.

Paint a detailed demographic picture of exactly who fits the mold of a hot prospect customer for you in the beginning.

For B2C startups , call out relevant attributes like:

Marital/family status
Home ownership

For B2B startups , highlight qualities like:

Industry vertical
Company size
Title seniority
Annual revenue
Tech adoption habits

Then outline statistical commonalities across your core beachhead buyers – what key similarities unite this subgroup vs. the entire population facing the problem?

Finally, convey TAM expansion opportunities once you solidify solutions tailored for that first niche. But defer outlining detailed ways to extend your reach right now since nailing product/market fit with just one segment is the critical prerequisite to win over adjacent groups.

Position your solution as optimized for an underserved niche ripe for disruption based on competitors failing to deliver adequate solutions. Then segue into how your distribution plan concentrated on this “low-hanging fruit” beachhead will purposefully evolve later to expand TAM reach long term.

4. Competition

What the competition section lacks by traditional business plan standards in length, it more than makes up for in strategic rigor.

The core question competitive analysis must answer:

Why are current solutions in the market failing to adequately alleviate your target customers’ pain?

Start by inventorying existing competitor products/services currently used by prospects experiencing this problem. List out the main options your target persona has for solving their struggles today, even if those solutions don’t perfectly fix the issue or fully satisfy them.

Then contrast point-by-point specifics on why your solution beats competitors, especially on the metrics most important to your target niche. Show how you will “disrupt the disruptors” because even pioneering products have limitations needing innovation.

Criteria to call out where you claim competitive advantage:

Convenience
Scale potential
Business model innovation

Back up any bold claims of superiority with limited initial evidence beyond conjecture — data from beta user testing prototype versions, customer quotes from initial beachhead outreach, or precedents from analogs in adjacent markets.

Take care to focus specifically on competitors targeting the same early adopter beachhead market segment though. Details contrasting solutions for other peripherical segments are unnecessary right now.

Round out competitor analysis by itemizing macro trends almost certain to diminish prospects for legacy products over the next 5-10 years. These should make the rationale behind your startup now abundantly clear even to skeptics.

5. Key Features

Thus far you’ve made a case for:

A pressing customer problem inadequately solved
Your startup’s superior solution
Quantified target beachhead market

Now it’s time to shift to specifics on the crucial product and feature details enabling your entire value proposition.

Remember – only include what’s absolutely necessary for launch based on addressing revealed target customer needs!

Err on the side of a minimal feature set early on. Describe additional functionality prospects request once you start serving initial customers.

Outline the critical set of features required to deploy a minimum viable product (MVP) with just enough core attributes to satisfy early adopters on day one.

Organize by:

Must-Have Features

What feature absolute “must-haves” must be ready for early adopters to provide enough value converting from current solutions?

Nice-To-Have Features

What would enhance perceived value but aren’t imperative to activate paying users? Defer these to later product milestones.

Future Features

Briefly mention functionality on the long-term roadmap to showcase platform potential.

Think of must-have features as the “walking version” of your product – unscalable manual processes providing baseline value perfect for testing with friendly early adopters.

Then nice-to-haves represent the “jogging version” – automating more of the workflow via technology – while future functionality serves as the “running version” enhanced for steep vertical scaling.

In conjunction with digital tools, brainstorm creative ways to manually deliver MVP experiences centered around must-haves. This showcases your determination to activate solutions for that first tiny niche even sans a fully built production-grade product.

Emphasize with investors that you respect their money enough to not waste it on premature optimizations. Your plan ensures you build and roadmap additional functionality responsibly IF AND ONLY IF initial feature experimentation proves substantial product/market fit warranting doubling down.

6. Marketing & Sales

Thus far you’ve covered the key value proposition and functionality your startup will offer. Now shift to tactical specifics on how you’ll connect your novel solution with that clearly defined target beachhead.

Start by breaking down your blended omni-channel market blueprint to cut through the noise and achieve conversion lift.

Here is an ideal framework pairing both scalable and targeted elements for seed-stage ventures:

Paid Digital Marketing

Targeted Facebook/Instagram/TikTok Ads
Search/Display Retargeting
Streaming Radio Spots
Industry Forum Sponsorships
Highly-Targeted Content Marketing

Grassroots Outreach

Beachhead Email Outreach
Beachhead Calls/Texts
Industry Event Networking
Local University Campus Reps
Early Adopter Referral Programs

Earned Media

Contributed Articles
Podcast Interviews
Reviews / Testimonials
Referral Partnerships
PR Launches & Press Releases

The glaring omission? Sales team headcount.

Early on, founders must handle sales themselves to economize cash burn. Hiring reps too early risks overextending finances before ensuring product viability.

So spotlight your personal founder sales fit first. Play up hands-on selling experience within the specific market context you’re pursuing with this venture.

Then convey a scaling plan centered on refining and automating conversion funnel elements that empirically guide qualified leads to become delighted long-term customers.

The core funnel methodology goes:

Broad-based brand awareness marketing → Baits wide audience
Lead capturing mechanisms → Filters for buyers
Consultative selling touchpoints → Focuses high-potential targets
Frictionless conversion → Delivers ROI proof

If your business model doesn’t fit this framework, adapt concepts accordingly while sticking to the seed stage constraints of capital efficiency and lean experimentation.

7. Operations

By this point you’ve described WHAT your startup does and WHO it serves. Now it’s time to explain HOW you’ll deliver on ambitious promises to customers.

Start by simply framing core business processes required to get your product or service from raw inputs all the way through to solving target user pain points.

For physical products, that could involve flows like:

Design concepts → Engineering specifications → Prototyping → Manufacturing → Quality assurance → Packaging → Distributing → Support

For software platforms:

Product requisites → Cloud infrastructure → Coding → Version control → Usage analytics → Onboarding → Technical support

For services:

Prospecting → Onboarding → Account Management → Delivery capacity → Quality control → Supplemental services → Support

You get the idea. Just define macro processes without diving into granular details. Those come through experimentation!

Primarily, concentrate operational details on two crucial pillars:

Proprietary unfair advantages that supercharge efficiency to delight customers while maintaining profit margins despite tight costs. Common examples include algorithms, datasets, novel business model frameworks, or embedded industry experts.
Partnerships or platforms enabling you to deliver baseline functionality matching incumbent competitors on day one. Don’t attempt to build everything end-to-end or innovate across every dimension from the start! Leverage existing commoditized solutions while you test differentiated value propositions focused on solving target customer problems 10x better.

Essentially, convey you grasp the key 20% inputs that drive 80% of customer value. If the processes seem complex, find ingenious ways to simplify. Position enhanced intricacies as optional add-ons once baseline product/market fit is proven vs. overbuilding the wrong advanced solution.

8. Milestones

The milestones section represents the culmination of everything you’ve documented thus far. Here, outline the step-by-step process for methodically testing the riskiest assumptions underlying your startup.

In conjunction with the experiment design, detail concrete metrics or signals indicating whether hypotheses prove true or false. Then estimate costs, durations, and resource requirements for rapid experiments.

Frame assumptions through statements structured like:

We believe [this capability] will result in [this customer reaction]

Then design tests around the ability to measure:

behavioral changes
sentiment improvements
usage increases
revenue lift

Common milestone tests to consider:

Solution Viability – Manual then automated demonstrations quantifying interest
Demand Validation – Willingness to prepay as a signal
Market Sizing Accuracy – Applying proxies from analogous use cases
Business Model Fit – Contrasting pricing sensitivity across customer segments
Feature Prioritization – Gauging reactions to mockups or limited functionality
Operational Scalability – Maximizing utilization before adding overhead

Combine testing both internally-facing operations and externally-visible customer experiences. But concentrate on product/solution related hypotheses first.

Beating competitors takes precedence over backend experimentation. Optimize business operations AFTER establishing winning customer value propositions.

The key is conveying to investors an empirical, metrics-driven approach centered on turning critical assumptions into facts or disproving them faster than incumbents hampered by legacies and red tape.

Cement belief you’ll double down on evidence proving repeatable formulas to acquire and monetize target niche segments. And quickly cut losses spending minimal capital if data suggests limited viability.

9. Financials

We’ve made it clear that traditional multi-year financial projections typical of standard business plans are counterproductive guesses for early stage startups.

However, seed investors still want to see back-of-napkin math you’ve done to quantify potential venture scale. So mock up top level metrics more as directional guidelines than definitive targets.

Take utmost care however NOT to pull imaginary hockey stick numbers from thin air. Founders claiming $100 million valuations on basic eCommerce stores face extreme investor skepticism…and deserve to!

Baseline financial model components should include:

Estimated Customer Acquisition Costs Per Beachhead Channel
Willingness-To-Pay Price Range For Target Personas
Logical Volume Estimates Based On Analog Use Cases
Assumed Conversion Rates Each Funnel Stage
Operational Unit Economics At Various Scale Points

Use inherently bottom-up thinking grounded in realities of what combination of inputs would need to scale to hit specific 8-figure outcomes. Top-down abstract number picking lacks validity.

And remember, early-stage startup financial models serve more as instruments of learning than definitive targets. Adapt projections based on empirical evidence once live.

Concentrate everything on validating customer demand first. Defer advanced modeling of operational minutiae or elaborating hockey stick projections.

Getting REAL buyers is all that matters initially.

Bringing It All Together

Despite extending 3k+ words at this point, the lean startup methodology boils down to an elementary formula:

Start by deeply understanding a pressing customer problem
Design an innovative solution specifically addressing root causes
Concentrate on dominating an underserved niche beachhead market segment
Validate demand empirically through rapid testing
Scale up deliberately only once achieving initial product/market fit

In that sense, think of the lean business plan format as more of an exercise in startup soul searching than a stuffy document.

It pushes founders to pressure test their value proposition, business model, and operational viability through the lens of target customers rather than theoretical academic assumptions.

You can’t survive let alone thrive in the brutally competitive startup game without getting inside the hearts and minds of actual buyers needing your solutions.

So escape the temptation to overly complicate initial planning with intricate spreadsheets and 40-page reports professional managers expect.

Instead, concentrate efforts on distilling explanations of the crucial assumptions requiring testing above all else before launch.

Then close your lean startup business plan with next step calls-to-action so readers clearly understand how you’ll leverage funding to start rapidly experimenting using the scientific method.

Now…go show the world what your brilliance is made of!

Partha Chakraborty

Partha Chakraborty is a venture capitalist turned entrepreneur with 17 years of experience. He has worked across India, China & Singapore. He is the founder of Tactyqal.com, a startup that guides other startup founders to find success. He loves to brainstorm new business ideas, and talk about growth hacking, and venture capital. In his spare time, he mentors young entrepreneurs to build successful startups.

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Planning, Startups, Stories

Tim berry on business planning, starting and growing your business, and having a life in the meantime., lean business plan to get what you want from your business.

Are you running your own business or looking to start a new business? The lean business plan is an easy way to set down your strategy, tactics, milestones, and essential business numbers. Just do it for yourself and your team, with a few streamlined bullet points for strategy and tactics; plus lists of key milestones, tasks, assumptions, and performance metrics; and essential business numbers. Then review and revise it regularly and you’ll have your progress towards goals, and accountability.

Lean Business Plan in Four Steps

One: strategy.

Two: Tactics

Strategy is useless without tactics. In a lean business plan, tactics define your choices related to pricing, channels, website, mobile app, launch dates, features, benefits, messaging, media, promotion, platforms, locations, signage, financing, recruitment, bundles, and so forth. There is no reason to define all this in detail, or defend it for outsiders. Just decide and set it down as a bullet points. These are the core thoughts of marketing plan, product plan, and financial plan — but just what you need to do it. You don’t need elaborate text. Keep what you say about your tactics simple.

Three: Concrete Specifics

A lean business plan includes milestones to make your planning real. Milestones include dates, deadlines, tasks, responsibilities, and plan your budget and goals to reach specific milestones. List your important assumptions. Set dates for review and revision, plan vs. actual analysis, at least once a month. Set performance metrics you can track. Match every key task with somebody who owns it and lives with its results.

Four: Plan for Cash Flow

A lean business plan includes a sales forecast, spending budget, and cash flow. Profits don’t guarantee cash in the bank. Allow for time to wait for clients to pay, and money to buy what you have to before you sell. The purpose of forecasting is management not accurately predicting the future. Connect the dots so sales depends on drivers of sales like traffic, conversions, leads, closes, and so forth. Match sales forecast to projected spending on sales and marketing expenses.

Review and Revise Often

Always track results and review and revise often. What’s happened with the plan? Were assumptions valid? Was it executed?

Lean startup? Yes. Borrow the concept of minimum viable product and apply it to minimum business plan. Borrow the concept of small steps and frequent reviews and apply it to planning and management.

Nothing lends credibility like milestones met. Nothing says planning better than a revised fresh plan. Be a line, not a dot.

The Lean Business Plan is to Get Stuff Done

Times have changed. Don’t do a big traditional business plan but don’t throw out planning either. Do it right. Do a lean business plan. Your business deserves it. Focus, set priorities, highlight execution and specifics, manage cash. Get what you want from your business, whether that’s high-tech growth and funding or independence and peace of mind. It’s not about a plan; it’s about optimizing your life.

After reading through your standard business plan the purpose for me is to help my family focus on new potential small business or business’s in the near future . I will hold your basic outline close to my heart. It was very easy to follow and yet made since because it created an easy bullet list of the most important points to focus on. Thank you for publishing.

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Lean Startup: Defined, How It Differs From a Traditional Business

What Is Lean Startup?

A lean startup is a method used to found a new company or introduce a new product on behalf of an existing company. The lean startup method advocates developing products that consumers have already demonstrated they desire so that a market will already exist as soon as the product is launched. As opposed to developing a product and then hoping that demand will emerge.

Gaging Consumer Interest

By employing lean startup principles, product developers can gauge consumer interest in the product and determine how the product might need to be refined. This process is called validated learning and it can be utilized to avoid the unnecessary use of resources in product creation and development. Through lean startup, if an idea is likely to fail, it will fail quickly and cheaply instead of slowly and expensively, hence the term “fail-fast.”

The lean startup method was developed by American entrepreneur Eric Ries, founder, and CEO of the Long-Term Stock Exchange (LTSE). He fully explains the method in his bestselling book, The Lean Startup, which has been translated into 30 languages.

Lean startup is an example of consumers dictating the type of products they are offered by their respective markets, rather than those markets dictating what products will be offered to them.

Lean Startup vs. Traditional Businesses

The lean startup method also differentiates itself from the traditional business model when it comes to hiring. Lean startups hire workers who can learn, adapt, and work quickly while traditional businesses hire workers based on experience and ability. Lean startups also use different financial reporting metrics; instead of focusing on income statements, balance sheets , and cash flow statements , they focus on customer acquisition cost, lifetime customer value, customer churn rate , and how viral their product could be.

Requirements for Lean Startup

The lean startup method considers experimentation to be more valuable than detailed planning. Five-year business plans built around unknowns are considered a waste of time, and customer reaction is paramount.

Instead of business plans, lean startups use a business model based on hypotheses that are tested rapidly. Data does not need to be completed before proceeding; it just needs to be sufficient. When customers do not react as desired, the startup quickly adjusts to limit its losses and return to developing products consumers want. Failure is the rule, not the exception.

Entrepreneurs following this method test their hypotheses by engaging with potential customers, purchasers, and partners to gauge their reactions about product features, pricing, distribution, and customer acquisition. With the information, entrepreneurs make small adjustments called iterations to products, and large adjustments called pivots correct any major concerns. This testing phase might result in changing the target customer or modifying the product to better serve the current target customer.

The lean startup method first identifies a problem that needs to be solved. It then develops a minimum viable product or the smallest form of the product that allows entrepreneurs to introduce it to potential customers for feedback. This method is faster and less expensive than developing the final product for testing and reduces the risk that startups face by decreasing their typical high failure rate. Lean startup redefines a startup as an organization that is searching for a scalable business model, not one that has an existing business plan that it is determined to execute.

Example of Lean Startup

For example, a healthy meal delivery service that is targeting busy, single 20-somethings in urban areas might learn that it has a better market in 30-something affluent mothers of newborns in the suburbs. The company might then change its delivery schedule and the types of foods it serves to provide optimal nutrition for new mothers. It might also add on options for meals for spouses or partners and other children in the household.

The lean startup method is not to be used exclusively by startups. Companies such as General Electric , Qualcomm, and Intuit have all used the lean startup method; GE used the method to develop a new battery for use by cell phone companies in developing countries where electricity is unreliable.

Key Takeaways

Lean startup is the process of developing a product or company based on the expressed desires of the market.
The lean startup uses validated learning, which is a process by which companies assess consumer interest.
Lean startup methods focus heavily on customer-related information such as customer churn rate, lifetime customer value, and product popularity.
In lean startup practices, experimentation is favored more than adherence to a rigid plan.
Lean startup standards will involve the release of a small form or early concept products in order to assess the customer reaction to the product.

The Lean Startup. " The Book. " Accessed Sept. 14, 2021.

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Lean Business Planning

Get what you want from your business.

Lean Business Plan Steps. Just Do It.

Keep it lean. Benefits, definitions, and principles aside, this section takes you step-by-step through the process of creating a lean business plan. It’s four steps: strategy, tactics, essential projections, and concrete specifics. Just do it.

Lean business plan in 4 easy steps

Steps illustrate the business plan step-by-step

Four simple steps. You can do this. You can follow along with the “next page” link on the lower right, to go in order. Or you can click any of these next few links to go to each of the four steps:

Set Your Strategy Your lean business plan starts with simple strategy, usually just bullet point lists, which you write down so you can refer back to it later.
Plan Tactics Tactics are pricing, distribution, promotion, product, financial plans, sales, marketing, and so forth. Set down the tactics in bullet points, so you can refer back to them.
Basic Numbers and Forecasts You really need to manage sales forecasts, cost forecasts, expense budgets, and cash flow. You need that to manage your business. Include it in your lean business plan and then track results and manage the difference between what you planned and what happened.
Execution: Concrete Specifics the final, and maybe most important, business plan step is to add the specifics, the details, the trackable elements, of what is supposed to happen, when, who is responsible, budgets, and so forth. Anything that isn’t tracked is not nearly as likely to happen.

Measure the value of a business plan by the execution it causes. Tweet

Lean is a key difference.

Don’t do a full formal business plan if you don’t need it. Just do the lean business plan, and then track results, and follow up with management and steering. Tweet

Keep it simple. The lean plan is just what you’ll use. Yes, you should know your market. Yes, you should have a marketing plan. But almost everything in your lean plan is lists or bullet points, for your own use only. Remember, it’s a lean business plan step-by-step.

Form Follows Function

Your planning is supposed to fit your business’s needs. It’s not universal. They aren’t all the same. If you don’t need to show it to outsiders, then don’t do more than you will use.

Lean Canvas: How To Create a Business Plan that People Will Actually Read

Everybody has a plan until they get punched in the mouth… – Mike Tyson

Which, let’s face it, happens to most start-ups and entrepreneurs. Around 75% in fact.

You have the best idea. You spend days, weeks, and months perfecting a 40-page business plan filled with five-year forecasts, 18-month roadmaps, and in-depth marketing strategies. You confidently pitch it to stakeholders and investors.

Then you get punched in the mouth.

Potential investors go quiet or “ haven’t had time to read it ” and you’re left with an expensive, wasted deliverable and a chunk of time that you’ll never get back. Worse still, your product isn’t any nearer launching and you haven’t secured any buy-in or investment.

What. A. Waste. Of. Time.

Traditional business plans are of little use to start-ups, and of no real interest to investors.

But what’s the alternative?

A one-page business plan inspired by Eric Ries ’s Lean Start-Up methodology and specifically designed for emerging entrepreneurs: The Lean Canvas.

The Lean Canvas is a living framework that allows you to quickly capture your idea or concept, thoroughly validate it, and then continuously share, improve, and most importantly move on it.

Ok, I know what you’re thinking:

How can a one-page Lean Canvas possibly replace a 40-page business plan?

How can i tell the entire story of my business on one-page, is a lean canvas really enough to help me secure investment or buy-in.

I have the answers to all these questions and more in this Process Street post.

Ready to dodge some punches?

Creating a detailed business plan (complete with comprehensive forecasts, roadmaps, and strategies) and pitching it to investors has always been the first step new businesses and entrepreneurs take to secure buy-in or investment, right?

Why business plans don’t work for start-ups

During the early stages of an idea or a business, all you really have is a strong belief, a clear vision, and a lot of untested assumptions: You believe there’s a market for it. You think your pricing will generate $X in revenue, and you hope your product roadmap will look a certain way.

But you don’t really know. How can you? You haven’t tested the concept.

Of course, your business model might be based on similar businesses, products, or concepts, which allow you to hypothesize the future. But you can’t provide any concrete proof or evidence that your idea is going to work.

Which is surely the sole purpose of a business plan?

Plus, a business plan typically takes ages to write as it requires lots of detailed, accurate information. And, it becomes obsolete incredibly quickly, as and when you encounter the various operational and marketing challenges that inevitably arise.

So, instead of being a clear, factually accurate, representative proposition, a start-up’s business plan tends to be a wishy-washy, out-of-date, speculative document.

And, what do investors, Angels, and stakeholders hate more than anything…? Exactly.

The alternative to speculative, inaccurate, & obsolete business plans

Start-ups face a vicious circle: You can’t prove your concept without investment, but you can’t get investment without proof.

The original concept of a business plan was to break this circle and give investors the information they needed to justify a decision on whether to fund the idea or not.

But as we’ve already established, not only is a start-up’s business plan incredibly time-consuming to create, it’s difficult to digest and full of guesses rather than reassuring facts. As a result, all that hard work can often get bypassed by investors.

The answer to this dilemma is the Lean Canvas. The Lean Canvas is an actionable, entrepreneur-focused, one-page business plan.

Inspired by Alex Osterwalder ’s Business Model Canvas and the principles behind the Lean Start-Up movement and eradication of waste , Ash Maurya developed the Lean Canvas framework specifically for start-ups.

He felt that spending time creating a business plan that was often inaccurate, obsolete, and ignored was unproductive and a wasteful.

“ Waste is any human activity which absorbs resources but creates no value. ” – James Womack , Leanstack , Bootstrapping + Lean Startup = Low-burn Startup

So, he developed the Lean Canvas; a one-page, easy-to-digest document that:

As you can see, the Lean Canvas is a set of nine blocks:

Value proposition
Unfair advantage
Key metrics

Each block presents clear, concise, and accurate information in a digestible format. It takes less time to complete, it’s easy to keep up-to-date, it gives investors the information they need, and it paints a clear picture of the business or idea on one page (instead of 40).

What’s not to like?

OK, you get it: It’s a waste of time creating a semi-fictional business plan that won’t get read. But, seriously ? How can you convey how fantastic your idea is on one, single page?

To answer this, we’ll need to look at each of the nine components that make up the one-page Lean Canvas framework.

Lean Canvas component #1: Customers ‍ ‍

The first block to fill out is all about your customers. As you might do with a business plan, you need to determine who your user base is and understand what makes them tick.

Go deep and build up a customer profile for each group of customers you’re targeting. Get under their skin and get to know them as people:

Who is your intended audience?
What type of person are they?
What are their likes, dislikes, and pain points?
What’s their average day like?
What makes them happy?
What frustrates them?

One thing you must do during this exercise is define who the early adopters of your product are likely to be.

Identifying this group of people is essential because you can use them to validate your ideas.

Ask them questions, send them feedback surveys, and get them to trial your product. Collect these valuable insights and use them to iterate your Lean Canvas, determine the direction you take your product in, and justify your ideas.

Real customer opinions and feedback are valuable proof points that investors will trust.

Lean Canvas component #2: Problem

The next step you need to take should be in the shoes of your customer. Walk a mile in your customer’s shoes so you can identify the problems they might face with (and also without) your product.

Conduct interviews, carry out tests, or send out surveys to help you uncover the real issues they’re likely to face or are already facing.

Interact with your product yourself, or ask an unrelated third party to give it a try. Consider the experience from your customer’s point of view and objectively identify what works and what doesn’t.

Take this back to your Lean Canvas and tweak your idea accordingly. Use it as evidence to prove the concept you’re pitching.

Lean Canvas component #3: Solution ❗

Next, you need to describe what your product is going to do. What will it solve? What’s the ultimate vision?

You might feel that your product solves several problems and is the answer to everything. But, remember, this needs to be clear and concise.

So, play around with each solution to see what sticks. Assess your features and capabilities, carry out research, collect feedback, and brainstorm with your team so you can narrow it down to one or two solid solutions that are grounded in evidence.

Lean Canvas component #4: Channels

How will your customers find your product? How will they come into contact with you or your product?

List every single channel or touchpoint that you could use to get your product in front of your audience.

You might want to use a mixture of paid channels, like Facebook ads or trade fairs, and free channels like SEO or blog posts. Create a content strategy to help you decide where best to center your efforts and show investors that you’re able to provide the best experience to your customers at every step of their journey.

Lean Canvas component #5: Value proposition ⚡

Write out a punchy statement that explains the core value of your product.

Think: Why would your target customer care about it? What will it do for them? What problem does it solve? Why is it a better option than the competition?

Sell the end-benefit not the solution, and keep it short, catchy, and powerfully persuasive (eg. the film ‘Alien’ isn’t a film about aliens, it’s “ Jaws in Space ”).

Three words of warning though:

Don’t confuse a value proposition with a tacky slogan. For instance, M&M’s “Melts in your mouth, not in your hand…” is a slogan, not a value proposition.
Don’t write a sentence that’s all hype and no substance. For example, “The best product EVER made” is pure hype. There’s nothing to back it up and investors will see straight through it.
Don’t use meaningless buzzwords or jargon. You might think that phrases like “value-added interactions” make you sound like a prestigious expert, but they don’t. They make you sound like a pretentious airhead.

This block is one of the most important ones to get right. Your value proposition is how investors will see you and your product, and how they will describe you to other partners and investors.

Lean Canvas component #6: Unfair advantage

Whether you know it or not, you have an unfair advantage over your competitors. All you have to do is find out what it is!

What makes you stand out? What puts you streets ahead of your competitors? What do you have that others can’t replicate or acquire?

It might be your internal team; it might be in-depth knowledge or inside information; or it could be your unique position within a community.

It’s there somewhere. Dig it out and put it on display.

Lean Canvas component #7: Revenue

This is where you’ll need to identify the sources of income that will keep you and your business afloat.

Create a simple pricing model and test it out on your early adopters. Does it work for them and for you?

You might charge a subscription fee; you might generate income through advertising on your platform; or maybe you’ll get customers to pay for their usage. Maybe it’s a combination of all three!

Just remember to keep it as simple as possible, test it out, and keep iterating until it’s perfect.

Again, testing it out on early adopters backs up your concept.

Lean Canvas component #8: Costs

I probably don’t need to tell you that over 90% of start-ups fail because they don’t consider the proper costs of launching and running their business.

So, list all of your expenses.

Consider everything, from customer acquisition and retention costs, to distribution and office overheads. And to make sure you don’t miss any key costs, work through each of the nine blocks in your Lean Canvas and consider the costs that each might bring.

Lean Canvas component #9: Key metrics

To be able to prove the success of your product, you’ll need to set clear, easy to measure metrics.

Outline what you plan to track and why.

Identify the indicators that will demonstrate how well your company is doing. For instance, you may choose to measure the number of users, downloads, or social followers you get; or you may focus on retention figures, brand interactions, or costs, etc.

Fill in this section of your Lean Canvas with the metrics that are most critical to the problem you’re trying to solve with your product.

Now you’ve seen what goes into a Lean Canvas, can you see how it’s possible to tell the whole story of your business on one page?

Key things to remember when creating your Lean Canvas

The trick to creating an effective Lean Canvas that fits onto one page is to:

Fill in all 9 blocks in the above order and work your way through each one logically.
Fill each block with concise notes and link-out to images, documents, and other related information.
Remember it’s a fluid, working document that’s not set in stone.

To test the Lean Canvas out before you share it with investors, go through each step and relay the story to yourself:

We will help [customers] solve [problem] by providing them with our [solution] . They will know about us through [channels] and they will be convinced to join us because [value proposition] and because we [unfair advantage] . We will charge them by [revenue] which will cover our [costs] . We will measure our performance by tracking [key metrics] .

It should all flow nicely, like a story where everything is linked. If it doesn’t, it needs more work before you show it to investors.

But wait a minute. Don’t investors expect to see a business plan? Will they take a one-page Lean Canvas seriously?

Why the Lean Canvas works for start-ups

The Lean Canvas is centered around validation and justification. It’s about working the idea out, asking for feedback, and using that feedback to iterate your plan until your idea becomes a valid one.

Your Lean Canvas then becomes living proof that your concept will work. Investors will value proof of concept 10X more than 40 pages of empty promises and unfounded statements.

Not only that, but it’ll take you hours, not months to put together. So, if you get punched in the mouth again, it’s no biggie. Just go back and rework it based on investor feedback.

And it’s quick and easy to update; it moves as you move, allows you to pivot, and it means that you can get your product out to market quickly. These are all reliable indicators for VCs, Angels, and investors that a start-up can take off.

“ It lets you focus on building your business faster, by capturing your idea, collecting feedback, and iterating on it dynamically. ” – Infolio , How to Create a Lean Canvas

To prove the Lean Canvas concept even further, let’s take a look at it in action.

The Lean Canvas in action

Below are two hypothetical Lean Canvas examples from a couple of familiar companies who, although it’s difficult to believe, were start-ups themselves once…!

In summary, Google’s Lean Canvas story (if the Lean Canvas existed back in 1998!) might have gone a little like this:

We will help all web users to find what they’re searching for easily by providing them with technology that allows them to search and find relevant content . They will know about us through other users and they will be convinced to join us because they’ll be able to find what they’re looking for quickly (unlike with competitors) and because we have an innovative combined citation-ranking system . We will make money through investment and advertising revenue which will cover our hosting and development costs . We will measure our performance by tracking the number of search requests and the percentage of users who end their search on the first page .

And, Facebook’s Lean Canvas might have gone like this back in 2004:

We will help all college students to communciate with their peers online by creating an online communication platform that will allow them to connect with their friends, share photos, and chat . They will know about us through referrals from other students and they will be convinced to join us because it’s a student orientated communication platform and because we have invented a new type of website: A social network with social features! We will make money through investment and advertising revenue which will cover our hosting, development, and payroll costs . We will measure our performance by tracking the number of daily, weekly, and monthly active users .

To conclude…

Despite the obvious benefits of the Lean Canvas, it has to be said that:

“A one-page document of this kind may not satisfy every potential investor at every financing stage. But many investors will consider a document like this to be more than adequate. ” – BSchools , Can a Lean Canvas Replace a Traditional Business Plan?

I think we can all agree that the moral of this story is: don’t waste months agonizing over a hefty business plan that no one is likely to read.

Instead, create a Lean Canvas. Tell the story of your business with key information that’s up-to-date and backed by research, testing, and customer proof. Get the ball rolling in one afternoon, with one page.

Think of it this way, which would you rather do:

“ Spend 6 months pitching investors so you can refine a story based on an untested product? Or, spend time pitching customers so you can tell a credible story based on a tested product? ” – Ash Maurya , Leanstack , Bootstrapping + Lean Startup = Low-burn Startup

I’d rather roll with the punches with a Lean Canvas. You?

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Amanda Greenwood

Amanda is a content writer for Process Street. Her main mission in life is to write content that makes business processes fun, interesting, and easy to understand. Her background is in marketing and project management, so she has a wealth of experience to draw from, which adds a touch of reality and a whole heap of depth to the content she writes.

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Control plan (Six Sigma) — definition and example

A woman in an office optimizes a business' organization process with Six Sigma.

Project managers and business executives are always looking to optimise organisational processes. If you’re in a leadership role, you probably already know about Six Sigma, a continuous improvement framework that’s part of the Lean methodology. You may even be familiar with the five stages of Six Sigma — Define, Measure, Analyse, Improve and Control (DMAIC).

A control plan is a crucial element of that last stage and is designed to standardise processes established in the four previous stages. Understanding control plans can help you to make lasting process changes that improve your organisation.

In this article, you’ll learn what a control plan is, including an example, so you can continue your educational journey into Six Sigma. This post will cover:

What a control plan is

Control plan example

How to get started with Six Sigma

What is a control plan?

A control plan is a document that provides guidance on how to monitor a process. Control plans are part of the fifth and final phase of the Six Sigma process improvement framework. They help businesses standardise newly adopted processes to increase their uptake and longevity.

Control plans should contain:

An outline of what the process should look like
Key variables or metrics to measure the process
Information on how frequently to measure these variables
What to do if the results stray from the desired outcomes

The goal of the control plan is to provide guidance so that a process can be successfully replicated over time by different individuals. Originally created for manufacturing, Six Sigma and the Lean methodology are now used in a range of industries including healthcare, education and the service sector.

There are a variety of control plan formats, but some of the basic information would typically include the industry that the plan is for, the company’s goal and how the sections of the plan help the company track its progress.

For example, a control plan for a manufacturing product might contain:

The name of the product
Its key characteristics, such as size, colour and material
How to measure those characteristics, including the tool needed
The acceptable range — also called the tolerance range — for each characteristic
The testing frequency, possibly as a time period or amount
How to visualise and evaluate the measurements, perhaps in a chart
A specific person who will oversee quality control
Contingencies for particular or unexpected situations

A graphic shows a control plan to follow and measure the Six Sigma process.

While this example is for a manufacturing product, the same structure and approach could be applied to any business process. Remember, maintaining hard-won gains is as important as making them in the first place. Project teams need to put guidelines in place to ensure processes stay efficient, for instance by creating monitoring and response plans. Process owners should then make sure process changes are maintained and kept current with best practices.

Get started with Six Sigma

Control is one of the critical steps in the Six Sigma framework because it ensures that the processes you’ve refined will be maintained into the future. Without a control plan, processes could revert back to the way they were before, resulting in a loss of essential progress.

If Six Sigma and Lean management sound like they might be right for your business and you’re interested in learning more, check out one of the additional resources below:

Learn about Six Sigma to Improve Workplace Processes
Lean Project Management
A Guide to Lean Management

Adobe can help

Adobe Workfront is enterprise work management software that can help you to adopt or expand Lean Six Sigma, optimising your workflow and bringing organisation to your teams.

Take a product tour https://business.adobe.com/products/workfront/tour.html or watch the overview video to learn more about Workfront.

https://business.adobe.com/blog/basics/what-is-six-sigma

https://business.adobe.com/blog/basics/lean

https://business.adobe.com/blog/basics/lean-management

A woman in an office optimizes a business' organization process with Six Sigma. card image

IMAGES

Lean Startup vs Traditional Business Plan
Lean canvas: un esempio di business plan semplice e veloce
How to write a Lean Business Plan in under 60 Minutes
The Principles of Lean
PPT
Free Lean Business Plan Template

VIDEO

Lean Business Plan Presentation
Startup Lean Business Canvas 64011550, 64011625, 64011620
How to Write a Business plan? 10 Important Steps of Business Plan
Definition of Organizational Plan
Determine the Purpose of your Business Plan
Lean Business Model

COMMENTS

What's a lean business plan. Simpler and easier than you think
The lean plan contains four essentials every business needs, and nothing else. It's a streamlined core plan for running the business, not a document or detailed plan, full of descriptions, to be presented to investors or lenders. It's to optimize management. Here's what the lean business plan includes. The principles apply to every ...
A Guide to the Lean Business Plan (With Template and Example)
Follow these steps to create your lean business plan: 1. Define your business. Start with a brief high-level description of your business. Write a single sentence about what your business does. Focus your answer on your value proposition and how you're unique from other options on the market. 2.
How To Create a Lean Business Plan (2024)
List your company's key points: name, business model, product/service, USP. Identify the target market and financial highlights. Use bullet points to organize these details in a concise manner. Write a draft of your executive summary, ensuring it's compelling and brief.
Fundamentals of Lean Planning Explained
Step 4: Revise your plan. Lean Planning is a process, not just a document. It's is all about continuous improvement. You're quickly defining a strategy, experimenting to see if that strategy works, reviewing the results, and revising the plan before you start again. Lean Planning is never finished.
Fundamentals of Lean Business Planning
The lean business planning method is about taking small steps, consistent tracking, and frequent course corrections. The lean plan itself only includes what adds value to management, without waste. The plan itself is lean, small, streamlined for internal use only, just big enough for optimizing the business.
How to Write a Lean Business Plan
A lean business plan is a concise summary of your company's key details. It briefly outlines how your business works and the path you'll follow to become profitable. Think of it like an MVBP: a minimum viable business plan. In this guide, we'll walk you through the process of writing a lean business plan, and we'll provide a template ...
Lean Business Planning: The Modern, Simple & Powerful approach
A lean business plan is essentially a one-page business plan for companies to kickstart their businesses. Contrary to traditional business plans which are often bulky and complex documents, a lean business plan is a simple, reader-friendly, and easy-to-make document. It is a streamlined core plan that acts as a basis for a more elaborate one.
What is a Lean Business?
What is a Lean Business? Simply stated, a Lean business is a business that maximizes value while minimizing waste. A Lean business model focuses on improving processes across the value stream in order to eliminate waste and deliver optimized value to the customer. This can help teams and organizations achieve their goals in smarter, more ...
Lean Startup Business Plan: Definition and How to Create One
A lean business plan is a streamlined approach to planning, focusing on the essentials of your business idea while eliminating any excess. Unlike traditional business plans, a lean plan is concise, often fitting on just one page, and emphasizes adaptability and direct strategy. It's about knowing your target market, defining your value ...
Write your business plan
A good business plan guides you through each stage of starting and managing your business. You'll use your business plan as a roadmap for how to structure, run, and grow your new business. It's a way to think through the key elements of your business. Business plans can help you get funding or bring on new business partners.
Lean Business Plan Template & How-To Guide
Download Your Free Lean Business Plan Template . Lean Business Planning Process. To create your lean business plan, follow these 4 steps: Create the Plan; Your lean business plan will start with you, your business idea, and one sheet of paper. Yes, one sheet is all you will need. Business Strategy . You will first begin by explaining your ...
PDF Lean Business Planning
o a Lean Business PlanSection 2, Lean Business Planning Step by Step, is all about how to d. a lean business plan. First you define your strategy, such as focus on specific target markets and busin. ss offerings to match. Then you set execution, such as pricing, messaging, and locatio.
What is Lean Business Planning and Why It Matters
You may have heard of the lean startup movement, or lean manufacturing. This is a pplying the same concept to business planning. It gives you planning so you can follow up with tracking, management, and course corrections, to get the benefits of accountability, having strategies and tactics aligned with specifics, and managing your cash flow.
The Ultimate Guide to Creating a Lean Startup Business Plan
The lean startup movement first became popular around 2008. It emphasizes testing a product or service idea quickly, using a minimum viable product (MVP), and getting real user feedback before committing to long development and release cycles. The key principles of lean startup are: Rapid build-test-learn loops.
What is a Lean Business Model Canvas? Definition and Its ...
The Lean Business Model Canvas is defined as a visual tool and framework that helps entrepreneurs and business professionals plan and communicate their business ideas, strategies, and models in a concise and structured format. Learn more about lean business model canvas benefits.
Lean Business Plan to Get What You Want From Your Business
A lean business plan includes milestones to make your planning real. Milestones include dates, deadlines, tasks, responsibilities, and plan your budget and goals to reach specific milestones. List your important assumptions. Set dates for review and revision, plan vs. actual analysis, at least once a month. Set performance metrics you can track.
Lean Startup: Defined, How It Differs From a Traditional Business
13 Business Models: Definition and Examples A business model is a company's profit-making plan. It defines the products or services it will sell, its target market, and any expected costs.
Lean Business Plan Steps. Just Do It
Measure the value of a business plan by the execution it causes. Tweet Lean is a key difference. Don't do a full formal business plan if you don't need it. Just do the lean business plan, and then track results, and follow up with management and steering. Tweet. Keep it simple. The lean plan is just what you'll use. Yes, you should know ...
Lean Canvas: How To Create a Business Plan that People Will Actually
The Lean Canvas is an actionable, entrepreneur-focused, one-page business plan. Inspired by Alex Osterwalder 's Business Model Canvas and the principles behind the Lean Start-Up movement and eradication of waste , Ash Maurya developed the Lean Canvas framework specifically for start-ups.
Control plan (Six Sigma)
Control plan example. There are a variety of control plan formats, but some of the basic information would typically include the industry that the plan is for, the company's goal and how the sections of the plan help the company track its progress. For example, a control plan for a manufacturing product might contain: The name of the product

Fundamentals of Lean Planning Explained

Here’s the Lean Planning process:

Create a professional business plan

If you’re a startup

If you’re an established business

What to include in your one-page plan

Your business strategy

The problem you’re solving

Your ideal customer

Your competition

Your sales strategy

Your marketing strategy

Key partners and resources

Business model

Your one-page plan is just a set of assumptions about a business. Ask yourself:

Reducing risk is your goal in the early stages of starting a business

If your business is up and running, focus on implementation

For new startups

For established businesses

What if you need a more detailed business plan?

Become a smarter, more strategic entrepreneur.

The quickest way to turn a business idea into a business plan

How to Write a Lean Business Plan (With Template and Examples)

A lean business plan vs. a traditional business plan

A lean business plan is a brief overview, not a comprehensive guide

A lean business plan helps you get started faster

A lean business plan tends to focus on smaller milestones

Mature businesses tend to have more traditional business plans

Traditional business plans require far more work

How to write a lean business plan

Identify your audience and use case

Business concept

Business model

Business goals

Target market

Competitive landscape

Go-to-market strategy

Financial state

Mission and vision statements

Product or service description

Sales channels

Marketing plan

Lean business plan template

[Insert company name]

Lean business plan example

Topher’s Loafers

Competition

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Lean Business Planning: The Modern approach to Business Plan Writing

What is Lean Business Planning?

Why Choose Lean Business Planning?

Steps to Create a Lean Business Plan

Step 1: Lay the foundation for your business plan

1. Strategy

3. Execution

4. Business model

Step 2: Put your ideas to test

Step 3: Review your results

Step 4: Revise your plan

Step 5: Set your business to launch

Lean Startup Business Plan: Definition and How to Create One

What is a Lean Business Plan?

Benefits of a Lean Business Plan

What to Include in a Lean Startup Business Plan

How to Create a Lean Startup Business Plan

Lean Startup Business Plan Example

Lean Business Plan Overview :

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Lean Business Plan Template & How-To Guide

On this page:

Review Your Results & Revise Your Plan

Business overview

Value propositions

Key partnerships

Key activities

Key resources

Customer relationships

Customer segments and channels