One of the key documents every entrepreneur needs when starting a small business is a business plan. When we think of a business plan, we tend to think of its traditional format.
A traditional business plan is typically 30-40 pages long and written 3-5 years out into the future. This comprehensive, detailed document allows entrepreneurs to map out goals and milestones they plan to reach with their small business. It also gives entrepreneurs the chance to request capital and funding from prospective investors.
Writing a traditional business plan, however, may not fit the needs of every entrepreneur. Some entrepreneurs may prefer to work with a less-intensive document. This is where a lean startup plan comes in handy for your small business. Let’s take a look at what this plan does and how to write a lean startup plan.
What’s a Lean Startup Business Plan?
There are plenty of differences between traditional business plans and lean startup plans. Traditional business plans, as mentioned above, tend to be intensive and thorough. They examine a startup’s feasibility from a critical and objective standpoint and detail how they will be able to reach certain goals. These plans also provide a framework that attracts investors to invest in the business.
Lean startup plans, on the other hand, tend to be no longer than a page or two. The information provided in a lean startup plan acts as a quick summary for a business. It’s easy to read and digest, while containing much of the necessary information found in a traditional business plan.
How to Write a Lean Startup Plan
Do you feel like a lean startup plan is the best fit for you and your business? Are you ready to draft this document? Great! Here’s what you need to include in your lean startup plan.
1. Value Proposition
For this section, take a moment to consider the value of your business. What kinds of original qualities may be found in your startup? How does your business solve problems for its target audience?
Clearly sum up the value that your small business may be able to bring to its respective market.
2. Key Partnerships, Resources, and Activities
Which partners are currently working alongside your business? You may detail information about your business partners, like vendors and suppliers, in this section.
Additionally, you’ll need to share some information about the startup’s key activities and resources. Key activities, for example, may include strategies your business is using to gain an upper hand on the competition. Resources, like capital funds or intellectual property, may be used to create value for your consumers.
3. Customer Segments, Channels, and Relationships
This section takes a closer look at your customer base. Here your business will be able to answer the following questions:
- Who is your audience? Which individuals make up your target market? What are their needs?
- Where can you reach your audience? For example, you may use social media platforms or email to reach out to your audience and engage with them.
- How will you build a lasting relationship with customers? You should be able to detail what kind of experience your business will be able to provide customers and strategies for establishing this kind of experience.
4. Revenue Streams
In a traditional business plan, entrepreneurs dedicate a section to financial projections. This covers cash flow as well as additional financial information as it pertains to the business.
Lean startup plans also take stock in their financial information. List each revenue stream that is associated with your small business. Then, explain how these revenue streams make money. You may also use this section to define the cost structure strategy of your startup, too.
These are the key components necessary to write a lean startup business plan. Remember that if you find there are more details to include or changes to make, you may always go back to this plan and make revisions accordingly. Edits may be made to any business plan, regardless of its initial format.
