Business Planning on a Page
When coaching new business people, so many of them start by doing the obvious or easy stuff first: business cards, domain name & website. However, if you were to build a house, would you start building without a floor plan? Would you put the roof up before the walls? No, why not? Because you need to do things in order to get it right, which is why builders work off plans.
The quote, attributed to famous inventor Benjamin Franklin, is “If you fail to plan, then you’re planning to fail”, so I would never disagree that you should do a thorough business plan first. It helps you think out all of the important aspects of creating a successful business, like who your target market is, who are your competitors, what’s your pricing model, start-up costs and cashflow forecast. The biggest problem with doing a business plan is how long it can take to complete, and at best, there is a lot of information in them that is guesswork.
Time is one of your most valuable assets, especially when you’re starting out and if you’re doing it alone. Speed of learning is the aim of the game and is called the new ‘innovation’. So an alternative way to think through your business is to complete a Lean Canvas – it’s a short, quick one-page version of a business plan. Instead of taking you a month to complete, you can answer many of the big questions you need to think about in 20 minutes.
In a nutshell, the Lean Canvas is a template made up of 9 sections, each with a key question about your business that you should answer:
What problem are you solving with your business?
What is your solution to solve this problem?
What is your unique value proposition? What value are you creating for your customers?
Who is your primary customer?
What channels will you use to sell your solution? How will you get your solution into your customer’s hands?
What is your competitive advantage? What will make you win over your competitors?
What are your biggest costs?
What are your revenue streams? How will you make money?
What metrics will you measure that will tell you how your business is going?
All of these sections are interconnected, so when you’re filling it out, know that you’ll have to go back and forth between sections, tweaking and changing things until you have a viable business story.
The beauty of the lean canvas – it is designed to be a permanent draft, that should be constantly evolving based on what you learn. From here, the next step is to test everything you have written in your lean canvas so that you’re making evidence-based decisions – not decisions based on assumptions and guesses - we all know where that can leave you!