Have you ever put a business plan together? I did not for my current business. I just "hung a shingle" and started telling people I built websites and started riding the rollercoaster.
But in college I did. I put hours and hours of research into developing a "plan" that amounted to little more than pages and pages of neatly packaged assumptions. I got a grade, but had no business. What a big waste of time.
Your plan is built around a model. Your model is, at least initially, based on assumptions. Your assumptions might be (and probably are) wrong.
So why build out the long, detailed plan if your core assumptions might be wrong? Unless you like writing for the sake of writing, you should not. I think no amount of writing and planning without getting in front of real customers will result in a validated business. On top of that, what a pain to haul around and keep updating.
Instead, use a model that you can quickly document, is low maintenance, and is easy to manage. On top of that, you can focus on testing your model with real people. Build a real business, not a theoretical plan.
The Lean Canvas Is Not Just For Startups
This is not a tool just for startups either. Your customers' needs and your business are constantly evolving. You can always improve their communication.
I work with businesses all the time that are just doing their thing and have not built their business around the problem and the people they are providing a solution for. As is so well described in The E-Myth Revisited, this is because most people start their businesses as a technician -- they can do something -- not to solve a market problem. The problem with this is that their communication is off target and they miss out on opportunities. Once you know this, your communications become much more targeted and effective.
For example, a service I provide is building websites. I also utilize a bunch of inbound marketing tactics. But nobody really hires me just because they think these are so neat. At least they should not and I would prefer they would not. They hire me (or should) because I can help them grow their business. Their problem is a lack of sales. My solution provides them an online presence, qualified traffic, and , ultimately, leads or sales.
For years, I focused on websites. I can build you a website. But the website, or lack thereof, is not the problem. The problem is a lack of sales. I can help you grow your business. The website is just a tool that can help with that.
The Lean Methodology
Adopting a lean business development process allows you to build or improve a real business, not just a theoretical model, through iterations of building, measuring, and learning with real customers.
The Lean Canvas by Ash Maurya provides you a very simple way to get your business model down on paper in about 15 minutes. In his Running Lean book, Ash describes the lean methodology in three steps:
- Document your Plan A
- Identify the riskiest parts of your plan
- Systematically test your plan
You use the Lean Canvas to complete Step 1, documenting your Plan A, and then you keep updating your model as you go through your build-measure-learn iterations.
Model Your Business In Minutes
You can build out your first model in about 15 minutes. Here are the sections, in Ash's recommended order:
- Problem: Your customer's top three problems (Existing Alternatives: How these problems are solved today)
- Customer Segment(s): Your target customers and users
- Unique Value Proposition: Single, clear, compelling message that turns an unaware visitor into an interested prospect
- Solution: Outline a possible solution for each problem
- Channels: List your path to customers
- Revenue Streams: Your sources of revenue
- Cost Structure: Your fixed and variable costs
- Key Metrics: The key numbers that tell you how your business is doing (this is what investors care about)
- Unfair Advantage: Something that can't be easily copied or bought
The problem is first for a reason. Every business exists because it solves a problem. You need to start there, and then fill out the rest to support that.
Zoom Out And Get The Big Picture
It is easy to get lost in the details and day-to-day operations of your business. I do it, we all do it. If you do nothing else, document your Plan A. I am certain you will find it valuable to take a couple of minutes to think about and look at the big picture of your business.
If you want more, follow the links above to dive into the site. You will find a ton of information and online tools that will guide you on implementing the process.