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By Stephanie Faris, Sapling
Launching a startup takes hard work and careful planning. You could create a comprehensive business plan, but that takes time and may not even be necessary for a while. A lean business plan can solve similar goals without requiring you to invest weeks putting it together.
Read More: 5 Foundational Principles of Early Entrepreneurial Success
1. It Serves as a Foundation
A lean business plan is designed to keep things as simple as possible, with you simply detailing your product or service, your target market and how you differ from others already in the industry. In creating this simplified business plan, you'll get started thinking through what your business is, what you want it to be and the steps you plan to take to get there.But perhaps the best thing about going through the 3 or 4 steps is that you'll have a starter document that you can use later, once you're ready to move to a full business plan. You can even put your lean startup plan through a monthly review and update it so that it will be ready to expand whenever you're ready.
2. It Requires Market Research
To create a lean startup plan, you'll need to devote serious time to discussing the competition. That means you'll have to research pricing and market share for anyone who already occupies the space you're moving into. In the process, you'll learn more about the market and what you can do to set yourself apart.As you're creating your lean business plan, consider how you'll put what you're learning to use. What marketing tactics will you use to stand out? Will you regularly hold promotions to lure new customers over and, if so, how will your promotions compete with what other businesses in the space offer?
3. You’ll Set a Spending Budget
One of the best things about putting together a business plan is that it forces you to tackle the financial aspects of your startup. Although a lean business plan lacks the detail of a full plan, you should still include some basic figures and forecasts. This will give you a reason to sit down and assess your funding, your spending strategy and your cash plan for tackling future expenses.As you're building a lean startup plan, spend some time working on your sales forecast. How long will it take your new business to become profitable? How will you cover your expenses until you get to that point?
4. You’ll Identify Your Audience
All of the marketing tactics in the world won't help a small business grow if it's targeted in the wrong direction. A lean business plan helps a startup get to know its target demographic. Once you understand your customers, you can then build a product or service that meets demand.Of course, the most important thing about any plan is execution. It's important to make sure you're using the data you've gathered as you set up your marketing plan. Otherwise, you might find you're spinning your wheels.
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5. You’ll Outline Your Mission Statement
Every business needs a mission statement, and a lean business plan can help you identify it. Chances are, if you don't already have one, you'll come up with your mission statement while you're writing your summary.If you've written your lean startup plan and still haven't been able to boil your mission down to one sentence, look a little deeper. Write out all the things you hope to accomplish in a list with bullets and search that list for common themes. Once you have a mission statement, make sure everyone helping you build and grow your company is on board with it.
A lean business plan is a great way for you to organize your thoughts and put them down on paper. Since this document is typically not something you'll show to investors or business partners, it's a great opportunity to think through your business and document your plans so you can revisit them later.
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