what is lean business planning

Fundamentals of Lean Planning Explained

Noah Parsons

11 min. read

Updated April 15, 2024

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• It’s often outdated by the time you finish writing it.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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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.

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How To Create a Lean Business Plan (2024)

Learn how to create your own lean business plan, with a step by step guide and an example, in this article.

There are two types of entrepreneurs: those who start a business with careful planning and those who jump right into it without a formal business plan. Both offer avenues to success, but starting a business with a plan helps you visualize that path—and, more importantly, stay the course.

But sometimes your business plan is too long or comprehensive for your needs or audience. That’s when your lean business plan comes into play. 

What is a lean business plan?

A lean business plan is a shortened version of your full comprehensive business plan. Lean business plans are useful for when you need to modify your plan for a specific audience. Typically the lean business plan is for internal use. For example, if you want to share your business plan as part of the onboarding process for new hires, you may use a lean business plan to avoid overwhelming them with too much information.

While a detailed business plan may have lots of information and full paragraphs, your lean business plan includes only the most important, need-to-know information. You might use more bullet points and lists in your lean business plan than in your regular business plan.

Further, your full business plan talks about the what, why, who, where , and how behind your business idea. Your lean business plan, on the other hand, zeroes in on the how behind your business.

What are the benefits of a lean business plan?

• A lean business plan enables a business to quickly adapt to new market conditions
• It distills the business’s offerings to their essence
• It highlights what sets the business apart from competitors.
• It takes less time to create
• It makes it easy for investors and business partners to grasp the company’s mission

Lean business plan template

Your lean business plan template should have the following sections:

• Executive summary (optional)

Company description

Market analysis, products and services, customer segmentation.

• Marketing plan

Logistics and operations plan

Many times, you can also omit the financials section of your lean business plan.

If you want to follow along, consider starting with this business plan template as a base and then trimming it down to fit your lean business planning needs.

How to write a lean business plan

For the purposes of this article, we’re going to take our fictional Paw Print Post business plan example and modify it to be a lean business plan. If you don’t already have a full business plan, you can follow this business plan writing guide to get started. Then you can adapt it as follows to suit your lean business planning needs.

Executive summary

The executive summary should have bullet points highlighting what’s to come in the rest of your lean business plan document. The job of the executive summary is to draw your readers in and get them interested in the information that follows. Call out exciting or surprising bits of information to pique their interest.

• 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.

In the company description, provide a clear and concise overview of your business. Explain what you sell, your business model , and your business type.

• Summarize what your company does in two sentences.
• Define your business structure and mention the founder’s background.
• Write down your short-term and long-term business objectives.
• Create a bulleted list incorporating these points.

The market analysis section highlights the research you’ve done to validate your business idea. You’ll want to outline the fact that there’s a sizable audience who is willing to spend money with a business like yours.

Your market analysis section of your lean business may also consist of a SWOT analysis of your strengths, weaknesses, opportunities, and threats. You may also summarize your competitive analysis , perhaps listing your competitors and their strengths and weaknesses.

• Gather research data on your industry and target market.
• Perform a SWOT analysis for your business.
• Identify key competitors and note their strengths and weaknesses.
• Bullet your findings for inclusion in the lean plan.

This section of your lean business plan will outline what exactly you plan to offer for sale for your customers. 

• List all products or services your company offers.
• Describe the customer experience from start to finish.
• Keep descriptions clear and brief.

This section of your lean business plan puts your audience into groups based on shared characteristics. Customer segmentation is helpful because it allows you to define specific audiences and create targeted promotions and messaging that appeal directly to those groups.

• Define your primary customer segment.
• List the characteristics that define this segment.

Marketing strategy

The marketing plan should outline your pricing strategy , promotional channels, and sales venues.

• Detail your pricing model and justify it based on your market analysis.
• List your main marketing and promotional strategies.
• Define where and how customers can purchase your products or services.

This section will cover the day-to-day operations, including suppliers, production, and shipping.

• List your suppliers and their role in your business.
• Detail the production process step by step.
• Explain your shipping and fulfillment strategy.

For each section, ensure you focus on the essentials that matter most to your business’s strategic planning and operation. Keep it concise and actionable with bullet points for easy reading.

Lean business plan example

Here is a lean business plan example you can use to inspire your own. 

COMPANY: Paw Print Post

EXECUTIVE SUMMARY

Paw Print Post is a sole proprietorship that sells customized greeting cards featuring a pet’s unique paw print. Founder Jane Matthews runs the business using her extensive experience in the pet industry and formal graphic design training.

The pet industry generates $100 billion each year, globally. Paw Print Post’s high-end greeting cards fill a niche in the market serving pet owners who don’t want the mess of a traditionally captured paw print involving ink or plaster. All customers need to do is send in a digital image of their pet’s paw.

Paw Print Post’s ideal customer is a woman based in North America who considers herself a “cat mom” or “dog mom.” These greeting cards are priced as premium cards with volume discounts for larger orders.

COMPANY DESCRIPTION

Type of business : sole proprietorship run by owner Jane Matthews

Industry: pet industry (primary); some goods could be categorized in the greeting card industry

Business objectives:

• Immediate: Launch at the Big Important Pet Expo in Toronto
• Two-year goals: (1) Drive $150,000 in annual revenue from the sale of Paw Print Post’s signature greeting cards; (2) Expand into two new product categories

Team: Jane Matthews is the sole full-time employee

• Contractors hired as needed to support her workflow and fill gaps in her skill set.
• Standing contract for five weekly hours of virtual assistant support with Virtual Assistants Pro.

MARKET ANALYSIS

PRODUCTS AND SERVICES

Paw Print Post’s flagship product is a line of greeting cards customized with a pet’s unique paw print. Here’s how it works:

Customers send a digital image of their pet’s paw

Paw Print Post edits the image and adds it to the front or interior of several card options, including:

• New pet welcome
• Pet loss condolences
• Pet birthdays
• Adoption milestones
• Training course completion
• Service pet work commencement

CUSTOMER SEGMENTATION

• A woman who owns a cat or dog
• Lives in North America, 25–55 years old
• No children
• Shops online at least once a week
• University-level degree
• $50,000 average annual salary
• Values her time
• May refer to herself as a “cat mom” or “dog mom”

MARKETING STRATEGY

• Price. A single card costs $9.50, while bundles of identical cards reduce the price, with three for $20 and six for $30.
• Product. Paw Print Post’s greeting cards solve a specific problem—pet owners want custom, high-end products featuring their pet, and a paw print is a unique and affordable way to do so. Since pet owners only need to take a digital image of their pet’s paw, it’s a lower-effort way to customize cards than what exists in the market currently.
• Promotion. Leading industry trade shows, partner promotions with established products, and digital ads on both Facebook and Instagram.
• Place. Paw Print Post will have an online store at pawprintpost.ca where customers can place their orders. Paw Print Post will ship all orders to customers’ chosen addresses.

LOGISTICS AND OPERATIONS PLAN

Suppliers: Local print shops for one-off prints, given that each item needs to be made to order, and cheaper offshore options won’t work.

Production:

• Customer places order and sends their digital image
• Jane takes five minutes to process the image in Adobe Lightroom and Photoshop before sending to the local printer
• Local print shops offer one- to two-day turnaround for custom orders. Each custom card will cost $2 for setup and 75¢ for each print, so the costs for each bundle offered are:
• One card: $2.75 (Price: $9.50, margin: $6.75)
• Three cards: $4.25 (Price: $20, margin: $15.75)
• Six cards: $6.50 (Price: $30, margin: $23.50)

Facilities: Jane processes images and ships orders from her home office; all contractors maintain their own facilities.

Equipment: Paw Print Post already owns the required software and hardware to process the images.

Shipping and fulfillment: Paw Print Post will fulfill orders using Shopify Shipping and may look into local fulfillment options or contractors to help scale if needed.

Inventory. Paw Print Post does not hold inventory and all orders are created as they come in.

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Lean business plan FAQ

How do you write a lean business plan.

• Start with an executive summary: Write a high-level overview of your business strategy, objectives, and how you plan to achieve them.
• Describe your business: Detail the products/services you offer, how you will price them, how you plan to market them, and how you plan to organize the business.
• Identify your target market: Describe your target customer, the size of the market, and how you plan to reach them.
• Outline your financials: Provide a financial overview of your business, including projected income and expenses, break-even analysis, and financial goals.
• Define your operating plan: Outline the day-to-day operations of the business, from staffing to inventory management to customer service.
• Provide supporting documents: Include any supporting documents, such as résumés, contracts, or legal documents.

How long is a lean business plan?

A lean business plan is typically shorter than a traditional business plan, usually no more than two pages in length. It usually consists of a brief overview of the business, the current situation, the goal, the action plan, budget and timeline, and a conclusion.

What are the 4 types of business plans?

• Startup business plan: A detailed document used to define and plan your business’s objectives, strategies, and tactics.
• Growth business plan: A plan used to identify and capitalize on opportunities for growth.
• Internal business plan: A plan used to assess the internal strengths and weaknesses of a company.
• Strategic business plan: A plan used to set long-term goals and strategies for achieving them.

How is a lean plan different from the traditional business plan?

A lean plan is a simplified version of a traditional business plan that focuses on the core elements of the business, such as the mission, strategy, and key activities. It emphasizes identifying and testing assumptions, keeping plans short and simple, and focusing on the customer. The traditional business plan is more comprehensive, with a greater focus on financials, market analysis, and operations. It also requires a longer timeline and more resources to complete.

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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.

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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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.

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When you decide to start a business, at first you may just have an idea: a product you’ve imagined, a problem you want to solve, or people you want to help. But turning that idea into a viable business requires you to think through the specifics. What will your business model be? How will you turn a profit? How will you grow? Who do you need on your team? What do you actually need to do ? This is the kind of information you need to provide in a business plan.

Your business plan is the blueprint for your company, mapping out the specifications you’ll follow to build a successful business. It should also assure stakeholders — like partners, employees, regulators, or investors — that you’ve thought through the challenges and opportunities, that you have all the ingredients for success, and that your idea will work. 

Altogether, a traditional business plan can amount to dozens of pages, and the visualizations, research, and financial information can take months to prepare. But not every business calls for that level of formality or comprehensiveness. In some situations, a traditional business plan requires more work and detail than is actually beneficial. That’s where you’ll want to write a lean business plan instead. 

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 with examples. First, let’s discuss how a lean business plan differs from a traditional 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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Explore Lean Thinking and Practice / What is Lean?

What is Lean?

Lean is a way of thinking about creating needed value with fewer resources and less waste. and lean is a practice consisting of continuous experimentation to achieve perfect value with zero waste. lean thinking and practice occur together..

Lean thinking always starts with the customer. What does the customer value ? Or, stated differently and in a way that invites concrete action, what problem does the customer need to solve?  

Lean practice begins with the work — the actions that directly and indirectly create value for the customer — and the people doing that work. Through ongoing experimentation, workers and managers learn by innovating in their work — be it physical or knowledge work — for increasingly better quality and flow, less time and effort, and lower cost. Therefore, an organization characterized by lean practice is highly adaptive to its ever-changing environment when compared to its peers because of the systematic and continuous learning engendered by lean thinking and practice . 

A lean enterprise  is organized to keep understanding the customer and their context, i.e., specifying value and looking for better ways to provide it: 

• through product and process development,  
• during fulfillment from order through production to delivery, and 
• through the product’s and/or service’s use cycle from delivery through maintenance and upgrades to recycling.  

Lean Transformation Framework

Lean enterprises, both ongoing firms and startups, endlessly address fundamental questions of purpose, process, and people : 

• What is the value-driven purpose? Or what is the problem to solve? 
• What is the work to be done (to solve the problem)? 
• What capabilities are required (to do the work to solve the problem)? 
• What management system — operating system and leadership behaviors — is required? 
• What basic thinking, including mindsets and assumptions, are required by the organization as a purpose-driven socio-technical system? 

Lean thinking has a moral compass: respect for the humanity  of customers, employees, suppliers, investors, and our communities with the belief that all can and will be better off through lean practices. Lean is not dogmatic. It’s not a rigid, unchanging set of beliefs and methods. Instead, it progresses in the context of specific situations. There is no endpoint as long as value is imperfectly created, and waste exists.  Learn about the brief history of lean thinking and practice .

Let’s elevate the work. Celebrate it. And, with that, let’s treat it—the work—with the deep respect it deserves. – John Shook

How can lean thinking help you?

From executive  coaching  in strategy development, deployment, and alignment to engaging employees to create a culture of problem-solving and everything in between, see how lean thinking and practice can elevate your organization’s performance.  

I want to know how lean thinking can help me with

• Product and Process Development
• Administration / Support
• Problem-Solving
• Executive Leadership
• Line Management

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How to Write a Lean Business Plan? Guide & Template with Example

In the dynamic world of entrepreneurship, agility and adaptability are key components of success. The Lean Startup methodology, popularized by Eric Ries, revolutionized the way businesses approach product development and growth. At the heart of this methodology is the Lean Business Plan, a strategic document designed to guide startups through the turbulent waters of innovation and customer discovery.

What is a Lean Business Plan?

A Lean Business Plan is a concise roadmap that helps entrepreneurs validate their ideas, make informed decisions, and efficiently allocate resources. Unlike traditional business plans, which can be lengthy and rigid, the lean version prioritizes flexibility and responsiveness. It serves as a living document that evolves with the startup, allowing for quick adjustments in response to customer feedback and market changes.

Why Do You Need a Business Plan for a Lean Startup?

1. Focus and Direction

A lean business plan provides a clear focus on the core elements of your startup, helping you avoid distractions and concentrate on what truly matters. It acts as a compass, guiding your team towards the common goal of sustainable growth.

2. Resource Optimization

By identifying and prioritizing key activities, a lean startup business plan enables efficient resource allocation. This is crucial for startups operating with limited funds, ensuring that every dollar and hour invested contributes directly to the company’s progress.

3. Continuous Improvement

The iterative nature of the lean approach encourages constant learning and improvement. A well-crafted lean business plan becomes a tool for ongoing refinement, helping entrepreneurs pivot when necessary and capitalize on emerging opportunities.

Source of Funding for Lean Startup Business

Securing funding is often a critical step for startups to transform their ideas into viable businesses. While traditional business plans might be comprehensive in detailing financial projections, a lean business plan offers a more streamlined approach to attracting funding from various sources.

1. Bootstrapping

Bootstrapping is the art of self-funding. With a lean business plan, entrepreneurs can showcase a clear vision and strategy, making their startup an attractive prospect for personal investment or loans from friends and family.

2. Angel Investors

Lean startup business plans appeal to angel investors who are looking for scalable and innovative ventures. The focus on quick iterations and validated learning aligns with the risk-tolerant nature of angel investors, making your startup an enticing proposition.

3. Venture Capital

Venture capitalists appreciate startups that demonstrate a deep understanding of their market and a willingness to adapt. A lean business plan, with its emphasis on agility and data-driven decision-making, can be a persuasive tool for securing venture capital.

What to Include in a Lean Business Plan?

A lean business plan differs significantly from its traditional counterpart in terms of content and structure. It revolves around key elements that capture the essence of your startup without unnecessary details.

1. Problem Statement

Clearly define the problem your product or service solves. Articulate the pain points your target audience experiences, establishing the foundation for your solution.

2. Solution

Describe your product or service succinctly. Highlight its unique features and how it directly addresses the identified problem. Emphasize the value proposition that sets your startup apart.

3. Target Market

Identify and understand your target audience. Utilize market research to define your customer segments, their needs, and how your solution meets those needs better than existing alternatives.

4. Revenue Streams

Outline your monetization strategy. Clearly state how your startup plans to generate revenue, whether through product sales, subscriptions, or other innovative methods.

5. Key Metrics

Define the key performance indicators (KPIs) that matter most to your business. These metrics should align with your strategic goals and provide a measurable way to track success.

6. Unique Value Proposition (UVP)

Clearly articulate what makes your startup unique and why customers should choose your solution over competitors. A compelling UVP is crucial for standing out in a crowded market.

7. Channels

Detail the channels through which you will reach your target customers. This includes marketing and distribution strategies that maximize your product’s visibility and accessibility.

8. Cost Structure

Clearly outline your startup’s cost structure, including both fixed and variable costs. This transparency is vital for understanding your financial health and making informed decisions.

9. Milestones

Set realistic and measurable milestones that mark the progress of your startup. These milestones provide a roadmap for growth and serve as indicators of success for both internal and external stakeholders.

How to Write a Lean Business Plan?

here is the step-by-step guide on writing a lean business plan for your startup or business.

1. Start with the Lean Canvas

The Lean Canvas, inspired by the Business Model Canvas, is a one-page document that serves as the foundation for your lean startup business plan. It condenses key elements into a visual format, promoting clarity and simplicity.

2. Iterative Process

Embrace the iterative nature of the lean methodology. Begin with a draft, gather feedback, and refine your plan based on insights and lessons learned. This continuous improvement cycle is integral to the lean startup philosophy.

3. Customer-Centric Approach

Prioritize understanding your customers. Leverage customer feedback, surveys, and interviews to refine your business plan. A customer-centric approach ensures that your product aligns with real market needs.

4. Test Assumptions

Identify and test assumptions underlying your business plan. This may involve conducting small-scale experiments or launching a minimum viable product (MVP) to validate key hypotheses. Adjust your plan based on real-world feedback.

5. Stay Lean and Agile

Maintain a lean mindset throughout the planning process. Avoid unnecessary details and focus on the essentials. Be prepared to adapt your plan as market conditions and customer preferences evolve.

Lean Business Plan Template

Check this also Guide on lean business plan template

Lean Business Plan Example

Let’s consider a hypothetical example: a mobile app that connects local farmers with consumers looking to buy fresh produce directly. Here’s a simplified Lean Canvas for this startup:

also read detailed step by step guide on writing a lean business plan

Crafting a Lean Business Plan is a strategic exercise that demands a balance between vision and adaptability. By distilling your startup’s essence into a lean, actionable document, you position yourself for success in a rapidly evolving business landscape. Embrace the iterative nature of the lean methodology, stay customer-focused, and be prepared to pivot based on real-world feedback.

Lean Startup Business Plan FAQs

How do you write a lean startup plan?

To write a lean startup plan, focus on your problem-solution fit, key metrics, experiments to run, and pivots you can make rather than detailed financials.

How do I start a lean startup?

To start a lean startup, identify your vision, find your early adopters, create an MVP to test your assumptions, use customer feedback to improve your product, and only then scale up.

What is an example of a lean startup business?

An example of a lean startup business is a company like Dropbox that started with a simple MVP product to validate its file hosting needs hypothesis before building out more features.

What are the 5 principles of lean startup?

The 5 principles of lean startup are to focus on the problem-solution fit, embrace experimentation and learning, build minimum viable products, utilize customer feedback, and establish actionable metrics.

What are the components of a lean start-up model of a business plan?

The components of a lean start-up business plan model are the business concept including the target problem to solve, assumptions about the target customers and their needs, key experiments and metrics to test assumptions, and funding needed to run experiments.

Written by Ivan Smith

Hello, I'm Ivan Smith, a graduate with a Bachelor of Business Administration in Marketing. Currently, I'm actively engaged in practicing business plan writing.

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Table of Contents

What is Lean Canvas?

Introduction to lean canvas.

The Lean Canvas is a powerful strategic planning tool that entrepreneurs and business owners can use to streamline their business planning process. It provides a structured framework for developing and testing business ideas, allowing for quick iterations and adjustments. In this article, we will explore what Lean Canvas is, its components, and the benefits it offers in the business world.

Lean Canvas is a one-page business model developed by Ash Maurya. It is designed to replace the traditional and often complex business plan with a more concise and focused approach. The Lean Canvas template condenses the essential elements of a business plan into nine key components, allowing entrepreneurs to quickly and effectively communicate their business idea and strategy.

Importance of Lean Canvas in business planning

The Lean Canvas holds significant importance in the realm of business planning. Its simplified and visual nature helps entrepreneurs gain a clear understanding of their business model and identify potential pitfalls early on.

By using Lean Canvas, entrepreneurs can align their ideas with customer needs, develop a unique value proposition, and analyze the viability of their business concept. It serves as a valuable guide throughout the business planning process, promoting agility, effective resource allocation, and risk mitigation.

Understanding the components of Lean Canvas

To effectively use Lean Canvas, it is crucial to understand its various components. Each element plays a vital role in shaping the business model and strategy. Let's explore the key components of Lean Canvas.

The problem component of Lean Canvas involves identifying the core challenges or pain points faced by customers. By clearly defining the problem, entrepreneurs can better understand the needs and motivations of their target audience.

Identifying the customer's pain points

To create an effective Lean Canvas, it is essential to identify the specific pain points experienced by the target customers. Understanding these pain points allows entrepreneurs to develop solutions that address their customers' needs more precisely.

Describing the problem succinctly

The problem component of the Lean Canvas requires a concise description of the identified problem. By condensing the problem statement, entrepreneurs can articulate it clearly and communicate it effectively to stakeholders and team members.

The solution component of Lean Canvas focuses on presenting a unique solution to the identified problem. It involves developing a product or service that effectively addresses the pain points of the target customers.

Presenting a unique solution to the problem

Entrepreneurs must present a unique and innovative solution to the problem they have identified. The solution should differentiate their product or service from competitors and provide a clear advantage to the customers.

Focusing on the value proposition for customers

The solution component of Lean Canvas requires entrepreneurs to clearly define the value proposition their product or service offers to customers. By highlighting the unique benefits and advantages, they can attract and retain their target audience effectively.

Key metrics

In the key metrics component of Lean Canvas, entrepreneurs define the metrics they will track to measure the success of their business. These metrics help gauge the progress and effectiveness of the implemented strategies.

Defining the metrics to track success

Entrepreneurs need to identify and define the key metrics that align with their business objectives. These metrics could include customer acquisition cost, customer lifetime value, conversion rates, or any other relevant data points that provide insight into the business's performance.

Identifying data points to measure progress

The key metrics component of Lean Canvas emphasizes the identification of crucial data points that are essential for measuring progress. By tracking and analyzing these data points, entrepreneurs can make informed decisions and adapt their strategies as needed.

Unique value proposition

The unique value proposition component of Lean Canvas highlights the differentiating factors of the product or service being offered. It focuses on the aspects that set the business apart from competitors and attract customers.

Highlighting differentiating factors

Entrepreneurs must clearly articulate the unique aspects of their product or service. By highlighting the factors that set them apart, they can communicate the added value their offering brings to customers.

Explaining how the offering provides superior value

The unique value proposition component of Lean Canvas requires entrepreneurs to explain how their offering provides better value compared to existing alternatives. By highlighting the benefits and advantages, they can convince customers to choose their product or service over competitors.

The channels component of Lean Canvas focuses on identifying the most effective distribution and communication channels to reach the target customers. It involves selecting the strategies and platforms that enable effective engagement with the target audience.

Identifying the most effective channels

Entrepreneurs need to identify the channels that best align with their target audience's preferences and behaviors. These channels could include online platforms, social media, physical stores, or any other means of reaching and engaging with customers effectively.

Discussing strategies to reach target customers

The channels component of Lean Canvas involves discussing and developing strategies to effectively reach and communicate with the target audience. It requires entrepreneurs to consider the most appropriate channels and techniques to maximize their marketing and distribution efforts.

Customer segments

The customer segments component of Lean Canvas emphasizes the importance of defining the specific target audience for the business. By understanding the distinct customer segments, entrepreneurs can tailor their product or service to better meet their needs.

Defining the target audience

Entrepreneurs need to clearly define the specific customer segments they are targeting. This involves understanding the demographics, preferences, and behaviors of their ideal customers, which enables better product development and marketing strategies.

Segmenting customers and understanding their needs

The customer segments component of Lean Canvas encourages entrepreneurs to discuss the different customer segments and gain a deep understanding of their unique needs and preferences. By segmenting the target audience, entrepreneurs can develop tailored solutions and more effective marketing campaigns.

Cost structure

The cost structure component of Lean Canvas focuses on analyzing the cost elements associated with the business model. It involves identifying the expenses required to operate the business and exploring potential cost-saving measures.

Understanding the cost elements

Entrepreneurs need to carefully analyze the various cost elements associated with their business model. This includes identifying expenses related to production, marketing, personnel, infrastructure, and any other significant cost factors.

Identifying potential cost-saving measures

The cost structure component of Lean Canvas encourages entrepreneurs to explore potential cost-saving measures without compromising the quality or value of their product or service. This could involve optimizing processes, leveraging technology, or finding creative solutions to reduce expenses.

Revenue streams

The revenue streams component of Lean Canvas focuses on exploring different ways to generate revenue for the business. It involves analyzing potential monetization strategies and identifying the most effective approaches.

Exploring different ways to generate revenue

Entrepreneurs need to explore various revenue streams that align with their business model and target audience. This could include product sales, subscription models, advertising, licensing, or any other viable revenue generation approaches.

Discussing monetization strategies

The revenue streams component of Lean Canvas encourages entrepreneurs to discuss and evaluate different monetization strategies. This involves identifying the most profitable and sustainable approaches to generate revenue and support the long-term growth of the business.

The benefits of using Lean Canvas

The use of Lean Canvas offers several benefits to entrepreneurs and businesses. Let's explore some of the advantages it provides.

Agile and iterative approach

The Lean Canvas promotes an agile and iterative approach to business planning. It allows entrepreneurs to quickly test and validate their assumptions, make adjustments based on feedback, and iterate their strategies. This flexibility enables rapid experimentation and learning, leading to more effective decision-making and adaptation in a dynamic business environment.

Flexibility and adaptability

The Lean Canvas is designed to be flexible and adaptable, allowing entrepreneurs to iterate and refine their business model as they gather more information and insights. This flexibility ensures that the business can respond effectively to changes in the market and customer needs.

Supports rapid experimentation and learning

The Lean Canvas encourages entrepreneurs to conduct rapid experimentation and to learn from these results. By testing their assumptions and gathering feedback early on, entrepreneurs can identify potential weaknesses or areas for improvement and adjust their strategies accordingly. This iterative process enables continuous learning and optimization of the business model.

Clear communication

Lean Canvas provides a clear and concise way to communicate business ideas to stakeholders, team members, and potential investors. The one-page format ensures that the key components of the business model are effectively communicated, making it easier for others to understand and support the vision.

How Lean Canvas helps communicate business ideas

The visual and structured nature of Lean Canvas makes it easier to communicate complex business ideas. By condensing the essential elements into a single page, entrepreneurs can effectively convey their value proposition, target audience, revenue streams, and other critical aspects of their business model.

Pitching to investors or stakeholders

Lean Canvas is particularly useful when pitching to investors or stakeholders. It allows entrepreneurs to present a clear and compelling overview of their business model, demonstrating the market opportunity, unique value proposition, and potential return on investment. This concise format enhances communication and increases the likelihood of securing support or funding.

Efficient resource allocation

Lean Canvas assists entrepreneurs in identifying the resource requirements for their business and optimizing the allocation of time, money, and effort. By understanding the key components and their interdependencies, entrepreneurs can allocate resources effectively to maximize productivity and minimize waste.

How Lean Canvas assists in identifying resource requirements

The Lean Canvas prompts entrepreneurs to consider the resource requirements for each component of the business model. This helps in identifying the necessary personnel, funding, technology, and other resources needed to implement the strategies and achieve the desired outcomes.

Optimized allocation of time, money, and effort

By using Lean Canvas, entrepreneurs can optimize the allocation of their limited resources. It enables them to prioritize activities and investments based on the most critical components of their business model. This efficient resource allocation increases productivity and reduces the risk of resource misallocation.

Risk mitigation

Lean Canvas helps entrepreneurs identify potential risks and challenges early on, enabling proactive risk management. By addressing potential risks and challenges in the planning phase, entrepreneurs can develop mitigation strategies and increase the chances of business success.

How Lean Canvas helps identify potential risks and challenges

Lean Canvas prompts entrepreneurs to critically evaluate each component of their business model, allowing them to identify potential risks and challenges associated with the market, competition, customer adoption, or other factors. This early identification enables entrepreneurs to develop contingency plans and mitigation strategies.

Facilitates proactive risk management

Lean Canvas encourages proactive risk management by systematically addressing and monitoring potential risks. Entrepreneurs can continuously evaluate and adjust their strategies to mitigate risks, reducing the likelihood of failure or setbacks. This proactive approach increases the resilience and success rate of the business.

Use Miro to create a Lean Canvas

Lean Canvas is a valuable tool for entrepreneurs and business owners seeking a streamlined approach to business planning. By condensing the essential elements of a business model into a one-page framework, Lean Canvas enables clear communication, efficient resource allocation, and proactive risk mitigation. Its agile and iterative nature promotes rapid experimentation and learning, while its emphasis on problem identification, unique value proposition, and customer segmentation ensures a customer-centric approach.

To leverage the power of Lean Canvas effectively, sign up for free to Miro to collaboratively create and share a Lean Canvas business model.

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What is Lean Canvas?

The Lean Canvas is a business modeling tool created to help deconstruct a startup idea into its key and most risky assumptions. Deeply influenced by the lean startup methodology, the Lean Canvas servers as a tactical plan to guide entrepreneurs navigate their way from ideation to building a successful startup. The methodology has been developed by Ash Maurya , as an adaptation of Alexander Osterwalder ’s Business Model Canvas – the most used modeling canvas in the world.

The Lean Canvas is composed of nine building blocks, just as the Business Model Canvas . But, on the Lean Canvas, these blocks have their titles and purposes modified, in a logical order that begins from your customer’s problem. Let’s understand better how this modeling system works.

Why use the Lean Canvas?

It is really important clen 40 , for any kind of entrepreneur, to put their ideas on paper, so it’s possible for every stakeholder to be aware of the goals and threats of the project. That’s the best way to make everyone think of solutions and accomplish the aimed results. But this process needs to overcome two challenges:

• Translate your thoughts into some language. It is complicated to translate what’s in our mind into words, in a clear and assertive way. Often, the opposite takes place: everything gets even trickier when concepts must become something concrete and visible.
• The time this translation can take . Traditional business plans usually take weeks – sometimes even months – for elaboration. This may become a waste of time and energy. Especially when we consider that the market and the scenario where your business is can change in a few days. When we think of an unexpected crisis, they can transform drastically.

The purpose of Lean Canvas is precisely to solve both problems. Because this method is based on practical principles, with a simple user-friendly visual language, which allows the entrepreneurs to test their hypotheses more efficiently.

How does the Lean Canvas work?

Download here the Lean Canvas Template Lean Canvas puts all the information you and your team need to visualize and analyze together, in a single canvas, eliminating unrelated and irrelevant details. The focus, here, is to avoid waste – of time, energy, processes, money – just as Lean Startup methodology encourages. So, this modeling system is based, as mentioned above, on only nine building blocks, which are:

• Problem : when you want to sell a solution (whether a product or a service), there should be a demand, in other words, at least one identifiable problem. Every customer segment you are going to define has its own problems, and it’s your business’s purpose to solve them. You are going to build your whole canvas over this building block. This section, then, must contain up to three priority problems.
• Customer Segments : perhaps this is the first building block for you to establish. Because probably the first step to understanding your business will be to discover who your customer is. After all, you can only get to know what are the problems you are going to solve when you know the ones who face them. Thus, if there is more than one customer segment, you ought to develop one canvas for each.
• Unique Value Proposition : This block shows how your business differentiates from others, what the value your customer will only have through your product or service, and no one else. Therefore, list what makes your brand stand out over the competition – i.e., why your customer must buy from you rather than your rival.
• Solution : now that you know what and whose the problem is, it’s time to offer the solution. It must stand for the minimum set of functionalities and features (Minimum Viable Product) that allows you to deliver the value proposition from the previous block.
• Channels : here, you have to inform the means you are going to use to reach your audience. That includes all marketing, communication, and distribution channels that you intend to adopt, both from traditional and digital media.
• Revenue Streams : ask yourself “how much will my customer pay for my product/service?”. The price and the payment system was chosen are a very important part of your offer. That can mean the success or failure of your venture.
• Cost Structure : gather here all the costs needed for you to be able to sell your product. You should list all the expenses, from research and development to monthly fees and salaries.
• Key Metrics : it’s imperative for you to get to know what metrics you are going to apply when measuring your business’s performance. That’s the only way you may monitor the team towards the results.
• Unfair Advantage : ask your team “what does this business/product/service have, that no one else does?”. This is possibly the most difficult question in the whole canvas. The answer has to be something that cannot be copied, mimicked, or acquired – that is unique in the market. It’s challenging, but it’s an essential matter, mainly if you intend to use the canvas for attracting partners and investors.

As you may have noticed, we are talking about only nine blocks, very objective. Therefore, it is about a modeling method that can be concluded within 20 minutes! Can you think of something leaner ?

The Benefits of Using Lean Canvas

Besides the brevity and objectivity of this 20-minute tool, there are other advantages in using the Lean Canvas, such as:

• Focus on the solution . Especially when compared to complicated typical business plans, Lean Canvas permit the stakeholders to adjust their focus on problem-solution relation. That makes the hypotheses simpler and clearer.
• User-friendly design. This one-page canvas encourages all the team members to take part in the development and fulfillment of ideas. Also, there is little space available – on purpose – what compels to reduce the analysis to what is completely fundamental, leaving aside unconnected and trivial data.
• From entrepreneurs to entrepreneurs. The method has been created by businesspeople. They are aware that the business plan is for the company owner and team – it will seldom be present to outsiders. Therefore, there is no need to waste time and energy in details and accessories.

What’s the difference between Lean Canvas and Business Model Canvas?

As the creator of Lean Canvas, Ash Maurya, said, one is not better than the other. They are just different. While the Business Model Canvas focuses on planning the business from a strategic point of view, Lean Canvas focuses on the customer-problem-solution relationship. In practice, the difference between the two tools is just on the four blocks, which Maurya modified in Lean Canvas from Business Model Canvas. But this “small” change transforms the entire understanding of the business model. Maurya’s objective, by modifying Business Model Canvas’s blocks, has been turning it into a more user-friendly tool, that didn’t need explanations from experts. One where you could simply read the titles to understand how the components are supposed to be filled out.

What building blocks have been introduced in Lean Canvas?

• Problem : most businesses that fail at the beginning of their operations choose the wrong product to be produced. They waste a lot of time, money, and energy on creating and developing a product that doesn’t really interest their audience. To avoid that, sometimes it is easier to define what the problem of your customer is, what challenges they are facing that needs a solution. Thus, you will be able to develop a product which solves this problem and will not waste time in the wrong – and useless – product.
• Solution : having established the problem to be solved, then you can move to developing the solution for this issue. If you compare the space provided in each of the blocks – Problem and Solution –, you will see that the second one is half the size of the first. This is purposeful, to align with the idea of the Minimum Viable Product (MVP).
• Key – Metrics : the purpose of this component is to make the entrepreneur focus on the most important numbers of their business. Often, you can decide on a particular metric and practically ignore the rest, because this is the foundation of your business. The objective, therefore, is to find out what these key metrics are, so as not to spend time, money and energy on activities or resources that are not essential and that, more than that, may change in the very near future.
• Unfair Advantage : the unfair advantage is that factor that differentiates your business from the competition, capable of blocking the entry or expansion of your competitors in the market. It is, in simple words, that which cannot be easily copied or purchased. Often, new companies don’t have – or fail to identify – their unfair advantage right away, so this block may end up going blank at first. But the component is there to encourage the entrepreneur to continue searching and working to find their unfair advantage, in order to protect it from the competition, especially from new entrants.

Which Business Model Canvas’s building blocks have been replaced?

• Customer Relationship : this component has been substituted partly by the Channels, the Solution, and the Customer Segment. Because you determine the solution to a customer segment’s problem and keep a relationship with that segment, through the channels.
• Key Partners : although some businesses essentially depend on partnerships, for the vast majority this is not true. Especially for beginning and unknown entrepreneurs, seeking partnerships right away can be a real waste of time and energy.
• Key Activities and Key Resources : These blocks are more for outsiders to understand your business than for you to make it work yourself. In addition, the key activities will only be discovered, indeed, during the operation, and only after your solution – your MVP – has already been tested. As for the main resources, a good part of the new businesses, mainly the startups, are no longer focused on “physical” resources. More and more, it takes fewer resources to launch a product on the market. Again, this will only become very clear with the progress of the operation.

Different tools for different purposes

Check out, bellow, how differently both tools can be applied to business management:

• In simple words, we may say that the Business Model Canvas is more appropriate for those who are beginning a business – especially if that is not a startup – from scratch. On the other hand, Lean Canvas aims other activities, such as iteration, expansion or innovation startup development, since that focuses on problem-solution relations.
• Another difference is that Lean Canvas focuses straightly on the customer , by seeking to create value by observing their problems that need solution. While Business Model Canvas, to be used this way, needs to be combined with the Value Proposition Canvas, and you end up with two canvases instead of only one.
• This way, Lean Canvas is simpler than the Business Model Canvas , since BMC emphasizes the creation and building of a whole new business model from the beginning. And that’s why it’s so fundamental for the businesses that are coming out from scratch. Lean Canvas, on the other hand, approaches the business as the product itself. So, the business model is not perfect yet. It is a lean framework, in progress, that can be iterated the same way you could do with a product.
• Besides, while Business Model Canvas has been developed to and by managers, Lean Canvas has been thought as an accessible tool for any kind of person , whether the entrepreneur or any other team member. That’s why the blocks have been simplified.
• For that same reason, the Lean Canvas can be used outside the marketing and management area , too. It is, actually, a tool that has been used by engineers, designers, and even high school students.

As may be seen, both tools, therefore are useful and efficient. As Maurya stated, there is not “the best one”. You must get to know what your objective is, regarding business modeling, and choose the alternative you believe will fit better to what you need.

Ash Maurya’s Lean Canvas’s Book

The creation of the Lean Canvas and many of the articles published by Ash Maurya in his blog created an opportunity for him to publish a book . The book revolves completely around the main premise of Maurya’s Lean modeling: “life’s too short to build something nobody wants”, i.e., nobody should waste time, money, and energy on developing the wrong product. The best way to do that, according to Ash Maurya is his book, is to achieve a product/market fit. And that is done based on innovative methodologies, including Lean Startup and its Lean Canvas.

Final Considerations about the Lean Canvas

It is important to keep in mind that the Lean Canvas is not a project for the entire lifetime of the company. On the contrary, it is about a method that permits experimentation. You and your team may test different combinations until you find out what the ideal business model for your venture is. Never forget: it is always better to invest some time planning and experimenting, than building a product nobody wants.

Who is Daniel Pereira ?

I love understanding strategy and innovation using the business model canvas tool so much that I decided to share my analysis by creating a website focused on this topic.

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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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Imagine a symphony orchestra where each musician plays their own tune without listening to others. The result would be chaotic and dissonant, right? Similarly, in the business world, when decision-making happens in silos and planning processes are disconnected, it’s like having a group of individuals playing their own instruments without any coordination. The harmony is lost, and the organization becomes inefficient, misses opportunities, and struggles to keep up with the fast-paced market.

Integrated Business Planning (IBP) addresses these challenges by providing a comprehensive framework that integrates strategic, operational and financial planning, analysis, and reporting to drive better business outcomes.   A retail company experiences a sudden surge in online sales due to a viral social media campaign. Integrated planning incorporates supply chain planning, demand planning, and demand forecasts so the company can quickly assess the impact on inventory levels, supply chain logistics, production plans, and customer service capacity. By having real-time data at their fingertips, decision-makers can adjust their strategies, allocate resources accordingly, and capitalize on the unexpected spike in demand, ensuring customer satisfaction while maximizing revenue.   This blog explores the significance of IBP in today’s modern business landscape and highlights its key benefits and implementation considerations.

Integrated Business Planning (IBP) is a holistic approach that integrates strategic planning, operational planning, and financial planning within an organization. IBP brings together various functions, including sales, marketing, finance, supply chain, human resources, IT and beyond to collaborate across business units and make informed decisions that drive overall business success. The term ‘IBP’ was introduced by the management consulting firm Oliver Wight to describe an evolved version of the sales and operations planning (S&OP process) they originally developed in the early 1980s.

1. Strategic planning

Integrated Business Planning starts with strategic planning. The management team defines the organization’s long-term goals and objectives. This includes analyzing market trends, competitive forces, and customer demands to identify opportunities and threats. Strategic planning sets the direction for the entire organization and establishes the foundation for subsequent planning roadmap.

2. Operational planning

Operational planning focuses on translating strategic goals into actionable plans at the operational level. This involves breaking down the strategic objectives into specific targets and initiatives that different departments and functions need to execute.

For example, the sales department might develop a plan to enter new markets or launch new products, while the supply chain department focuses on inventory optimization and ensuring efficient logistics. The key is to align operational plans with the broader strategic objectives to ensure consistency and coherence throughout the organization.

3. Financial planning

Financial planning ensures that the organization’s strategic and operational plans are financially viable. It involves developing detailed financial projections, including revenue forecasts, expense budgets, and cash flow forecasts. By integrating financial planning with strategic and operational planning, organizations can evaluate financial profitability, identify potential gaps or risks, and make necessary adjustments to achieve financial targets.

 4. Cross-functional collaboration

A fundamental aspect of IBP is the collaboration and involvement of various functions and departments within the organization. Rather than working in isolation, departments such as sales, marketing, finance, supply chain, human resources, and IT come together to share information, align objectives, and make coordinated decisions.

5. Data integration and analytics

IBP relies on the integration of data from different sources and systems. This may involve consolidating data from enterprise resource planning (ERP) systems, customer relationship management (CRM) systems, supply chain management systems, and other relevant sources. Advanced analytics and business intelligence tools are utilized to analyze and interpret the data, uncovering insights and trends that drive informed decision-making.

6. Continuous monitoring and performance management

The Integrated Business Planning process requires continuous monitoring of performance against plans and targets. Key performance indicators (KPIs) are established to measure progress and enable proactive management. Regular performance reviews and reporting enable organizations to identify deviations, take corrective actions, and continuously improve their planning processes.

By integrating strategic, operational, and financial planning organizations can unlock the full potential of IBP and drive business success and achieve their goals.

Enhanced decision-making

IBP facilitates data-driven decision-making by providing real-time insights into various aspects of the business. By bringing together data from various departments, organizations can develop a holistic view of their operations, enabling them to make better-informed decisions.

Improved alignment

By aligning strategic objectives with operational plans and financial goals, IBP ensures that every department and employee is working towards a common vision. This alignment fosters synergy and drives cross-functional collaboration.

Agility and responsiveness

In the rapidly changing business landscape, agility is crucial. IBP allows organizations to quickly adapt to market shifts, demand fluctuations, and emerging opportunities. By continuously monitoring and adjusting plans, businesses can remain responsive and seize competitive advantages.

Optimal resource allocation

Integrated Business Planning enables organizations to optimize resource allocation across different functions. It helps identify bottlenecks, allocate resources effectively, and prioritize initiatives that yield the highest returns, leading to improved efficiency and cost savings.

Risk management

IBP facilitates proactive risk management by considering various scenarios and identifying potential risks and opportunities. By analyzing data and conducting what-if analyses, companies can develop contingency plans and mitigate risks before they materialize.

Implementing an effective IBP process requires careful planning and execution that may require substantial effort and a change of management, but the rewards are well worth it. Here are some essential strategic steps to consider:

1. Executive sponsorship

Establish leadership buy-in; gain support from top-level executives who understand the value of Integrated Business Planning and can drive the necessary organizational changes. Leadership commitment, led by CFO, is crucial for successful implementation.

2. Continuous improvement

Continuously monitor and adjust; implement mechanisms to monitor performance against plans and targets. Regularly review key performance indicators (KPIs), conduct performance analysis, and generate timely reports and dashboards. Identify deviations, take corrective actions, and continuously improve the planning processes based on feedback and insights.

3. Integration of people and technology

To foster cross-functional collaboration, the organization must identify key stakeholders, break down silos, and encourage open communication among departments. Creating a collaborative culture that values information sharing and collective decision-making is essential.

Simultaneously, implementing a robust data integration system, encompassing ERP, CRM, and supply chain management systems, ensures seamless data flow and real-time updates. User-friendly interfaces, data governance, and training provide the necessary technological support. Combining these efforts cultivates an environment of collaboration and data-driven decision-making, boosting operational efficiency and competitiveness.

4. Technology

Implement advanced analytics and business intelligence solutions to streamline and automate the planning process and assist decision-making capabilities. These solutions provide comprehensive functionality, data integration capabilities, scenario planning and modeling, and real-time reporting.

From a tech perspective, organizations need advanced software solutions and systems that facilitate seamless data integration and collaboration to support IBP. Here are some key components that contribute to the success of integrated business planning:

1. Corporate performance management

A platform that serves as the backbone of integrated business planning by integrating data from different departments and functions. It enables a centralized repository of information and provides real-time visibility into the entire business.

2. Business intelligence (BI) tools

Business intelligence tools play a vital role in analyzing and visualizing integrated data from multiple sources. These tools provide comprehensive insights into key metrics and help identify trends, patterns, and opportunities. By leveraging BI tools, decision-makers can quickly evaluate financial performance, make data-driven business decisions and increase forecast accuracy.

3. Collaborative planning and forecasting solutions

Collaborative planning and forecasting solutions enable cross-functional teams to work together in creating and refining plans. These planning solutions facilitate real-time collaboration, allowing stakeholders to contribute their expertise and insights. With end-to-end visibility, organizations can ensure that plans are comprehensive, accurate, and aligned with business strategy.

4. Data integration and automation

To ensure seamless data integration, organizations need to invest in data integration and automation tools. These tools enable the extraction, transformation, and loading (ETL) of data from various sources. Automation streamlines data processes reduces manual effort and minimizes the risk of errors or data discrepancies.

5. Cloud-based solutions

Cloud computing offers scalability, flexibility, and accessibility, making it an ideal choice for integrated business planning. Cloud-based solutions provide a centralized platform where teams can access data, collaborate, and make real-time updates from anywhere, at any time. The cloud also offers data security, disaster recovery, and cost efficiencies compared to on-premises infrastructure.

6. Data governance and security

As organizations integrate data from multiple sources, maintaining data governance and security becomes crucial. Establishing data governance policies and ensuring compliance with data protection regulations are vital steps in maintaining data integrity and safeguarding sensitive information. Implementing robust data security measures, such as encryption and access controls, helps protect against data breaches and unauthorized access.

IBM Planning Analytics  is a highly scalable and flexible solution for Integrated Business Planning. It supports and strengthens the five pillars discussed above, empowering organizations to achieve their strategic goals and make better data-driven decisions. With its AI- infused advanced analytics and modeling capabilities, IBM Planning Analytics allows organizations to integrate strategic, operational, and financial planning seamlessly. The solution enables cross-functional collaboration by providing a centralized platform where teams from various departments can collaborate, share insights, and align their plans. IBM Planning Analytics also offers powerful data integration capabilities, allowing organizations to consolidate data from multiple sources and systems, providing a holistic view of the business. The solutions’s robust embedded AI predictive analytics uses internal and external data and machine learning to provide accurate demand forecasts. IBM Planning Analytics supports continuous monitoring and performance management by providing real-time reporting, dashboards, and key performance indicators (KPIs) that enable organizations to track progress and take proactive actions.  As the business landscape continues to evolve, embracing Integrated Business Planning is no longer an option but a necessity for organizations. To succeed in this dynamic environment, businesses need an integrated approach to planning that brings all the departments and data together, creating a symphony of collaboration and coordination.

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The vice president supports the tax increases proposed by the Biden White House, according to her campaign.

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By Andrew Duehren

Reporting from Washington

In a campaign otherwise light on policy specifics, Vice President Kamala Harris this week quietly rolled out her most detailed, far-ranging proposal yet: nearly $5 trillion in tax increases over a decade.

That’s how much more revenue the federal government would raise if it adopted a number of tax increases that President Biden proposed in the spring . Ms. Harris’s campaign said this week that she supported those tax hikes, which were thoroughly laid out in the most recent federal budget plan prepared by the Biden administration.

No one making less than $400,000 a year would see their taxes go up under the plan. Instead, Ms. Harris is seeking to significantly raise taxes on the wealthiest Americans and large corporations. Congress has previously rejected many of these tax ideas, even when Democrats controlled both chambers.

While tax policy is right now a subplot in a turbulent presidential campaign, it will be a primary policy issue in Washington next year. The next president will have to work with Congress to address the tax cuts Donald J. Trump signed into law in 2017. Many of those tax cuts expire after 2025, meaning millions of Americans will see their taxes go up if lawmakers don’t reach a deal next year.

Here’s an overview of what we now know — and still don’t know — about the Democratic nominee’s views on taxes.

Higher taxes on corporations

The most recent White House budget includes several proposals that would raise taxes on large corporations . Chief among them is raising the corporate tax rate to 28 percent from 21 percent, a step that the Treasury Department estimated could bring in $1.3 trillion in revenue over the next 10 years.

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The 4 Key Strengths of China’s Economy — and What They Mean for Multinational Companies

• Mitch Presnick
• James B. Estes

Companies that fail to understand them risk falling behind.

China’s hybrid “state capitalist” system, driven by centralized planning and fierce competition, has led to dominance in critical technological fields and emerging markets. Western multinational corporations are advised to adopt a pragmatic approach to capitalize on four key strengths of China’s economy: its innovation ecosystem, its investment in the Global South, its ultra-competitive markets, and its vast consumer base. Those who fail to engage risk losing global revenue and strategic opportunities.

In 1978, Deng Xiaoping launched his “Reform and Opening” policy to leverage Western technology and know-how for China’s development. It was a politically risky move: Ideological hardliners in the Communist Party resented the implicit assumption of China’s economic backwardness under socialism — and the superiority of the capitalist West. But Deng recognized that China’s modernization required both pragmatism and humility.

• MP Mitch Presnick is a visiting fellow of practice at the Fairbank Center for Chinese Studies at Harvard University. He is the founder and former chair & CEO of Super 8 Hotels China, the founder and former managing director of the China practice of APCO Worldwide, a Washington D.C. advisory and advocacy firm, and the former vice chair of the American Chamber of Commerce in China.
• JE James B. Estes is a senior at St. Paul’s School, Concord New Hampshire. He is research assistant to visiting fellow of practice Mitch Presnick at the Fairbank Center of Chinese Studies at Harvard University. He is co-founder and project director for educational startup company Reason & Rationality LLC.

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A necessary step or government overreach? Economists are divided over Kamala Harris' plan to clamp down on food inflation

• Kamala Harris unveiled plans for the first-ever federal ban on price gouging.
• Some experts question whether price gouging has been a central factor in inflation's rise.
• Opponents say the plan amounts to price controls, a notion rebuffed by the proposal's advocates.

Vice President Kamala Harris' proposal to combat grocery inflation hasn't elicited a range of opinions from economists, and many have turned to history to dispute her idea.

Last week, the Democratic presidential nominee unveiled early details of her economic platform, which included a pledge to ban grocery price gouging .

Price gouging skepticism

The plan has elicited a range of responses from experts and economists, with some deriding it as an unnecessary overstep by the government to address a problem that is not at the heart of the inflation dilemma.

"I hope she walks this one back. She had some good ideas, some mixed ideas," Harvard professor Kenneth Rogoff told CNN . "This was a horrible idea."

Rogoff's position was based on doubts about whether retailers were to blame for the wave of inflation that has weighed on Americans' spending power in the last two years.

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Harris called for a first-ever federal ban on the basis that firms have notched record profits at a time when many households have struggled to adjust to runaway costs. Since January 2020, grocery prices have jumped 25%.

But according to market veteran Ed Yardeni, data doesn't suggest gouging is the problem.

He wrote this week that the ratio between the consumer price index and supermarket producer price index has been dropping since 2000, suggesting that profit margins in the industry have been trending down, not up. CPI tracks prices paid by consumers, while PPI measures the prices paid by wholesalers.

And yet, consumers feel strongly that corporate greed is a central factor for why prices have risen abruptly. In a study from May, price gouging was the second leading perceived cause of inflation among surveyed consumers.

Real-world examples do exist. Cal-Maine, the largest egg producer in the US, saw its profits rocket 718% in the first quarter of 2023 . By December, the distributor was found liable for artificially inflating prices.

'Price controls' a partisan label?

Whether gouging deserves the blame for inflation, some have also criticized Harris' plan as an ineffective government overreach.

Pundits have alluded to the price controls under President Richard Nixon. The Republican executive froze prices and wages over fifty years ago to clamp down on inflation, but it eventually jumped much higher, according to Cato Institute , a libertarian think tank.

"I think all of us would agree that price controls have never worked," Stephen Moore, visiting senior fellow at the conservative think tank Heritage Foundation, told CNBC . "They certainly were a complete failure in the 1970s when we had major inflation that hit 11%-12% and the government couldn't get rid of it."

Broader examples through history show that price ceilings can distort the allocation of goods and supply, as prices no longer serve to signal a surplus or scarcity. This can eventually lead to shortages and higher pricing.

However, supporters of the plan argue that such comparisons are an overreaction to Harris's proposal, as the details thus far say nothing about fixing costs.

"This is not 'price controls.' 40 states have price gouging laws on the books. These are red states. These are blue states," Groundwork Collaborative executive director Lindsay Owens said, noting that Donald Trump also cracked down medical supply price gouging during the pandemic. "This is a common-sense set of policies."

The federal ban would help patch up legal inconsistencies between each state's approach, experts told Business Insider . Harris would likely find success by empowering the Federal Trade Commission to pursue bad actors, though the challenge would lie in carefully defining price gouging.

While the plan's advocates have cheered this on, anonymous campaign sources that spoke with The New York Times noted that even allies may have the wrong idea about what it can do .

Given that it would be modeled on state laws, the ban would really only come into effect in emergencies, officials said, stating that just as price-control critiques are misguided, so are expectations that the ban will immediately cut down on grocery costs.

For that to happen, a campaign official cited Harris' other policy ideas, such as efforts to spur competition and support small businesses in the food sector.

While economists are divided, voters seem supportive of the proposal. Summer polling from the Democratic firm Blueprint found that four out of five voters are in favor of price-gouging prosecution, as well as price fixing.

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