A lean business plan, unlike a traditional business plan which typically includes 10 key components and is 15-25 pages in length, is much more compact and streamlined.
What to Include In Your Lean Business Plan
Specifically a lean business plan includes the following nine elements:
- Business overview
Describe what the business does.
- Value proposition
Detail the value your business brings to the market and the industry.
- Key partnerships
List the key partners, including suppliers, manufacturers, distributor, vendors or software firms, with whom your business will work.
- Key activities
List the key activities your business will perform to gain competitive advantage, grow market share and fuel profits.
- Key resources
List the resources that your business has at its disposal to create maximum value. This could include human capital (your own experience or that of your core team,), intellectual property, patents, funding, etc.
- Customer relationships
Describe how your customers will interact with your business. Will you have personal or automated channels of communication available? Chart out the end-to-end customer experience journey.
- Customer segments and channels
Specify your target audience, what requirements of theirs you cater to, how you reach out to them and, most importantly, the steps you are taking to generate a customer experience that will result in long-term loyalty.
- Cost structure
Define your key costs and how they represent a competitive advantage if applicable. A lean startup business plan (versus a lean business plan for an existing company), needs to also include key startup costs you anticipate in launching your company.
- Revenue streams
Describe how your business generates money. What are your revenue sources or streams, for example, selling advertising space on your app or publication, membership fees, direct sales, etc? List all your revenue sources in this section, starting with the source that delivers the largest share of revenue.
Can You Use a Lean Startup Business Plan to Raise Funding?
Developing a lean business plan is a critical step in launching or growing your business. However, it’s important to note that if you’re seeking VC funding, bank funding or angel investors, a complete business plan is required. Such a plan includes additional research, strategy, and financial forecasts to give investors and lenders the information they need to determine whether they will receive an adequate ROI (return on investment) if they provide funding to you.