Have you ever seen one of those 50-page business plans that goes into detail about every imaginable aspect of a business that remains just theoretical? Maybe you are, because these business plans have been the industry standard for decades.
However, in a world where words are similar continued and energetic becoming the new norm for startups, 50-page business plans look a bit out of place, and with good reason.
The fact is that creating a plan is very helpful for a new business. A study of more than 10 thousand businesses shows that enterprises will grow 30% faster on average if they create business plans.
However, another study shows that innovative start-ups in more dynamic environments benefit from shorter-term planning. The reason is simply – innovative startups are less familiar with their business environment and in particular – the specific needs of their customers. This means that the plan is likely to change frequently, and the more detailed the plan, the higher the chance of it moving away from reality.
This claim is supported by the fact that business plans are more efficient for existing companies than for new business start-ups. A company with at least a few years of history is more likely to have a deeper understanding of its customers, allowing more accurate plans to be firmly established based on facts.
So just add, if you have an innovative app idea, you should write a quick, high-quality go-to marketing plan. For the plan to be helpful in practice, it needs to be designed in a way that makes it easy for your startup team to be on the same page and at the same time easy to update.
In the so-called beginner world Lean canvas this need is very popular. To some extent, it replaces the traditional business plan. It is designed to put all the necessary information into one sheet of A4 paper, making it easy to share and update.
The sections in the lean canvas are designed to help you summarize the most important aspects of your business idea.
- Problem: This is arguably the most important section. Understanding the problem in depth is what would allow you to build a commercially viable solution. In an excellent world, you would be able to explain the problem correctly from the beginning. In reality, however, it would seem that you would need to update your definition of the problem as you gather views from your customers.
- Solution: The second half of the main equation. It is likely that the definition of your solution would change more frequently than the definition of your difficulty in finding product market suitability. These changes would usually be very rapid in the period of testing different ideas (solutions) at the early stage of start-up.
- Key metrics: If you prefer, you will be able to find one metric that clearly shows whether customers are getting value in your product or service. It’s usually some type of usage metric that is specific to your business. Don’t run a vanity metric (social media followers, raised capital, website visitors, etc.) because they are often misleading and have a weak correlation with the company’s success.
- Unique Value Recommended: What makes you different from the other solutions available in the market?
- Unfair advantage: Why are you in a position to be successful instead of someone else?
- Channels: How would you reach your customers? Keep in mind that many resources will not usually be a starting point. This means that it is usually better to focus strongly on one channel than to spread your efforts to multiple channels.
- Customer Sections: Who is your best customer? Again, as a starting point, it’s usually best to focus. Solve the problem of a single messenger profile (the lowest viable segment) instead of trying to satisfy the various demands of several market segments in the future.
- Cost structure: Fully self-explanatory, it helps you see and think through the financial features of your business.
- Income stream: What is your business model and how do you make money? It is very important to do this to make your business sustainable and scalable. However, try to focus on this point immediately after you find a hard-working solution that is appropriate in practice. It doesn’t matter what your business model is if people don’t need what you have to offer.
Finally, for a start-up campaign that seeks to introduce an innovative solution, a plan is made up of a series of learned assumptions or spells. Spend less time measuring and more time confirming. The lean canvas is an excellent tool that allows you to design, perform and change quickly.