Fundamentals of Lean Business Planning for Small Business Owners

Lean Business Planning for Small Business Owners
  • May 1, 2019
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It’s not a matter of opinion, but rather, a simple fact that a business needs to have a business plan. In order to function properly, to break even, and to improve, you need a business plan. Without one, you will be rudderless, you will move in whatever direction the wind blows. However, today we suggest you take a different approach towards business plans themselves. Instead of going with old-school, detailed systems, we advise small business (no matter how long you’ve been online) to look at start-ups for ideas. This is where lean business planning comes in.

Lean business planning is a flexible and clear system of planning how your work and your business will go. Because of its flexibility and simplicity, we believe it is superior to a regular business plan. You can find an elaboration on this issue below.

Strategy vs. tactics

There is a large difference between strategy and tactics. This same difference reflects the disparity between lean business planning and regular planning. Namely, lean planning is much more focused on tactics, than on strategy (even though strategy is important). Strategy means looking at the big picture, planning long-term, focus on the future. With a focus on strategy you set your goals, tasks, milestones and you move towards them. Strategy can be rigid, and even suffocating. Tactics, on the other hand, are all about flexibility, thinking in the moment, being on the move. This is what lean business plans focus on.

Now, strategy is important for any business plan – you need to know where you are going, you need to have a sense of direction. However, tactics (i.e. business plans) have more freedom attached to them. With tactics, you know where you should go, what direction to move towards, but the way you’re gonna do this can change greatly.

Fluidity and change

Lean business plans are not hindered by overcomplicated plans, laid out months in advance. What they do focus on are the tactics (see above) that are needed to get through the day. Lean business plans not only allows you to make frequent changes and shifts, they somewhat expect you to do so.

Namely, things change, the market changes, the entire economy can shift at a drop of the hat (as far as you’re concerned). But, with a lean business plan, you can adapt with more ease. This is especially useful for small business. It’s much easier for a smaller business to change course, than it is for a larger one. Also, lean plans are much easier to make when compared to old-school ones. However, most often the best option is to get some help from professional software, like the one MAUS Business Systems offers for example.

Now, in practice, this is how it could look like. You set some clear goals, more like reminders in the form of bullet points, not actual elaborate descriptions. You set out your pricing structure, your marketing, product financing, and all the core functions of your business in as few words as possible. This allows you to know what to focus on and what you simply mustn’t change, allowing you to have as much fluidity as possible, without compromising your core values and goals.

Safety nets and focus

In a way, this amount of flexibility and room to change gives you a unique safety net, unlike any other. The ability and possibility to change may be the only stability that actually exists in the business world. However, there are other factors, not just your goals that need to be taken into account if you want to reap the full benefits of a lean business plan.  Namely, you need to stay on track.

A real danger of lean business plan is meandering too much, going in the wrong direction at many different instances. This can be mitigated by making a monthly review, and setting clear milestones and achievements that you need to make for certain periods of time. So, not much detail, just a calculable, actionable number or goals. This will help improve both motivation and focus for your team, since you will have clear goals to strive towards.

For example, instead of lining out months’ worth of information, drama, and work that you need to achieve, all in great detail, with hundreds of pages of instruction for the entire year, you just need to set one long term goal (make x amount of sales in a year) and a short term goals that leads to the long term goal (make y amount of sales in a month. It’s clear, concise, and can serve as a clear motivator that can be hung up on any wall or board.

Conclusion

Lena business plans are an excellent choice for small businesses. Direct, concise, clear, these can help you achieve much greater results than a regular business plan, while at the same time being easier to make, and easier to adhere too. However, above all, what makes them stand out is the flexibility they offer. So, no need to obsess with old-school plans. Look up towards start-ups, and do your best to draft a good lean business plan.

About the Author, Chloe Smith

Chloe Smith is a design enthusiast and a part-time writer always willing to share tidbits of advice. She believes that passion, courage and, above all, knowledge breed success. When she’s not working, she’s probably somewhere cuddled up with a good book, and a cup of lemongrass tea (or more honestly binge-watching the newest Netflix hit show).

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