The lean method is slowly gaining momentum within businesses for launching new enterprises, from startups to new initiatives in large conglomerates. The old formula is failing, and business people are turning to new alternatives.
The Flaw of the Business Plan
The regular business plan is something that everyone knows that you have to do when you start a new business. However, it is fatally flawed.
It is a static document that describes the opportunity, the problem to be solved and the solution that the new venture will provide. It is a document full of unknowns that you’re guessing at before you’ve even raised any money or executed an idea.
Once you’ve got the go ahead and the budget to do it, developers begin creating the product in relative isolation – with no customer input whatsoever. In fact, it’s only after all the money has been spent that sales try to sell it and the customer gets a say at all.
The Lean Method
The main difference between the business plan and the lean method is that those engaged in the lean startup method are looking for a business model, and the business plan dictates one.
The lean startup approach is where you search for a repeatable and scalable business model. Your business fails and fails quickly until you succeed with the right model for you.
If you’re a lean company, then you are willing to fail.
How Does it Work?
Firstly, you come up with your ‘hypothesis’ a good guess of how your company is valuable to your customers.
Then, you determine your target market so you know and understand your customers.
Build an action plan to help you decide what is successful and so you can measure your progress.
Develop basic forecasts and budgets and track them carefully.
Essentially you are planning as you go: setting goals and objectives and revisiting and revising the plan as new experiences and information change them. By doing this you are embracing a more agile planning process, streamlining your processes and improving your business model.
For further help in taking on a new lean business model, take a look at leanstack.com for the lean canvas template, as well as information and training. Alternatively, if you’re an established business as opposed to a startup, then you may want to hire consultants like Evolve who will help you change your business model without causing havoc.