One question that comes up in my discussions, and in general, is if a business plan is still necessary. I maintain that this isn’t the right question. The answer is yes, you need a plan. However, the better question is, ‘how do I create an adaptable business plan for today’s fast-paced environment?’.
Switch to the Business Model Canvas or a Lean Business Model
The days when a 50-60 page document outlining your business in every detail is quickly fading. Business is moving at lightning speed. By the time you finish writing the plan, it will be time to update it again. Or, worse, someone else is already capitalizing on a similar idea.
However, you still need to create a plan that includes a destination, a roadmap, and required resources. You must identify your target audience, value proposition, and modes of engagement, but now you should do it in a different format. The Business Model Canvas (BMC) is a tool that enables you to identify all of the essential information on one page.
Alexander Osterwalder and Yves Pigneur explain their visual tool in the book Business Model Generation. It divides a page into nine boxes: key partners, key activities, key resources, cost structures, value proposition, revenue streams, customer relationships, channels, and customer segments. It forces you to work through these varying aspects of your business to determine critical information and drive strategy. The great news is that the BMC is adaptable and an excellent means to communicate essential elements of your business quickly.
The Lean Business Model canvas is very similar to the BMC, but the blocks are different. Depending on your business, the Lean Business Model may be a better choice. I use the Lean Busines Model with some slight modifications. The blocks are problem, solution, key metrics, cost structure, unique value proposition, unfair advantage, channels, customer segments, and revenue streams. I recommend this one for professional services.
While these canvas models are great in helping a business communicate the essentials quickly, there is no place for clarity. In other words, your vision, mission, and why. While there’s a place for metrics in the lean business model, that doesn’t exist in the BMC.
You Still Need To Write Stuff Down
Even though the BMC and Lean Model appear to be a quick snapshot of your business, it nevertheless requires research. The data you uncover about your competitors, target customers, the business landscape must be captured for future reference. I recommend writing 1-2 pages per box.
Whether you choose the Business Model Canvas or the Lean Business Model, or an adaptation of your own, here is a high-level outline of what your business plan should include:
- Mission and vision
- General strategy
- Business Model Canvas or Lean Business Model breakdown by block
- Operating structure (who is responsible for what and when)
- Primary goals (no more than five)
- Plan – how you will accomplish your goals
- Forecasts and financials
On the surface, this may seem like a lengthy business plan, but it isn’t. Your mission, vision, and general strategy shouldn’t change. Remember, you’re capturing the rest of the information at a high level. You will use other documents for more robust information such as a pitch deck, project planning tools, and back-office systems. Think of the new business planning as a guiding document to which you will return periodically to ensure you remain aligned to your overall business goals. The object is to spend more of your time doing the work rather than the planning.
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