As an entrepreneur-to-be, it can be challenging to convey ideas from your head to other key business players or implementers. A business plan should be able to address these difficulties, as the document underlines business objectives and the marketing, sales, financial and operational activities needed to achieve them.
Business plans take a huge chunk of the business preparation process. And, as an excited business owner, the output is typically reflected in several pages, which, honestly, does not assure that the ideas contained in the plan are relayed properly.
It’s always a good way to create a business plan. However, to relay the key messages properly, it’s more helpful to use the lean canvas model as a summary of your business plan.
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What is a Lean Canvas Model?
Lean Canvas is a single page business plan matrix created by Ash Maurya, and adapted from Alex Osterwalder’s Business Model Canvas, and optimized for Lean Startups.
It takes about 30 minutes to finish and has the typical blocks with the following main components:
- Problem: Come up with the top 3 issues faced by your target consumers.
- Solution: List the top features of your product that addresses the problems identified.
- Key Metrics: Note the main activities that you’ll measure.
- Cost Structure: Identify and understand your startup’s fixed and variable costs. Consider factors such as distribution, customer acquisition costs, and other operational-related expenses, etc.
- Unique Value Proposition: Provide clear and compelling messages to your consumers about the benefits of your product.
- Unfair Advantage: Something that cannot be easily copied or bought by your competitors.
- Customer Segments: Determine your target consumers
- Channels: In which ways or channels will you reach your consumers?
- Revenue Streams: Briefly discuss how you’re going to attract income.
The blocks can be modified slightly to fit your business needs or a particular niche.
A lean canvas for your startup saves time by eliminating weeks or months’ worth of work involved in coming up with a business plan. Aside from this, business plans need to be updated frequently, especially with the ever-changing consumer preferences and fresh technologies in online marketing and sales.
How Lean Canvas Can Help Your Business
The lean canvas model is useful in condensing your business plan into one easily digestible document. Interested to learn more about Lean Canvas and other invaluable business concepts? Consider enrolling in a business startup course.
A lean canvas model has the following advantages for your business:
1. Focuses on identifying problems and solutions
The Lean Canvas model is specially designed for startups, and it allows entrepreneurs to improve on their ideas by focusing on two main elements: the problem faced by each customer segment and the solutions for these problems. Integrating key metrics is likewise beneficial in that it encourages entrepreneurs and key business officers to identify activities and periodically assess them for effectiveness.
2. Encourages Businesses to Think of Ways to Stand out
It may be one of the most difficult elements to answer, but the section about unfair advantage, which is referred to as “something that can’t be bought or copied by your competitors.” Apart from thinking of ways to prevent your rivals from copying your products and services, this section also forces entrepreneurs to think out-of-the-box in coming up with ways to make them stand out. Here’s how you can use technology to further improve your business.
3. Promotes Adaptability
Lean Canvas is a tool that allows you to think of external and internal factors that impact your business and shows you the roadmap for your business. Because it is easy to make and understand, it can likewise be tweaked to adapt to your other business endeavors, not just in creating a summary of your business plan. It can also be used to create product launches and other business campaigns.
Additionally, it can be updated regularly to adapt to the changes in your products and overall market conditions. Business teams can place the chart in a conspicuous area and use sticky notes to introduce ideas, as well as to monitor the shifts triggered by the proposed changes.
4. Easy to Understand and Share
This business tool provides a visual representation to enable business decision-makers to model strategies and changes much faster. Due to its visual nature, it’s easy to conceptualize and share. Unlike other business tools that hold strict copyright licenses, the Lean Canvas business model is under a Creative Commons license, which means you can easily print out copies of the chart and use it to start your own brainstorming sessions.
5. Give a clearer Understanding of how Business Elements are Interrelated
Its design allows participants to think critically and filter the most important concepts and key principles in a more holistic manner, something that’s difficult to do when making the traditional business plan.
The Lean Canvas model provides the team with a better understanding of how the blocks are related to each other and how a change in some elements in one block can impact the other main blocks. It’s easier for the teams to study the main blocks and introduce changes that may produce better results. This is especially important in newly established ventures and startups, as it provides an opportunity to identify gaps and opportunities.
Key Takeaway
The Lean Canvas model provides a visual representation of your business roadmap. However, it is also designed in a way that enables business think-tanks to introduce changes to the business model easily, as well as analyze the potential impacts of these proposed changes. This makes the Lean Canvas chart a highly valuable visual tool that can be used at all stages of a startup.
