What Founders Must Know Before Spending Time Creating a Business Plan

Since I started my career in Marketing over a decade ago, I’ve seen my fair share of go-to-market strategies, marketing and business plans.

First, having started in a marketing agency, I got very well acquainted with business plans from companies ranging from some of the biggest public companies in Portugal all the way down to entrepreneurs who were selling vineyard tours in the Douro Valley.

Then, since I joined Altar over three years ago, I had the chance to analyse, discuss and often help dozens of founders and business leaders build their products with us, with their go-to-market plans.

From all of this experience, I’ve noticed one common theme – too many of them spend way too much time on their business plans, thinking that it’s a crucial part of their journey.

It’s not. It can actually be detrimental. 

Quick story moment: a while back, I was working with an entrepreneur that was perfectly positioned to transform his industry. Super smart, had experience in his vertical, was dedicated, and found a gap where a traditional industry could greatly improve its efficiency by leveraging technology. 

More than that, he went about building his product the right way. He created a blueprint for his product with an experienced team to reduce his chances of failure, and then he built an MVP to test his main assumptions. 

What he didn’t do was start selling from the get-go. 

Instead, he waited until he had his product in hand and, in the meantime, focused a huge portion of his time on writing the perfect business plan for that product to go to market.

Nothing he’d written in that business plan ended up materialising – because it rarely does. Because he spent so much time around the theory and not nearly enough on execution, his runway ended before he could secure his first customer.

It’s why my advice to early-stage entrepreneurs is always the same, execution is key. Instead of spending countless hours on your business plan, you should instead use most of that time to build your product and – equally important – get out there and talk about your vision with potential customers (your first customers won’t buy your service, they will buy your vision to solve their problems), investors, advisors and any other stakeholders who can help you improve your product and increase your chances of success. 

Then, once the product has been built, it will be a lot easier to put in the hands of customers and that product will solve their problems a lot easier than if you had built it in a silo.

With that said, I believe that writing a lean business plan can be useful for a few reasons. 

It can help you organise your thoughts and execute your vision more efficiently and focus. Moreover, you can use it to show potential investors, partners and talent that you’re committed to bringing your vision to life – and have put real thought into how to do it. All of which will go a lot further than presenting them with an idea on a napkin. 

But, you have to be mindful of the time and importance you give to it. 

You should also be prepared that the reality of your product may be vastly different to what you write down. 

Ask any successful entrepreneurs you know – or can find on Linkedin; vision shifts over time as it matures. Successful products often bear no resemblance to the original vision, just look at Burbn/Instagram as an example. 

In this article, I’m sharing a template my team created to make sure you focus on the right factors in a lean way. 

First, however, I want to dig into exactly what makes a lean business plan different from its traditional counterpart and what you should include in yours. 

What is a Lean Business Plan & Why Should You Write One? 

Unlike the traditional business plan, the lean version is a template around one page long that divides each part of your business plan into individual components. 

We’ll get to the exact things you should include in a lean business plan in just a moment. However, there are four high-level factors that you should cover in your lean business plan. They are your business model, schedule, strategy and tactics. 

By writing a lean business plan, you’ll be creating a focus on key drivers for your business strategy and success. It will benefit all the stakeholders in your business, as they’ll quickly be able to see a visual representation of your business model. 

Moreover, as it’s shorter than a traditional business plan, it will be much quicker to update in the future as your product develops and your goals and objectives inevitably change. 

This brings me to a vital part of the lean business plan process. It is a living document. It should be updated and revised on a regular basis to ensure: 

1. You’re sticking to the plan you set out to achieve
2. That plan is still relevant based on how your startup is maturing

You should also notify your stakeholders when you make updates to your lean business plan – so that everyone is aligned on the overall mission of your startup. 

With that said, let’s dig into the exact elements that you should include in your lean business plan. 

Related: What is Agile Scrum Methodology and How Can it Help Your Startup?

The Step-by-Step Process to Create a Lean Business Plan 

Now we’ve talked about what a leans business plan is, and why you should write one, I wanted to give you the step-by-step process that you can use to successfully write one. 

In the article’s final section, I’ll share a template that you can save for later to help you write yours as efficiently as possible.

Until then, here’s the information you need to get down on paper.

1. Define Your Startup 

The first thing you need to do is briefly describe your business on a high level. 

Think of it as an introduction to your startup and the product you want to bring to the market. 

2. Outline The Problem You’re Tackling & How You Intend to Solve it

It’s no secret that good products solve real problems for a specific subset of people. 

So in this section of your lean business plan, take the time to detail exactly what the problem is that you want to tackle. 

You should include the specific type of product or service you’re offering. Here you should showcase that you have enough knowledge of the niche your focusing on to build a business model around it. 

How will your product or service solve the pain points your customers are facing? What will it help them overcome? How will it make their lives easier? 

Why did you choose to tackle this problem in the first place? 

All of these questions need to be answered and will help you perfect your positioning, messaging and overall marketing strategy further down the line. 

3. Identify Your Target Market & Competition 

Once you’ve outlined the problem, you need to talk about who you’re solving it for. You should take the time to get specific here and outline the profiles of the customers you plan to target. 

This is essential to know before you start building your product. You can build a great product, but if it’s not tailored to your specific users, it will quickly end up in the graveyard of failed startup products. 

This will also help you when it comes to building your marketing strategy – specifically messaging and the channels you use to reach customers. 

You also need to take the time to identify who is currently solving the problem for your target market, a.k.a your competition. 

And in most cases, you have competition, even if it’s indirect. 

Thinks about the Ford Model T. It may be easy to think there was no competitor to the Model T – as it was the first mass-production car on the market. 

However, the problem of affordable transport was already being solved by the horse and cart – so there was a competition to take into account. 

4. Define Your Unique Value Proposition 

The next, and perhaps the most crucial factor to include in your lean business plan, is how your product is a better solution to the existing solutions on the market. 

It should include all of the benefits that your product or service offers. Specifically how the benefits that your product delivers differ from how your competitors do it – and why your way solves the problem in a better way – whether that’s more efficiently, more effectively, in a cheaper way, the list goes on. 

Without a clear unique value proposition behind your product or service, it will be extremely difficult to ask your clients to drop what they’re currently using and adopt your new solution. 

Related: How to Build a Successful Minimum Viable Product (MVP) in 3 Steps 

5. Define Your Go-To-Market Strategy

I said at the beginning of this article that execution is key. And the same applies here when it comes to your go-to-market strategy. 

You have two priorities at this stage in your startup: building a kick-ass product and selling it. 

Again, too many people focus on theory here. Creating 20 detailed personas, SWOT analysis etc. What they don’t focus on is on executing. 

When it comes to detailing your go-to-market in a lean business plan you need to look at the market direction (where the market is and where it’s going) and your competitors. 

Then, get to know your target in-depth (unless you’re speaking to at least 5 potential clients per day, you’re doing less than you can) so you can devise a specific positioning focusing on the key factors that showcase why your solution is the best one out there. 

Then you will be able to translate that positioning into the right messaging that will impact your target market and cause them to take action. 

Then, look at the places where they spend time and make sure the message finds its way to them. 

• Target Market 
• Your message to that target market (Why your solution will be 10x better than what’s out there already) 
• The media you will use to reach your target market

That’s all you need right now. And it will help you exponentially when it comes to the only other early-stage marketing activity you should be thinking about right now, which is getting out there and speaking with people. 

Potential clients, business partners, investors, coaches, mentors – anyone in your industry that you think can help you shape your product. Get out there and speak with them. 

Share your vision, share what you’re trying to accomplish and get them to buy into your vision. 

Right now you need to make sure the market understands your value proposition and that they’re willing to pay for it. This will of course change when you have your product out there and start gaining clients – but, like I said, you’re not there yet. 

When it comes to writing your go-to-market plan, I would recommend you bring in someone who’s been an early employee at a startup and who has marketing experience to help you.

If that’s not an option (or even if you just want to understand early-stage marketing better) I recommend you check out Allan Dib’s The 1-Page Marketing Plan. It will tell you a lot of what you need to know to create a solid marketing plan. 

6.  Detail Revenue & Costs 

Even a lean business plan needs to look at the numbers surrounding your startup. Here it’s a simple case of discovering whether or not your product/service has the potential to cover the costs and one day make a profit. 

Don’t worry, at this stage, you don’t need to start thinking about cash flow statements, balance sheets and the like. You do, however, need to realistically estimate the expenditures you’ll need to make to get your startup off the ground. 

You should list your key projected expenses on employees, contractors, physical office space, specific software platforms, and hardware. And any other startup costs you may need to launch the company. 

With that in hand, you then need to detail the projected revenue you can reasonably expect to earn from your product or service – and how you’ll earn that income (one-off sale, a subscription service, consulting fees, selling advertising space on your platform, you get the idea).

Here it’s important to consider your pricing and how attractive that pricing will be in your target market. 

Compare the revenue vs. costs to arrive at a basic idea of your fiscal viability. 

7. Outline Milestones to Schedule Your Success

Finally, you need to outline how you’re going to make your vision a reality – and how long it’s going to take. 

Here, you should outline specific tasks and assign who will be responsible for completing them. You should also designate deadlines for each task. 

Some of these milestones could include finalising your product rationale, completing your design specifications, setting up distribution channels, building a full marketing strategy, etc. 

These milestones will give your stakeholders a clear idea of how and when your vision will take shape – and what’s required of them to make that happen. 

Related: 20+ Entrepreneurial Platforms that will Help You Overcome Startup Hurdles in 2023

8. Summary of the Team

You should end your lean business plan with a quick rundown of who you are, and the specific roles within your organisation.

The Lean Business Plan Template 

As promised, below is our template for a lean business plan. Alternatively, you can find it as a Google Doc here. Feel free to make a copy and save it for later and share it with others. 

Summary 

___________[Startup Name] intends to offer ___________[product/service] for ___________[target customers]. Our team has been working in our ___________ [industry] for ___________[x number of years] and have seen/experienced/etc. The problem our ___________[target customers] face and believe our ___________[product/service] will provide the best solution possible. 

Problem 

___________ [the task your target market wants to complete] can be difficult  ___________[target customers] to complete their goals because of ___________[list hurdles your customers face]. 

Solution

Our ___________[product/service] intends to solve our users problem by ___________[outline how your solution will solve the problem]. 

Target Market 

Our ___________[product/service] will focus on the following target customers: 

• ___________ [e.g. businesses selling online] 
• ___________ [e.g. families with young children]
• ___________ [e.g. young professionals living in the city] 
• ___________ [e.g. millennials saving for a house] 

Competitors 

Currently, there are ___________[number of solutions] on the market: 

• ___________
• ___________
• ___________
• ___________

However, we feel that the current solutions do not properly provide our target market with the ideal solution. 

Unique Value Proposition

Unlike the current solutions on the market, ___________[product/service] will ______________________[explain the benefits of your product/service and how they differ from competitors.] 

We feel that ___________[product/service] is better than the current market offering(s) because ______________________[state the reasons your product is a better option]. 

Marketing Activities 

Our message to our target market is ___________[message defining why your solution will be 10x better than what’s out there already].

To reach our target market, we plan to use the following media channels: 

• ___________
• ___________
• ___________
• ___________

Revenue 

We will generate revenue for ___________[startup name] using the following methods: 

• ___________ [e.g. subscription service]
• ___________ [e.g. direct, one-off sale] 
• ___________ [e.g. selling advertising space on the app/platform] 

We forecast that we should be able to generate ___________[x dollars] from these revenue streams. 

Expenses  

We expect to incur the following key expenses launching ___________[startup name]: 

• ___________ [e.g. employees]
• ___________ [e.g. rent of physical office space] 
• ___________ [e.g. specific software needed by the team]
• ___________ [e.g. third part contractors] 

We estimate that we’ll spend ___________[x dollars] in total. 

Schedule and Milestones

To achieve a successful launch, we need to complete the following tasks by the deadlines assigned to each: 

• ___________ [milestone, person responsible for, deadline date]
• ___________ [milestone, person responsible for, deadline date]
• ___________ [milestone, person responsible for, deadline date]
• ___________ [milestone, person responsible for, deadline date]

Team 

• ___________ [e.g. Johnny Excelsior, CEO] 
• ___________ [e.g. Allie Techerson, CTO] 
• ___________ [e.g. Tony Leadcount, CMO] 
• ___________ [e.g. Barbara Closer, Head of Sales]

Wrapping Up

A lean business plan is an invaluable tool for founders looking to build a successful startup. 

It provides a clear structure and outlines for your business, allowing you to target the right market and plan for growth.

While traditional business plans can be time-consuming and filled with guesses, a lean business plan is a more agile and efficient way to plan for success. 

And with all the information above, you should have no trouble creating yours! 

Thanks for reading.