Starting a business can be an all-consuming adventure that has the potential to be both very rewarding and very challenging at the same time. When trying to figure out what kind of Minnesota business you want to start and why you want to pour your life and soul into that business, there are some tools that can help. Ash Maurya’s Lean Canvas is one such tool that we here at Morbey & Olsen, PLLP like to utilize when helping businesses think through their business plan.
The Lean Canvas is broken into nine questions and is essentially a one-page business plan which according to the book _ Lean Analytics: Use Data to Build a Better Startup Faster_, was inspired by Alex Osterwalder’s Business Model Canvas.
This one page canvas can assist you as an entrepreneur and future business owner in assessing your risks, rewards, and tradeoffs. While the Lean Canvas has nine simple, but provocative questions for you to ask yourself, we have added a tenth in order to help further think through your business plan. Here are the ten questions that you should be asking yourself prior to making real investments in starting up a new business:
1.The Business Problem:What are some real needs and problems that are crying out for solutions for people today and how does your business expect to address those problems for them? If there are already solutions, that are good, you need to determine if they are indeed viable alternatives to what you want to provide. If there is no clear business problem for you to solve, you are already in trouble.
2.Customer Segments: Who are your targeted customers and market segments? Your message must reach out to these groups in a clear and concise manner.
3.Unique Value Proposition:Is your elevator pitch clear, distinctive, and memorable? Remember, if it is not compact, or if it cannot explain why you are different or better than the competition, AND make people remember it, then you may need some help crafting that message.
4.Solution: Are you able to adequately provide solutions to your target customer and market problems? What capabilities do you provide that someone would want to pay you for?
5.Channels: What is your pathway to customers and how will you get paid? A business without customers, is not a business, it is research.
6.Revenue Streams: What are your sources of revenue? Knowing how much revenue you think you can get is important, but knowing how often and at what intervals or frequency those revenue streams provide real cash is critical. A business needs money to make money, so a clear plan to manage cash flow is critical to success.
7.Cost Structure: What are your fixed and variable costs? Initial start-up costs are only a part of a good plan, knowing how cash is used each month will make for a successful business plan.
8.Metrics: How will you measure success and how will you track that measurement? This is one of the most critical elements to consider. Enthusiasm often biases perception, and real metrics keep you honest. Knowing them in advance will make you discipline enthusiasm with reality, and make for a more profitable business.
9.Unfair Advantage: What gives you the edge? There is one thing that will separate your business from the pack, and you need to make that clear to everyone. Your business needs to have a clear view of its competitive advantage.
10.Timeframe: What does your timeframe for success look like? Many great ideas die because they take too long to get to market. You need to know what you must accomplish at various intervals (over 30 day increments, quarterly increments, etc.) Defining targets you need to hit by each interval is what a plan is for.
Creating a visual one-page business plan that answers these questions and posting it by your computer to remind yourself daily of where you are headed as a business will help you evaluate your success and constantly strive towards it. Without a plan, it is easy to lose focus and flounder. Danger lies not only in the enthusiasm of a great idea without a business plan, but also a business plan without true measures of execution effectiveness. That is why measuring your plan is critical.
As the saying goes: Proper Prior Planning Prevents Poor Performance! So get drawing on that whiteboard, break out Visio, or print out a word document that reminds you of your ultimate vision – then track reality against expectations with real metrics. If you do, you will be more successful and less stressed in the long run!