How To Build a Business Plan for your Startup — The Lean Business Model Canvas way
Short on background reading? Jump strait to the TL:DR section (Below)
Background
We already know today, that a startup isn’t just a mini version of a company. Startups have unique characteristics that are nothing like those of a mature company.
The main difference between a fully-developed firm and a startup is reflected in its ability to write down a strategic business plan. A startup will typically experience a huge gap between theory and reality, so writing down a plan forecasting the next five years similar to the business plans you have probably learned how to write back in your MBA days just isn’t relevant. Due to the nature of a startup’s life, a plan of this kind definitely won’t hold up in an encounter with reality.
Startup roller coaster’s life is full of surprises that just can’t be planned ahead of time.
Because of this gap, writing a full business plan is perceived as a clumsy, slow and alienated process from the very idea of a startup. For many entrepreneurs writing such a business plan seems as a complete waste of time, one that won’t be relevant to their everyday life, so why even bother?
Once upon a time I as well shared that feeling, I completely changed my mind the moment I discovered the business model canvas method.
This method offers a quick, efficient, sharp and piercing solution that, most importantly, is well adapted for entrepreneurs and startups life, helping them answer the most important key questions of building a startup:
What are we building? What needs does our business fulfill? Who is the customer? How much money will we make? How much will it cost? What are the essential steps you should take to build what you want — and more elemental questions that suddenly have a place and logical organization.
From the least helpful activity, building a business plan becomes the most important thing we can and must do. And of course, no one but you, the entrepreneurs, can do it for you.
The Business model canvas helps us confront all the questions and answers that we need and want to ask ourselves anyway. As a secondary benefit, after you’ve figured out what you’re building and why, you’ll gain maturity and preparedness during this process ahead of the capital-raising phase and towards questions you might be asked by investors, if you choose to raise capital.
The method is widely used by startups across the world, especially by Lean startup method believers and has proved to be so efficient that big companies like Google, GE, Intuit and others are adopting it today in their branches and teams as an effective way to plan changes and release products.
I have personally worked and used this method with a number of startups, both small and large.
So, let’s go — after we’ve come to understand its importance, let’s consider the method itself and learn how this miracle actually works.
TL:DR
I’ll divide the DIY into a number of sections:
- Work files
- Questions to help you fill out your business model canvas.
- Media videos & Online course, website.
- Step by step Workflow — A short explanation and walkthrough on how to work with the Business model canvas .
DIY
Let’s start with a short video explaining the canvas page (2 min):
Work files
- Canvas page download (PDF)
- Customer profile and value proposal page download (PDF)
- Business defining page download (PDF)
- My Google Slides Business Model Canvas template (with questions) to help you add digital sticky notes as a team and to keep the history from the various canvassing you’ve done
- My Workshop slides on building a business plan for startups & entrepreneurs — My Presentation
Helpful guiding questions
- 38 questions to profile the customer and find a product market fit
- 50 questions that will help you build your business plan canvas
Media
Free video course (Recommended)
Websites
- Strategyzer.com — The method website full of useful resources
Step by step walkthrough
How does the method work?
The Business model canvas presents all the 9 chapters and most essential building blocks to build a startup organized and laid out on a single page:
- The customer
- The product and value with which to create a value proposition
- Channels
- Customer Relationships
- Revenue Streams
- Key Activities
- Key Resources
- Key Partners
- Costs
Every one of these 9 columns gets its own series of questions you need to find solutions for and/or write your own hypothesis for. Your answers/hypotheses can be written on Sticky notes and put on a board/paper. This activity will help you quickly consider/fix/change/improve the hypotheses you’ve written. The business plan becomes a “living board” that’s constantly changing until the entire team settles on a stable business idea agreed upon by the entire team.
It’s very important to organize the work on the canvas and view the progress from page to page.
Notice that the right side of the canvas deals with creating income (customers, product value, channels, customer relationships, and revenue streams) while the left side of the model deal with the costs (key resources, activities, partners and costs).
As you can see, the business model canvas comes as one simple empty page, and that’s its genius. In this way, you can give your own interpretation on how you out to fill it out, so that your entire business plan will be on display on just one page.
More help to learn and practice the method:
Excellent and short animated series that explains the method (6 videos/15 minutes)
Friendly advice — In addition, I strongly suggest entrepreneurs to take the full course to learn the method. The course is perfectly structured and simply guides you, step by step, through the explanations of every phase of the method (each video is just 2 minutes and the entire course is 5 hours).
*Tip — Notice you can also change the speed settings of the video player to double speed, cutting the learning time in half.
How have you built your business plan? Have you tried the business model canvas in the past? Would love to hear your thoughts in the comments below
