“Life is what happens to you while you're busy making other plans.” Contrary to public belief, this was not said by John Lennon, but by American author and cartoonist Allen Saunders. Regardless of its origin, this statement highlights a paradox that can easily be applied to business planning. A plan has no value if it can’t be adapted to shifting circumstances. Things very rarely go exactly according to plan. Does that mean we should give up on planning altogether? In addition, most plans are created for the wrong reasons altogether. People often create business plans to express a need for external financing or support for their business. After they are created, they are left at the bottom of a desk drawer. Why is this?
The planning period is too long
The simplest way to improve the business plan is to make the planning period shorter. Instead of guessing what might happen three years from now, the focus should be on the next few months. We suggest making a plan for the next three months, and then add a new month at each months end. We call this a rolling three-month plan. Working in this way makes it a lot easier to make adjustments based on what we learn during the project.
You do not write the plan for yourself
Unfortunately, most businesses do not create their plan before they need to negotiate with banks, investors or public authority support agencies. This creates two major problems: first, the business plan is usually a set of arguments for the future success of the company. The plan is simply far too optimistic and lacks necessary skepticism and risk assessment.
The other major problem is that these external business plans are useless as a tool for managing the company. Implementation of the plan is poorly described, so most companies end up without a properly functioning internal plan. Nothing in the plan translates visions and ideas into daily tasks, which makes it difficult to follow up and assess development.
There is no common thread
Another important element in a business plan is that your company’s everyday activities should be linked to its long-term strategies. Unfortunately, very few entrepreneurs do this. Strategy documents are often drawn up by senior management, only to be left languishing in a desk drawer. Each departments sets its’ own objectives and tasks, and the financial manager makes the forecast. Often none of these planning activities are coordinated with each other.
The world is not static
The final important point is that your planning must undergo continual development. The one thing we know about growth companies is that it is difficult to predict the future; there will be both positive and negative deviations. Perhaps you will spend more time on developing your product than you thought. Or you might sell more than you had anticipated. In any case, it is important that you adapt to the new reality. We live in a time characterized by high tempo and rapid changes. You may have to respond to delays in development time by engaging a new developer or informing customers that the new version of the product will be postponed. In the worst case you will have to obtain extra financing to progress, while surprisingly good sales may allow greater investment in delivery capacity than you originally planned.
An alternative method
The purpose of this book is to offer a better alternative to a conventional business plan. It is suitable for all companies with ambitions for growth - companies in the start-up phase, and also established firms that wish to revise their strategies. It is especially relevant for managers, owners and board members who wish to play an active role in the business development process.
The basis for the method is a canvas consisting of eight parts:
How to use the Lean Business Platform
The Lean Business Platform will help you make a modern business plan as outlined in the book. However, you do not have to use the tool to benefit from the Lean Business method. Many people use the Lean Business principles together with other IT tools. Some people even use pen and paper to create a Lean Business Plan.
Of course, Lean Business Platform doesn't automatically make the right strategic choices for your organization, but it can help you create structure and collaboration in your planning process. You can begin making a strategy, and make a project plan based on it. The system will give you feedback on your progress at all times. You can test the choices you make, and if you need to change any information, you can return to the previous step at any time and make changes. In addition, you will have a brief summary of your plan. This will update itself as you make changes.
The Lean Business method and Lean Business Platform helps you to find a strategy for your project, it helps you to manage and lead your project, and it helps you to manage the economy of your project. Monitoring all these three things simultaneously makes it much easier to adapt your plan to changing circumstances. The method is excellent for developing, improving or growing your business. If you want to continue exactly the same way you have always done, using the method might be unnecessary.
You own all the information you enter into the system, and it will only be available to you. The data is protected in accordance with industry standards in the same way as other systems that you use, such as Internet banking. However, it is our strong belief that planning is optimal when several people participate, and you can easily grant access to colleagues or board members. It can also be useful to receive advice from someone with more experience and the appropriate skills in the process. You can also contact certified consultants for help.