Writing a Lean Startup Business Plan to Brief Investors
When setting up a startup business in the UK, you’ll need to decide on the type of plan you need to draw in potential investors. Here, we’ve provided some advice on writing out a lean startup business plan that’s bound to get your business off the ground and get your investors intrigued.
Table of Contents
- What is a Lean Startup Business Plan?
- Why Use a Lean Startup Business Plan Instead of a Traditional One?
- How to Write a Startup Business Plan: Lean Format
- Things to Consider When Writing Your Lean Startup Business Plan
- Will Your Startup Need an Office Space?
*Reminder: Here at Halkin, we are ready and prepared to provide our clients with virtual office spaces, offering them a working solution on their ideal platform in the time of the pandemic. For more information on what we’re doing to tackle COVID-19, please contact our team today.
What is a Lean Startup Business Plan?
Unlike a traditional business plan, which involves a lengthy, detailed format, a lean startup business plan offers a quick summary of your company and the ideas you intend to carry forward. Often, it will only be a single page in length (as opposed to traditional plans, which can sometimes contain dozens of pages).
Lean startup formats are usually created in the form of charts or tables, which then use a handful of elements to describe various aspects of your planned startup. For example, they will make note of the company’s value proposition, infrastructure, customers, and finances.
These business plans are also particularly useful for showing potential investors the most basic foundations of your company, drawing them in so they’ll want to hear more. You should always remember that your most important potential investors will be busy people, so keeping things brief and to the point is often key.
Why Use a Lean Startup Business Plan Instead of a Traditional One?
Out of traditional and lean startup business plans, neither can be considered “better” than the other. However, you might want to consider using a lean method if your business plan is fairly simple and straightforward (such as selling a product or an app idea). This is because the lean startup format only requires the most succinct key information.
It will also be easier for you to amend your plan if you use a lean format, as the content is brief and you can easily pick out the parts that need changing.
When thinking of the business plan you’ll need, you may want to start by thinking about the type of business you are setting up. This will help you to decide if you can keep it short, or if you need to write something out in full and really sell your company to investors (or a bank if you’re looking for a business loan).
How to Write a Startup Business Plan: Lean Format
There are a number of different planning templates available online that can help you set out your startup idea before you attempt to pitch your business to an audience of investors or buyers. The one you decide on will be up to you, but you should always make sure that the outcome is:
- Readable and easy to understand
- Kept brief, using shorter sentences and bullet points
- Full of content based on evidence (be sure that you can back up what you’re saying)
Here, we’ve added in an example of a startup business plan in the lean format. This particular format is based on the Business Model Canvas, set up by Alex Osterwalder. It’s one of the oldest and most famous lean startup formats, and has nine components:
1. Noting Down Your Key Partnerships
You should always include the other businesses or services you’ll be working with in order to run your own firm. For example, if you’re planning on offering a product or service, you will need to list your suppliers and any subcontractors involved in the process. You’ll also need to note down manufacturers and any similar strategic partners.
2. Listing Your Key Activities
You should be sure to list the ways your startup business idea will gain an advantage over competitors. For instance, you may wish to highlight points such as selling directly to your consumers, cultivating an online presence, or even using technology such as an app to create space for your company in the sharing economy.
3. Specifying Your Key Resources
Add in any key resources that you can use to leverage value from your potential customers, and don’t forget to include business resources that might be valuable to specific markets (e.g. women, young people, etc.). The most important assets you might include in this list are your staff and management team, capital, or even intellectual property.
4. Your Unique Value Proposition
State what unique value your company will bring to the market.
5. Describing Customer Relationships
Describe the kind of relationship your customers will have with your business once it’s up and running. Is the system automatic and generic, or will it be more personal? Will they come to you in person or will they order products online? Will they do business through an app you’ve created? Be sure to think about the customer experience from start to finish, so you don’t miss any points in the process.
6. Setting Out Your Customer Segments
Of course, your business won’t be targeted towards everybody. This is why you’ll need to be specific when naming your target market, so you know exactly the kind of person your business should be tailored to.
7. Listing Your Communication Channels
Note down the channels that you will use to talk and connect with your customers. Most businesses will have a range of options that they can optimise over time.
8. Being Clear on Cost Structure
Is your company going to focus on reducing costs, or maximising value? Be clear about your strategy and then list the most significant costs you’ll face when pursuing the goal.
9. Explaining Your Revenue Streams
Explain how your company is going to make money. For example, you may make money through direct sales, membership fees, or even through selling advertising space. If your company has more than one revenue stream, you should list all of these.
Things to Consider When Writing Your Lean Startup Business Plan
The important thing to remember when writing up any kind of business plan for a startup idea is market analysis and research. You should always ensure you know as much as possible about your market, that you have calculated your revenue forecasts, and that you know your target customers and what they’ll be looking for.
There are a few other points you may also wish to consider when setting out your business plan:
1. Always be Realistic
You should always be realistic with your plans, including financial projections. You should also be sure to look at possible worst-case scenarios, so you are aware of what could go wrong and what you would need to do to make it right.
2. Be Honest
Make sure to highlight any weaknesses in your chosen market and your business, before detailing how you’ll address them.
3. Work Backwards
You may wish to start with your business goals or scenarios of when your business will start making money, and work your way backwards to work out what you need to do to make your business profitable.
4. Review Your Plan Like Investors Would
A useful technique is reading your plan from the point of view of your audience, whether they are potential investors or business owners if you’re planning on selling your idea. This can often help you to spot any problems that you might have missed in the initial planning stages.
Think about everything carefully when going through this step. Are there any assumptions you need to double-check? Are your plans realistic? What could go wrong and how would you fix it if it did?
Will Your Startup Need an Office Space?
If your startup business has hit the ground running and you’re ready to move into your very own office space, get in touch with our team today. We have a large selection of rented spaces to choose from across London, and we can help you pick the right one to accommodate any equipment while staying comfortable for growing staff numbers.
We’ll be ready and waiting to help you move into the space your firm needs, and we can even cut costs for you by performing everything in-house, from IT services to maintenance and catering. Combined with transparent pricing on all of our offered spaces, you may find our services more cost-effective than attempting to buy.
If you’re still looking to get your company off the ground and need a place to host potential investors, we’ll also be happy to loan you the use of one of our meeting rooms. No matter the type of space you need most for your startup idea, we can be there to provide it.