69% Of VCs Don't Invest In Ventures Without Reviewing A Business Plan. Here's How To Write A Business Plan That Will Set You Up For Success In 2023 (And Beyond!)
Are business plans a thing of the past?
According to the latest statistics, they are more important than ever:
- 69% of venture capitalists say they have not invested in new ventures without reviewing a business plan first.
- Most companies that had over 92% growth in sales from one year to the next have business plans.
- In fact, 71% of fast growing companies have business plans.
Also, with so much change and volatility in the business world, it’s essential to have a rock-solid roadmap that will help you stay on track and achieve your goals.
As the founder and CEO of a successful business, let me tell you how I created my business plan and why it was paramount for me to have a plan that I can easily adjust as I scale my business.
Let’s dive right in!
- What’s a business plan and what are its benefits?
- Why do you need a business plan in the first place & how to create one that works?
- The 12 essential components of a successful business plan
- How I created my business plan
What’s a business plan and what are its benefits?
A business plan is a document that outlines your company goals, as well as the strategies needed to achieve them.
It can be used for internal purposes, or to attract investors or partners.
A well-crafted business plan can help a company stay on track and make necessary adjustments along the way. Also, having a comprehensive business plan will help you:
- Define your business priorities.
- Determine your main business objectives and challenges.
- Identify the main problems and pain points you’re solving for your customers.
- Create solutions that are unique to your company and highlight your unfair competitive advantage.
- Come up with KPIs to track progress and achieve success.
- Craft a meaningful value proposition that resonates with your customers.
- Understand your USPs and how to communicate them effectively.
- Get to know your competitors and define specific ways to gain the competitive edge.
- Create a content strategy that offers unique value, attracts attention, and builds your authority.
- Implement a robust SEO strategy that drives targeted traffic to your store and increases your CVR.
- Develop a marketing strategy that drives engagement and sales.
- Determine your cost structure and identify revenue streams.
- And, most importantly, put it all together into a cohesive business plan!
Why do you need a business plan in the first place & how to create one that works?
It's no secret that starting and running a business takes a lot of hard work and dedication.
But with a well-thought-out business plan, your odds of success increase exponentially.
So how do you create an effective business plan?
The Lean Canvas template is the answer.
In 2023, you should have a lean and concise business plan that contains all essential business information and presents it in a meaningful way - without any fluff or unnecessary detail.
So, whether you’re a new or established business, this easy-to-use template will help you stay on track and achieve your business goals in no time.
Let’s have a quick look at the Lean Canvas components!
The 12 essential components of a successful business plan
This is how the Lean Canvas template looks:
As you can see, it has 12 components:
- Existing Alternatives
- Key Metrics
- Unique Value Proposition
- High-Level Concept
- Unfair Advantage
- Customer Segments
- Early Adopters
- Cost Structure
- Revenue Streams
Filling out these fields will not only help you create a business plan that works, but also give you a unique perspective about your business and its future growth.
For example, by clearly defining the main problems your business tackles, you can come up with effective solutions that your customers actually want to use (and communicate their value in the best possible way).
And by defining your unique value proposition and unfair advantage, you can effectively deal with customer hesitation and build confidence in your products or services. All this leads to a substantial increase in sales and helps you achieve steady business growth.
Next, I’m going to tell you how I created my business plan and share some advice on how you can achieve the best results.
How I created my business plan
First, let me tell you why I decided to use Lean Canvas in particular.
Back when I was starting my business, I knew that if I focused too much on my business plan and making it perfect, it would be more of a drawback, instead of something that would benefit me.
Let me elaborate! As you know, I’m incredibly customer-centric and, if I had spent too much time trying to make my business plan perfect, then, instead of solving problems for my customers, I would have been solving problems for my business (which is not aligned with the customer-centric strategy).
Also, I wouldn’t say that business plans in the traditional way of doing them are really beneficial nowadays. Instead, I needed something leaner and quicker that would help me stay focused on my main business priority and stay on track of my success.
For me, it was important that everything was straightforward, concise, and agile in the sense that I wanted to be able to make adjustments any time I needed them.
So, early on, I was convinced that having a single page business plan would be better than having this massive 20, 30, or even 50-page document.
This led me to Lean Canvas - a single page template where you explain your whole business model and, instead of going into too much detail, you focus on the big picture.
And, for me and for my company, the biggest advantage of having this kind of a business plan (compared to the traditional huge documents) is that it’s much easier to make adjustments during the implementation.
So, I highly recommend that you check out Lean Canvas!
It is going to be really insightful for you to just sit down and start filling out the boxes.
As I already mentioned, it’s divided into sections that cover all the key aspects of running a successful business:
- Problems you solve and how you approach them
- Existing alternatives
- Key metrics
- Unique value proposition
- Unfair advantage
- The channels you use to reach potential customers
- Customer segments
- Cost structure and revenue streams
I know this seems a bit overwhelming!
But, essentially, this is your entire business in a single page.
And, if you can define your business in a single page, then, if you need to, it’s going to be much easier for you to switch some part of the business model and see how this is going to affect all other parts of the business.
This is important, because, an essential part of running a successful business nowadays is the speed of implementation.
And with the old structure of business plans - the structure of detailed and long documents - the speed of implementation is much lower. If you try to change even one thing in such a business plan, it can take you so much time. And time is an invaluable resource that should be invested wisely.
But if you use the Lean Canvas template, then you can quickly and easily switch between and test different business models, which will give you incredible insight into how each model, each strategy, even each action, affects your business.
So, yes - it is very overwhelming to put in all this work and define all this. But, once you do, it will open the door to so many other possibilities about your business and marketing your products in different ways and on different platforms.
An important note:
Keep in mind that the order in which you fill out the boxes in your Lean Canvas template is important and you should carefully consider where to start and how to proceed.
Because, essentially, the way you’re filling out the boxes should reflect how your entire business is structured.
But filling out the boxes will also help you wrap your head around the business itself.
So, I would definitely recommend just sitting down and spending some time filling out the Lean Canvas template. Most likely, you will come up with a myriad of new ideas and strategies.
My advice is to write everything down, because at this moment and during this process, your brain power and focus are going to give you fresh perspectives that you haven’t considered.
At least that was my experience. While I was filling out the Lean Canvas, I had so many ideas that I wanted to try and test in the real world.
So, the best advice I can give you here is to just write them all down and try to test them one by one. If you have a winner, then just continue implementing it and iterating with it.
Creating a business plan is one of the most important steps to driving success.
And, with the right tools, the process is quick, easy, and offers you a lot of agility (which is essential).
After reading this article, you should now have a better idea of how to create an effective and lean business plan, using Lean Canvas.
So, good luck as you start building your business plan for 2023!
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