If you’re working on a business, especially one in the early stages or preparing for growth, I strongly recommend getting straight to the guts of it with the lean canvas method.
What is the Lean Canvas? A simplified process for getting your business plan down on a page in 20 minutes or less. You can edit, update, redo, collaborate and store canvases.
Why is it awesome? It can help you to see where you need to go and to work out how you’re going to get there.
When you’re on the entrepreneurial journey, your brain can feel like an overwhelming tornado of ideas, tasks and plans. The Lean Canvas asks us 9 questions, to be answered in just a sentence or two per question. The outcome can be like the view from a helicopter on a clear day. Looking down from above we start to see the route from start-up to scale-up.
Here are the 9 questions, which I have rearranged into the order I find most useful. The Lean Canvas’s open format allows us to complete the canvas in any order we like.
- Problem – what are the problems that your customers have and that your products or services are going to solve for them?
- Solution – for each problem, list your solution. Consider listing here existing alternative solutions that your competitors are offering already.
- Cost structure – list your fixed and variable costs.
- Revenue streams – where does your money come from? A magazine can make money through traditional advertising, selling hardcopies, online subscriptions, online advertising… you get the idea.
- Your unfair advantage – something that you and your business possess that cannot be easily copied or bought. EG. Your expert knowledge or brand
- Customer – who will buy your product? This can be tiered. When you sell through multiple retail channels the end-user is not the same as the person who pays you for goods. If you are paid by New World Regent, they are your customer. They sell to shoppers, who are your end-users. If you are pre-revenue, or even pre-product, describe your early adopters in this section too. Early adopters are the crew at the sharp end of the wedge, feeling the pain of the problem and keen to try new approaches to a solution. These guys are important – they can become your brand ambassadors, heroes and influencers. Choose well and look after them.
- Unique Value Proposition – a short, compelling message about why your product or your business is different and worth choosing.
- Channels – what’s the path to your customer? In the retail sales example above, the supermarket is your path to the end user. Your path to the supermarket might be through the parent company, Foodstuffs, or it might be by contacting the store’s grocery buyer.
- Key metrics – what will you measure to get a picture of your business performance? I love data. What we measure, we improve. Setting the right key metrics will put you on the path to relevant, continuous improvement. Examples are turnover, distribution and ranging (how many stores range your brand/s), website traffic, digital engagement (social media likes, shares, etc).
Hopefully, you are starting to see the value in this simple structure. I find it useful for more than just big picture business planning. I’ve used it for drilling down into the small picture stuff, like customer-by-customer sales strategies and day-to-day decision-making and it’s just as effective.
The Lean Canvas is easy to update because it’s fast and you can export it to a pdf. Once you’ve created one lean canvas, it can be exported to pdf and you can file it.
Mine go on the wall.
Next time you’re planning or questioning a part of your business you can jump back in again. It’s never going to stop asking the questions you need to get that knowledge out of your brain and onto the page. You can look back at the journey; you can work forward through a challenge. Solutions to ‘what’s the sales pitch for this new prospect’ and ‘what do I need to do next’ spring from the canvas once you get into it.
In my opinion, it’d be good to have one extra question. On my own startup journeys, I didn’t know what I didn’t know. It was only by getting into it, finding out, failing and succeeding …. and often then reflecting a few months down the track… that I gained a clear picture of missing pieces on my map. I think it would be useful for the lean canvas to include a box for what’s missing from a business, perhaps to ask the question “what’s needed – experience / team / relationships”. This would also help identify pivot-points – those areas, big and small, where we need to make changes (and make them fast).
But as a simple solution and a start point, it’s pretty good, especially if your mind feels more tornado than clear skies. Have a go here at leanstack.com – let me know what you think, I’d love to hear from you.