Lean Business Planning
Lean planning is a simple and efficient form of business planning. It starts with a business plan that subsequently includes regular reviews and revisions. Ideally speaking, a business involves planning strategies and tactics. It means having to execute plans and thereafter to review the results. The plan may need to be revised based on the results achieved.
When you have a lean plan you keep it in the center of all activities. The plan is all about what will happen, when it will happen, who will do what and how much all this is going to cost as well as how much money is going to be generated. A lean business plan in this manner is a selection of many decisions and lists as well as forecasts. The plan is not necessarily only a document existing in some place. It is used for tracking performance against the plan, reviewing the result and regularly revising it. The lean plan is always kept current.
Lean business planning is therefore far removed from traditional business planning. It is streamlined and in the form of bullet points, lists and tables; that is, only those that are necessary for routine running of business, conduct of reviews and revision on a regular basis.
What are the Management Benefits of Lean Business Planning?
Helping the Management of Strategy
Quite often a business can get distracted either due to what appears like new opportunities or due to a new crisis that interferes with your schedule. In such cases your strategy is the focus. Lean business planning teaches you to remain focused no matter what. It also teaches you to remember that distractions dilute focus and ultimately weaken the business. Having a plan review each month ensures that you stick to your plans and adapt with care.
Execution and its Management
Lean business planning is all about moving steadily towards your goal. These goals include both short term and medium term goals. You can also refer to them as milestones. To each milestone you assign dates and datelines as well as budgets and your expectations as well as the manner in which responsibilities have been assigned. These details make things easy for managing your progress and monitoring during review meetings.
The Management of People
It is easy for people to work towards a goal. Therefore, when you lay down the objectives and milestones, people find it easy to assess the level of their performance. In lean planning there is a regular review of the expectations and results. The review and revision of expectations based upon the result makes the task easy for the management as well.
The Alignment of Strategy and Tactics
The tactics have got to be in line with the strategy. There must not be any dichotomy. Some of the tactics that are important are all customer-oriented such as the pricing and services offered.
Management of Cash
An efficient lean planning process must have expectations for both the money that is coming in and the money that is going out in order to manage the cash flow since cash flow is most critical to a healthy business. One can have a great business with all the money tied up in the inventory or in money owed by business customers. However, for healthy lean planning process the cash flow must be running as you expected.
The time has come when one must simplify one’s business plan by adopting the lean plan, which is simple and easy to adopt, review and revise.
" bizjumper (www.bizjumper.com) is India's first online business plan tool for startup founders who face difficulty in writing their first investor pitch, business plan and financial forecast. This product is specially designed for founders /entrepreneurs who have very limited knowledge in writing effective business plan to impress investors."