In construction, you draw up the blueprints before you build the building, and with startups, you write a business plan before you ask for funding, (because most lenders or investors are going to want to see one). But, according to Tim Berry, Founder of Palo Alto Software, you need two types of business plans, and one of them has nothing to do with getting funding. Berry recommends creating a lean business plan for your personal business use that doesn’t include the rigmarole of a traditional business plan. Your lean business plan should be a measure of tracking goals and progress that is always fresh and revised every month.
Your lean business plan should include:
- bullet points for strategies and tactics
- tasks, deadlines, concerete specifics
- sales, expenses, cash flow
Your lean business plan should not include:
- market analyses
- management bios
- founder’s story, etc.
The business plan you’ve never heard of and didn’t know you needed Tweet This
Berry points out that for your daily business needs, you don’t need a robust business plan. You don’t have to prove the value of the market or your product to yourself – you already know it. And you don’t need to introduce your team to yourself or write out your founding story. What you need is a plan you can consult and let guide you, that tells you the important details about your business – like cash flow – and that can be revised monthly to reflect new accomplishments, goals, and needs. When you do need funding or investments, you can use your lean plan as a starting point for your robust one and just add in the missing elements. This way, you won’t be overwhelmed by all the elements of a traditional plan, since you’ll already have many of the key components you’ll need.
To hear all of Tim Berry’s insights around creating a lean business plan, watch the full video below.
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Featured Photo Credit: kambizakhbari, Twenty20