Entrepreneurship – Lean Business Planning
Published May 3, 2012 | 
Technology and processes resulting from lean business planning and applied to an “efficient operation” will magnify and enhance its efficiencies, while the same technology and processes applied to an “inefficient operation” will magnify and expose any inefficiencies.
Characteristics of Successful Entrepreneurs – Lean Business Planning for Everything
Lean business planning is a critically important for planning every single facet of your business, and its essential nature to the success of your business should never be overlooked or dismissed as unnecessary. By planning you define the details of the business which in turn helps establish and build habits that every entrepreneur / business owner should develop, implement, and dynamically maintain.
The act of lean business planning is important as it requires you to analyze each business situation you face, quickly research and bring together data, and make vital conclusions and decisions that are based on the factual information and assumptions discovered through the research. In addition, lean business planning provides a valuable second function, by regularly reexamining the goals you have identified and established, and the tasks you will use to achieve them, and dynamically making any necessary adjustments and changes identified.
You should think of the plan that you create both as roadmap to take you from starting point A to ending goal Z, and as a measuring tool with milestones for each successful segment you and your team achieves within the plan.
Lean business planning is an “on the horizon” strategy that some call “next-generation,” is a “lean” process including planning-revising-testing, and repeating as you go. Obviously, “Lean Business Planning” is a streamlined process for maximum efficiency and timeliness. 
Ultimately the lean process results in the maximization of the effects on business success, including long-term staying power, growth and profitability.
Dynamic “Lean Business Planning” is extremely effective and powerful when the cycle of build, test, correct, then repeat build, test, correct and continue, is correctly executed.
The idea is simple with potentially fewer “moving parts” in the initial process, we have the cycle, the test and revise, and repeat. The quick focus on the relatively small corrections, and the quickened pace, is extremely ideal and at the heart of the “next-generation” style of business planning. The style requires almost instant decisions that can pivot a business “on a dime” without losing momentum and able to maintain the same pace.
Lean Business Planning and the Appendices
Published February 22, 2012 | In our drive to accomplish great things, we must act to reach for our dreams, and not only plan, but also believe in what we are doing.
Okay, so after you’ve completed the creation of the Table of Contents, what else is to finishing the lean business plan? The answer is there is not much left, unless you don’t want to include some material and information to support your plan in the Appendices, then your lean planning is complete for now.
In reviewing the major sections of your lean business plan, they each should only contain summarized results and focal points for your business. The inclusion of every piece of information and data you’ve obtained and gathered in the main components and sections of your business plan, results in too much information and overloads the reader (never let information overload happen), which in turn makes it quite difficult to establish if reading the entire plan is worth the energy of effort.
As an alternative, you should include any detailed research, sources, and other associated or linked information about your business and your lean business plan in the appendix. In addition, consider inclusion of the following information in the addendum or appendix of your lean business plan:
Management resumes are important to convey the experience and capabilities of the management team to execute the plan.
Pictures of products, locations, etc. help paint the complete picture of plan assets and value.
Copies of purchase orders are evidence of validity and value of the business model, and should always be included.
Floor plans are like images worth a thousand words towards the picture of the lean plan.
Marketing materials are an important component of your marketing strategies.
Details of the manufacturing process and machinery should emphasize efficiencies and direct effect on the bottom line profitability.
Market research surveys and results should include summary highlights and important focal points only.
Any other supporting documents you thinks’ important to tell the complete story or narrative of the business.
Just don’t overdo it by including way too much detail, which means exercise extreme caution not to include every last piece of material and information you have in the appendix component. “Significant support” is the key phrase to remember and apply for additional clarification for your lean business plan.
So, now take a step back because although you think otherwise, the work isn’t over yet. Remember, this is a dynamic process of lean planning, and you’ll want to spend the next phases of your business plan development on the cycle of review, fine-tuning and testing. Have your business minded friends, advisors and management team read through it and point out areas of potential improvement. This dynamic evolutionary planning process repeats itself on a regular basis as you continue to strive for maximizing efficiencies of every facet of operations, resulting in greater success and profitability.
Over the next few months, your lean planning will take you through many iterations of the plan and business. This is perfectly normal. 
Your goal is to be certain that you are presenting the exact plan that you and your team will execute when you are funded and beyond. Of course, the business will continue to evolve and change, and you want to put the most accurate representation of the actual business in the hands of not only those that invest, but your management team as well.
We understand completely the critical importance of a lean business plan and its direct effect on your desire and aspiration to achieve a lifelong dream. Let’s face it, being your own boss can be extremely rewarding. Follow this information and it will be extremely helpful as you proceed with your lean business planning.
To the maximization of your lean business success!
Lean Business Planning and the Table of Contents
Published February 21, 2012 | True entrepreneurs trust in themselves to simply make decisions for the best choices, and continue moving forward toward their vision of success.
First of all, a well-designed table of contents is part of the first impression you present to readers, as well as ensure they don’t waste their valuable time searching through your plan for the information they are specifically interested in. Understand that very few investors will actually read your entire plan. Rather, they will normally look for the precise details they need to make the most knowledgeable investment decision. Make sure you organize the table of contents to make it easy for readers to navigate your plan.
Most readers begin with your executive summary, and then want to locate specific information that they normally look for. You may want to consider placing the table of contents immediately after the executive summary.
It should be obvious that table of contents should list all the major sections within your business plan, and can also be further broken down into important or clarifying sub-sections. 75% of mistakes, sloppiness, or misspellings in the table of contents immediately presents to your reader the negative impression that you are unorganized and careless right from the start, and this never leads to successful results.
It is absolutely essential that your table of contents is clean, well organized and most important of all, free of mistakes.
Some common mistakes you want to avoid when preparing the Table of Contents include:
Important sections and/or subsections are missing. Never assume your reader is intuitive enough to know where the information is that they want to read and study.
Page numbers fail to correctly correspond with the content of the plan. Something as simple as page numbers is quite often overlooked, meaning you should pay close attention to this important detail.
The table of contents is two pages in length when it could neatly fit onto one page. Remember to keep it lean just as your plan should be.
The table of contents is cluttered with too much detail. Once again, the leanness of the plan begins with the table of contents.
The text layout is reflects sloppiness. You should make sure the text is crisp and clean for easier navigation.
The appearance of little or no thought in the creation of the table of contents. The simple appearance should reflect a well-thought out and designed table of contents, and plan.
Of course, every business plan is different, and every table of contents should be customized to reflect the content of each particular plan. Use only headings and subheadings from this example that make sense for your individual plan, and that will help your readers get the most from your table of contents.
Company Description
• Legal Description
• Business History & Description
• Current Status
• Future Plans
• Key Management
Mission & Vision
• Mission Statement
• Company Vision
• Corporate Values & Approach
Product & Service Description
• Overview of Products & Services
• Product & Service Advantages
• Proprietary Features
• Product Development Activities
• Product Liability
Industry Analysis
• Industry Overview
• Industry Participants
• Industry Trends & Growth
Target Market
• Market Demographics
• Market Trends & Growth Patterns
• Market Size and Potential
Marketing Plan
• Marketing Strategies
• Marketing Tactics
• Positioning
• Public Relations
Sales Plan
• Sales Strategies
• Sales Process
• Sales Team
• Distribution Channels
Lean Business Planning and Financial Plan Mistakes
Published February 7, 2012 | When properly prepared, reviewed and executed, the best business plans are straight forward information that answer the “who, what, where, why, and how much that charts the path on your roadmap to success.
It’s always good to take a close examination of what the most common mistakes found in the financial projection component segment of lean business planning.
Believe it or not, actually failing to include the financial statements and projections (income statement, balance sheet, cash flow) in the financial plan happens more often than most think. Okay, so there is no real reason to not include financial statements and projections, so make sure you include a complete set before you let anyone review the plan.
Presenting sales and profit projections in the lean business plan that are completely unrealistic and unfounded, which is never a good sign the business has been well thought out. Well thought out and researched assumptions should always be included as support for the sales forecast, which supports the financial statements.
Another very big mistake is omitting financial assumptions to explain where the “numbers” originated. Remember that assumptions are the answer to the question “why?” If there are no assumptions presented, then there are really no answers given for any financial information presented. This can be a “deal killer” all by itself. You need to make absolutely sure financial assumptions are included, and don’t release the plan for review until this requirement is satisfied.
There is nothing more aggravating then recognizing a poor attempts at creative accounting when reviewing “creative” rather than “accepted” financial statements. There is no room for creative accounting in lean business planning, especially when prospective investors will be reviewing the resulting plan. Remember to use only “accepted” financial statements.
Underestimating expenses and not budgeting for unexpected costs. Projected expenses should be overestimated if at all, but never underestimated, just as revenues should be underestimated if at all but never overestimated. Remember to expect the unexpected and build it into your lean planning.
Lack of financial investment on the part of the founders has been referred to “no skin in the game.” No skin in the game is a sure way to scare off any prospective investors. Make sure there is a financial investment included before anyone reviews the written plan.
Including unreasonably excessive salaries and office expenses at start-up is a very bad mistake, which is on the same par with overestimating revenues. If anything, salaries should be kept to a reasonable level, especially during start-up activities. Salaries can always be adjusted with the future success of the company.
Offering a lower percentage of ownership than the investment requirement demands is definitely too common, and signals a misunderstanding of valuations. If you need the investment to make the business a reality, then you have to understand what investors are looking for and expect when taking the risk to invest. Do the work you need for a comprehensive understanding of the issues.
Offering a return on investment that is out of line for your industry, as well as unreasonable. 
Know and understand the return on investment common to your industry, as well as what is expected by your potential investors.
The absence of contingencies and projections for worst case scenarios indicates a narrow view of the different outcomes possible. Both worst case scenarios and contingencies should be addressed in the plan as a clear indication of your understanding all potential outcomes.
Financial statements that are not prepared or reviewed by a reputable accountant can result in unnecessary delays while credible financial statements are prepared. Financial statements prepared with generally accepted accounting principles should be included, and is a good indicator that you fully understand financial statement requirements.
Lean Business Planning and the Management Team
Published February 2, 2012 | For every action that results in failure, there’s a different course of action that once determined, leads to success. Quickly find it, adapt, and roadblocks become simple detours.
It’s a well-known fact that many investors base their investment decisions based completely on the management team responsible for the execution of a company’s plan. Consider it an absolute that investors expect a well-formed team of professionals with experience in every process and function that’s essential to the successful business operations. So it should be obvious that the management component of your lean planning should explain very clearly who each person is, exactly why they have been selected to be part of your team, and a clear and succinct description of what each person will do.
Give it your best effort to limit the number of people on your management team to 3 to 5, and to only individuals directly involved in the day to day operations, and that have the greatest impact on the future success (or failure) of your business. You should view and consider everyone else as either an employee, or if they’re not involved in any of the day to day operations, as a member of your Board of Advisors, Board of Directors or consultants. Don’t forget to include a narrative about employees in the operations component of your Dynamic Lean Business Plan.
The Basic Components of the Management Team Segment
For each specific team member you should create a clear and concise narrative description of his or her experience and background and specifically calculated contribution. The narrative normally includes, position title, duties and responsibilities (what will they be doing), which specific operational functions they will be responsible for, personnel under their supervision, and of course, who they will report to.
If you include any previous experience, limit it to only experience directly related to the position, including who they worked for, their responsibilities, length of time, etc. Previous successes should include what they were able to accomplish, successful teams and or projects they may have organized and lead (did they save a business or create company’s new product division, responsible for some new breakthrough idea etc.). And, be sure to keep any education background descriptions brief.
Boards should
be briefly described as to who is on your Board of Directors and Board of Advisors including roles they may play as part of the business. Briefly list the names, along with backgrounds and contributions by each board member. Solid and experienced board of members and advisors can have a real positive impact on the credibility as seen through the eyes of investors.
Consultants are mentioned in the last part of your management segment including a very brief description of any outside consultants you may work with as part of your company’s plans for growth. Be sure to include professionals like accountants, attorneys, bankers, insurance agents, along with experts such as technology advisors, web developers, and payroll specialists, to name a few.
The founder background information should be included at a length not to exceed 1/2 a page. The bottom line is to stay with the facts on the bios of your management team, make it abundantly clear why each team member is experienced, which relates to both why they hold their position and the specific benefits they bring to your company.
You need to always r
emember that when faced with the choice between brilliant business concepts with mediocre below standard managers, and a mediocre business concept, but with top-notch managers, investors will always prefer to choose the latter. And, you should too!
Let’s discuss some of the common mistakes found when discussing the management team.
Place the business dependence on “unqualified” friends or family in key management positions. The key word here is “unqualified,” which unfortunately for many companies, occurs all too often. Make a rule for yourself to follow without exception that every team member will be highly-qualified, no matter whom they are, and you can avoid many sleepless nights.
Assuming that “previous success” in other industries will apply to where you are in your current situation. You may have certain skills that can contribute to creating a culture of success wherever you are, but don’t expect success to just happen. You have to do all the right things that are specific to the immediate challenges in front of you. It takes work to determine the optimal path to build and follow to the greatest success.
Thinking you can do everything and exhibiting a “team-of-one” philosophy for management. Understand that investors are very smart and they know the level of difficulty that exists with attempting to do-it-all, operating and growing a business.
Thinking you can attract the very best top managers without consideration of sharing ownership. To properly incentivize the very best management talent to agree to work for you, a share of ownership is quite common to offer, and is many times the deciding factor.
Lacking non-compete agreements for critical management staff. I can’t tell how many times I’ve heard the horror stories about highly-valued employees leaving, only to start the exact same type of business, and taking many of the best customer accounts with them. It is better to be safe with a “non-compete agreement” right from the beginning, and it’s a major component of successful business to require them.