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’re 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.
The Company Description and First Impressions
Published January 25, 2012 | If thinking well is wise, and it is, planning well with a clear vision is even wiser, but making the vision reality is the wisest and greatest of all.
The company description section is most reader’s first experience with learning about your business, and should outline your company’s basic background information, along with the business concept. You should explain in broad terms about yourself and what it is that you do. The description also needs to cover the history of your company, how you were able to reach the point where you are, in addition to the direction you intend to go in the future. There are several areas to consider including in your company description.
The Legal Description includes details about the formation of the business, such as where and when it was incorporated if so, a brief description of what line of business or industry it is in, along with a short overview the products or services your company has to offer. If there is significance to the physical location, briefly explain any advantages and benefits to your reader.
History of the company should be wide-ranging and succinct overview of the history of your business. Details should be organized into a timeline or narrative format, and be sure to include any achievements and noteworthy milestones. Include a good explanation of the reason for starting the business, with the main influential force behind its launch, and a brief look at your product/service mix and any changes over time. 
It can also be good to include historical data such as sales, profits, units sold, number of employees, and any other key facts to build a rationale for your business.
Current Status provides a “snapshot” view of the position of your company today. The view may include locations, products or services being sold now, the number of employees currently, and the level of success the business presently enjoys. Focus attention on your current strengths, as well as your weaknesses in an honest and candid way. Clearly understand investors know that every business has weak points, and by acknowledging your weaknesses and outlining steps to combat them, you demonstrate essential business maturity.
Future Goals provides your reader an idea of the directional heading your company is on. Accomplishments targeted over the next 1, 3, 5 or even 10 years, and how they are related goals to the investment you seek. Any investor needs to understand not only why you need their money, but what you intend to do with it as well. Also, the tone of explaining the complete or inclusive approach to achieve growth and realize profit goals should be presented with language that is not only optimistic, but realistic at the same time. 
It’s always quite easy to make projections about the future of your company while looking through rose colored glasses, but it’s much more difficult to make them even close to being believable.
So think of the company description as the “who, what, why, where, when and how” of your company, with the focus always on the most important highlights of your business.
You should avoid common mistakes that we find in the company section including:
Far too much detailed information included about your business. Remember, to hit only the most important facts to paint an accurate picture of the company.
Any narrative you include in the description that would lead an investor to consider it your “personal opinion.” Always be sure to stay with the facts and keep narrative that may be interpreted as your personal opinion out of any plan language.
Any appearance that visually indicates you have no business history or business purpose is never a good thing. Both history and business purpose are vital signs and representative of the character and experience of the business. This is not a time to be exceedingly humble about your company, so don’t leave anything out or shortchange your business.
Leaving out important business and legal details is never good. The accomplishment of certain legal steps and information in the life of a business is important to show the level of understanding an investor wants to see before reaching a positive investment decision.
Writing the section in an unorganized or confusing manner should be avoided. Preparing anything in an unorganized and confused manner results in an unorganized and confused mess, and can be avoided by being properly prepared right from the start of the planning process.