This article is part of our series on Lean Planning, where we will go into more detail on aspects of the Lean Planning process. Start with Lean Planning Step 1: Develop Your Business Strategy and Lean Planning Step 2: Develop Your Business Tactics. For a comprehensive overview of Lean Planning, check out An Introduction to Lean Planning.
A business plan and strategy can’t turn into a real business without milestones. Milestones are what you use to convert your business strategy and tactics into action. They’re what you use to manage responsibilities, track results, and convert your idea into a functioning business.
Previously, I’ve written about building your business strategy and then creating tactics to implement that strategy. Just like there’s a link between tactics and strategy, there’s a link between tactics and milestones. Tactics are the things you’re going to do to implement your strategy. Milestones determine who’s going to do the work, when they’re going to do it, and how much budget they need to make things happen.
Every milestone that you set should have:
- A description of the task
- A due date
- A budget
- A responsible person
Milestones are key to management
You’ll use your milestones to manage your business better. Once a month, when you meet to review your business strategy and business numbers, you’ll review your milestones to make sure your plans are on track. If there are problems or changes, this is when you can make course corrections.
3 types of milestones
When you’re building and growing a business, you should end up scheduling three different types of milestones:
- Plan review
- Assumptions validation
All businesses should have “plan review” milestones. These might be the most important milestones that you create. These plan review milestones will create a schedule to review and revise your plan. If you don’t regularly check your plan and make adjustments, you can easily get off track. Not that you should follow the plan blindly, either. Instead, a regular plan review meeting will give you a chance to look at what’s working, what’s not, and revise as you go.
Here at Palo Alto Software, we have a monthly plan review meeting on the second Friday of the month. We get our management team together, review our financials, and talk about what got done last month and what’s in the pipeline. This monthly meeting is critical for making changes and adjustments to our strategy and correcting course as necessary.
For early-stage startups, it might just be a few of you that get together and there might not be much in the way of revenue or expenses to review. That’s okay. Instead, your monthly meeting will focus on the next steps you can take to make your business idea a reality, and what progress you’ve made so far.
Milestones to validate your assumptions
When you’re just starting your business and figuring out if you’ve got the right strategy, you’re going to create milestones to help you validate your assumptions. These milestones are going to be for interviewing potential customers to figure out if they have the problem you think they have, and to discover if they’re interested in your solution.
Remember, at this stage, you’re figuring out if your assumptions about your strategy can create a real business, so your milestones will be focused on validating the assumptions you have before you go on to actually build your business.
The milestones that you create at this stage should be focused on the goal of finding what’s called “product/market fit.” This means that you’ve found a target market that’s interested in buying your product and that your product solves a real problem for your customers.
Implementing your strategy
Once your assumptions have been validated, you’ll start creating implementation milestones. These are the tasks you’re going to do to actually build your business. You’ll be doing things like building your product, setting up your office or shop, developing your website, and more.
Implementation milestones are typically for later-stage companies, ones who have progressed out of the early stages of starting up and have a proven strategy that they know is going to work. These milestones are all about getting things done to execute your strategy.
With Lean Planning, you’ll adjust as you go
Your milestone schedules will evolve as you go, so don’t spend a lot of time initially documenting every last step you’re going to take to launch your business. Instead, plot out the next few steps you’re going to take. When those steps are done, come back add more steps as you go.
After all, Lean Planning is an ongoing process, not just a one-time event. It’s all about creating a plan, running that plan, reviewing the results, and revising before you take next steps. Having solid milestones will make that process easier and more efficient, helping you build a better business, faster.