Why a Lean Plan Template is More Effective Than the Business Model Canvas

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Traditional business plans take too long to write and they’re difficult to update regularly. Wouldn’t it be easier to use a simple, one-page template that gives you (most of) the value of a traditional business plan without the overhead of all the time spent writing and formatting?  That’s where the Lean Plan—a Business Model Canvas alternative—comes to the rescue. 

If you’re looking for a way to get your business plan done faster, or if you’ve noticed that Business Model Canvas gives an incomplete picture of your business, the Lean Plan approach might help you spend less time creating a flexible, much more useful snapshot of your business roadmap. But first, if you haven’t used a Business Model Canvas before, here’s what you should know. 

What is the Business Model Canvas?

With the Business Model Canvas, Alexander Osterwalder pioneered a new method for developing a business plan with a one-page template. It provided all of the structure of a business plan, without the inconsistencies and vagaries of “back of the napkin” business idea sketches.

Here’s what the Business Model Canvas template looks like:

Business Model Canvas Alternative

Source

Pros of the Business Model Canvas

The core purpose of the Business Model Canvas is to demystify the business planning process. It removes the need for a traditional, copy-heavy business plan, in favor of a single-page outline that can help you and outside parties better explore your business idea. Here are a few key benefits that come with this template.

Simplified and focused

The structure of the Business Model Canvas ditches a linear structure in favor of a cell-based template. This is done to encourage you to build connections between every element of your business from the start. Rather than writing out disjointed expenses, value propositions, and potential customers — you work through them side-by-side and can easily reference previous sections as you develop them.

Faster to create

Now, you do have limited space to leverage with the Business Model Canvas. That’s really the point, as this is meant to be a faster and easier plan to create. Even the size of each cell is designed purposefully. 

For example, the problem takes up a larger section of the page, but your solution and metrics are each half the size. This tells you, without detailed instruction, that you need to take a deep and extended dive into potential issues and explore as many current alternatives as possible. But your solution and data measurements should be streamlined and purposeful in relation to those issues that you’ve uncovered.

Visualizes your business model

The layout of the Business Model Canvas is also useful for you, your team, and any third parties to visualize your business model. It showcases the framework of your business and helps connect the dots between business components, without needing to have intricate knowledge. It’s a useful visual to kick-off any discussions about elements of your business and an easy visual to work with during pitch or strategy discussions.

Cons of the Business Model Canvas

Unfortunately, the Business Model Canvas template doesn’t work for everyone.

As my team and I have worked with entrepreneurs over the years (and we’ve worked with thousands), we’ve consistently found that the Business Model Canvas can be difficult to understand without substantial training. It’s also difficult to read, especially for people who aren’t familiar with the format. 

It’s difficult to adapt to a full business plan

There will likely come a time where you need to pitch to investors or seek out funding. At that point, any financers will expect to see a traditional business plan that provides greater detail regarding the functions and financials of your business. A one-page Business Model Canvas may be beneficial to provide as an introduction to your business — but you’ll need to back it up with a full exploration of milestones, startup and operational costs, potential revenue streams, marketing activities, and financial forecasts.

The difficult thing is that by starting with a Business Model Canvas, you’ll potentially need to start over when you develop a full business plan. This is due to the formatting and simplified sections of the Canvas. Yes, they are beneficial to use when exploring an idea, but difficult to expand on when actually executing on them.

No room for validation

Regardless of what your business does, it’s critical that it’s solving a real problem for customers. If your products and services don’t fill a need, customers will never walk in the door. Known as validation, it’s an element that is lacking within the building block style of the Business Model Canvas.

Yes, this one-page setup helps you connect disparate pieces of your business plan, but it can also encourage you to make those connections when they don’t exist. For example, you may have outlined a problem and a few current solutions. Based on the structure of the Canvas, you work through your own solution, value proposition, and potential marketing channels. Then you start trying to tackle your customer segments and realize that you’re struggling to actually define them.

Rather than arriving at this issue earlier, and setting out to validate if your idea is attractive to anyone, you’re suddenly met with the need to find a target market that has the problem. This leads to the next issue with the Business Model Canvas.

No focus on product/market fit

The core issue is that the Business Model Canvas doesn’t focus on making sure a business is solving a real problem for their customers. People like to call this “product/market fit.” In other words, customers (the market) don’t have a reason why they need the product the business is selling.

In our experience, if a company can’t find a good product/market fit, it will almost certainly fail.

Why is the lack of product/market fit such a killer for businesses? Well, when a customer is shopping for something, they’re looking to solve a problem or fill a need. A good business offers products and services that help people solve their problems and fulfill their desires.

For example, Mailchimp helps customers easily send email newsletters. A hair salon helps people achieve the style that they’re looking for. Restaurants give people not only the kind of food they’re looking for, but a specific experience—think upscale dining, or a hip and trendy bakery.

If a business doesn’t solve a real problem for potential customers, it’s going to have a very hard time attracting customers. Just think for a moment, do you shop for things that you don’t need or want?

It’s not that a business needs to solve a completely unique problem, however. In fact, competition is actually a good thing. But, businesses do need to have a unique take on a customer segment’s problem. 

For example, think about a mobile phone repair shop. Perhaps customers want a cheaper solution, or a storefront that is closer to where they live or work, or maybe customers are willing to pay more for better service. So, figuring out what makes your business different—your unique value proposition—is a key ingredient in solving the product/market fit problem. 

Unfortunately, the Business Model Canvas doesn’t directly address product/market fit even though it’s such a critical issue.

Fortunately, this problem is simple to fix with the right planning tools.

LivePlan no guesswork

Our solution — The Lean Plan Template

Instead of forcing the Business Model Canvas to solve the problem of product/market fit, we decided to take a new approach and created an alternative to the Business Model Canvas Template. We call it a Lean Plan.

If you want to get started right away, download the Lean Plan template now. Or, read on to learn about what we changed and how to use the template.

What is a Lean Plan?

The Lean Plan format takes the best of the Business Model Canvas template and makes it easier to use and easier to read. It can be completed in under an hour and delivers three things that entrepreneurs need in their planning process: 

1. Focus 

Instead of developing a lengthy, traditional business plan, the Lean Plan requires entrepreneurs to focus on the key drivers of their business and find a strategy that will truly bring success.

2. Simplicity

Anyone can start using the Lean Plan template without any training or business background. And, anyone can easily read it and understand it.

3. Flexibility

Successful planning is all about revising your idea as you try and learn new things. The Lean Plan template is easy to update and tweak as you go.

The Lean Plan has 12 elements. Put together, those elements provide a comprehensive overview of a business and its strategy. A lean business plan focuses up-front on finding product/market fit by helping entrepreneurs identify the key problem they’re solving for their customers and how their solution fills their customers’ needs.

Here’s what it looks like:

one page business plan

With the Lean Plan Template, we kept the concept of “value proposition” because we think it’s important to have a one-line overview of what you do. This is somewhat similar to a tagline that explains what you do in as simple and concise a way as possible.

But, instead of focusing on “customer relationships,” as the Business Model Canvas does, we replaced it with sections to describe your “problem worth solving” and your “solution.” Since making sure you have a solid understanding of your customer needs and the problems they have is so critical to business success, including these sections as the foundation of the Lean Plan makes sense.

The Lean Plan also pairs the problem and solution boxes with sections to describe the target market and competition. These four sections together form the core of your business idea: What you’re doing, who you’re doing it for, and what the competition looks like.

Here’s a quick overview of everything else you’ll find in your Lean Plan.

The Lean Plan template step-by-step

  • Identity: A one-sentence overview of your business.
  • Problem: What problem are you solving for your customers?
  • Solution: What’s your solution to the problem? Describe your products and services here.
  • Target Markets: Who are your customers?
  • Competition: Who are your competitors and what alternative solutions do your customers currently buy and use?
  • Sales Channels: How will you sell your products and services to your customers? 
  • Marketing Activities: What are the key activities or approaches that you’re going to use to reach your customers? What’s your pricing or cost structure?
  • Revenue streams: How are you going to make money? 
  • Expenses: What are your key expenses when you’re running your business?
  • Milestones: What is your roadmap to test and start your business?
  • Team: What are the key roles that you need in your business to be successful?
  • Partners & Key Resources: Do you need to work with other businesses to make your business work?

The Lean Plan helps distill business strategy into one page and forces entrepreneurs to think about the most important aspects of their business—including basic financials. Without these core planning components in place, success will often be harder to find.

Download a Lean Plan Template— a better alternative to the Business Model Canvas

You can download the Lean Plan template here for free. Project it on a whiteboard and fill it in, or just print it out and work on it from there. You can also use sticky notes to add your ideas instead of filling them in just with a pen or pencil. Or check out LivePlan’s Pitch feature. It really is the fastest way to get started. Plus, you can share a private link to it with key stakeholders, or export it to PowerPoint for presentations to investors or other stakeholders. 

How to use the Lean Plan Template

The first time you use the Lean Plan Template, I encourage you to move through it quickly. Try and finish your first draft in under 30 minutes. Write bullet points instead of sentences. Then take a step back and see if it makes sense. Share your Lean Plan with key partners, friends, and family and see if it makes sense to them. If you need to make changes, it’s fast and easy since you’re just editing a single page.

If you need more step-by-step guidance, we have a series of articles that will walk you through the process.

When you’ve completed your Lean Plan, you’ve got building blocks for your business plan.

At this stage, however, your Lean Plan is really just a set of assumptions—it’s your best guess at who your customers are and what they want. We’ll just call this early version of your Lean Plan your “guess.”

Now, you need to go out into the world and actually talk to your potential customers and make sure your “guess” is correct—sometimes this is called idea validation. Do your potential customers have the problem or need that you think they have? What do they think of your solution? Will they be willing to pay you?

In this article on market research, I go into more detail about how to actually talk to your potential customers.

As you talk to people, come back to your Lean Plan and review and revise it. After a couple of rounds of this, you’ll have a plan for a business that has a good chance of success. It’s a good idea to get a business plan review meeting on your calendar each month, so you’re always reviewing and changing your plan as you go. 

If you need a complete business plan

As your idea develops and your Lean Plan moves from a collection of guesses to a collection of facts, you may need to develop a more detailed business plan.

A detailed plan can be useful for documenting in more detail than will fit on a single page about your target market, marketing activities, and details about your product. A detailed plan may help communicate your knowledge and ideas to your business partners and potential investors.

But, don’t start with the detailed plan. Instead, start with the much simpler and faster Lean Plan template. You can always grow and adapt your plan from the Lean Plan template, and it allows you to focus on testing and validating your idea, and build your business from there. 

Editor’s note: This article originally published in 2017. It was updated for 2021. 

Noah Parsons
Noah Parsons
Noah is currently the COO at Palo Alto Software, makers of Outpost and the online business plan app LivePlan, and content curator and creator of the Emergent Newsletter. You can follow Noah on Twitter.
Posted in Business Plan Writing