Using milestones to create a roadmap for your business is the third step in the lean business planning process. If you’re building a lean business plan, download our free template or signup for LivePlan, and then follow along to create a simple, one-page business plan that will grow your business.
Even if you’re not building a lean business plan, this article series will help you develop your business strategy, develop tactics to support your strategy, create a roadmap to grow your business, and define your business model.
In this step, you’ll learn how to use milestones to create a strategic roadmap for your business.
What are business milestones?
Milestones are goals that you set for business, with dates and the person or team responsible. For example:
The marketing team will launch a new website by the end of the third quarter.
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.
Just like a milestone on the side of a road marks how far you’ve gone, a milestone in business tracks your progress as you grow and implement your plan. They’re what you use to manage responsibilities, track results, and convert your idea into a functioning business.
How do milestones relate to strategy and tactics?
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. For example, using social media marketing might be a tactic that’s part of your marketing strategy.
Milestones are used to add specific details to implement your tactics. Continuing the example above, a good milestone would be to establish a new Instagram account for your business and start updating it regularly.
It may even be useful for you to outline how your strategy flows into a tactic and then to a milestone like this:
Marketing Strategy: Educate millennials about the environmentally friendly nature of our products.
Tactic: Social media marketing
Milestone: New Instagram account, established by the end of Q3, managed by our social media manager with a promotional budget of $1,000/month.
Now keep in mind that this is a very simple representation of this process. More than likely your strategy will have multiple tactics and each tactic will have multiple milestones. Think of them as a pyramid, building up toward the execution of your overall strategy.
What makes a good milestone:
A good milestone clearly lays out the parameters of the task at hand and sets expectations for its executions. When planning out specific milestones you’ll need to have:
- A description of the task
- A due date
- A budget
And lastly, you’ll need a responsible person to manage and meet these milestones. It may even make sense to work with this individual on setting the specifics of each milestone and task.
Milestones are key to management
You’ll use your milestones to manage your business better. Once a month, when you meet with your team 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.
Reviewing your milestones monthly gives you more opportunities to spot problems and identify opportunities. If you only check in on your progress once a quarter, or potentially just once a year, you have fewer opportunities to adjust course and change direction. In virtually every business, there’s always new information to review and changes in what your customers want and need.
A frequent review of your goals allows you to be nimble and adjust quickly when you need to. For more on why you should review your milestones and other business metrics frequently, check out my post on the topic.
3 types of business 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.
The plan review milestone sets aside time to review your business strategy, tactics, forecast and budget. If you don’t regularly check your plan and make adjustments, you can easily get off track. Not to say 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 changing 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.
You’ll review your progress on implementing your strategy and tactics, such as developing a new marketing campaign, increasing the number of customers who make a second order by 15 percent, or signing the lease on new office space.
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 set 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. You’ll also work to try and figure out what your pricing should be.
Remember, in the early days of your business, you’re making a lot of guesses – assumptions, really – about what your customers need and want. Your initial strategy is a collection of guesses about the problems your potential customers have, how they want their problems solved, and what they’re willing to pay for your solution. Your milestones at this stage should be geared around validating those assumptions so you can build a successful business.
Some example milestones might be:
- Interview 20 potential customers in my primary market segment
- Research pricing models of my competitors
- Creating a preview landing page for my business to see what potential customers think
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.
It’s very likely that you find out that you don’t have good product/market fit right away. That’s OK. It’s easy to make changes to your strategy, come up with new assumptions, and go back and test them again with your potential customers. That’s the benefit of validating your assumptions early in the business startup process – you haven’t invested too much in building your business yet and can easily change directions if necessary.
Implementing your strategy
Once your assumptions have been validated, you’ll start creating implementation milestones. These are the tasks you’ll 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 companies that have progressed out of the very 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 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 and 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. The next post in this series talks about your business model—how you’re going to make money. Read on to learn about the final component of your Lean Plan.