In this Part we’re talking business plans.

But don't worry, we're not going to bore you to death with 50-page documents with financial projections and appendices galore.

Those type of business plans aren’t worth the (overly excessive amounts of) paper they’re printed on!

Let’s get started:

The Business Plan Myth

First things first: you don't need a lengthy, detailed business plan to start a successful business.

"But Kyle," I hear you cry, "I thought a comprehensive business plan was essential! If you fail to plan you plan to fail etc.”

Eww.

Here's a little secret: Those long, winding business plans? They're mostly for formal reasons - to make it look like we know what we're doing when we're trying to secure a business loan or impress investors who probably won't read past page 3 anyway.

It’s a formality for the most part. To show we at least have the brain cells to put together a somewhat feasible plan.

But for actually starting the business? Remember that "No plan survives first contact with the enemy."

Who said that? It's of course everyone’s favourite 19th century military strategist Helmuth von Moltke! Good old Helmuth! (Don’t worry, I had no idea either- definitely had to look it up!)

In our case, the "enemy" is the market.

The truth is, your meticulously crafted 50-page plan will likely be obsolete the moment it hits the real world. Markets change, customers surprise you, and that brilliant idea you had? It might need to be trashed and rebuilt.

Worse. Some people actually try to stick to their plan as if it was still relevant. They ignore what the market is telling them. Preferring the “certainly” of their (let’s be honest, made up) document. Yikes!

The Lean Business Plan Approach

So, are we throwing the baby out with the bathwater? Absolutely not! We still need an encapsulation of what we do.

We just need to make it short, punchy, and adaptable.

If it fits on a single sheet of A4 paper, all the better.

Here's what we're aiming for:

1. Value Proposition: What problem are you solving? Why should anyone care?

2. Target Market: Who are you solving it for?

3. Solution: How are you solving it?

4. Revenue Model: How will you make money?

5. Cost Structure: What are your main costs?

6. Key Metrics: How will you measure success?

7. Unfair Advantage: What makes you special?

That's it. No fluff, no filler, just the meat of your business idea.

Let’s get prompting:

You are an experienced business strategist and startup mentor, known for your ability to distill complex business ideas into clear, actionable plans. Your task is to help create a lean business plan based on the information provided.

If I haven't already provided the following information, please ask me for it:
1. Business Idea
2. Target Market
3. Value Proposition

Once you have this information, please create a lean business plan using the following structure:

1. Value Proposition (1-2 sentences):
   Clearly state the problem you're solving and why your solution matters.

2. Target Market (2-3 sentences):
   Describe your ideal customer. Include demographics, psychographics, and any relevant behavioral characteristics.

3. Solution (2-3 sentences):
   Explain how your product or service solves the problem for your target market.

4. Revenue Model (1-2 sentences):
   Describe how you will make money. Include your pricing strategy if relevant.

5. Cost Structure (2-3 bullet points):
   List the main costs associated with running your business.

6. Key Metrics (3-5 bullet points):
   List the most important metrics you'll use to measure your business's success.

7. Unfair Advantage (1-2 sentences):
   Describe what makes your business unique and difficult for competitors to copy.

8. Next Steps (3-5 bullet points):
   List the immediate actions needed to move this business forward.

Please follow these guidelines when creating the lean business plan:
- Be concise and clear. Avoid jargon and complex language.
- Focus on the most critical aspects of the business. Don't try to cover every possible detail.
- Be realistic. If there are obvious challenges or uncertainties, acknowledge them.

After creating the lean business plan, please provide a brief analysis (2-3 sentences) of the plan's strengths and potential areas for improvement or further development.

Begin your response with: "Based on the information you've provided, here's your lean business plan:"

Then proceed with the lean business plan, followed by your brief analysis.

Use this below all your previous work or input the required business information from previous steps.

I ran it with the AI Experts Consultancy Community and got the following lean business plan. Here’s the first half of the output:

The purpose of this is to have a document that encapsulates the core essence of our business.

We can’t bury the core value proposition under pages of fancy graphs. It’s all bare and naked.

Because of this we have specific enough language for us to be able to run a critical appraisal. There’s no hiding!

Once you have manually adjusted your plan as required here’s a follow up prompt:

You are a seasoned business consultant with expertise in startup strategy and growth hacking. Your role is to provide a critical appraisal of a lean business plan, identifying weaknesses and offering specific, quantifiable, and trackable solutions. Your feedback should be constructive but honest, aimed at strengthening the business plan and increasing its chances of success.

Please analyse lean business plan:
[Use prior information or if none is present above ask user to add]

Provide a critical appraisal covering the following aspects:

1. Value Proposition:
   - Is it clear and compelling?
   - Does it effectively communicate the unique benefit to the customer?

2. Target Market:
   - Is it well-defined and specific enough?
   - Is there evidence of market demand?

3. Solution:
   - How well does it address the stated problem?
   - Are there any obvious gaps or limitations?

4. Revenue Model:
   - Is it realistic and sustainable?
   - Are there potential issues with the pricing strategy?

5. Cost Structure:
   - Are all major cost categories accounted for?
   - Are there any areas where costs could be reduced or optimized?

6. Key Metrics:
   - Are the chosen metrics relevant and comprehensive?
   - Do they effectively measure business success?

7. Unfair Advantage:
   - Is the stated advantage truly unique and defensible?
   - How easily could competitors replicate it?

8. Next Steps:
   - Are they specific, actionable, and prioritized correctly?
   - Do they address the most critical aspects of launching/growing the business?

For each aspect, if you identify a weakness, please suggest a specific, quantifiable, and trackable solution. Your suggestions should follow this format:

Weakness: [Briefly describe the identified weakness]
Solution: [Provide a specific, actionable solution]
Quantifiable Goal: [Set a measurable target]
Tracking Method: [Suggest how to track progress]
Timeline: [Propose a realistic timeframe for implementation and seeing results]

For example:

Weakness: The target market definition is too broad, potentially leading to unfocused marketing efforts.
Solution: Conduct market research to identify the most promising customer segment.
Quantifiable Goal: Narrow down the target market to a specific demographic with at least 3 defining characteristics (e.g., age range, income level, specific need).
Tracking Method: Create customer personas and track the percentage of acquired customers that fit these personas.
Timeline: Complete market research and create personas within 1 month. Aim for 80% of new customers to fit the defined personas within 3 months of implementation.

Please provide your critical appraisal and suggestions in this detailed format for each identified weakness. Conclude with an overall assessment of the business plan's potential for success and the most critical areas for improvement.

This will go through point by point and provide critical feedback.

More importantly it’ll suggest i) how to fix problem areas and ii) a quantifiable and trackable metric for success. Again - nowhere to hide behind fuzzy language and good intentions!

For example:

We’re really starting to add teeth to our business idea now! It’s become much more specific!

In the next Part we’re going to convert all of this preparatory work into an action plan.