Practical Lean Business Plan in Four Steps

One of the most common reasons for business owners not getting the benefit of business planning is putting off doing a plan because it seems too hard. People still think of a business plan as a big formal document, hard to do, and — sadly — not worth the effort. But what they miss with that attitude is the lean planning that could steer their business better.

Here’s how to do a lean business plan in four easy steps:

Step One: Strategy is Focus

You can summarize business strategy with a few key points: the problem you solve, your unique solution to that problem, your choice of target market and your unique business identity.

Don’t worry about big text, editing or the document. Just write down your key strategy choices. Make it as simple as a bulleted list. Consider it for your use only, not an academic exercise; and not the big formal business plan you heard about years ago. If you know your business, then you know your strategy. You write it down as a reminder, to help prioritize.

Step Two: Tactics to Match Strategy

Strategy needs tactics for execution. Tactics are what you do to execute strategy: the product or service, the marketing, pricing, distribution, personnel, financing, and so on.

Here too, as with strategy, your lean plan doesn’t mean long texts with a lot of editing. It’s as simple as writing down, usually in a list of bullet points, the most important elements.

You are looking for strategic alignment. That means tactics match strategy. That’s hard to define but easy to see when it works. You are linking what you mean to accomplish (goals) with the key action steps for each of those goals. Does your pricing match your product-market mix? Do the distribution tactics match the product and market?

For example, if your restaurant is targeting high disposable income diners for fine dining, you don’t have discount pricing, half-off coupons or a kids’ playground, but you may have reservation-only meal hours, valet parking and glamorous dining room décor.

Step Three: Specifics on What, When, & How Much

I call these milestones: smaller action items that you can put on the calendar to measure progress as you make it. These normally include tasks, deadlines, budgets and responsibility assignments. Think of milestones as things like reaching the first 1,000 customers, launching the new website, hiring the new sales manager, opening the branch store or landing the exclusive representation contract.

The underlying assumption is that teams and even individual business owners work better when they see tangible goals to work towards. Make the next milestone.

Furthermore, for most people, it’s easier to imagine the progress towards long-term goals of a business in a series of steps. What’s the next step? And the one after that? What steps can you identify for product or service? For marketing? For administration.

Make this a simple, practical list.

Step Four: Essential Numbers

Hard as it might be to forecast essential business numbers, it’s still easier than trying to run a business without a forecast. You don’t have to be CPA or MBA to be able to make educated guesses about future sales, costs, expenses and cash flow.

We’ve posted detailed help for your essential numbers in previous posts on this same blog.

Step Forever: Regular Review & Revise

The point of the business plan, for real business in the real world, is not the plan itself but the planning process. The goal of planning is to steer a business better. For that, you must keep your lean plan fresh with monthly review and revision as necessary. If business were navigation, then the plan sets the destination and route, but you still need a GPS with real-time traffic and weather to decide when to change the planned route. The GPS factor is the regular review and revision of the plan, to keep it fresh.

Tim Berry is founder and Chairman of Palo Alto Software and, on twitter as Timberry, and blogging at His collected posts are at Stanford MBA. Married 46 years, father of 5. Author of business plan software Business Plan Pro and and books including his latest, ‘Lean Business Planning,’ 2015, Motivational Press. Contents of that book are available for web browsing free at

Robert M. Donnelly is an author, educator and brand builder for businesses and individuals. His consultancy business is called His corporate life was spent in executive positions with IBM, Pfizer and EXXON and then as the CEO for several U.S. subsidiaries of foreign multinational firms. Professor Donnelly is on the faculty of Saint Peters University as well as Rushmore University, a global online university. His latest book is Personal Brand Planning for Life, available on Amazon. He also functions as an interim executive. You can contact him at or visit his website at