Chapter 6: Develop IT Business Plan

and Lean Startup Canvas

Definition of Business Plan

Importance of a Business Plan
Business Plan Outline
The Lean Canvas
Learning Objectives:

After this chapter, the students will be able to:

1.define business plan;
2.determine the importance of business plan;
3.identify the Lean Startup Canvas.
 Business Plan

A business plan is a document that summarizes the

operational and financial objectivesand contains the detailed
plans and budgets showing how objectives are to be realized.
ITis the road map to the success of your business. For anyone
starting a business, it's a vitalfirst step.In every startup, a
business plan is necessary because it will serve as a guide on
whatto do and it will give a clear outline of the things that need
to be done. Most especially tothose who are new to creating
business plan and new to join the business world
Importance of a Business Plan

A technopreneur should be involved in making the business

plan because he or sheknows the content of the business
proposal and it is his or her task to explain it thoroughlyto
the audience in a precise means. Thus, in order to get a
positive reaction from the desiredaudience, one must give
considerable importance to their audience
Reasons Why Business Plan is Needed

1.To raise money for business

Potential investors or lenders want a written business plan
before they giveyou money. A mere description of your
business concept is not enough. Instead,ensure you have a
thorough business and financial plan that demonstrates
thelikelihood of success and how much you will need for your
business to take off. The business plan is a blueprint of
achieving future plans and ambitions to be successful.Raising
money for your business is sometimes difficult to take
intoconsideration because, nowadays, people or investors do
Reasons Why Business Plan is Needed

not trust right away toentrepreneurs or technopreneurs.

However, there are investors who are willing totake the risk
and interested to take part on the business.
2.To make sound decisions
As a technopreneur, having a business plan helps you to
define and focuson your business ideas and business
strategies. Do not concentrate only on financialmatters, but
also on management issues, human resource planning,
technology andcreating value for your customer.
Reasons Why Business Plan is Needed

3.To help identify potential weaknesses

Having a business plan helps you to identify potential
pitfalls in your idea.You can also share the plan with others
who can give you their opinions and advice.
Identify experts and professionals who are at a positions
and advice. Identifyexperts and professionals who are at a
position to give you invaluable advice, andshare your plan
with them.
Reasons Why Business Plan is Needed

• Business plan should emphasize the use of SWOT

( Strengths , Weaknesses , Opportunities , Threats )
Analysis to distinguish what the company should improve
and develop to stay in the competition and to continue the
business for a long - term involvement . There are
business advisers that could give suggestions on how to
remain in the business world .
Reasons Why Business Plan is Needed

4. To communicate Ideas with stakeholders

A business plan is a communication tool that you can use to
secure investment capital from financial institutions or lenders
. It can also be used to convince people to work for your
enterprise , to secure credit from suppliers , and to attract
potential customers . The business plan is one of the
significant tools or factors that technopreneur should have
because through the documents presented to the investors ,
they will have an idea of whether they will earn profit on the
business or not . This is a tool to convey what the
technopreneur wanted to accentuate for the investors .
Benefits of a Business Plan
A business plan has proved to be a great help in starting a
new business or enterprisebecause it is a blueprint of what a
technopreneur or entrepreneur should follow to besuccessful
in the business world.The following are the benefits of a
business plan that has excerpt from Tim Berry forSmall
Business Administration's Industry Word blog:
1.See the whole business.
Business planning done right connects the dots in your
business so you get a better picture of the whole. Strategy is
supposed to relate totactics with strategic alignment.
Benefits of a Business Plan

2.Strategic Focus.
Startups and small business need to focus on their
specialidentities, their target markets, and their products or
services tailored to match.
3. Set priorities.
Allocate your time, effort, andresources strategically.Setting
priorities is important because it is how your business will
stay inthe competition. Technopreneurs should foresee the
future opportunities and shouldcreate their 5-10 years
strategic plan.
Benefits of a Business Plan
4.Manage change.
With good planning process you regularly review
assumptions,track progress, and catch new developments
so you can adjust. Plan vs. actualanalysis is a dashboard,
and adjusting the plan is steering.The organization should
manage change as clients change of mind iscontinuous.
Sometimes, change can make the business more
productive andbasically improved to gratify their customers.
5.Develop accountability.
Good planning process sets expectations and tracksresults.
I
Benefits of a Business Plan
It's a tool for regular review of what's expected and what
happened. Goodwork shows up. Disappointments show up
too. A well-run monthly plan reviewwith plan vs. actual
included becomes an impromptu review of tasks
andaccomplishments.
6.Manage cash.
Good business planning connects the dots in cash flow.
Sometimesjust watching profits is enough. But when sales
on account, physical products,purchasing assets, or
repaying debts are involved, cash flow takes planning
andmanagement.
Benefits of a Business Plan

Profitable businesses suffer when slow-paying clients or too

muchinventory constipate cash flow. A plan helps you see
the problem and adjust to it.
7.Strategic alignment.
Does your day-to-day work fit with your main
businesstactics? Do those tactics match your strategy? If
so, you have strategic alignment.If not, the business
planning will bring up the hidden mismatches.
Benefits of a Business Plan

8.Milestones.
Good business planning sets milestones you can work
towards. Theseare key goals you want to achieve, like
reaching a defined sales level, hiring thatsales manager, or
opening the new location. We're human. We work better
whenwe have visible goals we can work towards.
9.Metrics.
Put your performance indicators and numbers to track into a
business planwhere you can see them monthly in the plan
review meeting.
Benefits of a Business Plan

Figure out thenumbers that matter. Sales and expenses

usually do, but there are also calls, trips,seminars, web
traffic, conversion rates, returns, and so forth. Use your
businessplanning to define and track the key
metrics.Metrics is applicable to keep track the monthly
performance of the companyor organization so that they will
be able to distinguish if their performance meetstheir prior
objectives
Benefits of a Business Plan

10.Realistic regular reminders to keep on track.

We all want to do everything forour customers, but
sometimes we need to push back to maintain quality
andstrategic focus. It's hard, during the heat of the everyday
routine,to remember thepriorities and focus. The business
planning process becomes a regular reminder.From time to
time technopreneurs must check their business plan if
theyalready achieve their goals and objectives towards their
target markets, products orservices and satisfaction of their
customers
Business Plan Outline
1.Executive Summary
An executive summary provides an overview of a larger document orresearch
and is usually the first thing your reader will see. Often times,
executivesummaries are the only place decision makers will go to determine if
action iswarranted on a particular action or idea. Executive summaries will
analyze aproblem, drawn conclusions, and recommend a course of action in a
complete butbrief synopsis. Remember, the people who are reading the
summary often do nothave much time, so your executive summary must grab
their attention and enticethem to read through the larger, more in-depth
documentation
The executive summary should address these main points:
•Purpose
What is the point of the document? Makesure you have a purpose when writing
the summary.
•Problem
What issue needs addressing? Why is it an issue?
•Problem Analysis
What can be changed or improved?
•Results of analysis
What did you find while researching the issue? What
methods didyour use? How do you know your resources
are valid, reliable, andcredible?
•Recommendations
What can you do to address this issue? How will you achieve
yourrecommendations?
Business Plan Outline

2.Company Description
It is also known as the company overview that includes the
history, missionstatement, vision, goals, objectives,
products or services, management team,organizational
structure and location of the company or the organization.
This is significant to the business plan as it provides the
clients or customers with thecompany'sstability and
credibility.
Business Plan Outline

3.Product or Service
The product or service are what the company will offer to
their prospectiveclients or customers that will benefit
them.The products and services section of your business
plan outlines yourproduct or service, why it's needed by
your market, and how it will compete withother businesses
selling the same or similar products and services. Your
productand services section should include:
•A description of the products or services you are offering or
plan to offer
Business Plan Outline
• How your products and services will be priced
• A comparison of the products or services your competitors offer
inrelation to yours
• Sales literature you plan to use, including information about
yourmarketing materials and the role your website will play in your
salesefforts
• A paragraph or so on how orders from your customers will be
processedor fulfilled
• Any needs you have in order to create or deliver your products,
such asup-to-date computer equipment
Business Plan Outline

• Any intellectual property, such as trademarks, or legal

issues you needto address
• Future products or services you plan to offer
Business Plan Outline

4.Market Analysis
In writing a business plan, the company should undergo market
analysis inorder to know the market and customer needs. This can
be done thru surveys and interview to know what is the trends in the
market as well as what the customerreally needs for their daily
activities.A market analysis is a quantitative and qualitative
assessment of a market.It looks into the size of the market both in
volume and in value, the various customersegments and buying
patterns, the competition, and the economic environment interms of
barriers to entry and regulation
Business Plan Outline
5.Strategy and Implementation
A company should create their strategical plan in a maximum
span of 5years to 10 years. This will provide the company
with ideas and serve as a guide inachieving the goals and
objectives of the company through implementation.Strategy
implementation is the translation of chosen strategy
intoorganizational action so as to achieve strategic goals and
objectives. Strategyimplementation is also defined as the
manner in which an organization shoulddevelop, utilize, and
amalgamate organizational structure, control systems,
andculture to follow strategies that lead to competitive
Business Plan Outline

6.Management Team
Management team composed of the members of the team,
their personalstrategies and information. It is a group of
individuals that operate the organization,they have a day-to-
day responsibility in managing different individual as well
asmaintaining their responsibility in the business. The
management team ensures thatthe business strategy and
objectives are met because they will be liable to
thecompanies'board of directors or top-level managers.
Business Plan Outline

Eventually the management team are people who have

skilled knowledgeand expertise in handling the business
strategies because it is their bread and butterto be
successful in the market competition
7.Financial Plan
It probablyincludes the profit, cash flow, balance sheet,
break-even analysis, assumptions andbusiness ratios of the
company. This will exhibit the income and expenses of
thecompany in order to know if the company is winning in
the market competition orlosing
The Lean Canvas
Most entrepreneur uses the tradition business plan. On the
other hand, for startupbusiness, they use the Lean Startup
Canvas. The lean startup canvas is an adaptation byAsh
Maurya of the business model canvas by Alexander
Osterwalder, which adds a layerthat focuses on problems,
solutions, key metrics, unfair advantage based, and a
uniquevalue proposition. Thus, starting from mastering the
problem rather than the solution.This starts with the Lean
Startup methodology of experimentation, customer
feedbackand iterative design. A Lean Startup is a temporary
organization designed to search forrepeatable and scalable
business model
The Lean Canvas

-Ash Maurya found the business model canvas a bit too

general for a lean startupthat is why he revised the key
partners, key activities, key resources, and
customerrelationships and substituted it with a problem,
solution, unfair advantage, and key metrics,respectively.
The following explanations on the Lean Canvas by Ash
Maurya was excerpt from theFourWeekMBA.com by
Genaro Cuofano, which he brought to reach about a
millionbusiness students, professionals, and entrepreneurs
in 2019 alone.
Lean Canvas by Ash Maurya

1.Problem: A brief description of the top 3 problems you're

addressing
2.Customer Segments: Who are the customers/users of this
system? Can they befurther segmented? For example,
amateur photographers vs. pro photographers
3.Unique Value Proposition: What is the product's tagline or
primary reason youare different and worth buying? What is
the real essence of creating, making ordeveloping a
product?
Lean Canvas by Ash Maurya

4.Solution: What is the minimum feature set (MVP) that

demonstrates the UVP upabove? Based on the problem
that has been analyze then you will be able to knowthe
exact solution to help not just your client but the society at
large.
5.Key Activity: Describe the key action users take that maps
to revenue or retention?For example, if you are a blogging
platform, posting a blog entry would be a keyactivity. This
will help technopreneur to advertise the products or
services that willbe offered in the market
Lean Canvas by Ash Maurya

6.Channels: List the FREE and PAID channels you can use
to reach your customer.These channels could boost up the
products and services that you will offering sothat
customers will have an idea and be informed about it.
7.Cost Structure: List out all your fixed and variable costs.
8.Revenue Streams: Identify your revenue model—
subscription, ads, freemium,etc. and outline your back-of-
the-envelope assumptions for life time value, grossmargin,
break-even point, etc.
Lean Canvas by Ash Maurya

9.Unfair Advantage: Most founders list things as competitive

advantages that reallyIt is critical to remark herearen't.
Anything that is worth copying will be copied that the "unfair
advantage" is the essential part of the lean startup canvas
and thatis why it is crucial to understand it deeply.
Examples of Lean Canvas
Examples of Lean Canvas