The Lean Business Model Canvas: A Business Plan for Entrepreneurs

New entrepreneurs often assume that before they can start up, they need a detailed written business plan. But traditional business plans tend to be more useful for established businesses that are looking to scale up. Most new startups don’t need a plan that’s extremely detailed; the point is to get to the key things that matter.

At NaperLaunch, we encourage new startups to use the Lean Canvas, a 1-page business plan template designed especially for entrepreneurs. Created by Ash Maurya and adapted from Alex Osterwalder's Business Model Canvas, it helps you quickly assess the strength of your business idea by prompting you to examine essential aspects of your business early in your entrepreneurial journey.

With the Lean Canvas, you can focus on identifying problems and solutions. There’s only so much space to use, which means it’s necessary to boil down key points into the most important information.

The Lean Canvas covers, at a high level, all the major aspects of your company. It helps you determine whether your product or service should be created in the first place. It also helps you decide whether it is possible to build a sustainable business around a particular set of products and services.

The canvas breaks your company into nine building blocks, as shown in Fig. 1. Individually, they help you define your business in a logical order. When assembled in this configuration, they create a Venn diagram–like way of thinking about your organization.

The Lean Business Model Canvas
Fig. 1 The Lean Business Model Canvas
  1. Problem - This is what your product or service will solve for people. What problem(s) are you solving? Is it an adaptation or new product/service? Are you bringing lower cost, better design, more features?
  2. Customer Segments - These are the people that have the problems you’ve identified. It’s important to learn as much as you can about them, such as who they are, where they live, and how many of them there are.
  3. Unique Value Proposition - The heart of the canvas, the UVP is how you will set yourself apart from your competitors. It will guide you in your pricing strategy and your marketing messages. We describe the process of writing a UVP in this blog post.
  4. Solutions - What is your business going to offer that solve the problems you identified? Your offering should be something that your customer wants and for which the customer will pay enough to make your business profitable.
  5. Channels - What marketing and distribution channels will you use to reach your target audience (eg, Business to Consumer, Business to Business)?
  6. Revenue Streams - What is the market willing to pay? How much will you make and from where?
  7. Cost Structure - What will your solution cost to implement? Are you satisfied with your break-even analysis, and if not, how will you improve it?
  8. Key Metrics - What are the drivers for your business? What key performance indicators will you use to evaluate or predict performance of company activities or other specific outcomes against set goals?
  9. Unfair Advantage - What competitive advantage can you and your company develop, exploit, and maintain?

When completing the canvas, answer the questions starting at the top left with Problem, and continue to Customer Segment at the top right. Continue numerically until you've answered all the questions. You'll notice the boxes are out of order, but the Lean Canvas is designed this way to optimize your thoughts. When assembled, you'll see common themes emerge from the boxes that touch each other.

If you’re interested in creating your own Lean Canvas, the Naperville Public Library offers several resources to help you get started:

  • The NaperLaunch Academy offers a focused curriculum to help entrepreneurs develop fundamental business knowledge and learn the Lean Startup process. The next series of workshops kicks off Wednesday, Oct. 6 with Business Conceptualization, a session devoted to the first seven boxes of the Lean Canvas; the following session on Startup Financial Essentials, explains how to fill in the last two.
  • The library’s Gale Business: Plan Builder software, accessible at the library or from home with an NPL barcode number and PIN, is an interactive tool that walks users through the process of creating a Lean Canvas, and eventually, a business plan and strategic marketing plan.
  • If you’re interested in learning more about the Lean Startup process, this blog post is a good starting point. For more information, you can find Ash Maurya’s books, including Running Lean and Staying Lean, in the library catalog.
Posted: 
Tuesday, October 5, 2021 - 4:15pm