When you’re starting a business and even more so a startup, you’re going to need to write up some type of plan of how you’re going to go about your business.
Traditionally, business plans have been what people created.
But now, because they’re also traditionally long, and because businesses need to be more flexible, business plans are a less attractive option for planning your business.
What the business-savvy startups turn to now are lean business model canvases and executive summaries.
But they have each have pros and cons. There are two types of canvases and the executive summary is used for either your own purposes or for investors.
Below I discuss the differences between these options and what it means for you.
Lean Business Model Canvas
The great thing about lean business model canvases is that they are super simple and nicely laid out. It’s even simpler than the regular business model canvas that’s mentioned in the next section.
You have several options to use this lean business model canvas:
1) By saving and printing it out and writing on it with a pen or pencil. Pencil makes it easier to edit, though.
2) Typing text over it on an image editor.
3) Going to Mural.co and creating a free account.
4) Going to leanstack.com and signing up for a free account to make yours.
The only downside to the last two is that every time you want to edit it, you have to go back and log in — but that’s not so bad. So if you want to do that, then I suggest you bookmark that site into your toolbar so you can get back to it easily.
You can’t get much leaner and more basic than this template without sacrificing important information about your startup or business.
The final caveat is that canvases aren’t what investors ask for. They ask for executive summaries or business plans (which should be on the shorter side) and pitch decks.
Business Model Canvas
The business model canvas has one more category, but they’re not all the same as the lean canvas. In fact, there are several differences.
However, that’s not necessarily a bad thing. They’re just different and used for different things.
What they have in common:
- Cost Structure
- Revenue Streams
- Customer Segments
- Value Proposition
The differences between the business model canvas and the lean business model canvas are that the business model canvas has categories of key partners, key activities, customer relationships, and key resources.
Whereas the lean business model canvas has categories of problem, solution, key metrics, and unfair advantage.
The lean business model canvas is better suited for startups, as it drives towards necessary ingredients of a successful startup.
And the business model canvas is better for more traditional businesses.
If you want to use this canvas then you will need to print it out or write over it in an image editor.
Executive summaries only require a word processor, and there are quite a few of those, from Word to Open Office to Google Docs, etc.
You use the same content as you would with a lean business model canvas, but it’s displayed vertically on a page and you can edit it easily.
It also shows management and fundraising sections where the canvases do not.
The other major difference is that you can write more information down in an executive summary. You can’t write that much with a canvas.
So what’s better? There is no straight answer.
Figure out what your needs are.
If you have a startup that isn’t seeking venture capital or angel investment, then I’d use a lean business model canvas. You can always copy that information down and expand upon it within an executive summary.
However, if you want to seek capital, then you’ll need to have an executive summary.
Executive summaries and business plans should not be created as plans that are set in stone and neither should canvases.
Your startup should be able to evolve and pivot if need be and that’s why your summary or canvas should be flexible as well.
Use what suits you best for your situation.
If you’re looking for guidance on how to best move your startup forward and get tons of resources for early entrepreneurs like you, then you might want to check out StartupDevKit’s incubator membership.
What format do you like more (executive summary or lean business model canvas) and why?