Using a Lean Canvas to create your business plan

Avoid the clutter

Have you ever thought about creating a business plan for your freelance operation? Not some boring, 50-page-long document that you would just shove into the back of the drawer, but one you can use day to day? That’s where a Lean Canvas can help.

The Lean Canvas is a one-page business plan template you can create in 20 minutes and update whenever you want. It can greatly help startups and freelancers deal with extreme risk and uncertainty.

The Lean Canvas is the adaptation of the Business Model Canvas model to the Lean Startup methodology. The new model created by Ash Maurya has rapidly gained traction in the startup world and his book Scaling Lean also quickly became a Wall Street Journal bestseller.

Build products people want

The main goal of the Lean Canvas model is to avoid building products nobody wants to use — a problem that happens with embarrassing frequency in product design. Something that sounds cool or even brilliant first, but later it turns out that either the product doesn’t provide enough value to customers or nobody wants to pay for it.

The Lean Startup model goes against the “just do it” approach. It makes failing cheap and fast.

A Lean Canvas is meant to be a living document that changes regularly with time. It’s based on continuous testing and innovation, and works quite well in extreme uncertainty. Instead of asking whether a product can be built, it poses the question whether a product should be built.

Lean Canvas for your web design business

Using the Lean Canvas approach can significantly improve your web design business. It has everything web professionals love — it’s fast, cheap, shareable, easily can be updated, and most importantly, iterable.

You can create as many Lean Canvases as you want, not just one.

 

In fact, you can iterate the canvases the same way you use iteration in software development or user interface design.

For instance, you can create one canvas for your whole design agency and one for each product you want to build. Team members can create separate canvases for the same product in order to compare their ideas. Or if the same product has different customer segments, you can create a separate canvas for each. Your options are basically endless.

Get a Lean Canvas template

You can either print the Lean Canvas template and fill it in with a pen or pencil or create your canvas interactively on the Lean Canvas website. This is probably a better solution, as you can save and revisit your canvases at any time. Moreover, each building block on the canvas has an instructional video that can come in handy when you have no idea what you are supposed to do.
This is how the Lean Canvas template looks:Lean Canvas Template

Fill the Lean Canvas step by step

The numbers on the canvas denote the recommended order of the nine blocks. However, you can deviate from that if you want. Just make sure it doesn’t take more than 20 minutes (or maximum half an hour) to fill the Lean Canvas. It doesn’t have to be perfect. The goal is to take a snapshot of your ideas, not to research the answers for many hours.

1. Customer segments

First, you need to know the people you make the product for. Don’t define your customer segment too broadly. A product for everyone is, in fact, a product for no one. You need to have a customer segment that’s specific enough to make the plan actionable. If you build an app or a website, think over who might really want to use it. Then, find the customer segments who would also be able to pay for the product.

2. Problem

To create value for your customers, you also need to understand their problems. As Lean Canvas is a very straightforward business model, you can only specify the top three problems of your customer segment. Try to be as specific as you can when you define the problems. It’s hard to address generic problems with a unique solution.

3. Revenue stream

The creator of Lean Canvas recommends using value-based pricing instead of cost-based pricing to define your revenue stream. Instead of calculating the costs and adding a margin, it’s more effective to estimate how much it would be worth for an average customer to have their aforementioned problems solved.

Unless your problems can be monetized, you can end up creating a product that won’t be viable on the market.

This is especially true in the web industry, where even the biggest players such as Google and Facebook have struggled with monetizing their products.

4. Solution

You need to find solutions for the top three problems you listed earlier. These two blocks are next to each other on the canvas because each solution needs to address a specific problem. Think of each solution as a key feature on your landing page. Below, you can see how GoDaddy uses the popular “three icons – three features” web design technique on the SEO product page. The three key features (personal SEO team, getting started instantly, 24/7 check-in) are, actually, solutions to the three key problems SEO customers face.Lean Canvas Three Solutions

5. Unique value proposition

Now that you know your customers, their problems, and the solutions you’ll offer, it’s time to find out how to get their attention. Your unique value proposition is a clear and compelling message that makes a viewer interested in your product.

Think of it as the hero message you would place above the fold on your landing page.

 

It’s also important to keep the message short so that it could fit into a tweet or the character limit of different ad services.

Pay attention to the wording, as it’s the most important thing if you want to create a compelling message. In the example below from a GoDaddy product landing page, notice how they avoided empty buzzwords (using “yummy” instead of “unique,” “authentic,” or “custom”), provided measurable data (“in under an hour”), and defined the new product (“NEW Website Builder”).

Lean Canvas Value Proposition
Here’s an example of a unique value proposition on a GoDaddy product landing page.

6. Channels

Finding the channels to reach your customers is a crucial task with your Lean Canvas. If you can’t effectively get to your customers, you can have the most awesome product in the world but it will fail sooner or later. List all online and offline channels you could use to reach out to prospects, such as email lists, referrals, social media platforms, content marketing, ad services, professional events, and others.

7. Key Metrics

As the Lean Canvas model is about continuous testing and evaluation, you also need key metrics you can track in order to measure your progress. During the first iterations of the Lean Canvas, just focus on one key metric; later you can introduce more. Start with something simple and measurable, such as your monthly or yearly revenue and define your minimal success criteria (the smallest outcome you can accept as success).

8. Cost structure

The cost structure block is the opposite side of the revenue streams block. List all your fixed and variable costs such as software and hardware costs, office rent, web hosting services, and others. As it’s hard to estimate costs too far in the future, the Lean Canvas model recommends picking a smaller time window — such as taking your idea to launch or getting your first customers.

9. Unfair advantage

Finally, you need to define your unfair advantage — something that cannot be easily copied or bought by your competitors. Sometimes it’s also called competitive advantage or barriers to entry. Specific features or unique design are not unfair advantages, as they are not that hard to copy, especially in the web industry. Rather think of things that can give you extra power, such as a large network, existing customers, a built-up community, personal authority, or a high SEO ranking.

If nothing springs to mind right away, leave this block blank and fill it in later, as many unfair advantages only reveal themselves over time. According to Ash Maurya, it’s much better to have a blank box than to list weak some unfair advantage just to complete the task.

Test continuously

Your Lean Canvas is not a static document but a dynamic one. Test your vision continuously and update your business plan whenever it’s necessary. Don’t forget that the goal of the Lean Canvas model is continuous innovation and eliminating high uncertainty by constantly adapting to the fast-changing market.