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Lean planning tips for small businesses and start-ups

The pressure to innovate and grow at a regular pace presents a major challenge for many small business owners and entrepreneurs, especially when coupled with a still-faltering economy. Consistent growth is a critical factor for a Maryland small business's success, but ensuring that this occurs while keeping a fledgling company afloat and encouraging innovation can be difficult without spending inordinate amounts of time on planning and then changing plans when something unexpected occurs.

Fortunately, a practice known as lean planning can help start-ups and small businesses stay organized and thrive throughout the Business formation phase without locking in plans that could well become useless in several months' time. The key to lean planning is understanding how much planning is needed to successfully run a business and engaging in the least possible amount. This may seem counter-intuitive to many hopeful entrepreneurs, but lean planning allows a small business owner to easily adapt to new situations and better make crucial strategic decisions that help their companies grow.

Owners of existing business interested in formulating lean plans should in reviewing various business metrics, like gross margin, marketing costs and cost of goods and setting new targets for these figures as part of a comprehensive action plan. They should then compare these goals to their actual data every month, paying careful attention to any discrepancies and assessing why their results differ from their targets.

This allows business owners to make informed decisions about their businesses based on actual data. Every three to four months, they can see how their decisions affected their metrics and make small adjustments to their plans accordingly. This continuous tweaking allows business owners to introduce new services or goods with less risk and helps to avoid the pitfalls that can occur with a more extensive and less flexible plan.

Source: Forbes, "Lean Planning Drives Growth For Small Business," Sabrina Parsons, Nov. 16, 2012

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