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How to Apply Lean Principles to a Small Business

In 2011, Eric Reis published his book, The Lean Startup. While it got mixed reviews (some thought it was repetitious and its concepts were not new), it was based upon an important thesis – the Internet, technology, and the ways in which startups are funded and grow have transformed traditional business principles and will continue to do so.

How to Apply Lean Principles to a Small Business

Friday January 27, 2017,

7 min Read


The Traditional Way

All businesses begin with an idea. This has not changed. But the process of launching and growing a business in days gone by followed a pretty standard process:

• The idea was hatched

• A business plan was developed

• If the business involved a product, a prototype may have been developed

• If the business involved a service, it was carefully mapped out on paper and became a part of the business plan

• Banks were contacted, the business plan presented, and a loan was either approved or denied.

• If approved, the new business went into production and marketed its product or service according to the business plan – traditional marketing strategies were used

• If successful, the business may have then branched out – adding to its product line or developing additional services. Sometimes, another loan was secured for this expansion

The New Entrepreneur

We have all read the success stories of young entrepreneurs who began with an idea, no business plan, found funding through family, friends, and/or crowdsourcing, developed their product or service, marketed it via the web, and became quick millionaires. We think of Nick Woodman of GoPro, Michael Dubin of Dollar Shave Club, or Peter Vesterbacka, creator of “Angry Birds.” Some products and services just “take off” and become instant hits.

Most entrepreneurs today pattern their startups as the above-mentioned people. Though many ultimately do find success, they are not the instant hits of the few. They have to move a bit more slowly and be much “leaner” in the beginning. These are the people to whom Eric Reis and many others speak.

Going Lean

So, exactly what does “lean” mean, and how does a startup go lean? Going lean means that, as an entrepreneur, you do not waste your money or your time needlessly as you launch – it means you use experimentation and measurement rather than full-blown product or service development, without at least some guarantees.

Here are four strategies for going lean – strategies that will reduce costs and time and give you a verdict on your product or service quickly.

1. Define the Problem

Years ago, catsup came in glass bottles. To use catsup, consumers turned the bottle upside down and had to pound the bottom of the bottle to get the catsup to come out. This condiment along with many others was eventually packaged in a plastic bottle, which, if we recycle, is a bit more convenient. But the real problem – pounding the bottle’s bottom, was still not solved. Ultimately, someone came up with the idea for a larger cap – one that would allow users to store the bottle on its head – keeping the catsup at the top of the bottle so that it dispensed immediately. A small problem that was solved with a simple idea.

The point is this: Any product or service you anticipate offering must solve a problem for consumers of it. You must clearly define the problem that you will be solving. Once you know the problem to be solved, you have an assumption – that a certain group of people/businesses will want what you are going to produce.

You now to do some research, identify your target audience – not your family or friends. You want to see if someone will really buy what you plan to produce. This may be a bit difficult if you do not have another business already, a blog or social media following, or an email list. One way is to connect with customers of a related niche and, in a conversation on that blog or social media page, put it out there.

If you have the resources, there are other methods as well.

• You can buy email lists of your target demographic – this is risky for a number of reasons, but certainly you can provide segmentation factors.

• Ask your friends to survey their social media communities, especially if you do not know many of those friends

• Place ads on Facebook, providing a description of your solution and ask readers to click a link to “opt-in” to be notified when the product or service is ready for purchase. If you get some opt-ins, you know that there are people out there who will have an interest.

• If you do run an ad or promote your idea through social media or a blog post, then use the services of exceptional and expert copywriters/marketers or you can install a content writing mobile app on your iPhone. Lots of content writing services have content marketing departments with some pretty creative people.

2. Creating an MVP

Suppose your startup idea involves creating a calendar app with some unique features. Perhaps you develop an MVP (minimum viable product) that includes a couple of those features; if you are writing a book, complete the first chapter; if you are creating HR software, develop one piece of it; if you are designing an e-learning course or series of training videos, develop one module. Now you have something concrete that you can market and offer.

The goal here is that you want to show that your full product/service will be valuable by giving a preview. The other goal is to see if it is something people will actually pay for once it is a complete product. Once you have your MVP, there are a number of ways to get the word out:

• If you have developed an opt-in list, send your MVP to those individuals and ask for feedback before you go on. Is this a beginning of a solution for them? What do they want to see in the final product/service that will be most valuable to them?

• There are influencers in your niche – people whose opinions are valued by your target market. Influencer marketing, in fact, is one of the most powerful tools you have. Hopefully, you have been following their blogs and their social media pages and have engaged them in conversation. Now it is time to send your MVP to these influencers and ask for feedback.

Use the feedback you get to drive your final product completion. How much more efficient is this than competing the entire production and then finding that it does not meet all of the needs of your target market? Then, you are back to the drawing board having wasted a lot of time and money needlessly.

3. Experiment with Your Marketing Methods

Once your final product is complete, you are ready to really market it. Obviously, you will use the same venues that you used when “testing” out your MVP. But now, it must become more serious.

• Send it back to those influencers who gave you feedback before. Hopefully, you thanked them for their feedback then. Now, you would like them to provide a review of your final product that they will allow you to post on your social media channels and on your website or blog.

• Turn your current happy customers into brand ambassadors. Ask them to share your product with their communities, and offer them something of value to do so.

• Use targeted advertising strategies. Start with Facebook, where you can pick the specific demographics of your target audience for your ads to be displayed. Facebook advertising is relatively inexpensive too.

• Begin an Instagram based upon a theme that directly relates to your product/service. For details on how a campaign like this works, check out the story of Nathan Chan, who launched Foundr Magazine totally through Instagram. He offers a master class on this very strategy.

• Develop cooperative relationships with entrepreneurs in related niches. This is free advertising. Just be careful to use only high-quality businesses with good reputations.

4. Outsource as Much as You Can

As a solopreneur, or perhaps a partnership, and as one who is just launching a business, you have to be lean with your budget. Even after you begin to generate profits, continue to outsource and automate what you can.

• If you are not the creative type, employ the services of copywriters who are

• Automate your social media postings – it’s not that expensive and there are some great services to do this

• Be certain that your website design is stunning

• Keep employed staff to a minimum, and focus on marketing staff first.

“Lean” Does Pay Off

Businesses fail for two reasons: They develop a product or service that is not valuable and unique enough to attract customers, or they run out of money before they can get their product to market and marketed. By going lean, you can avoid these two disasters.