Another theory is proposed with the claim that it will improve the decision-making process in the business, and to reduce risk. Lean planning, suggested by Sabrina Parsons, will drive growth for small businesses and entrepreneurs. The views presented in the article appear to be overly optimistic and simplistic. The model introduced is similar to the business plan template that we have seen in the handbook online, where common sense and logic serve as primary ways to make judgements.

Lean planning, according to Parsons, enables entrepreneurs to keep “up to date with the innovation and security planning”. It contains an executive summary focused on administration, a financial plan with sales forecast, cash flow and balance sheet and lastly, an action plan in a form of time skeleton that outlines important events in the future. This is a simplified version of the business plan template, and it reminds me of the case assignments that we have completed. Then, the businesses should set up monthly meetings to compare the actual sales with the expectation, and to brainstorm methods of improvements. In short, lean planning is simply a short term business plan, with financial, operational, and action information so that business could refer to while making decisions or adjustments.  What I like about this methodology is that there is constant comparison between the expected sales and the actual sales, which triggers a moment of reflection and critical thinking.  We could even title these moments as a process of learning and rebuilding. After potential problems are identified, companies can then take their action to fix them. Also, because there are monthly meetings, owners is able to update their data fairly constantly, and is able to observe any short-term effect the solutions have on their sales.

Nevertheless, we do need to understand that lean planning is just a strategy, a tool that will help us to make better decisions. It does not mean the decisions made through this process will be the best one, because the market is very unpredictable and any forecast is based upon previous experience and observations, Lean planning is a useful, but inadequate tool that serves as a guidance rather than a determinant in the decisions making process.

http://teamaltman.com/2012/05/entrepreneurship-lean-business-planning/