Start your lean plan with simple business strategy. Use a simple bullet point list to set down key strategy points. You do this so you can refer back to them when you review results and manage the plan. Use the simple business strategy framework here — problem, solution, market, identity — or any other that works for you. I also like the IMO strategy framework, which is described in detail in the appendices.

Strategy is focus.

I’ve dealt with dozens of strategy frameworks, and every one I’ve known works pretty well if it’s applied correctly. Still, my favorite is the one I developed: IMO. Identity, market, and offering (product or service).

Think of it as the heart of the business, like the heart of the artichoke: it’s a group of three core concepts that can’t be separated: identity, market, and business offering. Don’t pull them apart. It’s the interrelationship between them that drives your business. Each affects the other two.

The Problem You Solve

We forget too often, so start with this: Your business is not about you, what you like to do, or what you want from it. It’s about your customers. And, most important, the problem you solve for your customers.

Theodore Levitt changed marketing with his pivotal piece Marketing Myopia, which includes this important reminder:

People don’t want to buy a quarter-inch drill, they want a quarter-inch hole.

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And this also famous quote, about railroads:

They [the railroads] let others take customers away from them because they assumed themselves to be in the railroad business rather than in the transportation business.

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Real businesses solve problems and for simple business strategy they have to know what problem they solve. In a social media company that posts updates for its clients, the problem it solves is not social media; it’s getting the word out; getting people to know you. My favorite restaurant doesn’t just feed me a meal; it gives me healthy, delicious food, in a comfortable environment, a place I like to be for an hour or two with my wife.

Decades ago, when I started developing business plan software, I had to remind myself that people don’t want business plan software; they want business plans they can have and execute and work with.

Every business better be solving a problem. If not, it’s continued existence is threatened.

Here’s an example, from a lean business plan related to a subscription soup business:

And another example, from a retail bicycle shop:

Your Business Solution

Your business solution is your product or service. You can already see with the bike shop example how one shop needs one kind of inventory and the other needs a different kind. That’s strategy at work. Your identity influences your choice of market, which influences your choice of product. Your choice of product influences your choice of market. They have to work together.

Understand that you can’t do everything. The bike shop that caters to families and racers is likely to fail. You can’t credibly offer high-end bicycles at bargain prices in a family-friendly atmosphere.  If you say you do, nobody believes you anyhow. The subscription soup business can’t compete with normal fast foods or established sandwich delivery on price and convenience alone. So it offer healthy organic cooked soup delivered to the desks of office workers. In both cases, you see strategic focus.

Seth Godin’s book The Dip is about being the best at one thing. That’s the point of your focus. Since you can’t do everything and even if you could, your customers wouldn’t believe you, then you need to focus on something that you do well, that people want. Be the cheap and practical bars of soap that sell in volume in the big chain stores, or be a finely- packaged, expensive and sweet-smelling soap that sells in boutiques. Don’t try to be both.

Here’s an example from a subscription soup business:

And another example, from a bicycle retail shop:

The Market

Your identity influences your choice of target market. The bike racer focuses on attracting enthusiasts, offering expensive high-end bicycles and equipment. The couple focuses on attracting parents with kids, concentrating on medium-level bikes, trailers, and family-friendly accessories.

Keep your business focused on specific target markets. That bike racer shop owner has to know his products are too expensive for the families, and the families bother the high-end enthusiasts. The family bike shop can’t scare away its target market with very expensive racing bikes.

Business Identity (Why Us)

Every business has its core identity. How are you different from others? What are your strengths and weaknesses? Your core competence? Your goals? What makes you different?

Tip: Think of a business identity as answering the question: Why Us? Why are we the right people for this business? How do we relate to the problem, solution, and market?

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As an example, imagine the difference between a bicycle retail store owned and operated by a former professional bike racer, and another one owned and operated by a couple with children who like bicycles as a family activity. The first one will probably stock and sell expensive, sophisticated bicycles for the racing enthusiast and extreme long-distance or mountain biking hobbyist. The second will probably emphasize bicycles for children, bike trailers, carriers, and accessories for families.

Part of your identity is what you want from your business. Some businesses are about your lifestyle or pursuing your passion. Some people want their businesses to grow as big and as fast as they can and are happy to work with investors as owners. Others want to own their own business, even if it has to grow more slowly for lack of working capital. What’s your case? If you’re committed to a second income in a home office, incorporate that into your identity. Don’t look for generalized formulae; let your business be unique. That’s differentiation, and it’s important.

Your team as your identity

As an example, imagine the difference between a bicycle retail store owned and operated by a former professional bike racer, and another one owned and operated by a couple with children who like bicycles as a family activity. The first one will probably stock and sell expensive, sophisticated bicycles for the racing enthusiast and extreme long-distance or mountain biking hobbyist. The second will probably emphasize bicycles for children, bike trailers, carriers, and accessories for families.

Notice please how the owners’ identity affects strategy in strengths and weaknesses, knowledge and focus, and choice of product and target market. The strongest teams set the business identity to reflect vision, ideals, preferences, and skills and backgrounds too. Consider how this team sets the identity for a retail bicycle business:

And our sample soup subscription business sets strategy based on its identity that is a combination of foodies, restaurant experience, values related to local and organic, and startup experience. Compare this team to the team for the bicycle shop:

You don’t have to tie identity to specific people. Here’s another example from a more generalized strategy, for the soup subscription business, without the pictures:

Roll Them Up Together

These three things are your business strategy. Don’t pull them apart. Don’t take them one at a time. Keep thinking about them. Remember, in planning as well as in all of business, things change. Keep watching for change.