Lean Start-Up Business Plan Essay
$5.99
Kindly ADD to CART and Purchase an Editable Word Document at $5.99 Only.
Lean Start-Up Business Plan
Introduction
Contigiani and Levinthal (2019) state that a lean start-up can be termed as a model used to establish a new business or company. This method advocates for the development of products that customers have already expressed interest in so that existence of a market will be guaranteed when the product is introduced or launched. Furthermore, the lean start-up procedure is advantageous because it is better than hoping for a product to gain demand from the market once it is developed. As indicated in part A, the Pet Home Care business is a lean start-up because the consumer interest has been gauged in terms of their interest in the service. Therefore, there are certain ways in which the service has been refined in order to avoid unwarranted use of resources when it comes to product development and creation.
From the perspective of the CHRO (Human Resource and Organization Plan), relevant HR structures need to be created so that incentives for participation can be enabled when launching the new project. Villalobos Rodriguez et al. (2018) assert that companies should develop an adequate HR structure that supports taking part in growth initiatives and risk-taking, including creative methods of incentivizing innovation. Furthermore, CHRO will groom the employees in the company to embrace more responsibility, which will often lead to promotions due to the quality of their work. The feedback received from the intent to establish Pet Home Care has helped in the formulation of better strategies that will maximise the company’s profits significantly. It is important to note that CHRO will help identify some of the lean characteristics of the company through organizational alignment, which will ensure employees and other stakeholders understand their purpose and the tasks that they need to accomplish.
Business Objectives
De Cock et al. (2020) note that the introduction of new products, as well as market performance, are correlated because new products assist in retaining and capturing market share and aid in increasing profitability within those markets. Setting objectives is crucial, especially with regards to profits and sales revenue, because it provides a solid plan as to which direction the company should take in order to attain long-term success (Gbadegeshin and Heinonen, 2016). Some of the common business objectives include increasing profit, revenue and acquiring a return on investment. In the next three years, the projection of the company is that profits will be increased by raising revenues, lowering expenses or extra costs, or both through a formulation of a strategic CHRO plan. It will be vital to ensure that all financial information is adequately updated and monitored.
The total revenue for the three years will be accounted for by determining the gross revenue from the sales of the service (Pet Home Care), the number of discounts that were offered to the clients, the net sales derived from the services, the income from alternative sources like dividends from securities, property rent when leased to other individuals and the bank deposits interests. Since the business offers more than one service, there are positive projections of profits in the next three years because of each service’s relative contribution, whereby more profitable items will be considered. Moreover, the operating profit margin will offer a new perspective on the business’s existing earning power by showing that the operating profit margin is a projection of a possibly profitable company in the future (Villalobos Rodriguez et al., 2018).
Value Proposition
According to Blank (2013), the value proposition is meant to persuade a client why your service will be valuable to them compares to similar offerings from other competitors. A strategic value proposition can offer a competitive advantage because prospects will use it to evaluate the business. Furthermore, the value proposition is what customers encounter first when exploring a brand; therefore, there needs to be a clear and direct value proposition to capture the target customers’ attention.
Formulating a value proposition requires identification of all the advantages of your service or product while explaining the reason why the benefits are valuable to the customers so that it can make an impression on them (Rasmussen et al., 2016). Hence, it is vital to assess the main issue the value proposition solves because connecting this value to the challenges of the client will help make it more clear. This is what will help differentiate this brand from the competitors.
| Key Partners | Key Activities | Value Proposition | Customer Relationships | Customer Segments |
| -Pet supply retailers -Pet supply brands – Pet owners – Pet care centres that do not have the additional services being offered by the Pet Home Care business – Start-up friendly financial institution – Pet owners that use pet care services | – Platform development – Sales – Advertising – Website development -Offering care, food, and safety | Consumer -Provide resources in pet care – Make the lives of pet owners easier – Introduce the pet owners to services and products that are necessary for their pets that they may have otherwise not known about – Save time and cost for the pet owners – Peace of mind for the pet owners, status updates and GPS tracking – Offer cost-saving resources and simple product guidance | Consumer -Maintaining a continuous customized experience for the users -Offer useful information about the pets -Digital influencers (blogs/articles) -Maintain quality and affordable services -Encourage referrals -Web advertising that appeals to the target customers -Customer support -Active social media | Consumer -Pet owners that value provision of care for their pets – Busy professionals that need extra care for their pets since they have no time to do it – Professional with a minimum of $60k annually and above -Deal seeking and price sensitive pet owners Retailer -Pet product brands -General retailers – Key pet store chains |
| Key Resources | Channels | |||
| -Capital investment -Business management -Sample content creators -Sales staff -Human resources | -Website -Social Media -Mobile Applications | |||
| Cost Structure | Revenue Stream | |||
| -Sales and marketing -Platform development -Marketing Costs -Operating costs – Costs for research and development – Payroll expenses -Rent, electricity, and care expenses | -Integrating revenue sharing with advertising – Monthly fee depending on the business size and the number of pet owners -Website and app will be accessed by the users free -Advertising fee -Devices and software fee |
Based on this diagram, it is evident that the Pet Home Care business offers value which ensures a healthy life for the pet even when the pet owner cannot find time to offer the best care for the pet. The competitive advantage that will assist in the development of the business is focusing on the strategy which drives enhanced innovation (Blank, 2013). Furthermore, the main customers like the pet owners require maintenance through customer relationships which guarantee product innovation.
Value Capture
Value capture is the advantage delivered to a company as well as the stakeholders which entails monetary value and the overall value that is offered to the society and environment (Teece and Linden, 2017).
| Problem | Solution | Unique Value Proposition | Unfair Advantage | Customer Segments |
| -Need for expertise and proper training to handle a wide range of pets -Need for bonding and/0r insurance to protect the business against any liability -Need for formulation of adequate policy when handling pet emergencies which is costly | -Ensure that staff get certification and training in handling different pets, animal temperaments and breeds -Ensure that the company insures itself against any injuries the pets may sustain including getting lost in order to avoid law suits -Offer owners assurance that the right policies are in place to ensure pet emergencies are handled professionally. | The Pet Home Care provides food, care, grooming, safety along with other specialized services so that they can live healthy lives and keep on running their daily schedules without worrying how the pet is coping when not around. | Unlike other competitors, the pet home care will offer additional services within the same price and will ensure that specialised or specific care is applied to each individual pet. Furthermore, all the services provided for the pet will surpass competitors because they will be performed each day that the pet is cared for by the business. | -Pet owners that have busy work schedules and lack enough time to be at home with their pets -Pet owners that have extra income to ensure their pets are well taken care of. -High earning pet owners that would like to ensure the safety of their pets. |
| Key Metrics | Channels | |||
| Capital investment -Business management -Sample content creators -Sales staff -Human resources | -Website -Social Media -Mobile Applications | |||
| Cost Structure | Revenue Streams | |||
| -Sales and marketing -Platform development -Marketing Costs -Operating costs – Costs for research and development – Payroll expenses -Rent, electricity, and care expenses | -Integrating revenue sharing with advertising – Monthly fee depending on the business size and the number of pet owners -Website and app will be accessed by the users free -Advertising fee -Devices and software fee |
Assessing the problems that the business is likely to encounter will help in finding accurate solutions (Agafonow, 2015). The high priority problems have been identified in the diagram because if there is no problem to be solve, the service or product being offered is not relevant. The customer segment section assists in revealing why the business is different from the rest and why the target customers should invest in the business.
Finding the solutions to the problems is essential in a lean business start-up because it assists the business to learn more about the needs of the business. A lean start-up involves learning aspects of a business idea so that the relevant strategies can be implemented to ensure that it succeeds (Teece and Linden, 2017). On the other hand, the channels are portrayed as ways in which the customers can be reached because this access will help ensure the success of the business once it starts.
The CHRO Human Resources and Organisation Plan
Human resource planning is essential because it aids in handling issues regarding the future of the business, which ensures its success (Jacob, 2020). This form of planning can identify competency gaps and skills and eventually lead to the development of plans that aid in enhancing competencies and skills in human resources so that a competitive advantage can be maintained. At the same time, this is influenced by the external and internal factors within the business environment (Obedgiu, 2017).
There are six main components of Human Resources and organization planning, and they include; determining the human resource needs, assessing the recruiting strategy, selection of employees, developing training, determining compensation, and appraisal based on performance (Timms, 2017).
The CHRO plan will begin by determining the number of individuals needed to ensure that the business runs smoothly. This will be done by observing the company operations with the assistance of the other departments of the company. Involving the other departments will ensure an accurate estimation of the staffing needs. In this case, the job components will be analysed according to the different demands that the business will present. Once the needs assessment has been carried out, the number of employees will be accurately determined in their suitable positions and the time frame required for them to be hired. The recruitment process can then begin (staffing plan).
Recruitment is an essential role when it comes to CHRO because hiring staff that has skills for the job guarantee the success of the business and ensures that the strategies are implemented accurately. The recruiting process needs to be diverse, equitable, and fair (Jacob, 2020). The staff and other stakeholders’ responsibilities and roles need to be accurately defined before the business begins. Furthermore, the organizational plan or structure determines the stakeholders involved in the business, and they act in a way that suits the company’s functions.
Selecting the right person for a role is also a crucial plan for CHRO. This is done by interviewing candidates, assessing the payroll, and the costs linked to the absence of productivity. The organisational plan, in this case, will include the formulation of positions like the HR Manager, the HR specialist, the Human resource information specialist, the HR coordinator, and the recruiting coordinator.
The CHRO will also consider if the talent assignment, key performance indicators, and budgets align with the delivery of the business desired outcomes (Obedgiu, 2017). According to Timms (2017), financial information is essential for assessing and incentivizing performance due to its simplicity in measurement and the fact that alternatives can be proposed freely.
Basic work policies need to be determined because the formulation of policies assists in reaching the goals of the strategic plan, which is one of the functions of the CHRO. After the development of the policies, there will be proper communication on them in terms of security, safety, vacation times, scheduling, and flexible schedules. The human resource will collaborate with other departments to formulate these policies.
Market
The Pet Home Care market size was estimated to be worth 2.6 billion US dollars by 2019 and this is projected to grow annually by 8.7 percent every year between 2020 to 2027. Consumers are expected to increase their spending on their pets and the services offered to them and this will lead to the growing need for pet care services that save time. This will fuel the Pet Home Care business. Additionally, since the number of pet owners is increasing, the demand for pet support services will go up.
The situational analysis will also be considered in the CHRO plan; whereby different factors will be analysed. Firstly, the economic conditions in terms of the employment trends and rates, the disposable income trends, and interest rates indicate that the pet home care business will require specifically skilled for the job. The technological advancements also need to be determined because consumers often change how they purchase and use services by using devices to purchase items (Jacob, 2020). Technology has a major impact on the pet home care business because it affects how the company supplies and sources its services, including reaching a wider customer base.
Competition
The CHRO plan have a crucial role to play when it comes to ensuring that the business maintains a competitive advantage in the market. The main competitive edge of the Pet Care Home will be the affordable costs and the high quality of services offered. The CHRO plan will ensure that experienced and qualified employees are hired and the assessments of service delivery are done frequently in order to ensure quality. The business culture will incorporate policies that will enforce the need for employees and other stakeholders to accomplish the business mission. Therefore, the Pet Home Care business will make sure that the quality of service is maintained and value capture is guaranteed to satisfy the customers’ needs.
The internal analysis will focus on the corporate culture, workforce composition, and employee competencies by assessing their particular skills (Jacob, 2020). Analysing the staff will offer a basis for determining the future needs of the staff. Furthermore, it is vital to ensure that the staff is catered to sufficiently because it will contribute to the achievement of the business objectives as well as maintain a competitive advantage.
Forecasting demand entails supply predictions and labour demand, which indicate a shortage or surplus in the planning stage (Blank, 2013). The estimates of the demand will consider the objectives of the organization, the budgets, and overall turnover. In the Pet Home Care business, a qualitative method will be utilized to project the business demand instead of relying on the statistical data. The management expertise will also be utilized because their knowledge will help in assessing future employment needs.
It will be essential to identify the needs of the customers in order to form a strategy that will concentrate on customer value. The CHRO plan will focus on this aspect because it influences the types of skills and mannerisms required from the employee. For instance, the attitudes and actions lead to exceptional customer service, including speed of service delivery, willingness to attain extraordinary needs, and readiness to re-do poorly performed services (Jacob, 2020).
The corporate strategy should also be determined, as indicated in Appendix I, and this includes the markets that are being targeted. Knowing the markets ensures the CHRO plan’s success because of the accurate navigation of the relevant domain. This element will help the company increase its value by decreasing the cost of services and increasing the employee benefits based on the services they provide.
Financial Analysis
The start-up is financially profitable because it offers a unique aspect of pet care by incorporating other services that would have otherwise been paid separately and combined into a single service. This is a competitive advantage because the customers will prefer using this service rather than paying for each separately, which is more expensive. Therefore, different customer segments are bound to be attracted to purchase the services of pet home care. This unique selling point is what guarantees the profitability of the business. The CHRO has a role to play in ensuring this by concentrating on the customer’s needs when forming a workforce and a strategic plan that guides the corporate culture of the business. Since the human resource is responsible for ensuring the implementation and development of continuous learning and adjustment in the firm, this will assist in maintaining the financial viability of the business and help in ensuring stakeholder satisfaction (Scott-Jackson and Mayo, 2017).
Evaluation
According to De Cock et al. (2020), a successful company needs to review its business plan to make sure that it continues to meet the desired needs. It is necessary to assess the current performance of a business regularly and find the strategies that are most likely to ensure growth. The CHRO plan has incorporated sufficient resources to develop the human resource, including the formation of relevant departments and consideration of customer value. This plan has developed the strategies and procedures required to transform the business opportunity into reality. Moreover, it will act as a reference point that will measure the performance of the firm during implementation by including the management, financial, and social projections.
However, Crick and Crick (2020) conclude that a plan does not always guarantee business success. Therefore, in the future, it will be important to ensure that the plan has been aligned properly so that it considers the competitors and the specific variables that they have applied to the market so that more details can be incorporated into the strategy. The competitor moves are essential to consider because they also indicate the changing demands of the customer. Considering the competitors’ strategy will help improve how the clients will be catered to and improve the services they are already receiving from competitors significantly. This will ensure value creation and attraction as well as retention of existing customers. The CHRO can also incorporate this in the operations of the company by ensuring the workforce is sufficiently trained to meet the demands of the dynamic customer base.
Summary
The pet home care business is profitable because the start-up costs are relatively low, and the potential clients vary. Since the services included in the care of a pet vary, there is an opportunity to generate revenue from each of them, which increases the chances of profit. Furthermore, the charges are usually done per hour depending on an area. This means that the profits are set to increase over time because of the increased level of experience and good business practices.
The business has a competitive advantage because of the variety of services it offers in one package, which has the potential to attract a wide array of customers. This means that the business creates value for the stakeholders by having this unique selling point. Therefore, it is an entrepreneurial opportunity that can be invested in because of how the business addresses the needs of the customers and evaluates what aspects are in demand in the current market.
This business should be invested in because of the potential it has on attracting a wider customer base including pet owner that may have otherwise been paying for only one service that is included in the home care package. This means that the return on investment is guaranteed because of the profitable opportunities presented in the plan. If this start-up never existed, then there would be no opportunities for customers to access a one-stop-shop that offers a variety of services at an affordable price. The pet owner would not care for their pet sufficiently enough to guarantee that they live longer as their companion.
References
Agafonow, A., 2015. Value creation, value capture, and value devolution: Where do social enterprises stand? Administration & Society, 47(8), pp.1038-1060.
Blank, S., 2013. Why the lean start-up changes everything. Harvard business review, 91(5), pp.63-72.
Contigiani, A. and Levinthal, D.A., 2019. Situating the construct of lean start-up: adjacent conversations and possible future directions. Industrial and Corporate Change, 28(3), pp.551-564.
Crick, J.M. and Crick, D., 2018. ‘Lean Start-Up’Practices: Initial Internationalization and Evolving Business Models. In Advances in Global Marketing (pp. 37-58). Springer, Cham.
De Cock, R., Bruneel, J. and Bobelyn, A., 2020. Making the lean start-up method work: the role of prior market knowledge. Journal of Small Business Management, 58(5), pp.975-1002.
Gbadegeshin, S.A. and Heinonen, L., 2016. Application of the Lean Start-up technique in commercialisation of business ideas and innovations. International Journal of Business Management and Research, 43(1), pp.1270-1285.
Jacob, C., 2020. How Do Innovative Business Concepts Enable Investment Opportunities in the Complete Construction Value Chain? In Innovative Technologies for Market Leadership (pp. 245-264). Springer, Cham.
Obedgiu, V., 2017. Human resource management, historical perspectives, evolution and professional development. Journal of Management Development.
Rasmussen, E.S. and Tanev, S., 2016. Lean start-up: Making the start-up more successful. In Start-up creation (pp. 39-56). Woodhead Publishing.
Scott-Jackson, W. and Mayo, A., 2017. HR with purpose: future models of HR.
Teece, D.J. and Linden, G., 2017. Business models, value capture, and the digital enterprise. Journal of organization design, 6(1), pp.1-14.
Timms, P., 2017. Transformational HR: How human resources can create value and impact business strategy. Kogan Page Publishers.
Villalobos Rodriguez, G., Vargas Montero, M., Rodriguez Ramirez, J. and Araya-Castillo, L.A., 2018. Lean start-up as a strategy for the development and management of dynamic entrepreneurships. Dimensión Empresarial, 16(2), pp.193-208.
Appendix 1
Pet Home Care will concentrate on travelling professional families with dual income with busy schedules. The customers will consist of individuals that are trying to balance their career demands, their pets and their personal lives. The most important group of customers will be those that do not have time to spend with their pets and want additional assistance despite the costs.
Market Needs
The target customers will be pet owners but not restricted to just one pet in each household. They will consist of working professionals who require trusting, convenient, and reliable pet care that is available to them in order to maintain the demands of their busy schedules. There is the need to have one-stop convenience.
Market Trends
The current trend entails professionals that have families late in their life or ones that decide that they do not want children at all. In addition, pet owners are also offering their pets the same treatment as they would a child. Therefore, they do not mind investing on their pets so that they can receive proper care especially in a place that is just the same as their home surroundings.
Market Growth
For busy professionals, single pet owners and families, the Pet Home Care will provide them with peace of mind which is provided by the fact that they will not need to leave their pets alone at home. The nation has over 60 million pet owners who spend an average of 30 billion on pets.
