There are hundreds of variables that can make a startup successful; ask a hundred entrepreneurs what they think the most important factor for success is, and they’ll
Why “Lean” Is Good
These are some of the most important advantages of lean operations in a startup:
First and foremost, lean startups have lower expenses. When you’re dealing with limited revenue and a finite pool of funding, controlling your expenses is one of your highest priorities. Reducing those expenses to only what’s necessary will help you maintain your financial health for longer. Plus, you’ll be able to earn a higher profit once you start collecting more revenue.
Everything from data to engineering can be complicated in a startup. Keeping things lean reduces that complexity, and enables you to do more with your time. It also prevents hiccups and misinterpretations that can rise with that complexity—especially when it comes to training new people or explaining things to new customers.
Focusing on what’s most important
Eliminating things that aren’t important means you’ll spend more time doing things that are important; this is a simple concept that often gets overlooked, but it means you’ll spend more time on your highest priorities, and that’s always a good thing.
Startups rarely end up with the same vision they started with, and that change is good. You need to be able to make fast decisions, accommodate new variables, and turn on a dime if you want to succeed in a competitive market. Staying lean allows you to make faster, more abrupt decisions without issue.
Allowing room for growth
Being less occupied and less burdened with unnecessary items means you’ll have more flexibility when it comes to growth—and as a startup with high potential, that’s crucial for long-term planning.
How to Be Leaner
If you’re looking for ways to make your own startup leaner, try these seven important strategies:
#1. Prioritize your minimum viable product
Your minimum viable product is the simplest version of your product or service you can go to market with. It’s a popular concept that helps your business become profitable as quickly as possible, while preventing you from going down rabbit holes of endless improvement and tinkering. Minimum viable products have a ton of advantages over their more complex counterparts—they get to market faster (which means they earn you revenue faster), they force you to focus on the most important elements of your product, and they give you lots of flexibility for future growth.
#2. Restrict hiring until necessary
How many people does your startup really need? Chances are, it’s only a handful. You’ll be tempted to hire more staff so you can get more done, or to be prepared for your impending growth, but it’s better to wait and hire until absolutely necessary. It will save you money and training costs, and will give you a better idea of what you actually need when the time comes.
#3. Consolidate your software
Your choice in software can make or break your team’s ability to operate, whether it’s project management or data analysis software. Think carefully about your decisions here, don’t overspend, and try to get everything you need into as few platforms as possible. That way, you’ll save money and keep your staff organized and stress-free at the same time.
#4. Avoid overhead
Overhead is a killer when it comes to expenses, so try to reduce it wherever you can. Don’t buy when you can rent or lease. Don’t purchase things just for the sake of purchasing them. Instead, focus only on what you truly need; some startups are even building businesses without a physical office.
#5. Set better priorities
Work with your team to set better priorities for yourselves. Working leaner means reducing the scope of your vision to only the top few most important items; learning how to decide which items are more important is a vital skill to have if you want to do this effectively. To start, try splitting things into three main categories: urgent, important, and unimportant.
#6. Practice lean data management
You’ll also need to practice lean data management. For a startup especially, gathering and managing thousands of data points can become overwhelming, especially when you only need a handful of insights to keep your business moving in the right direction. Collect only what you need, and keep your analysis tight. Choosing an appropriate software platform here can go a long way.
#7. Don’t plan too far ahead
It’s good to have long-term goals, but don’t plan your future so extensively that it limits what you’re able to do in the present. Instead, focus on your short-term goals, and allow yourself to flexibly accommodate whatever might come down the road. It’s an important concept if you want to respond effectively to surprises like new competitors, shifting trends, or other disruptive developments.
There’s no single metric for leanness, but the leaner you are in multiple areas, the more efficiently and more focused your startup will operate. You’ll notice you and your staff have less stress, more focus, and more productivity, and you’ll be able to reach your long-term goals faster.
Don’t waste time on things that aren’t important; instead, trim the fat and keep things tight. In the end, your business operations will be more efficient.