Having recently stumbled upon a blog post by Dave Moskovitz on a great board meeting template we disappeared down the Lean Canvas rabbit hole, including watching and rewatching this helpful Youtube video from Lean Canvas founder Ash Mayura:
What is a Lean Canvas?
Lean Canvas promises an actionable and entrepreneur-focused business plan. It focuses on problems, solutions, key metrics and competitive advantages
Startups will typically put together a Lean Canvas to document their business model, and regularly test and review their assumptions on an ongoing basis.
How Lean Canvas Helps Accounting
So how does an exciting tool like Lean Canvas help your boring old accounts and tax return? While most accounting is about prepare historical accounts of the business, it's also a critical function to prepare a future look at where the business is going. It's in this forecasting and budgeting role that a Lean Canvas becomes really valuable:
1. Start forecasting with founders thoughts in mind
It's easy to prepare something based off what the business has done in the past, only to find that the forecast bears no resemblance to where the founders are thinking of going. Having a Lean Canvas in place helps to get away from the "what we did last year, +10%" thinking and starts the forecasting process off on the right foot.
2. Deals specifically with Cost and Revenue
Lean Canvas has two boxes devoted to Revenue and Costs, and can give valuable advice on where the founders expect money to be coming from and going to.
3. Documents assumptions
Lean Canvas gives a good idea of cost and growth assumptions which can help drive your forecast model.
4. Helps startups with no history to build forward
Going through a Lean Canvas exercise with founders prior to forming a financial forecast means the future can be predicted without necessarily having past figures to rely on.
We recommend startups try out the Lean Canvas model in order to document their assumptions and build their business model. The information generated is highly valuable when it comes to prepare a financial model to include in your business plan.
Need help going through the Lean Canvas or Financial Forecasting process? Please get in touch