Home Advertise Contact Blog Advertiser Login RSS
Newsletter Signup

Buy A Business Opportunity of Franchise
Home-Based Businesses
Choosing a Business Opportunity Growth and Profit Marketing and Sales
Plans and Goals Running Your Own Business Start-Up
Working From Home Entrepreneur Exchange Feature Articles
Opportunity Community Opportunity Focus In The News
Come Read Our Featured Articles About Business Opportunities, Franchising, Business Opportunity News and More
Are into healthy living? Do you have an entrepreneurial spirit? If so, you should read about this skincare, beauty and hair care product business opportunity. A company that is pioneering the...
Did you know that you can operate your own business that helps mid to large sized companies with their energy efficiency? Yes you can with this clean technology (cleantech) energy management...
Are you into healthy living? Do you have an interest in working for yourself? Well then, you should check out this nutrition and wellness product business opportunity that enables you to be a top-selling health...

Sponsors

STARSCAPES®
Imagine making up to $500 to $1,800 a day! Call or click now see how you can get your business for FREE! (602) 679-0257
Promotional Products Home Business
Run Your Own Business. Be Your Own Boss. Earn Great Profit Potential. Start At A Low Cost. Try It For Free!
I-insureme
$$$ BUILD HUGE INCOME SELLING SOMETHING EVERYONE MUST HAVE $$$ Call our 24-hour message line at 301-276-5575 now!
CTFO
TAKE A FREE POSITION NOW WITH CTFO SELLING CBD HEMP OIL! Join The Hottest Wellness Trend & Next Billion Dollar Industry.
TheIncomeTaxSchool.com
Earn up to $100 per hour, this is NOT a Franchise, No Franchise Fees or Royalties work Full or Part-time 1-800-984-1040.
NUMedia
NEW OPPORTUNITY JUST LAUNCHED! Try it before you buy it! Click To Get Your 15-Day FREE Trial! Daily payouts no waiting!
How Many Leads Does It Take To Close A Sale?
This article is now live on our blog and I know could be very insightful for many. Read On
It Takes a Hot Voicemail to Land a Warm Lead
If you're a successful entrepreneur who provides others like you the chance to follow in your footsteps... Read On
 
Resource Center > Article
Innovation Accounting: A Necessary Part of Any “Lean Startup”
1 Nov 11 Posted by: Kathleen C Lanza
in Start-Up
Share this Article:

In his recently released New York Times bestseller, “The Lean Start-up,” entrepreneur and master business start-up blogger Eric Ries lays out a host of business strategies that have caught the nationwide attention of prospective and current business owners alike.  The basic supposition of Ries’ book is that the success rate for innovative entrepreneurial endeavors can be improved by following his five Lean Start-up principles, one of which is “innovation accounting.”

According to Ries, among the most dangerous moves any business start-up can make is persevering for far too long, all in the name of that most stalwart of entrepreneurial traits―optimism.  Although there are exemplary tales of hugely successful business people who have risen above what were thought to be extremely grim odds, the tales of others in the same boat who led their companies into abject failure are far more common.

The Lean Startup

One of the reasons Ries cites for this sobering fact is that the more long-term projections of any traditional business plan, although helpful, are not realistic.  They oftentimes don’t accurately reflect or allow for the inherent turbulence that any start-up encounters, especially in its earliest days.

A start-up requires a degree of fluidity early on that is not conducive to a rigidly constructed and more standard approach, according to Ries.  This perspective is supported by his definition of a start-up’s job―“to (1) rigorously measure where it (thestartup) is right now, confronting the hard truths that assessment reveals, and then (2) devise experiments to learn how to move the real numbers closer to the ideal reflected in the business plan.”

While standard accounting policies and procedures are an integral part of any successful business, particularly larger corporations, they are not necessarily beneficial in evaluating entrepreneurial endeavors, especially early on.  That’s where Ries’ concept of innovation accounting comes in.

Many business owners deem the ongoing modification of their products and services coupled with rising numbers as a solid measure of progress, according to Ries. He says that’s just not good enough and encourages entrepreneurs to ask themselves two very important questions in this regard:  “How do we know that the changes we’ve made are related to the results we’re seeing?” and “More important, how do we know that we are drawing the right lessons from those changes?”

Innovation accounting, Ries says, allows for this more in-depth level of analysis.  It takes into account the “disruptive innovation” that is an inherent part of any start-up.  By implementing the three basic steps to innovation accounting set forth in Ries’ book, start-up entrepreneurs can prove objectively that they are growing what will become a sustainable operation.  Furthermore, they are able to turn what would once be considered faithful assumptions into a quantitative financial model, one that supports accountability even when the model changes.

According to Ries, innovation accounting works in three basic steps:

1)  It uses a minimal viable product (MVP) to establish real data on where the company stands at any
given juncture.  An MVP is the fastest way to establish a customer feedback loop with minimal output of effort, Ries
says.  Its primary goal is to test fundamental business hypotheses without having to perfect the product or service in question too prematurely.

2)  Using the MVP, start-ups, through many attempts, move from the baseline to the ideal, when the company then reaches a decision point.

3)  At this juncture, a company is either making solid progress toward the ideal enough that it makes sense to continue, or persevere.  If not, the strategy must be deemed flawed and in need of serious change―or as Ries labels it, a pivot, which starts the process all over again and in a more productive fashion than before.

If you are a home-based or other small business opportunity or franchise owner or start-up entrepreneur and want more in-depth information on innovation accounting and The Lean Start-up’s other key principles, visit http://theleanstartup.com/ today.

 

Related Blog Posts
17 Nov 17 Posted by: Margaret Mallonée
in Start-Up

If you’re a woman looking to start a business, you need to make use of all the Small Business Resources for Women.

It’s 2017, and more than two-thirds of new business owners are women....
6 Nov 17 Posted by: Margaret Mallonée
in Start-Up

It’s that time of the month again! Our November Book-of-the-Month is The E Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It by Michael E. Gerber.

As we head into the end of 2017 and transition into the holiday season, there’s no better way to kick back and...
11 Oct 17 Posted by: Margaret Mallonée
in Start-Up

To help you get inspired, we’ve collected success stories from some of the Top Mom Entrepreneurs of 2017, or mompreneurs.

There is no question that starting your own business is tough. It requires a lot of time, dedication, effort, and money. You’re putting your financial stability, job security,...
22 Sep 17 Posted by: Margaret Mallonée
in Start-Up

Young Entrepreneur's Start-Up Advice — The best advice, helpful tips, and questions for the aspiring, young business owner.

To help you decide if you're ready to start a business, we’ve compiled the best young...
18 Sep 17 Posted by: Margaret Mallonée
in Start-Up

Entrepreneur Start-Up Tips - How to Keep Your Bottom Line from Going Bust When Starting a Business

Entrepreneur Start-Up Tips - Congratulations—you’ve decided to take the plunge and make your dream a reality by
 
   
Entrepreneur's Source for Everything Business Opportunity and Franchise Related

I had the pleasure of chatting with Shawn Pigg, CEO of Hotels Etc. for BusinessOpportunity.com's Podcast series that will be released very soon on our new Digital Platform.  Here is the transcript from that call for our regular RSS feed subscribers who get all of our posts first.

If you would...
Read More


Premium Sponsor