Wednesday, August 01, 2007
Business plans and so much more
I'll start by saying I just can't keep up with Guy Kawasaki's blog. It is jammed with valuable entrepreneurial storytelling, guidance and fun every time I open it. I've posted references to his blog, and link there permanently from this site.
Guy just did an on line interview with Tim Berry, the founder of Palo Alto Software that sells a software program called Business Plan Pro. This is probably the most widely used software program out there for writing business plans.
They discuss in good detail the merits and challenges of writing business plans. I recommend it.
Here is one question and answer I think has special resonance for small, self-funded or micro-funded start ups...
Question 6: What are some of the common mistakes (in writing a business plan)?
Answer: The worst by far is focusing on the plan instead of planning. This generates the idea that you create a plan as a document, and the related misunderstanding that the plan is for somebody else. You don’t postpone life while you’re developing a plan; you’re always developing the plan. In the meantime, “Get going.” Here are some other common mistakes:
• Blue-sky blurry: lots of strategic thinking without any hard facts. Planning requires specifics: dates, deadlines, responsibility assignments.
• Trying to do everything. I use the rule of displacement: everything you do rules out something else.
• Thinking that being the lowest price option is important. It isn’t. The price and volume thing they talk about in economics classes is for 200-year-old lumps of coal, not your business. Use price as a statement of quality. Leave the low-price strategies for Walmart and Costco.
• Mistaking profits for cash. Profitable companies go broke all the time. You don’t spend profits. Plan your working capital well.
Mistaking the plan for the planning. Amen. This is the easiest mistake for new entrepreneurs to make. It's not the document. It's doing the document.
Incidentally, Business Plan Pro is what my new teaching venue, Waukesha County Technical College (WCTC) uses in their business courses. WCTC is making this software available at a really good discount to any class members of my new courses.
Now as Mr, Berry so aptly says about start ups, "Get going!"
Guy Kawasaki's interview with Tim Berry of Palo Alto Software's Business Plan Pro.
Tim Berry's blog. Excellent writing about business plans and planning, as well as a perspective from deep in the trenches.
Business Plan Pro software.
My training courses for new start ups at WCTC