Category Archives: Planning Process

I’m Loving the New Version of Business Plan Pro

If you’re a regular reader you know I don’t normally do sales pitches here on this blog, but this is special. Last week Palo Alto Software introduced a brand new version of Business Plan Pro incorporating (finally) my Plan-as-You-Go Business Planning ideas into the mainstream of the software.

With this new version, when you start a new plan, Plan as You Go is the first choice for setting up a simple, practical, management-oriented business plan. Not the whole big formal document plan, but just what you need to run a business with. That’s the key screen above (with my annotations in red):

Now the new built-in option is exactly what I suggested in the book: a streamlined, practical outline, shown here on the right. Of course you can add more later and eventually make a larger business plan, but you do that as the business plan events happen, not before. So you add the embellishment, like description of management team, or exit strategy, only when you need it. Which is great, because a lot of people really don’t need it.

I wrote the book in 2008, but because we’ve been busy with liveplan, the new online web business planning, our mainstream software had to wait. So now I’m celebrating that it’s finally here.

We’ve also added a lot of video at many different points, so that – if you’re online – you get me talking about what you’re looking at, in very short snippets. That’s hard for me to watch, frankly, because I’m as self-conscious as anybody else … but as an author, I love the opportunity to talk to you while you’re working with what I wrote.

This is the 12th version of Business Plan Pro since the first one was published late in 1994, and actually hit the shelves in 1995. We’ve come a long way since the first one – it’s still my business planning advice, but I wrote a third of the code in the original, and now there’s a team of a dozen programmers – which makes it way better.

And, by the way, if you prefer an online version, or you’re a Mac user, there’s also a lot of my methodology and my instructions in the new online planning web app at

For more information click here for the website or call them toll-free at 1 (800) 229-7526.

10 Lies About Business Planning (Video)

Business plans are a waste of time? That’s a dangerous lie. Don’t bother, because nobody’s going to read it anyhow? That’s another lie, because it’s about running your company, not whether somebody else reads your document. The lies matter because they interfere with business planning, which ought to be part of your management. Planning is supposed to be a tool to help you control your own destiny. Instead, many of us don’t plan right because we let some of these lies get in the way.

The list of 10 is included in the video here, a recording of the webinar I gave as part of Global Entrepreneurship Week, earlier this week. And what’s more important is that I talk about what you should do, instead of believing the lies, to make business planning part of your business management. The goal isn’t just listing lies: it’s steering your company, managing better, and having a better business. Control your destiny.

Would you take a trip without planning it? Would the plan be a big honking document? Would it matter to you whether anybody else read it? Would having a plan mean you couldn’t change it when a flight got cancelled?

This webinar was sponsored by (an entirely free site, which you are on as you read this) and Palo Alto Software, publisher of Business Plan Pro.

(If you don’t see the video, you can click here for the original on YouTube)

Business Plan, Marketing Plan, or Both?

“if I have a marketing plan, do I need (or want) a business plan too?” Good question. And so is its opposite question too, “if I have a business plan, do I also need (or want) a marketing plan?”

As for a lot of these planning questions, you’re going to get different answers from different people. There’s no consensus on this.  But here’s my answer:

  1. Marketing is critical to business, and every business plan has a lot of marketing plan in it. There’s no need to keep the marketing separate from the rest of the planning. The marketing plan is an extremely important part of the business plan. No need to do it separately.
  2. That is, however, unless you are one of those people who are responsible for marketing, but not for the whole company. You don’t manage cash or financial strategy or ownership of the business. Then your job is marketing and related functions like sales and customer service and branding and social media and SEO, and so forth. You ask for the resource, and somebody else reviews, prioritizes, and gives you that resource or a reason why not. You probably have to manage expenses and show how they relate to sales and the health of the company. You probably have to show how those expenses make good business sense. You should probably be doing marketing planning, not the whole business planning; just your subset.

So to me, at least, the marketing planning is different from the business planning because it’s a subset. It doesn’t deal with financial health or financial strategy. It should have projections for sales, cost of sales, and sales and marketing expenses. It doesn’t project overall cash flow or the projected balance sheet. It probably deals with personnel, but just the related personnel, not the whole company personnel or larger personnel strategies.

Somebody just asked me that in email.

When Brainstorms Fizzle

I just read Is Brainstorming a Waste of Time? on Lateral Action. Consider this quote:

I’ve heard similar complaints from quite a few creative directors and professional creatives – instead of seeing brainstorming as essential to the company’s creative process, they see it as a chore, something to get out of the way as quickly as possible so that they can get on with the real business of creativity. Particularly in companies where everyone is expected to contribute to the brainstorm – not just the 'creative team' – some creative directors have said they see it as a matter of political expediency rather than a source of inspiration: by involving other departments, everyone gets to 'have their say', but the really valuable ideas don’t emerge until afterwards, when the creatives start work in earnest.

I don't know who first said that whenever a committee chooses a color, it's beige. I do know that strategy is often annoyingly obvious. The simplest output of a SWOT analysis (strengths, weaknesses, opportunities, and threats) is often the best.

Still, strategy isn't done best by committee, consensus, or vote.

There's a reason some people end up in marketing, others in sales, finance, or operations. One would hope, somehow, that the finance people do the finance, and the marketing people the marketing.

Zen Habits to Autopilot to Business Planning

Dieting. Regular exercise. Investing. Planning.  All of them so much easier said than done. Easy to know what to do, but hard to do it, because you have to actually do it, repeatedly, not just know what to do. Emphasize, for me please, planning.

What do these things have in common? You guessed it. We know what we should do, but it takes patience, habits, discipline, routines. So we just don’t do it.

While driving over the weekend I heard the podcast of Terry Gross of NPR interviewing Joe Nocera of The New York Times about investment. He said that same thing (I’m paraphrasing):

Good investing takes patience, and waiting, and sticking to things. It’s a lot like dieting. We all know what we’re supposed to do, but we just can’t sustain it over the long term.

And related to this, I just picked up Autopilot Achievement: How to Turn Your Goals Into Habits on Zen Habits. Dealing, essentially, with the same underlying problem. In short:

It’s such a simple concept, yet it’s something we don’t always do. It’s not exceedingly difficult to do, and yet I think it’s something that would make a world of difference in anyone’s life.

Break your goals into habits, and focus on putting those habits into autopilot.

I immediately recognized the problem of planning, which is intended to be a matter of routinely reviewing and managing plans and comparing the plan to actual reality, and course corrections; but too often it just isn’t. If we manage to plan, we forget to work the plan, revise it, review it, keep assumptions where we can see them, and of course change the plan as reality reveals itself.

As I read on, I saw a recipe for working goals into habits that sounds astoundingly close to what I’ve been saying about business planning (that’s planning, of course, not just plan). Here are the details (as direct quote):

It’s a pretty simple process, but let’s go over it step-by-step:

  1. You goal should be written out very clearly. The better you can visualize your goal, the easier this will be.
  2. Think about the steps needed to get to your goal. There may be many.
  3. Can the goal be accomplished with a series (2-4) of daily or weekly actions? For example, to save money, you will need to make a savings deposit every payday, before you pay your bills. Through that regular action, the goal will eventually be accomplished. Figure this out, and that’s your habit or series of habits.
  4. Figure out the amount of the habit will need to be done to get you to your goal by your timeline. By ‘amount’, I mean that you have to figure out quantity times frequency to get your desired result. For example, I can run every single day but not be prepared to run a marathon if I don’t do enough miles or long runs. So if I’m going to run every day, I have to also know how far (and any other things such as different workouts on different days). If I’m going to have a savings deposit every week, I need to know how much is necessary for each deposit in order to reach my goal. Figure out this ‘amount’ for your habit and make a schedule.
  5. Focus on the first habit for at least one month, to the exclusion of all else. Don’t worry about the other two habits (for example) while you’re trying to form the first habit. For more on forming habits, this article is good place to start.
  6. If more than one habit is necessary, start on the second habit after a month or so, then on the third, and so on, focusing on one habit at a time until each is firmly ingrained.
  7. After all the necessary habits are ingrained, your goal is on autopilot. You will still need to focus on them somewhat, but to a lesser extent. If any of the habits gets derailed, you’ll have to focus on that habit again for one month.
  8. After you’re on autopilot, you can focus on a new goal and set of habits.

Does this remind you of good business planning process? I hope so.

The Planning Process 10%

Picture yourself in front of a group of 20-30 business owners. They are computer or software resellers, dealers of Progress Software, Autodesk, SolidWorks, or a personal computer manufacturer. They are mostly men in their 40s and 50s. Most of them have been in business for themselves for 10-20 years. Most of them have three or more employees, a few have 25, 50, and one or two 100.

If you ask this group how many of them regularly review their business plans and revise them as needed, roughly 10% of them will raise their hands.

You can explore the details in front of the group. The ones who regularly review their business plans will be the stronger and healthier businesses in the group. If they’ve been around for a while, they’ll be the ones with more employees and more market share. If they’re younger and newer companies, they’ll be the ones with more growth.

You want actual data, numbers, and better yet, names? Yeah, me too. I wish I’d done that but it was enough to run full-day planning seminars, each one took a lot of energy, and there just wasn’t enough bandwidth for me to be managing the seminars and populating a database at the same time.

What I will give you, though, is accumulated experience. When I run one of these seminars I can count on my 10% number enough to take the risk of setting myself up in front of the group, at the beginning of the day, with those people as leaders. Throughout the day I can call on them confidently for comments and details and anecdotes, and they’ll have the right kind of useful responses.

These people are my stars. They don’t all plan the same way, they don’t all have the same process, but they do have process. I can count on them. They get it. Timseminarsmalldropshadow

Here’s a concrete example: during part of the seminar I want to illustrate the paradoxes of planning, say "business plans are always wrong." I have my two or three stars in the room and I can be sure of getting a useful response from one of them when I deal with this issue for the group. I’ll ask, "Ralph, Mabel, Mary … what do you say? Why do I say that?" And I’ll get back a response about how they’re wrong because assumptions change, which is why plans need to be kept alive and managed. Or they’ll say something like that.

I don’t like to blithely take risks when I’m in front of a group. This 10% rule, however, has worked consistently for me for years. Now, I realize having a set of numbers to display would be stronger than my anecdotal evidence, but then, so many sets of numbers are flawed anyhow, and give the wrong impression. My people in the seminar aren’t a random sample by any means, so the numbers wouldn’t be statistically valid anyhow.

So who are these people? Starting in the 1980s I did some seminars for Apple Computer dealers in Latin America, and then in the 90s in Japan and Singapore, then HP dealers in different places, then Data General, UNISYS, and more recently for dealers of Autodesk, SolidWorks, and Progress Software.

Does this same 10% apply for other industries? I can’t be sure that my anecdotal data applies; but I’ll bet it does.

— Tim

The Blog Business Plan

Professional investor Bijan Sabet received a blog as a business presentation. He suggests it makes sense. "It’s a first for me," he adds. "I actually liked it."

You can read more of the post for a quick view of the navigation involved, and some interesting comments as well.

What I really like about this is it is a concrete example of what I’ve been saying about planning and plans. Form follows function. Business planning is about running a business better and a business plan is not the set-in-stone standard format coil bound quasi-PhD treatise. It doesn’t have a standard outline and a defined format. It better have good market analysis, good focus, good cash flow, and it better have concrete dates, deadlines, budgets, and assigned responsibilities.

I think it will help people get out of the rut,  meaning all these stupid "don’t do a business plan" comments from people who really mean don’t get lost in the document, don’t obsess, don’t do a business plan covering more than you need, and do a business plan as a tool for business management, a plan you’ll track and follow up.

Schedule Regular Reviews

Each year, as you get ready to publish the next year’s plan, schedule the plan review meetings. Use some regular meeting schedule such as the third or fourth Thursday of every month.  All the managers committed to the plan will know way ahead of time so there are few reasons to miss a meeting.

day planner

Some excuses will come up. There will be events like trade shows or client events that some managers have to attend. However, with a preplanned schedule for review meetings, these problems won’t happen that often.

If your planning process includes a good plan — with specific responsibilities assigned, managers committed, budgets, dates, and measurability — then the review meetings become easier to manage and easier to attend.  The agenda of each meeting should be predetermined by the milestones coming due soon, and milestones recently due.  Managers review and discuss plan vs. actual results, explain and analyze the differences.

At Palo Alto Software, we review coordinated milestones once a week, Tuesday mornings, in about 20 minutes.  The monthly plan vs. actual review includes financial results and other measurables — product milestones, support calls, sales events, etc. — and takes just two hours a month.

It doesn’t take that much time, but there is very little in management more valuable.  It makes your plan a planning process.

— Tim —

Involvement vs. Commitment

In breakfast, the chicken is involved, the pig is committed. Baconandeggsistock_000001083916smal

In the business planning process, commitment is essential. Chickenistock_000000427700smallPlans need to be implemented, and implementation means commitment.  There has to be accountability, and peer pressure.  You have to follow up on what was planned to make sure that it was actually carried out. Here are some ways to develop commitment within your team:

  • Use the SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats) to start discussion. SWOT brings team members into the  strategic discussion. It makes strategy understandable. Your managers have to be part of the team that discusses strategy.
  • Make the budgeting elements of the planning process visible. Managers should see what their peers are spending and should hear why. One of the best things I ever watched, as a consultant, was a management group that argued over the activity budgets during the planning process. Each manager had to defend his or her budget, showing what sales and marketing budgets would come out of it. There was a lot of peer pressure.
  • Make sure people know that actual results will be compared to plan.  With time, in a company that uses the planning process, this becomes second nature.  In the beginning, however, it is extremely important that the main company owners and operators set the standards by scheduling plan review meetings each month and attending them. This has to be important.

Pigistock_000000873019smallThe bottom line here is that planning process, for a growing company, is about the people more than the plan. Not only does everything have to be measurable, but it also has to be measured, after the fact, and tracked, and managed. Your people must be committed to your plan.

— Tim