Up and Running Blog

Business Planning

If You Don’t Like Planning Your Business …

by Tim Berry on August 31, 2011

  • Do you like planning a vacation? Do you book the flights, reserve the hotels, and look at the restaurants?Does having that plan lock you in, or cut into your flexibility?
  • Do you like planning a party? Do you plan the meals, drinks, entertainment, and who’s coming? Does having that plan lock you in, or cut into your flexibility?
  • In your business, do you plan events? Marketing? Product launches? Meetings? Does planning these things improve them? Does it improve the results?
  • Are you in business for yourself because you like what you do? Is your business supposed to make you happier? Do you like working in your business?

If you answered yes to some, most, or all of those questions, then let me ask you these two related questions:

  1. Do you think about your business a lot? Do you care about doing it better, improving it, making it better?
  2. Do you plan your business?

The disconnect here is that too many people think of “the business plan” as a daunting unpleasant task, and its results as a document. I say planning your business is something you should like to do, but it shouldn’t be as hard as the big document. It should be about strategy, milestones, activities, responsibilities, and projected sales, profits, and cash flow.  It’s not a document, it’s what’s going to happen.

If you don’t like planning your business, keep your day job.

{ 2 comments }

head-against-wall

Build a Business Not a Job.

by Susan Solovic on August 29, 2011

MYTOP is an acronym I created to describe a key strategy business strategy.  I’ll explain what it means and how it works momentarily. But first, I need to preface why the MYTOP theory is a critical element for business success and sustainability.

With unemployment rates at unprecedented levels, more and more Americans are finding the best path to a new job is creating it themselves. As a result, we’re seeing an increase in the number of self-employed individuals. Whether you label them as consultants, independent contractors, or freelancers, they are in business for themselves and by themselves.

But I ask, “Have these people really started a business?” I would argue that they have not. There is a difference between creating a job for yourself and starting a business. When you create a job for yourself, once you stop doing what you are doing, the business — or income — stops too. By contrast, when you establish a business, the company eventually becomes bigger than you alone and can survive without your daily contributions.

Now to explain the MYTOP theory. MYTOP stands for Multiply Yourself Through Other People. In order to build a sustainable business, your service or product offering needs to be easily taught to and followed by others. Otherwise, you will always be “the business.”

At this point in my life, I own and operate two companies: Susan Solovic Media and ItsYourBiz.com.  Susan Solovic Media is all about me. It’s a business I launched because I have certain business initiatives that are personal to me. While I have three part-time employees working with me in the company, it will never be a sustainable business model because without me, there is no product.

However, ItsYourBiz.com is a company I helped launch that has the operational processes in place to become a sustainable business with a clear exit strategy. My partners and I wanted to build something with value beyond the three of us. So today, ItsYourBiz.com is a strong organization supported by a team of talented individuals who know how to provide a consistently quality product to our market — without my day-to-day operational involvement.

Why is this distinction so critical? Because building a business is hard work. It’s a major commitment of your time, financial resources, and intellectual capital. If you are “the business,” when you want to retire or sell the company, it will have little if any value. Without you, there is no business.

Conversely, a business organization that’s functional without you has ongoing value. Your exit strategy may be to pass your company on to your heirs. I’m seeing many businesses continuing with second- and third-generation ownership. Another possible exit strategy is to give your employees an opportunity to buy you out. Finally, you can always sell to an unrelated third-party or competitor.

There’s no right or wrong answer to these business scenarios. Some people are happy with a consistent income stream and don’t want to grow their business beyond that point. However, it’s important to recognize the limitations of that decision early in your business development. I’ve met many dissatisfied entrepreneurs who were unable to sell their businesses or practices because they allowed themselves to become the business.

 

—–

You can pre-order Susan’s new book, It’s Your Biz, right now!

Check out her website for some fun extra’s too!

{ 6 comments }

Maria Torres, Program Manager; Celina Solis, Gigi Paquette, Nina Taylor, Greg Magie, Barbra Nelson, Silas Denny, Carolyn Elliot, Jarred Partridge, Margarita Solis, Susan Coyle, and Instructor, Polly Mertens. (not pictured Reena Plant)

An Introduction to Entrepreneurship

by Kai Davis on July 15, 2011

Designed for entrepreneurs who are either starting a new business or growing an existing one, Palo Alto Software’s Start, Run & Grow Your Business: An Introduction to Entrepreneurship course is currently being taught at colleges and universities around the country.

Maria Torres, Program Manager; Celina Solis, Gigi Paquette, Nina Taylor, Greg Magie, Barbra Nelson, Silas Denny, Carolyn Elliot, Jarred Partridge, Margarita Solis, Susan Coyle, and Instructor, Polly Mertens. (not pictured Reena Plant)

This course takes students through the process of conceiving, creating, managing, and growing their own business. The goal is to provide a solid background of important concepts for anybody starting or running a business.

Congratulations to Spring 2011 Graduates!

David Ryal recently wrote to us to tell us about the Women’s Business Center’s graduates from the program.

MCSC/WBC consultant and instructor Polly Mertens recently celebrated the conclusion of the latest Entrepreneurial Training Program offered to budding entrepreneurs and existing businesses. The Spring Class graduated from the course with a graduation ceremony held at the community room of a People’s Self Help Housing facility on South Higuera.

Eleven students (see photo) completed the class that is based on the curriculum and software program Business Plan Pro that has been developed by Small Business Guru Tim Berry of Palo Alto Software. The core curriculum has been taught at the University of Oregon.

The fourteen-week class takes the students on the trek of writing a business plan. Topics include: business basics and start-up; market analysis and strategy; developing financials; getting financed; the importance of the Web and Social Media; building a team; legal issues; tax issues; and making the pitch.

The certificate program comes with the seal from the Association of Small Business Development Centers. The corporate sponsor for the class was Citibank. The graduation ceremony was the last for Maria Torres, former Program Director of the WBC. She congratulated the students on behalf of the MCSC Board of Directors for a job well done.

Everyone at Palo Alto Software wishes the Spring 2011 Graduates an exciting and entrepreneurial future.

{ 0 comments }

Business Plan

Q&A: Can You Recommend a Business Plan Writer?

by Tim Berry on June 15, 2011

I’m amazed how often I still get emails asking me to either write a business plan or recommend a business plan writer for somebody who has a great idea and mistakenly thinks having a business plan done for them, by a supposed expert, will sell that idea to investors.

Sorry, it just isn’t so. Your business plan is the key to what you say in the pitch, and how quickly you can respond to questions. Investors want you, not an outsider, to plan your business. And that’s what they’re after — planning, which leads to management and controlling your destiny — not just a plan document.

I say “still” in my first paragraph because this should be common knowledge by now, but the myth of the “great” plan lingers on.

When you imagine a business plan document so great that some investor will read it and want to invest, you’re being wildly unclear on the concept. They don’t want the business idea by itself; they also want people who can make that idea a reality. The idea by itself isn’t enough.

Anybody who can develop a business can develop a business plan. A plan is good or not based on its content, specifics, milestones, scalability, defensibility, financial projections, and team in charge. It’s not style, writing, or formatting.

Maybe a coach can help, somebody to look over your shoulders, particularly on the financial projections. You want the math and finance to be correct. But having it your own plan, that you know backwards and forwards, and that you can change in an instant, is many times more important than any quality you’ll get by farming it out to an outsider.

{ 0 comments }

Good_plan_article

What Makes a Good Plan, Then and Now

by Tim Berry on June 8, 2011

The other day somebody tweeted my bplans.com article What Makes a Good Plan, something that comes from my book Hurdle: the Book on Business Planning, which I wrote in the late 1990s, at the height of the big Internet boom, the same one that turned into a bubble and popped in 2001.

I popped over to look at that article, and I found it’s a good reminder of what’s changed about business planning and what hasn’t. Which made me think of what will never change about business planning, and what has to change.

What hasn’t changed?

All of this:

Successful implementation starts with a good plan. There are elements that will make a plan more likely to be successfully implemented. Some of the clues to implementation include:

  1. Is the plan simple? Is it easy to understand and to act on? Does it communicate its contents easily and practically?
  2. Is the plan specific? Are its objectives concrete and measurable? Does it include specific actions and activities, each with specific dates of completion, specific persons responsible and specific budgets?
  3. Is the plan realistic? Are the sales goals, expense budgets, and milestone dates realistic? Nothing stifles implementation like unrealistic goals.

The subtitle above the illustration, hard to see in its reduced picture there, says:

Planning is a process, not just a plan

I’m glad to see that I’ve been writing that for a long time now. It’s as true as ever. And also this, about the process:

Even if it is all these things, a good plan will need someone to follow up and check on it. The plan depends on the human elements around it, particularly the process of commitment and involvement, and the tracking and follow-up that comes afterward.

What has changed?

To start with, my original has a fourth point, the bottom brick in the diagram, labeled “complete.” I’m glad, in retrospect, that I wasn’t too dogmatic with what’s complete. I wrote:

  1. Is the plan complete? Does it include all the necessary elements? Requirements of a business plan vary, depending on the context. There is no guarantee, however, that the plan will work if it doesn’t cover the main bases.

Today that’s way too static. It’s as if the plan were supposed to take roots in the ground. Real business planning these days keeps the plan — what’s going to happen — at its core, and those documents, pitches, and speeches drawn from the plan are just output. Those main bases that a plan was supposed to cover, back then, shift too quickly today.

Another thing: it’s not a hurdle. It’s a long-term process. It reminds me how much I’ve come to dislike the title of that earlier book, Hurdle. I confess: I thought of it as a hurdle to be conquered and left in the past. Do you have a plan, or not. Today I think that a good plan is never done. It’s always changing. The hurdle idea is no longer valid.

What has to change?

We’ve all got to get over the myth of the big business plan document. Business planning is desperately needed to help us steer businesses and manage change in a rapidly changing business landscape. Too many people confuse business planning with the big formal plan, and end up dismissing what’s good — business planning and planning process — while what they really mean to dismiss is the old formal plan document. Not planning.

What will never change?

Sure, if you do other things brilliantly, give great value, market beautifully, sell well, and deliver, you can prosper without business planning. But for those who want to really do their best, manage their business as well as they can, and control their own destiny, planning, and planning process, are vital.

{ 0 comments }

Now or Never

Why Passion & Creativity Are Not Enough- You Need Goals, Too

by Carol Roth on June 7, 2011

Many of us fall into business because of passion, circumstance or perhaps an exciting idea, forgetting about the end game.

However, goal setting- making tangible, definable goals- is critical to get you to where you want to go.

To illustrate this, I wanted to tell you a bit about my mother, Sheri, and her adventures in entrepreneurship.  I can only describe my mom as a cross between Martha Stewart andCher, meaning that she can create an elegant evening broach out of a brown paper grocery bag and free-hand pancakes in the shape of elephants (the Martha part) and would often do just that wearing four-inch stiletto heels and purple contact lenses (theCher part).  Being talented and creative, once upon a time, that creativity led her towards entrepreneurship.

In the early 1980s, my mom was putting together some really unique holiday gifts that looked like this:

One of our neighbors came over and asked my mom if she would make a few gift baskets for her to also give as gifts for the holidays.

My mom agreed (and as an aside, of course she didn’t charge the neighbor anything incremental to put the gifts together!).

Proof of Concept

News of the unique gift baskets my mom was making spread like wildfire throughout the neighborhood and kept my mom busy throughout the holiday season.  She enlisted a friend to help her- who thankfully informed my mom that they should charge something to make the baskets- and a “jobbie” (a hobby disguised as a business) was born.

When the orders continued after the holiday season for baby gifts, get well gifts, birthday gifts and more, it occurred to them that maybe this jobbie could be turned into a business.

The “Job Business”

While today there are hundreds of gift basket companies, nearly 30 years ago, this concept didn’t exist and my mom and her partner really were pioneers in the niche.

They started in the business in our basement, which usually looked like a tornado had hit Party City.  Inventory, cellophane, ribbons and balloons were everywhere.  The business quickly took off- they were working full time, taking orders, assembling and wrapping the gifts, packing, finding new business, purchasing inventory, invoicing, chasing down payments and creating marketing materials.

Eventually, the operation outgrew the basement and they bought a warehouse and they continued to work hard.

And by 1991, nearly a decade after they had started the business, their circumstances changed.  My mom was getting a divorce and her partner’s family was in financial trouble and so they had to look at the business and how much they were making.

They realized, for the first time, that they were making $10,000 a piece.

Working 50 hours a week and 50 weeks each year, they were pulling in a whopping …drum roll, please…$4 per hour.

This was a job, not a business, and one that wasn’t even pulling in the minimum wage.

This was not enough money to sustain either my mom or her partner when their circumstances changed.

Now or Never

Needing a Purpose

My mom went into her business because she had a creative idea.  Even though she got some proof of concept, there was no goal, no purpose and no real strategy.  She got orders, she filled orders, she had increasing interest in her product, but ultimately, she never made enough for it to be worth her time or effort- a fact ironically lost on her for a decade until her circumstances shifted.

If you are led by your creativity or passion, make sure to ask yourself what you want out of your business.  If you don’t set goals, how will you know what direction to go in?  Do you want to build something?  Do you want to help even more people?  Do you want to create jobs and growth in the economy?  Do you want recognition as a savvy businessperson? Are you looking for a hobby?  It is totally up to you and there is no right answer, but make a conscious decision.  You can’t keep score if you don’t know what game you are playing.

Why it Matters

After my mom’s circumstances changed, she had to abandon her business to support herself (as did her partner).  She swore she would revisit running a business and do it differently the next time.

However, there wasn’t time for a “next time” for her.  Just a few years after leaving the business behind, my mom was diagnosed with Leukemia.  She passed away just after her 51st birthday.  She was creative, she was bright and she had an entrepreneurial spirit, but she never had someone tell her how important having a goal was to get where she wanted to go.  She never had an opportunity to hear that message and she also never had an opportunity to be everything that she could be.

In her honor, I have vowed to help change that and I hope that her story can be an extra motivator for you to be and achieve everything that you can.

There are no right or wrong goals, only the ones that matter to you.   Set them so that you can make progress and achieve success, whatever that may mean to you.

(Image by Drew Melton)

{ 1 comment }

Stilettos and Brass Knuckles: One Woman’s View as an Entrepreneur

by Shennandoah Diaz on May 30, 2011

Stilettos and Brass Knuckles: One Woman’s View as an Entrepreneur
I’ve been called many things in my life. Most recently I have been called a “woman entrepreneur,” “mompreneur,” “social entrepreneur,” and a few other things I won’t repeat. Transitioning from freelancer to entrepreneur (not businesswoman—a distinction I will explain shortly) was an exhilarating, frightening, and freeing experience. Through that transition I became a master of my destiny, a creator of possibility in a world wrought with excess and destruction, and forever an advocate for a new way of life–a way to personal and ideological freedom.

You see, entrepreneurs are a special breed. We look at the unknown and say, “I can make something out of that.” We don’t run haphazardly toward the dark abyss of uncertainty as many assume. We see possibility. We calculate the risk, develop a strategy, and attack uncertainty with unrelenting stubbornness. Enticed by the reward only creation can bring, we mold new technologies, challenge paradigms, and build cultures of thought and living that startle the dreary corporate mentality.
Continue Reading »

{ 1 comment }

Video: Why is a business plan important?

by Tim Berry on April 1, 2011

I’ve been working with the team at Palo Alto Software on a series of videos to help you with business planning. This video answers the question “Why is a business plan important?”

Transcript

So let me take a minute and talk to you about why I want you to do business planning. Because you’re going to use it to run your business better.

So I’m saying that the business plan you need is not necessarily the full, complete formal document that you probably fear and loathe; it sounds hard to do, but for the vast majority of us what you can really use (now note I say use, not need) is a plan that sets forth your strategy in a simple, bullet point–what are we doing, what are we not doing–as a reminder when you get back into the routine and the fires need to be put out, or the daily taking your phone calls and returning calls and whatever. A reminder of strategy, priorities, what are we trying to do here?

You can’t please everybody, so you focus. That’s one element that will give you benefit from your business plan. Another element then is to set your objectives. What’s success for you? And put them into steps and then set through on those steps, how do I accomplish what I want to accomplish? And you lay it out so you have ways to measure progress and track towards key goals, whether it’s dollars of sales or dollars or costs or expenses, or it’s calls or trips or hours or engagements or page views or conversions, you want to set forth for yourself your measurements, and then assign tasks to people, and set it up so that you can communicate what’s supposed to happen, and then as time goes on every month you look at, okay, here’s our numbers that we were expecting to meet, here’s our actual numbers, why is that different? And it will always be different. Nobody’s ever written a business plan that accurately predicted the future.

But what you get is the process then of management and steering your company. And what you get then is a monthly review so that your plan is being revised, stays alive, stays flexible, that old thing that’s in a drawer, static, that wasn’t able to change, forget that. You’re changing it and managing, and it gives you management. That’s why you’re planning.

‘Cause you can manage. It’s never about, oh, I need to do this because we have to stick to the plan, no, it’s about, as you change things, because you have a plan, it’s easier to see quickly when one thing is different from plan, what other things have to change because you have those relationships.That’s why you’re doing business planning. And notice, it’s probably on your computer and you’re going to use it to manage yourself and if there are others involved. And if you need to show a document to somebody, well then you’ll spin out the document. That’s output.

Your plan is what’s going to happen, and why.

What did you think about this video? Leave a comment below and let me know if there’s a question you’d like me to answer next.

{ 5 comments }

6 Secrets to Creating an Amazing Small Business Website

by Carolyn Higgins on March 17, 2011

Finally, small business owners everywhere realize they need an online presence if they are going to compete in today’s world. Small business owners who just a year ago adamantly argued that their customers aren’t using the web are now jumping on board and admitting – yes, indeed they are.

But slapping up a website just for the sake of having a website can defeat the purpose – and can even harm your image if it isn’t done right.

If you’re thinking about creating a website – or even if you already have one – follow these 6 rules to make it the effective and powerful marketing tool it should be: 6 secrets to a great website for small businesses

  1. The website is not about you. A prospect is not looking for information about you; they are searching for a solution to their unique problem or need. THAT should be the focus of your home page. Use words and phrases they would use to describe their pain and then outline the solution you have to solve it.
  2. Have an offer. Get the most out of your website by using it as a lead generation tool. If someone spends time on your site, don’t just let them click away without engaging them further. Offer a newsletter, a free report, or even a free consultation. Do something to get them to act so you can find out who they are and market to them further.
  3. Be Unique. Beware of canned website services; you know – the ones that offer websites for CPAs or Chiropractors or Attorneys. They all the look the same, they all have the same content, and they make it really hard to differentiate you from your competition. Invest a little bit more in a site that allows you to stand apart from the crowd.
  4. Your website is your online storefront. Your website is very often going to be the first impression people get of your small business. Make it visually appealing. Make it interesting, informative and engaging. Make it different – add some fun elements, or news stories or free tips that your target market would be interested in. Make sure it’s professional- and PLEASE check your grammar and spelling!
  5. Use testimonials and case studies. Yes, your home page should be about the prospect and their problem – but once you’ve engaged them and gotten their attention, they will want proof that you can deliver as promised. Having a page of testimonials and case studies is a great way to demonstrate that you can deliver as promised.
  6. Make it easy for a prospect to contact you. Have a contact page that is easy to find, with your email address, and/or phone number. Put your phone number on the home page (some experts recommend having it on every page of your website). Finding a way to contact you should not be a game of “Where’s Elmo?” If it takes more than a second or two – you risk losing them – and they could mean a lost sale.

{ 0 comments }

Common Business Plan Mistakes You Need To Avoid

by Tim Berry on February 4, 2011

In the more than 30 years I’ve been involved with business planning, I’ve seen styles and fashion of plans change a lot, but the fundamentals remain fairly constant. To help you craft a plan that hits all the right notes, here’s a list of some of the more common business planning mistakes you should avoid:

1. Don’t put off writing a plan. Don’t wait until you have enough time, don’t wait until you have the right people, and definitely don’t wait until there’s an urgent reason you suddenly need a plan. Instead, just do it now. Recognize that you need a business plan and that your first step is to prepare your first plan. Get a draft up and running and then continue updating it to keep it current with your business. Of course, you’ll soon realize that your plan may never be done, but the important thing is, you’re planning.

You should always be planning your business.

2. Don’t confuse cash with profits. There’s a huge difference between the two. Waiting for customers to pay can cripple your financial situation without affecting your profits. Loading your inventory absorbs money without changing profits. Spending most of your money buying inventory doesn’t affect profits, but cash flow is much more important than profits because profits are an accounting concept and cash is money in the bank–you don’t pay your bills with profits.

3. Don’t dilute your priorities. A plan that stresses three or four main priorities is a plan with focus and power. People can understand three or four main points. A plan that lists 20 priorities doesn’t really have any.

4. Don’t overvalue the business idea. What gives an idea business value is not the idea itself but a business that’s already built on top of it. It takes employees having shown up every morning, phone calls being answered, products being built, ordered and shipped, services being rendered, and customers paying their bills to make an idea a business. Either write a business plan that shows you building a business around that great idea, or forget it. An idea alone does not a great business make.

5. Don’t confuse a plan with the act of planning. You need both to succeed. And your planning process doesn’t end when your plan is done. The value of a plan is in the implementation it causes, and implementation starts the day you settle on the main points of your plan. Understand that your business plan is never really done-you’re always revising it, or should be, because reality is always pressing forward. Without a plan setting markers, you’ll never know the difference between plan and reality.

Work your plan; don’t just write it.

6. Don’t fudge the details in the first 12 months. By details, I mean your financials, milestones, dates, responsibilities and deadlines. Cash flow is the most important, but you also need lots of details when it comes to assigning tasks to people, setting activity dates and specifying what’s supposed to happen and who’s supposed to make it happen. These details really matter. A business plan is wasted without it.

7. Don’t sweat the details for the later years. This is about planning, not accounting, and you’re only guessing the future in a system full of uncertainties. As important as monthly details are in the beginning, they become a waste of time later on. How can you project monthly cash for three years from now, when your sales forecast is so uncertain? Sure, you can plan in five, 10 or even 20-year horizons in the major conceptual text, but you can’t plan in monthly detail past the first year. Nobody expects it, and nobody believes it.

8. Don’t create absurdly optimistic “hockey stick projections” of sales taking off in the near future. Yes, it happens about once a generation, but nobody believes it in a business plan because they all say that. No investor is going to tell you they believe that even though your sales have been flat up to this point, once you have their money, your sales are going to go through the roof. If you’ve really created that once-in-a-generation business whose sales will take off, then you’d better build so much bottom-up detail into that forecast that even the most jaded investor will believe it.

9. Don’t write too much. Keep your business plan short and focused on your main priorities. It’s a business plan, not a doctoral thesis. Stick to the main points, and use bullet points to keep the main points highlighted and simple.

10. Don’t sweat the formatting details. No business plan has ever failed because the page headers weren’t color-coded. Don’t dress up your plan with multiple fonts, too many colors or complex page layouts. Don’t hide the important information.

Keep it simple, and don’t sweat the small stuff.

Tim Berry is the president of Palo Alto Software Inc., based in Palo Alto, Calif, which produces the industry’s leading business planning software, Business Plan Pro, as well as other popular planning applications for businesses. He is also the author of The Plan-As-You-Go Business Plan, published by Entrepreneur Press.

This article first appeared on Entrepreneur.com, March 1st, 2005. ©Entrepreneur Media, Inc. All rights reserved

{ 1 comment }

Newer Posts » « Older Posts