General Business Planning

Last week saw the thrust and parry of dueling keyboards as [a mainstream media consortium] took umbrage with the blogosphere, and bloggers’ frequent quotations from the [mmc]’s posted stories. There were demands for the take-down of various blog pages, and attempts to collect fees-per-word of quotes, as well as rapier-like witty ripostes. You can read about this on the TechCrunch blog, Post 1, and and Post 2.

While this issue seems, on the surface, to be about copyright, fair use, and possibly expansion of new revenue streams, it also deals with attribution and citing of sources. This is not just for journalists. It is just as important to entrepreneurs.

When you write your business plan, especially if you are using the plan to secure funding, you must cite your sources. Your plan will have topics and statistics covering your target market, population demographics, spending habits, market trends, market growth, and the like. The banks or investors or VCs are savvy business people. They know how to double check your assumptions, and will have no qualms about calling your bluff…and quashing your funding if they don’t credit your stats.

If your business is going to provide day care services, you’d better be able to show an increase in young dual-income families in your area. Investors are unlikely to support the construction of high-end mansions in a community that has been losing all of its industry. If you forecast skyrocketing sales, you’d better be able to document how a similar product or service did the same, and why yours will follow suit, and not crash and burn in a saturated market niche.

In other words you can’t pull your projections out of your … that is, out of thin air! Do your research! Develop your forecasts using that information. Document your sources in your plan. Take a look at this blog post by Alan Gleeson, Managing Director of Palo Alto Software Ltd, in the UK. The post quotes several people, businesses and news sources, and includes links and footnotes. Your business plan should do the same, giving the proper attribution to your sources.

As a raconteur I can make it up as I go along. As a business owner you don’t have that luxury.

Steve Lange
Senior Editor
Palo Alto Software

Tags: attribution, business plan, citing sources, document forecasts, quotes, research
Posted on June 25th, 2008 | No Comments »

One of Palo Alto Software’s most popular websites is www.bplans.com website, on that free resource website you can find hundreds of articles on a wide array of business planning information from starting your business to incorporation and buying a business.

We also have a page full of extremely helpful business calculators.

One of our most popular calculators is the Cash Flow Calculator.

Many startups and small businesses fail despite being nominally profitable. When it is time to pay the bills, cash is king. This handy calculator helps you see the effect of sales, inventory, credit terms, and other variables on your company’s cash flow.

‘Chelle Parmele
Social Media Marketing Manager
Palo Alto Software

Tags: bplans.com, business tool, calculator, Cash Flow, free
Posted on June 24th, 2008 | No Comments »

While some people associate business planning narrowly with sales forecasting, or as a means to obtaining investment, it can also be used by companies to assess the impact of changes to the environmental context. This analysis of the future can help inform strategies and tactics in the present, which help to minimise the likelihood of certain outcomes, particularly negative ones happening in the future.

I spotted an advert in a recent edition of Newsweek which resonated strongly with me. The advert was placed by a company that clearly had one eye on the future, had identified a significant threat to a key supplier and had begun to put in place a number of clever activities in an attempt to protect this key supplier.

Who was the key supplier?

It is the humble honey bee, and the company in question is Haagen-Dazs.

Recognising that the ingredients it uses in its ice cream rely heavily on pollination by honey bees, Haagen-Dazs has set up a website which strives to raise awareness of the alarming decline in honey bees. The advert in Newsweek went one step further, consisting of an advert alongside a printed recyclable sheet embedded with wild flower seeds. The instructions suggested you ‘save a bee‘ by planting the page and watering it.

Not only is this a clever campaign that both engages and drives action, but also one that essentially carries no cost for the consumer. In economic terms it is a great solution to a real growing strategic problem, and also a very effective marketing ploy. For ice cream lovers the world over, it is also a very worthy cause!

Alan Gleeson
Palo Alto Software Ltd (U.K.)

Tags: business plan, business planning, ice cream, Marketing, Strategy, suppliers
Posted on June 17th, 2008 | No Comments »

I found the following story on several Internet sites.

At New York’s Kennedy airport today, an individual, later discovered to be a public school teacher, was arrested trying to board a flight while in possession of a ruler, a protractor, a set square, and a calculator.

The Attorney General and the Secretary of Homeland Security believe the man is a member of the notorious Al-Gebra movement. He is being charged with carrying weapons of math instruction.

Al-Gebra is a very fearsome cult, indeed. They desire average solutions by means and extremes, and sometimes go off on a tangent in a search of absolute value.

They consist of quite shadowy figures, with names like “x” and “y”, and, although they are frequently referred to as “unknowns”, we know they really belong to a common denominator and are part of the axis of medieval with coordinates in every country.

As the great Greek mathematician Isosceles used to say, there are 3 sides to every triangle, and if God had wanted us to have better weapons of math instruction, He would have given us more fingers and toes.

Therefore, I’m extremely grateful that our government has given us a sine that it is intent on protracting us from these math-dogs who are so willing to disintegrate us with calculus disregard.

These statistic scumbags love to inflict plane on every sphere of influence.

Under the circumferences, it’s time we differentiated their root, made our point, and drew the line. These weapons of math instruction have the potential to decimate everything in their math on a scalene never before seen unless we become exponents of a Higher Power and begin to factor-in random facts of vertex.

As our Great Leader would say, “Read my ellipse.”

Here is one principle he knows with certainty, they continue to multiply, their days are numbered and the hypotenuse will tighten around their necks.

Funny, yes? I think so.

Mark Twain said, “The difference between the right word and the almost-right word is the difference between lightning and the lightning-bug.”

The story above is also a cautionary tale about spell checker software, and the almost-right word. Everything in that story is spelled correctly, but many words are very incorrect in the context of Homeland Security. My spell checker just breezed right on by those.

If you make similar mistakes in the business plan you submit, the bank, the investors, the venture competition judges, or your MBA professors will also get a good laugh … and keep right on chuckling as they send your plan to the Out box.

Proofread your plan. Have someone who wasn’t involved in writing the plan read it over. Implement the edit suggestions you receive.

Steve Lange
Palo Alto Software

Tags: , business plan, edit, funding, investment, proof read, spell checker, spelling, venture, words
Posted on June 17th, 2008 | No Comments »

In her article “Six Steps to Starting Your Own Business“, Elizabeth Kountze says:

One of the biggest mistakes a young entrepreneur can make is simply failing to write a business plan. There is no other single process that can be more useful in beginning business problem-solving than addressing the risks and thoughtfully forecasting by writing the plan. Don’t fall into the excuse that you have the business plan in your head.

Right on!

I’ll never forget manning our Business Plan Pro booth at eBay Live! a few years ago and a gentleman walked by, took a look at our software and said in a rather scornful tone, “I don’t need that, I have my business plan on a napkin!”

Oh really?

No offense, but that’s not a business plan. That’s an idea. Can a napkin help you keep track of your cash flow? Can a napkin list out your business milestones? Will the napkin be able to grow as your business does? Perhaps he would have been better off with a paper towel.

A Business plan is so much more than just a few pieces of paper with words on it. It’s a map. It’s your sweat and hard work. All your ideas and vision for each level of your business. Don’t relegate it to the back of a napkin.

‘Chelle Parmele
Social Media Marketing Manager
Palo Alto Software

Posted on June 11th, 2008 | No Comments »

…can be so confusing.

I was bemused, once again, over the various ways we measure success in our society.

We were watching a movie, Martian Child, with John Cusack and Bobby Coleman. John’s character was trying to teach his adopted son to hit a baseball. As he explained “If you hit 3 out of 10 you’re a star. If you do just a little better, you’re a superstar!” That theme recurs in the film.

It was heartening in the film’s context. If we apply it to our daily lives, the little bit of wisdom can be freeing and encouraging. It gives us lots of room to try, to experiment, (and yes, to fail and try again), to learn, and to grow. We don’t have to be perfect the first time, every time. 3 out of 10 and you can be a star. Heady stuff.

But that idea contrasts with so much else we hear.

“Nobody wants to be a 0, but everybody wants to be a 1, and there’s so little room in between.”
– Laurie Anderson, songwriter/singer.

In school if you were to get only 3 of 10, you’d not only get an F, but never get into college. Today you need to get all those advanced placement credits to get a 5.0 on a 4.0 grading scale. (And what kind of math does that teach, eh?)

And of course, if you’re a figure skating or ice dancing Olympian, you strive to be a 10. (And who can remember that very forgettable movie by the same number?)

We spend our lives searching for and nurturing love….unless you play tennis, in which case “love” is the dreaded lowest score.

And this relates to business how? By being realistic in your measure for success. Write your business plan, set your goals, establish your timelines and milestones.

Then review how you’ve done, run a plan vs. actual analysis. And adjust your plan as necessary, making decisions using real data.

If you converted 100% of your marketing leads into sales you’d be doing fantastically well. If you set your goal and measure of success as converting 100% of your leads you’ll be both deluding yourself, and very very disappointed.

Be honest and set realistic goals for yourself. If you converted 3 out of 10 marketing leads you would be a star, and quite likely have a very successful business.

Steve Lange
Palo Alto Software

Tags: , , 10, 3 of 10, business plan, business planning, marketing leads, measure of success, sales, Success
Posted on June 2nd, 2008 | No Comments »

I’ve had the pleasure of meeting Guy Kawasaki on a couple of occasions. Not that he’d remember, but they were pretty special moments for me. He’s a fantastic speaker and, as my 4-year-old niece said to me just last weekend about a story I read to her, “he writes good.”

For those of you who don’t know, Guy is an entrepreneur, venture capitalist, blogger, author and columnist. His book, Art of the Start, is included when you purchase our Business Plan Pro software.

On Wednesday, Guy wrote an article for the Sun Microsystem’s blog about “How to Pickup a VC“, basically 10 ways NOT to start a conversation with a venture capitalist. (Don’t worry, he gives you a clue on the right way to do it.)

Many entrepreneurs ask me what is the best way to open a pitch to potential investors. I’ll answer that question at the end of this posting, but first let me tell you the ten worst opening lines that you can use:

   1.     You say: “I’m bright and ambitious.” Investor thinks: “That’s a relief because I usually invest in stupid and lazy people.”

Enjoy the article and have a great weekend!

‘Chelle Parmele
Social Media Marketing Manager
Palo Alto Software

Posted on May 30th, 2008 | No Comments »

About a year ago, Kongo Gumi, a Japanese temple building company and the world’s oldest continuously operating family business, closed it’s doors after 14 centuries of prosperity.

I’ve wanted to talk about this company ever since I read the article about it in April 2007. The company history is interesting not just because of its longevity but how the business consistently passed from generation to generation for 1,428 years.

There is a 10-foot 17th century scroll which traces the 40 generations back to the origins of the business, listing the sons, daughters and sons-in-law that worked in the family run business.

In the article, available at the businessweek.com website, the last president of Kongo Gumi, Masakazu Kongo (the 40th member of the family to lead the company) explained some of the keys to the companies success.

…the company’s flexibility in selecting leaders as a key factor in its longevity. Specifically, rather than always handing reins to the oldest son, Kongo Gumi chose the son who best exhibited the health, responsibility, and talent for the job. Furthermore, it wasn’t always a son. The 38th Kongo to lead the company was Masakazu’s grandmother.

The company, now under the managing control of the Takamatsu Corporation, continues to operate, but no longer with the guiding influence of the family who built the empire over 14 centuries.

‘Chelle Parmele
Social Media Marketing Manager
Palo Alto Software

Posted on May 30th, 2008 | No Comments »

Yesterday I attended an Advisory Committee Meeting for the local Business Development Center office (also known to many as the SBDC office), and although I have been working with them for the last 20 months, I gained a deeper appreciation and respect for what they do day in and day out.

In the last 9 months, the Lane Community College Business Development Center has helped spawn over 10 new businesses, create 218 new jobs, and retain 91 jobs in Lane County. They did all of this while juggling budget cuts and employee lay-offs in a slowing Oregon economy. I was impressed. And these numbers might be low (due to variances in reporting, varying definitions of “new business”, etc) which is even more impressive. I just wonder if those in the community truly realize what their Business Development Center (BDC) can offer them.

Clearly, with numbers like the above, many entrepreneurs take advantage of the resources the BDC provides, but just think of how many more new businesses or jobs we could have in Lane County if more people took advantage of their services and resources. I won’t do the BDC justice with listing all the resources and services they offer, but with free counseling services, workshops and training on business planning, financial plans, marketing, etc, and an abundant library of books, software and brochures, how can a local business, especially an early-stage entrepreneur or a start-up, not utilize the BDC?

I would highly recommend that any entrepreneur who is looking for advice, assistance, resources and success check out what his/her local BDC office has to offer. Take advantage of what you may not even know is right in your backyard!

Kristen Langham
Marketing Manager
Palo Alto Software, Inc.

Posted on May 9th, 2008 | No Comments »

I had a little disagreement with a palm tree in our rental car while we were on vacation in Hawaii.  First Day - what a bummer!  Then I remembered that if you rent a car with a Platinum VISA card , they have extra insurance coverage that is automatically included.  The application is conveniently online. I had to FAX in the paperwork from the rental agency and my primary insurance.  Within 2 weeks, I had a check that covered my deductible, and the “loss of use” charges from the rental company, and $100 of their admin fees.

This coverage would work for business travel, too, and every little bit helps the bottom line for any business.

Vie Radek
Controller, Palo Alto Software

Posted on May 6th, 2008 | 1 Comment »