This latest round of government bailout of big industry reminds me how history seems to repeat itself.

Tom Paxton wrote the song, I’m Changing My Name to Chrysler in 1980, after the U.S. government bailed out auto maker Chrysler Corporation, some 18 years before it was merged with Daimler-Benz. Here’s a short excerpt from the lyrics.

I am changing my name to Chrysler
I am going down to Washington D.C. …

…If you’re a corporate titanic and your failure is gigantic
Down to congress there’s a safety net for you…

… So when they hand a million grand out
I’ll be standing with my hand out
Yes sir I’ll get mine

Click here to listen to a performace of the song by Arlo Guthrie.

Other bailouts have helped Lockheed, Penn Central Railroad, New York City, and Continental Illinois National Bank. And so it continues with the current AIG rescue and $700 billion bank bailout attempt.

After the current bailout bill failed to pass the House of Representatives, Indiana congressman Mike Pence warned that the bailout ran counter to the principles of American government, (recent history notwithstanding).

“Economic freedom means the freedom to succeed and the freedom to fail,” Pence said.

Now, that’s not news to some businesses in the United States. The potential and “freedom to fail” is a reality, a constant care for the millions of small- and medium-sized businesses that form the basis and lifeblood of our daily lives, in every town across the country.

You won’t see national rescue bills being put forward for local restaurants, muffler repair shops, shoe stores, or book shops. Nope. Sorry. We are on our own. And short of all of us changing our names to Banks and heading off to D.C. to lobby for hand-outs, our recourse is to plan for our future, including how to weather our financial storms.

And I mean serious, concerted planning, on a frequent and ongoing basis. Planning cannot be a simple once-a-year budget exercise any longer. If you haven’t looked at your business plan, your marketing plan, and your cash flow in the last month, you are way behind the curve. The economic environment is changing daily and you are out of date. By neglecting to plan you are exercising your freedom to fail.

You have the freedom to succeed! Plan on it!

Steve Lange
Senior Editor
Palo Alto Software

Tags: bailouts, business planning, economy, fail, financial collapse, freedom, succeed
Posted on October 1st, 2008 | No Comments »

One of the most overlooked, forgotten, and intentionally ignored sections in a business plan is the analysis of the competition. Don’t kid yourself. You have competition. Everyone has competition.

It might be direct competition; another business selling the same service or products. Say you sell house paint. There are probably several other paint dealers and home improvement stores in your area selling paint as well.

It might be indirect competition. Using the same example, stores which sell wallpaper, wood paneling or vinyl siding compete against you. Even the house painter/contractor may compete against you by convincing a “do-it-yourself” homeowner to pay for the job on a “time and materials” contract where the painter provides the paint, purchased from his favorite supplier.

Read more about the competiton in Tim Berry’s Hurdle: the Book on Business Planning online: What you Sell and The Business You’re In.

Here at Palo Alto Software, we have read hundreds of business plans over the years. Our Business Plan Pro business-planning software includes over 500 sample plans. Time and again we’ve read a plan where someone thinks they have a unique service or product and proclaims they have no competition. Wrong. So very wrong.

Remember, before anything else, that every potential customer you identify has the option to not spend their money at all. They can choose not to buy from you, choose not to buy from anybody. Or they can spend their money on something entirely different.

Your competition is the savings account, the electric bill, the school tuition, the 401(k), the groceries, the kids’ allowance, next year’s vacation fund, etc.

When you develop your business plan, whether it is a startup plan for the bank or your day-to-day operations roadmap, spend some time thoroughly finding and analyzing your competition. From this you can evaluate what the other businesses are doing right and what they are doing wrong in marketing themselves, how well they are generating potential leads, and then converting those leads into customers.

For a marketing perspective on competition, visit John Jantsch’s Duct Tape Marketing and do a search on competition. Here is one of the many good articles from the list; Analyzing your competition.

Steve Lange
Senior Editor
Palo Alto Software

Tags: business plan, business planning, competition, competitive analysis, competitor
Posted on September 26th, 2008 | No Comments »

Regardless of whether you are based in San Francisco, California or London, England, we all agree that recent months have been pretty unstable from an economic perspective. What should one do with all of the business uncertainty we now face? As these two articles by Alan Gleeson of Palo Alto Software Ltd, U.K. describe, it is not a time to “batten down the hatches”. Instead Alan describes a number of solutions to help you manage your business through these times of unprecedented business uncertainty.

In Planning in times of Extreme Turbulence he suggests that managers revisit their business plans, undertake some scenario planning and also that they look for new opportunities as competitors scale back!

In his article, Steps to Recession-Proof your business plan he describes how it is important to assess your own businesses vulnerabilities as well as ensuring that all aspects of your credit control system are functioning effectively.

As he concludes:

“The increased uncertainty in our environment means that planning for the future has become more difficult. However, it is how we deal with this extra risk that will determine how our businesses fare over the coming months and years.”

Tim Berry
Founder and President
Palo Alto Software

Tags: business planning, business plans, economic upheaval, recession, turbulence
Posted on September 25th, 2008 | No Comments »

Product release days are kind of like juggling a couple dozen china plates all at once. With the occasional addition of a feral cat thrown in for fun.

This will be the 6th or 7th product release I’ve been through with Palo Alto Software and each one is completely different from the last. Well, except for the juggling and ending the day with a brand new shiny product to show our customers and the rest of the world. That is always pretty much the same every time.

Leading up to every release is weeks and weeks of hard, exhausting work and one brilliant day of relief in getting a job done and done well. Followed immediately by starting all over again.

So let me pull back the curtain a bit and explain what goes through the usual release of a new or updated product at Palo Alto Software.

With a refresh of a product, as what we’ve done with Marketing Plan Pro, everything starts with a brainstorm meeting. Key members from Product Development, Customer Support and Documentation all get together and go over customer feedback, general updates, platform considerations and they decide what should be updated, and if any massive overhaul is required for the new program. Then all those “wouldn’t it be nice to have” ideas are given over to the Development team who comb through them and start coding the software. Fast forward a bit past all the hard work put into product development, quality assurance, editing and documentation, we get to a point where the rest of the company starts gearing up for the actual release date. Customer Care and Technical Support start to learn the ins and outs of the software, the new features, etc. The Web team starts mapping out what the new Web pages are going to look like. Marketing starts creating copy and figuring out just exactly how to position all the information. The PR department starts writing press releases, updating social networking profiles and starts writing blog posts like this one.

Then everyone holds their breath for that moment when the switch on the server is flipped and all the new content goes live.

It’s an exciting moment, usually met by a loud celebration quickly followed by a lot of naps.

It’s important, especially in the software world, to keep up with the movement of the industry. Computers, programs, platforms, computer language… it’s all constantly changing. Software produced a just few years ago is obsolete today. As a company we have to grow with the demand of the world and the technology, or poof! we go away.

Recently, Shuna Fish Lydon from the Eggbeater blog wrote about sustainability in the Restaurant business. She’s smart and talented, and never fails to make me see things from another viewpoint. In her article she concludes - “My industry is not sustainable. Restaurants are not sustainable. Not for the employees. Or most employers.”

We talk here a lot about planning and knowing your market. We want people to succeed at their business. We want people to grow their businesses. But there is a hard truth out there that not all businesses succeed. For whatever reason, they eventually close and something new replaces them.

It takes a lot of hard work to start a business. It takes guts to keep it going, especially in an industry you know has a very steep sustainability curve. But sometimes business isn’t about sustainability and longevity. It’s about making money, or creating a product or service that fills a [sometimes short-term] need in your community. It’s about doing your best and making it work for as long as possible. And celebrating that amazing achievement.

Having a plan and making sure you are smart with your money and marketing yourself right is going to give you a huge advantage over someone who didn’t bother with planning. It makes sense to think about what your goal is before you start the process.

Maybe, when it comes down to it, you’ll only go through one product release during the life of your business. So make the most of it.

Break a few of those china plates and make sure to watch out for the cat.

‘Chelle Parmele
Social Media Marketing Manager
Palo Alto Software

Tags: business planning, Marketing, sustainability
Posted on August 20th, 2008 | No Comments »

Good, solid, well-thought-through cash-flow planning just became all the more important. The New York Times reported in a 28 July 2008 article, Worried Banks Sharply Reduce Business Loans, how banks nationwide have clamped down on loans and lines of credit to businesses.

“Financial industry executives say tighter credit from major banks represents a swing back to a realistic assessment of risk, after years of handing out money with abandon,” says the NYT. This new aversion to lending to businesses is putting a damper on the expansion and growth of business and industry alike.

Here’s where realistic cash-flow planning proves its worth. With it, businesses can moderate their yearly goals, adjust their accounts receivable and payables, keep tighter inventory control (such as just-in-time ordering), and weather the current financial storm without having to borrow money.

With a history of well-documented planning, correct accounting, and plan vs. actual analysis, coupled with well-considered course adjustments, a business which does need to borrow can overcome the reticence of newly risk-averse banks.

Without realistic cash-flow planning, you can be a profitable, successful business and still be bankrupt.

Business Plan Pro, published by Palo Alto Software, is the tool for planning and managing your business’ cash-flow. Use it to sail the stormy waters of this tempestuous economy. And if your planning process shows you will need to borrow money, Business Plan Pro can produce the plan and report documents you need to successfully navigate the reefs and shoals of bank financing. Show them that this is a planned part of the voyage, not just a desperate cash-dash to any port in the storm.

Steve Lange
Senior Editor
Palo Alto Software

Tags: , banking, business planning, Cash Flow, financing, loans
Posted on August 19th, 2008 | No Comments »

Over the past 8.5 years that I have worked for Palo Alto Software in technical support, I have coached thousands of our customers on the importance of a business plan. Explaining how it can help create a road map for your business as well as assisting you with sustaining a positive cash flow, a basic of business planning.

Lately, I have been thinking of starting up a small home based business of my own. Something to do in my spare time for a little extra cash.  Even after eight plus years of encouraging others to start one, I didn’t even think of creating a business plan.

I was making the same mistake that a lot of the people I have talked with over the years had been making. I was trying to rush to the finished product before I had even gotten started with some of the fundamentals. Things like- what my start-up costs really were or who I was going to purchase my raw materials from to get the best price. I didn’t even have a simple mission statement (Something that defines what my company wants to do).  I was too busy worrying about things like turning my spare bedroom into a mini-warehouse and setting up my website. Things I would need to do, but not before I had a better idea if the idea was sustainable.

This isn’t really a plug for our software, Business Plan Pro (even though I will be using it), but rather a reminder.

Start by defining what your end goal is and put together a road map of how you plan to get there before you waste time and money going in endless circles.

Curt Barnes
Systems Administrator
Palo Alto Software

Tags: , business planning, getting started, startup
Posted on August 18th, 2008 | No Comments »

Every year Palo Alto Software contributes to and participates in business plan competitions. We receive business plans from several different competitions around the country and key members of our staff read the plans then meet to determine best written plan, or best executive summary, what ever it is we’re set to award for that particular event.

I’ll never forget this particular plan for a resturant that was submitted.

Business plans for resturants seem fairly easy to write, I say this because we seem to get a lot of them during college business plan competitions, but harder to implement in the real world.

The plan started out well, they had a good management team, a good location and their “secret sauce” was pretty effective I thought. But then I got to the end of the document where they finished the plan with this summarizing comment:

While we believe the restaurant is a good idea, we’ve realized through the writing of this plan that there’s no way we could make a living running this restaurant. It’s just not going to work.

Well, I guess it’s good to know before you go too far that it’s not going to work, but here’s my question. Did they give up too soon? Was it a good assessment of the feasibility of the plan and the business? Or of their passion and willingness to build the business? I guess we’ll never know.

Sometimes the difference between success and failure is all in the way you look at it.

‘Chelle Parmele
Social Media Marketing Manager
Palo Alto Software

Tags: business planning, success vs failure
Posted on July 23rd, 2008 | 3 Comments »

What a great title, right? “I hate business plans.” That’s the title from John Jantsch’s newest blog post on his Duct Tape Marketing blog.

He talks about business and marketing plans being different than the actual planning, and about Tim Berry’s new book, Plan-As-You-Go, The book on Business Planning.

He’s also running a giveaway for 10 of Tim’s books (which I think he’s already ended) where people comment and finish the phrase: “I hate business plans but I love business planning because . . .”

So make a point to check out the post and don’t forget to read the great comments!

‘Chelle Parmele
Social Media Marketing Manager
Palo Alto Software

Tags: business planning, business plans
Posted on July 15th, 2008 | No Comments »

One of the great benefits of websites such as Amazon is the ability to read other peoples impartial reviews. Faced with what seems like an every growing array of choice, for an ever growing set of problems, real user reviews can help you reduce the option set so you can buy the best solution for your particular need. However this system is not without it’s problems as Tim Berry has previously pointed out. Competitors can game certain systems (including Amazon) by posting bad reviews behind a cloak of anonymity, and customers can also use them to gain revenge if their demands are not met. Reviews undertaken by established companies tend to be much rarer and are particularly valuable to customers (and producers alike).

As a software producer we are always keen to get independent reviews. We are 100% confident that we have a fantastic product in Business Plan Pro 11.0, but it’s especially pleasing when reviews come out so positively. Business Plan Pro 11.0 has just been reviewed by Company Partners, in the U.K. and has received a ‘highly recommended’ commendation - the first one Company Partners have issued since they first started reviewing business plan products and services.

When these reviews assess competitive and substitute products also, it helps inform entrepreneurs as to which products are clear category leaders. One challenge for software publishers is that prospective buyers are faced with an array of choices and until they consume the product they cannot assess its true value. Consumers are not going to buy all of the options so have to rely on marketing, word of mouth and reviews to help them decide.

We also like reviews as any negative points can help inform new features, or design changes in future editions. Thankfully any negative points we receive regarding Business Plan Pro are usually pretty minor, after all, we are fully committed and focussed on making the business planning process as painless as possible.

The Business Plan Pro 11.o review is available here.

Alan Gleeson

Palo Alto Software

Tags: business plan, business planning, product review
Posted on July 10th, 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 »