Have you seen Tim Berry's surprising new book The Plan-As-You-Go Business Plan? It's available for free right now online at: http://planasyougo.com/outline/
I say it's surprising because it is in part an apology for much of the work he's done over the last decade or so in being part of the "you must write a business plan" choir. Tim is the founder and president of Palo Alto Software, the manufacturer of Business Plan Pro, the best selling business planning software, and he has published books and written many magazine articles on planning.
I've gotten to know Tim over the last couple of years through an exchange of emails and a couple of telephone conversations.
On my first phone call to Tim, I said that it seemed to me that much of what the Small Business Administration and others have to say about planning is just plain wrong.
I asked him if he had done formal market research and if he created a written business plan before he'd started his business. "No" he said, and I like to think that is part of what got him thinking about what has resulted in this new book.
There is no mention of me in the book, and that's OK. But it's hard to understand how he could fail to cite the important work of Dr. Amar Bhide www.bhide.net who I have repeatedly drawn to his attention. Dr. Bhide has written what the publisher of Inc. Magazine has called the most important book every on the topic of business startup, The Origin and Evolution of New Businesses.
In it, Dr. Bhide makes the case that successful businesses don't start the way that the Small Business Administration and most academic programs say they should start, with formal market research and formal strategic planning. If planning worked that well we'd have a planned economy and not a market economy.
I'll be digesting Berry's new book, and also the manuscript of Dr. Bhide's new book which he recently sent me, The Venturesome Economy this week and be talking about them, along with my own advetures in startup, at the IDEA Cafe this week. More info about the free meeting and RSVP at http://ideacafe.meetup.com/1
Ouch!
ReplyDeleteIn fact, as I developed Palo Alto Software beginning in the late 1980s I worked a business plan for years, revised it every month, and even created the full formal business plan several times along the way. The first time was when I needed to get a merchant account with the credit card company, so I could take credit card sales from customers, which would have been in 1987. Then again in 1993 when I moved the company from Palo Alto to Eugene and needed new banking relationships, and once again in 1999 when we took in venture capital partners.
I think what may have confused the issue was that I didn't always do formal market research every time I revised my plan. Often I dealt from the strength of talking to my customers every day. The formal research would come once every year or so, and then became regular as the company grew, when we started formally managing the information our registered customers would share with us.
And my new book is in no way an apology for past work; quite the contrary. In it I'm pointing out that all businesses can benefit from business planning, whether or not they need the full formal business plan and formal market research. That's right in line with Business Plan Pro, so much so that if you go to the Plan As You Go website you'll find a free downloadable add-on to integrate this approach with the software.
I think the real core confusion here is that you have to make the distinction between planning, which every business can use, and should have; and the full formal business plan, which comes up when businesses have what I call business plan events. Everybody needs, wants, and deserves planning; only a subset needs to produce the formal document.
Furthermore, it's time to separate the document from the plan itself. The document is just output. It could as well be a presentation or an elevator speech. The plan is the combination of strategy and specifics, what's going to happen, that you use to run the business.
If you'll allow an analogy, it's as if I'm advocating good diet and exercise, but not necessarily running a marathon; and you're quoting me as saying I don't advocate running because I don't say everybody needs to run a marathon.
Still, thanks, I appreciate the conversation, and I'm glad you brought it up.
Tim Berry
Hi Tim,
ReplyDeleteThanks for this post and your email to me asking if we'd really talked on the phone.
The call was the highlight of my day, maybe month, and I remember it clearly.
I call your book an appology because as I read through it quickly that was the impression that was created. You regret the title of your last book; feel like the emphasis on business plan templates is a real problem, and that you helped created it; etc.
The big question in my mind: Are you familiar with the work of Dr. Bhide? I was very surprised that he wasn't cited by you, in my opinion his research reinforces the plan-as-you-go concept.