After some weeks of inactivity, Wayne Liew Dot Com Entrepreneur Interviews is back.
Business planning and writing a business plan are inevitable for entrepreneurs these days in order to secure funding from investors as well as providing you with a sense of direction for your small business or venture.
This week, I am proud to have Tim Berry, founder of the famous business plan resource, Bplans.com, on this segment where he answered a few of my questions on business planning and business plans. I know aspiring entrepreneurs will like this so enjoy the interview below.
Interview with Tim Berry, Founder of Bplans.com
Wayne: Hi Tim, I would like to welcome you to Wayne Liew Dot Com Entrepreneur Interviews segment and thank you for agreeing to do this interview about business plans with me. Before we proceed further, can you tell the readers a little bit about who you are, your background and what are your current ventures?
Tim: President and founder of Palo Alto Software, founder of Bplans.com, co-founder of Borland International. Author of ‘The Plan as You Go Business Plan‘, book published by Entrepreneur Press, and ‘Business Plan Pro,’ software published by Palo Alto Software. Plus half a dozen other books on business planning and starting a business. Stanford MBA degree.
Wayne: Tim, we are going to talk about business plans for entrepreneurs and small business owners today. I know that business plans can serve different purposes in the course of launching and running a business. Why is it that most small business owners or entrepreneurs out there will need a business plan at some point of their business or venture?
Tim: Let’s rephrase that to be business planning rather just a business plan. A business plan alone, by itself with nothing else, is an excellent way to develop a plan for a whole business, covering everything from what you want, and where you want to go, to the steps you’ll need to take to get there, plus projected sales, profits, and cash flow.
Tim: But a plan alone, by itself, is not nearly as good as a plan as part of a business planning process, meaning a plan that will be reviewed regularly, results compared to what was projected, changing assumptions, market, and the course corrected. The real goal is management. Set your sights on the long term and manage the short-term specifics as well.
Tim: The common misunderstanding is that some business plans, a relatively small proportion of those that are needed, are used as if they were a sales document for investors or information backup for a loan application.
Tim: All companies need planning as a way to set their sights on the future, and navigate through change, and mark the changes in assumptions and revisions. Not needing to show it to outsiders doesn’t mean you don’t want to have planning as part of your regular management.
Wayne: I actually came across some entrepreneurs out there who are actually prefer to be "entrepreneurial" and construct emergent strategies as and when issues arise rather than having a business plan. What are your thoughts on this?
Tim: It’s based on the myth that having a business plan means you have less flexibility for change. That’s not the case. Having a business plan means that you can manage change better, more flexibility, because you have markers for your assumptions and you can track how things have changed, and react, more quickly, and more flexibly, than if you were just wandering around without a plan.
Tim: You cannot say that not planning is more "entrepreneurial" than planning; it’s just making things harder for yourself. Things always change, and good planning is about managing change, optimizing your response to change. All business planning processes should always include regular reviews to mark and manage changing assumptions.
Tim: Think of it this way: what’s more entrepreneurial, to look out for things and watch as you drive a vehicle, steering as the road curves, or to paint the windshield over so you can’t see anything, and just drive and see what happens. Blindness is not entrepreneurial, it’s blindness.
Wayne: What do you think are some of the common mistakes that entrepreneurs make when preparing their business plans?
Tim: 1. Writing it as if it were a document for outsiders when in fact they are doing it just to manage their own business. Form follows function. Don’t sweat the format, editing, and completeness until you have to because some outsider demands it.
2. Not setting the regular review schedule to analyze actual results, compare them to the plan, and set course corrections.
3. Not plainly marking assumptions so you can understand when things have changed, and therefore manage the change better.
4. Printing it out and leaving it somewhere, instead of keeping it live on your computer.
5. Delaying the business while waiting to finish the business plan. Get going, and keep the plan alive as you go. Don’t think it will ever be done. Keep it alive.
6. Doing something or not doing something just because it’s in the plan. Review and revise the plan.
Wayne: Let’s say I have a startup idea and I need a business plan to impress potential investors. Where should I get started and what are some of your tips for this?
Tim: I think you go online to Bplans.com, or PlanAsYouGo.com, for step by step help for free. Or, better yet, go to www.paloalto.com and download Business Plan Pro.
Wayne: As a business plan expert as well as an entrepreneur yourself, Tim, have you came across any interesting business plan-related stories that you can share with us?
Tim: One of my favorites was the entrepreneur who told a group of investors that he needed $300,000 for "Peace of Mind," and being able to sleep at night. The investors were not amused. They want to give entrepreneurs money needed for creating a business, not for the entrepreneur’s peace of mind.
Wayne: Tim, apart from Bplans.com, which is a great resource for business plan writing and business plan-related tutorials, what are you currently working on which you think can add value to entrepreneurs and small business owners reading this interview?
Tim: My publisher Entrepreneur Press has generously allowed me to post the entire text, including all illustrations, of my latest book online, for free. That’s at http://planasyougo.com. Also my blogs at timberry.bplans.com and upandrunning.entrepreneur.com. And I am extremely proud of Business Plan Pro, the software, which is now in its eleventh version, and is a great tool for writing a business plan the way I recommend.
Wayne: How can my readers get in touch with you?
Tim: http://timberry.com/email-me/
Wayne: Tim, thanks again for answering my questions about business plans and business planning.
Interview with Tim Berry Afterthoughts
Although I et income goals for my own online marketing business, I don’t really have a proper plan for it. Tim, through this interview, opened my eyes about the importance of business planning.
I make decisions based on data, analytics and information provided but it is still all about my gut feeling when someone asks me where do you see your business in 5 years time.
Blindness is not entrepreneurial, it’s blindness.
What are some of the lessons about business plan and business planning that you have picked up from this interview? Do you have an interesting experience about business planning that you would like to share?
Leave a comment below. Hearing from you is priceless.
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Photo Credits: jurvetson
