Up and Running:

… It isn’t really a business plan. It’s a recruiting tool. It’s a test.

I get e-mails like this:

“I’m applying for a job in sales and the company is asking me to submit a business plan first. What is that? What should I do? What should it include?”

It seems to happen most often for people looking to get sales jobs, particularly performance or commission-based sales jobs.

If you encounter this while trying to get a job, my advice is that you understand what it’s really about. They’re not really looking for a business plan. They want some kind of a sales plan, at best. Mostly, they want to see that you’re willing to stick your neck out, that you can be optimistic about prospects, and that you really want the job. In some cases they want to see that you can put together some kind of readable document.

What to include? The best tactic is to ask for examples. Try this line: “I’m sorry, but business plan means different things to different people. Do you have some examples of plans you’ve liked?” If that doesn’t work, ask directly for what topics to include. And take notes, so whoever is asking this of you takes responsibility for content. If they can’t give you either examples or topics, at least take a moment to reconsider whether you want to work for this company at all.

If you still do, then keep the plan short, make your headings include objectives, strategy and tactics–and good luck with it, because it’s almost impossible to produce something meaningful.

I think they want commitment. And promises. They’re probably hoping you’ll commit yourself to some very high goals they can hold you to. Or–best case–they just want to see that you understand what you’re getting into. And maybe just seeing if you can put a document together. They don’t really want a business plan. At best it’s a sales plan.

We all know there’s a huge boom in mobile computing and mobile marketing, but does that mean you either develop phone applications or look on from the sidelines longingly? Not hardly.

I read How to get in on the Mobile boom on VentureBeat yesterday. What I like about that post (aside from the fact that it’s written by my daughter) is the nice list of options. It’s a good reminder that you don’t necessarily have to create the world’s best iPhone application to take your business into the mobile world. It can be as simple as buying advertising. And it can also be staged, taking ads as a first step and seeing how that goes before you go on.

This is good advice:

Don’t just go charging in to develop your own iPhone app. Take just a little time to consider what makes the most sense for your company. Mobile advertising can be a great way to get your feet wet, while building up a full mobile presence requires a bigger investment with the possibility of greater rewards and risks.

She points out five main options, three of them variations on advertising, and two of them involving code and programming and mobile apps.

1. Advertising inside applications.

The Apple App Market has 115,000 apps, and the Android market already has 13,000 according to a Mobclix App Snapshot in a recent SMART report. In-app advertising can allow in-depth targeting based not only on application, but also by behavior, demographic information and location.

2. Advertising on the mobile web.

Most new phones have web browsing, so there’s a range of expense levels and targeting available.

3. Sponsoring an application.

Let somebody else do the software, but join them in the branding.

An example of this is the 50 Cent “Baby By Me” sound lab that allows the user to remix 50 Cent’s latest song, while prominently featuring Vitamin Water. This is much less common, but depending on your marketing strategy, might be a good middle way between banner ads and developing your own application.

4. Create a customized mobile website.

It’s not always that hard, as more platforms become available, customizations of existing websites, optimizing with CSS and other tools. Lever off what you already have, and get onto the mobile browsers on phones.

5. Create a mobile application.

More resources required–more risk, too–but the web application can also be the biggest win. The post ticks off some intriguingly big successes, like Adobe’s iPhone Photoshop application; eBay’s iPhone application; and Pandora, the internet radio web application, which discovered its new iPhone application is generating half of its new signups.

(Photo credit: Madlen/Shutterstock)

As part of Global Entrepreneurship Week 2009, I presented a webinar titled “Build Your Business, Not Just Your Business Plan, on  Thursday Nov. 19, 2009. The recording of that webinar, plus an additional segment of questions and answers, is now available on YouTube.

If for any reason you don’t see that video embedded here, you can also click here to go to the original on YouTube.

Here’s the original announcement, below. The register link has been revised to take you to the recording instead.

I like this Plan B idea. Consider this, from Discover Your Plan B, a write up on the Business Standard (from India) on co-author John Mullins’ visit to India:

If you ask investors, how did they make money, they’ll tell you they didn’t make it on the original plan, but on the second or third when the entrepreneur adapted the original plan and found a better plan. Rarely do initial plans with which entrepreneurs begin work the way they have been planned. Almost always there are twists and turns on the road.

This is about a new book, Getting to Plan B. I haven’t read this book, but I like what its authors are saying.

The challenge is not to make a better Plan A, the challenge is to recognize that however good your Plan A is, it is probably not very accurate. So your mind-set, as you enter a process, should be to work out the best plan and at the same time, to get beyond that initial plan. Get it into the market and see if the market can tell which parts of that plan are correct, and which are off base, so that you can quickly adapt to the reality. Plan As are mostly partly correct, but not completely correct.

That sounds right to me.

Amazon.com: Getting to Plan BISBN: 1422126692 ISBN-13: 9781422126691

I have to admit that I like how much this sounds like The Plan-As-You-Go Business Plan, my book from 2008. All business plans are wrong, but vital. It’s about change, course corrections and management.

Browsing and searching last night, I discovered “Why You Need a Business Plan” by Colleen DeBaise on the Wall Street Journal’s website. This is a good, strong post and a good reminder. Her five reasons:

1. Identify your company’s strengths and weaknesses.
2. Figure out how much money you’ll need.
3. Get clear direction, which can help eliminate stress.
4. Summarize for lenders, investors or partners.
5. Evaluate the market for your product or service and size up the competition.

My personal favorite is No. 3, particularly the phrase “help eliminate stress.” It’s not as if the business plan eliminates uncertainty, but business planning does manage and reduce uncertainty by laying things out where you can see them more easily (like cash flow, for example). The interrelationships between the different parts of the business are not all intuitive.

Point No. 4–summarize for lenders, etc.–bothers me. Too many people miss the benefits of business planning because they don’t need to show anything to anybody else. If that’s your case, look at points 1, 2, 3 and 5.

That link is “Why You Need a Business Plan”–WSJ.com

This is a lively and easy-to-listen-to audio piece that covers business planning very well. It’s a discussion between Jim Blasingame, Small Business Advocate, and Kelle Olwyler, author of Paradoxical Thinking. Both of them are right on target about business planning in the real world, for real small businesses.

This is not about the academic formal business plan, but business planning to run businesses.  And, yes, I may very well be influenced by the fact that they’re agreeing with things I’ve written here and elsewhere. And Kelle’s list of myths sounds a lot like one I would have written (obviously because she and Jim are both smart and know what they’re talking about).

Olwyler’s business planning myths:

1. No time to plan:

Jim calls this a prescription to fail. Having no time to plan means failing to run your business well. Planning saves time.

2. Once you have a plan it doesn’t change.

Of course a plan changes, because assumptions change, and reality changes. A plan should be flexible and expect change.

3. The fact that things will change makes planning a waste of time.

This one is very closely related to the first two, of course, but it’s worth setting apart because you hear it voiced in these terms often. “Why bother to plan, since things change?” That of course misunderstands the relationship of planning to change: planning helps manage change. As the pace of change increases, planning becomes more, not less, important.

4. Plans are too big to implement all at once.

Very nicely put, and I have to admit, this is one that I’ve never heard before, and never written about; although it seems obvious as soon as you think of it. Olwyler points out that business plans aren’t implemented as the whole thing all at once; you implement a plan one piece at a time.

I posted here last Friday about the new business planning tutorials posted on the (relatively) new business.gov information site for small business and entrepreneurs. I’d like to point out a special section of that focusing directly on the problem of forecasting sales for a new business.

I get that question a lot: “How do I forecast sales for a new company?” Or a new product, or new service, of course. A lot of people make the implicit assumption there that if you don’t have data on past sales, then you can’t forecast. In the illustration here below, you see part of the video where we look at how you would forecast a new restaurant–just one example–using the specifics of the chairs and tables available during prime meal serving time.

The three videos covering sales forecasts take a combination of only about 20 minutes to watch. They cover the standard structure, a simple example, and a lot of tips on how to develop a sales forecast for a new business.

The way that site works, you can select from 11 different portions of the business plan tutorials. If you’re interested in the sales forecast portion, browse down the page and find the ones shown here.

I’m pleased to say that the business.gov site is hosting my  Business Planning Tutorials, a collection of 13 videos I did for the site about business planning–soup to nuts, top to bottom. For the benefit of entrepreneurs and business, these are presented free.

Although I do cover the classic formal business plan, I’m happy to say that my emphasis in this series is on the business planning process, a tool for all the rest of us who don’t have a business plan event (like getting financed) to use to run our businesses better.

I also like the way that business.gov presented the series as 13 separate links on the same page, so you can look at the topics and see what interests you. You don’t have to take it one by one, or in any preset order.

If you’re at all interested in business planning, whether or not you need a business plan document to show to outsiders, I hope you’ll drop by the tutorials page at business.gov/start/business-plan-tutorials.html. It was a lot of work, for me and the team at business.gov that put it together, and I’d like to think it’s very useful. You don’t have to go start to finish in order, either. If you have just four minutes to spend, click on the “Form Follows Function” link and try that one. It’s my personal favorite.

I liked Why You Need a Business Plan, a nice piece by Colleen DeBaise in yesterday’s Wall Street Journal. She has a lot more detail than I’m showing here for each item, based on a very useful five-point list:

1. It forces you to identify your (and your company’s) strengths and weaknesses.
2. It helps you figure out how much money you’ll need.
3. It gives you clear direction, which can help eliminate stress.
4. It will serve as a resume when you seek lenders, investors or partners.
5. It makes you evaluate the market for your product or service and size up the competition.

I particularly noticed point three there, in the middle of the list, with its note about clear direction and helping to eliminate stress. Colleen explains:

As a business owner, you often have to juggle multiple roles–everything from bookkeeper to CEO–and that can leave you feeling distracted, disorganized and overwhelmed. A document that outlines your mission and plans for the future can prevent overload, help you set realistic goals, keep you on track and boost your productivity.

I’d also add a sense of the step-by-step process, breaking things down into more manageable pieces. And having numbers to use in tracking progress.

I noticed that four of those points (No. 4 excepted) apply equally to new businesses and existing businesses, and whether or not you’re looking for business loans or investment.

And also that only point No. 4 requires a fully formed, edited and polished business plan printed out and made available to outsiders. For the rest of those benefits, you can work with a plan-as-you-go business plan that lives on the computer.

And in all cases, the benefit comes from living with the plan, keeping it up to date, revising as actualities and assumptions change, and using it to manage your company.

(Photo credit: Gabi Moisa/Shutterstock)

I have to admit bias squared with this post, because I like Ramon Ray, the author, and he’s congratulating Business Plan Pro, which is my work, on its 15th anniversary. Still, Ramon makes this point very well:

We all know that when applying for a loan and seeking venture capital funds you simply have to have some sort of business plan. But we often forget about one important audience, ourselves. A business plan is not only needed for third parties involved with providing funding to us in one shape or another, a business plan is an important, strategic document to help guide our growth. Like a good road map on a trip, it helps us know where we have been, where we are and where we are going.

That’s from Business Plans Are Not Just for Startups on Ramon’s excellent blog Smallbiztechnology.com. If you don’t follow Ramon there and as ramonray on Twitter, well, you ought to. He’s a true expert in the subject.

(Photo credit: I captured that picture from Ramon’s Twitter profile)

You don’t have to do a formal business plan to get the benefit of business planning. Why not start the planning process today; or, if you’ve done a plan in the past, reinvigorate the planning process. Real planning is modular, and iterative, not step by step. Here are some things you could do today.

• Set a review schedule now. When are you going to double back and look at results? Put a date on it.
• Develop assumptions. List them. 
• Review or develop your strategy, the heart of any plan. How are you different, what are you better at? Who are you selling to, and who isn’t your market? What are you not doing, and why is that important?
• Review or develop milestones: dates, deadlines, activities, budgets, and who’s responsible.
• Develop your basic numbers, and write them down: sales forecast, expense budgets.

And don’t feel compelled to do all of these today if you can’t. Do just one. Pick a card. Start anywhere, and get going. One step at a time; and you choose which step.

So, I do follow my own advice. Yesterday I posted here about how putting video on your site is relatively easy. So today I’m posting this video here. I did it last weekend. I confess; I was motivated in part by wanting to do something with my new FlipHD video camera.

The river seems to drown more people in the slow deep inviting part than in the crashing and splashing white water part. Similarly, unexpected Cash flow problems are more likely to catch the growing company that’s enjoying sudden growth than the declining company that knows it’s in trouble.

Here’s my video explanation of that, as posted on YouTube on Sunday. By the way, you can click here to go to the YouTube original, which includes an HD option.