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Tuesday, August 22, 2006

Forbes Magazine On Business Planning

As mentioned before in Be Excellent, Tim Berry knows business planning. (He's the successful founder of Palo Alto Software.)

A few key points from the interview with Tim in Forbes Magazine:

  • "There is a myth that a business plan is about starting a business, getting a loan or attracting capital. But many businesses may not need to raise capital, so they think business plans are a waste of time. They use it once and stick it away in a drawer."
  • "Business planning should be a process that allows for regular review. A good business plan is never done. It is a projection of what you think you're going to do, after which it becomes a tool for comparing, month by month, what you did to what you thought you were going to do. It becomes a guide. "
  • " The plan contains as many measurable objectives as possible. Sales by product, cost by product, basic financial stuff. But we'll also look at other markers like the number of tech support calls every month, things that don’t show up in the financials. Maybe a couple dozen data points."
BOTTOMLINE: Business planning is just one key element of what Six Disciplines calls "business-building."

Business-building involves the integration of key management elements, including strategy, planning, measurement, execution, learning and leadership.

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