I was shocked, over the weekend, to discover that it’s been more than 10 years since I posted The Future of Business Planning Software here on this blog. I wrote then:
As time goes on, more people are going to use planning as process to manage their businesses better. More will see the power of regular plan review, regular plan-vs.-actual analysis, regular milestones management, and using it all to manage teams and priorities. As this happens it will improve the quality of business planning software as well as of business planning. We’ll all start to look at built-in plan-vs.-actual analysis, regular plan reviews, and software that makes that happen.
Okay, so I’m an optimist. Instead of what I predicted (yeah, rose-colored glasses, I suppose), business planning is still, 10 years later, obscured by myth and misunderstanding. Experts who should know better are still advising people against business planning when what they mean is the wrong kind of business planning, the use-once-and-throw-away formal business plan full of painfully-perfected summaries and descriptions.
And what I said would happen was, definitely, what should have happened; and what should happen still. Better late than never. These things seem self evident to me:
- All business owners and startups have enormous benefits to gain from proper planning. Lately I’ve been writing about it as lean business planning, but it’s basically still today what has been fundamentally good planning for all of my lifetime. Short, concrete, specific, trackable, used for regular review and revision, part of a process that is heavy on plan vs. actual analysis.
- The ideal business plan, today, is smaller and more concentrated than the formal business plan we did in the Silicon Valley heydays of the 1980s. It’s a lot more lean.
- If those experts who say don’t do a business plan would say don’t do an old-fashioned formal complete business plan, just a lean plan, then they’d be right.
- Apply the general business rule of form follows function to business planning. Do only what you need. Do only what you’ll use. For business owners, you rarely a real business reason to do a full formal plan, but having a lean plan is golden, as long as you track it and use it to steer the business. Sometimes a bank will require a business plan, but usually a lean plan is good enough for that use too. Startups may need a business plan for investors who want to do due diligence on them before investing; that may or may not require more than a lean plan.
Will businesses finally pick up on this idea? I hope so. If you want to improve management and steer your business better, the right kind of business planning develops focus, priorities, accountability, and execution. And business plan software is going there already.
In regards to software, I’m happy to report that Palo Alto Software has made my 2006 predictions self-fulfilling prophecy. LivePlan connects to your QuickBooks or Xero accounting software and does plan vs. actual analysis automatically; plus this year vs. last year too.