Plan-as-you-go Business Planning

As we finish up 2007 and roll into 2008 I am certain it is time to adapt a new kind of business planning, which I want to call “plan-as-you-go” business planning. This is intended to bring the idea of the business plan up to date with the kind of flexibility and power we have in the tools we use in business everywhere, while focusing on the real power of planning, meaning management and tracking and accountability, and easing up on the form to make sure that form follows function. For convenience, let’s call it PAYG. The plan-as-you-go business plan is PAYG planning.

And I’m very happy to share, with this column, that I’ve started on a book called “The Plan-as-you-go Business Plan,” due out later this year, to be published by Entrepreneur Press. That’s an early cover design shown here.

What’s Different?

How is the PAYG plan different from the standard business plan? Good question. Let’s get into some specifics:

1. It’s a process, not just a plan. Every PAYG plan has a review schedule built in, from the beginning. It sets the dates and participants in the future review meetings, taking 60-90 minutes once a month and 2-3 hours once per quarter.  and PAYG planning is about process: not just the plan, but the regular review and management of the plan.

2. Form follows function. The PAYG plan is not necessarily the same kind of formal business plan document you did in business school or read about all over. It doesn’t necessarily follow a recipe. Every PAYG plan is unique. It might generate a formal document at some point, or over and over again actually at different points in company history, but until you need the formal plan document to show somebody it lives on your computer. You pull from the plan to make a pitch presentation or elevator speech or summary memo or full detailed business plan document, as required for business purpose. It’s the source of all of these, the key thinking including strategy and metrics and dates and deadlines, without having a specifically defined form.

3. It assumes and manages change. The PAYG plan is about navigation, not just a static map. It assumes that assumptions will change. That’s why it builds the review schedule into it, and in keeping with that idea, assumptions must always be visible, on top, where they can be reviewed. Unlike the misunderstood formal business plan, the PAYG plan is a way to keep your view of the long term goals and directions while also managing the short-term surprises.

Now I recognize that you could read this list and say “but that’s the same as good planning has been for years, it’s not so new and different.” And I’d say “that’s right, you’re getting it.” What’s most important about PAYG planning is that people in the real world, startups and growing companies alike, can actually use it. It gets people out of the silly talk about how a business plan isn’t useful because they misunderstand how a business plan is supposed to be used.

4. Accountability. Plan-as-you-go planning develops accountability in the process, as a matter of metrics, and tracking. It is important that accountability be a matter of collaboration, and not the crystal ball and chain.

What’s Essential

1. Start with the review schedule. If you don’t have a plan review schedule, you don’t have PAYG planning. You might have a plan, but it’s not PAYG planning. Set the dates from the very beginning. As you develop the plan, you keep the people involved aware of the touch points, when and how and who you’re going to track.

2. Develop useful metrics. PAYG planning is about actually managing, not just planning into thin air. The main metrics are money, and the most important is cash flow, but look for metrics that involve the team. Calls, presentations, visitors, inquiries, average time of calls, downloads, whatever. Ideally, everybody on the team deserves metrics.

3. Identify the assumptions. Effective PAYG planning keeps the assumptions on top, where you can revisit them with every review meeting. We assume things change and the planning is about navigation, not just a static map. This is how you keep your plan alive and active.

4. Every plan has a heart and flesh and bones. The heart is strategy, market need, differentiation, and focus. This is as true with PAYG planning as with traditional plans. The flesh and bones are just as important, and in PAYG planning that’s metrics, milestones, tasks, dates, deadlines, and responsibility assignments, and, most important, cash flow planning.

Important Principles of PAYG Planning

1. Start anywhere. Get going. The plan is a matter of interlocking blocks, so some people start with a numbers task, like a sales forecast, and others start conceptually, with a vision or a strategy or focus. Just get started. Don’t wait until your plan is finished, get going. Start today and start using it tomorrow.

2. All business plans are wrong – but still vital. It’s a matter of humanity, you are predicting the future, you’ll be wrong, but you set down tracks so you can follow up and revise without losing sight of the long-term goals and directions.

3. Good business plans are never done. My company’s business plan started in the late 1980s and it’s still a work in progress. If your plan is finished, your company is finished. Instead, you revise as needed, as in steering, navigation, and walking. The core of the plan is the collection of heart and flesh and bones, it’s content, thinking, and specifics (by karaba at dhead); from that you spin out a document or presentation or elevator speech as needed, and when needed.

4. Form follows function. Do only as much as you need to run your company, to manage, to build strategy and follow-up and long-term goals and directions. If you don’t need to create a formal plan, don’t; keep it on your computer.

5. Keep it alive, always, and spin the output as needed. Don’t ever let your plan go static. Keep it on top of things, active, and alive, not forgotten in a drawer.

6. Planning is worth the implementation it causes. You measure a plan by results. It’s as good as the decisions it guides.


  • Carlos Diaz says:

    Looking good, Tim, hope to read it as soon as you have it available..will it be on ebooks, etc? Un abrazo from your Mexican Professor, Carlos Diaz

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  • Tim Berry says:

    Thanks John, I appreciate the comment, but I feel I have to add something:

    Dr. Bhide's work shows that it's possible to be successful without a formal business plan. That's not a surprise and it doesn't mean, as your summary seems to imply, that planning is bad.

    On the contrary: I respect Dr. Bhide's work very much, and I'd like to think his skepticism about formal planning is very much a part of my approach, which emphasizes the benefit of planning as management, and points out that you don't need a full formal complete business plan as defined by tradition. His work came first, of course, so I don't want to exaggerate, but it does in fact validate what I'm saying, not detract from it.

    Actually, the way you put it would be something like using research showing that not all regular joggers live to be 80 as proof that jogging is bad for you. I can't imagine Dr. Bhide himself being comfortable with the way you're summarizing his results.

    I suggest you take a shot at reading The Black Swan, a truly excellent book that points out some of the logical fallacies we so frequently take for granted. Like, for instance, confusing the fact that some successful businesses didn't have a full formal plan with the idea that successful businesses don't plan.

    I hope you like my book when you get it. I bet you'll agree with the approach. Tim.

  • John Wren says:

    Dr. Amar Bhide's research has shown that successful NEW businesses don't start with formal market research and a formal plan.

    For over 10 years I've invited successful entrepreneurs to tell us how they did it at the Denver IDEA Cafe. See link on

    Rarely has anyone said they started the way I was taught is the "right" way, with formal research and planning.

    Long ago, I explained all this in my little book, available right now as a FREE e-book, see link on

    But I'm open. This new book sounds very interesting. I look forward to reading it!

  • Tom Volkar / Delightful Work says:

    Yes, this has the feel of something closer to what actually happens. I like the dynamic nature of what you propose. As you rightfully say it's about navigation not blind adherence without flexibility. Good luck with your book. Let's just hope that lenders see the wisdom in this kind of plan as well.

  • own a franchise says:

    Your article is extremely influential. I like your plans very much. Hope I would enjoy the fruit,implementing them. Thanks for making this post.

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