General Business Planning

Palo Alto Software moved from California to Eugene, Oregon in 1992 with two employees (founder Tim Berry and his wife Vange), and has grown into a successful business employing 45  people. But unfortunately, our state has the second-highest unemployment rate in the country. In discussions about what our company could do to help the local economy, CEO Sabrina Parsons came up with the idea of creating our own stimulus package for the state.  From there, the Oregon Small Business Boost took off.

Tomorrow we’ll be giving away 15,000 copies of Business Plan Pro Premier to any Oregon resident who can make it to one of 80 giveaway locations throughout the state.

We’re giving away the software to Oregonians, says Berry, “So that they can develop their business plans, and we at Palo Alto Software can contribute to the economy in Oregon, which has been great to us for 17 years now. So this is really giving back.”

If you can’t view this video, click this link.

Posted on June 30th, 2009 | 2 Comments »

John Jantsch from Duct Tape Marketing is hosting a live panel webinar Wednesday, May 20th at 9am PDT/Noon EDT.

John will be joined by Ken Yancey, Jr, CEO of SCORE, Tim Berry, founder of Palo Alto Software, and Rich Sloan author of StartUpNation to talk about starting a business.

Collectively, this group has poured over thousands of business plans, seen great successes and great failures and advises many a fledgling start-up on the strategies, resources and regulations involved in going out there on your own.

Don’t pass up this unique opportunity to get first hand information from this amazing panel of experts.

More information, including a link to register, can be found on the Duct Tape Marketing Blog

‘Chelle Parmele
Social Media Marketing Manager

Tags: information, startup, Tim Berry, webinar
Posted on May 19th, 2009 | 1 Comment »

Today we have a guest post from one of partners, The Company Corporation.

Incorporating or forming an LLC is a fast, affordable and easy process. It benefits the business owner by protecting personal and family assets from the risks and debts of the business. Here are eight easy things business owners can do to make incorporating a breeze.

1.    Select Your Company Name

Your company name can identify the type of products/services your business provides, or it can simply tout the name of the founder. The two main requirements for a company name are: no other entity in the same state may have the same or similar name; the name must include an ending like company, incorporated, corporation, association, foundation, institute, fund, society, union, syndicate, or limited. Words like “bank”, “trust” or “education” may not be used without approval from the appropriate state agency.

2.    Select Your Business Structure

A general corporation, also known as a “C” corporation, is the most common corporate structure. It may have an unlimited number of stockholders. A “close” corporation is appropriate only for the individual starting a company alone or with a small number of people. An LLC is not a corporation, but it offers many of the same advantages, combining the limited liability protection of a corporation with the “pass through”" taxation of a sole proprietorship or partnership.

3.    Select Your State

Many business owners incorporate or form an LLC in the state where they are planning to operate because it is often least complicated and most cost effective. However, Delaware still holds appeal for new companies because of its low incorporation fees, low annual franchise taxes, and lack of state income tax for corporations operating outside of Delaware. Likewise, Nevada has become increasingly business-friendly with its advantageous tax advantages.

4.    Select Your Management Team

Naming initial directors for your corporation is straightforward. Directors are typically the key players or owners in the business. In most states, only one director is required and you may simply name yourself. In an LLC, managers or members are selected.

5.    Select Your Number of Stock Shares and Par Value

Stock represents ownership in a corporation. Par value is the minimum selling price for each share of stock. Many states allow you to elect a $0 par value, to give you the most flexibility. LLCs do not issue stock, so LLC ownership is like a partnership.

6.    Choose a Corporate Kit

A Corporate Kit will help you organize and save your important company documents. They often include a corporate seal, stock certificates, stock transfer ledger, and sample forms for bylaws and minutes.

7.    Designate a Registered Agent

The Registered Agent serves a critical purpose and is an important part of protecting your corporate status. Select a highly reliable company to serve in this role. Look for a company that maintains a nationwide network of offices and serves as a full time Registered Agent in all 50 states plus District of Columbia, so that they can service your company’s needs as you grow.

8.    Worry Not!

Your decisions about company formation may be changed after your company is formed, simply by filing an amendment. Broad flexibility is available to you as your company grows and its needs change.

John Meyer from The Company Corporation will be our guest at this month’s Back to the Fundamentals webinar, April 14th.

Make sure you register for this event soon. Space is limited.

Tags: incorporation, information, Small Business, starting your business, the company corporation
Posted on April 9th, 2009 | 10 Comments »

Did you miss Sabrina Parsons on Friday’s Business Insanity Talk Radio with Barry Moltz?

Not to worry – Listen to it here: Business Planning, Innovation and Your Career

Tags: Barry Moltz, business planning, radio appearance, sabrina parsons
Posted on March 16th, 2009 | 1 Comment »

Barry Moltz has founded and run small businesses with a great deal of success and failure for more than 15 years. He’s also the author of “Bounce! Failure, Resiliency and the Confidence to Achieve Your Next Great Success”. He is an enthusiastic speaker and teacher on entrepreneurship.

The 11 things that matter in a Business Plan

What problem exists that your business is trying to solve. Where is the pain?

What does it cost to solve that problem now? How deep and compelling is the pain?

What solutions does your business have that solve this problem?

What will the customer pay you to solve this problem?

How will solving this problem will make the company a lot of money?

What alliances can you leverage with other companies to help your company?

How big can this business get if given the right capital?

How much cash do you need to find a path to profitability?

How will the skills of your management team, their domain knowledge, and track record of execution will make this happen?

What is the investors’ exit strategy?

Please remember, the business plan is basically an “argument” where you need to state the problem and pain, then provide your solution with supporting data and analogies.

Barry Moltz

www.barrymoltz.com
Twitter: barrymoltz

Tags: Barry Moltz, business plan, planning, tips
Posted on February 22nd, 2009 | No Comments »

I’m sorry for the late notice, but, if you’re in or near Eugene, Oregon tomorrow, Jan. 22, Sabrina Parsons and I are doing a planning workshop for smartups.org. Live and in person. That’s 5 to 7 pm at the Vistas Conference Room atop the Eugene Hilton. Click here for more info.

Tim Berry
President
Palo Alto Software

Tags: Eugene OR, planning workshop, workshop
Posted on January 21st, 2009 | 1 Comment »

I noticed this very plan-as-you-go post by Guy Kawasaki on the American Express Open Forum. What I like about it, particularly, is where Guy says “set goals” and then lists these four desirable qualities of goals:

Measurable. If a goal isn’t measurable, its unlikely you’ll achieve it. For a startup, quantifiable goals are things like shipping deadlines, downloads, and sales volume. The old line “What gets measured gets done” is true. This also has ramifications for the number of goals, because you can’t (and shouldn’t) measure everything. Three to five goals measured on a weekly basis are plenty.

Achievable. Take your conservative forecasts for these goals and multiply them by 10 percent; then use that as your goal. For example, if you think you’ll easily sell a million units in the first year, set your goal at 100,000 units. There is nothing more demoralizing than setting a conservative goal and falling short; instead take 10 percent of your forecast, make this your goal, and blow it away. You might think that such a practice will lead to underachieving organizations, because they aren’t being challenged. Yeah, well, check back with me after you don’t sell a million widgets.

Relevant. A good goal is relevant. If you’re a software company, it’s the number of downloads of your demo version. It’s not your ranking in Alexa, so telling the company to focus on getting into the top 50,000 sites in the world in terms of traffic is not nearly as relevant as 10,000 downloads per month.

Rathole resistant. A goal can be measurable, achievable, and relevant and still send you down a rathole. Let’s say you’ve created a content website. Your measurable, achievable, and relevant goal is to sign up 100,000 registered users in the first ninety days. So far, so good. But what if you focus on this body count without regard to the stickiness of the site? So now you’ve gotten 100,000 people to register, but they visit once and never return. That’s a rathole. Ensure that your goal encompasses all the factors that will make your organization viable.

What I like about this, as you might guess, is that it’s a very close match to what I’m saying here, in this site, and in the Plan-As-You-Go Business Plan book. Goals are about business, getting things done, and they do you no good unless you follow up on results and manage accordingly.

Tim Berry
President and Founder
Palo Alto Software

Tags: business plan, business planning, goals, Guy Kawasaki, objectives
Posted on January 15th, 2009 | No Comments »

The tax man is coming to your Internet store. Sooner than you think.

Today, 13 January 2009, New York State Supreme Court Justice Eileen Bransten dismissed a lawsuit brought by Amazon.com challenging New York State’s right to collect sales tax from out-of-state Internet retailers.

With most states cash-strapped and facing decreased revenues from existing sources, collecting sales tax on goods sold via the Internet and delivered in-state is looking like a ripe plum.

Much hinges on interpretation of conditions included in a 1992 US Supreme Court ruling, on what constitutes a “substantial physical presence” in the state.

While this issue may not be resolved one way or the other in the immediate future, NOW is the time to look into your Internet store’s system functionality. Implementing software changes to your system to comply with sales tax collection will be a problem; more likely a nightmare.

Most local, physical retail stores only have to collect taxes for one state, and possibly a county or municipality. An Internet store will need to incorporate and apply tax rates for all 50 states, Washington, D.C., and U.S. dependencies and territories. (Don’t kid yourself. Once the Internet sales tax moratorium dam breaks, every taxing entity which can will be riding the flood waters.)

In many states sales taxes are not collected in a blanket application. Sometimes groceries are exempt, but prepared foods, such as restaurants are taxed. Sometimes prescription medicines are exempt. In other cases, certain classes of goods are considered luxury items and taxed that way. Therefore, your store will need to be programmed to compute and collect taxes based on these variables as well. (Your customers will demand it. They won’t want to pay sales tax to you if their local store doesn’t have to charge it.)

And that’s not all. Not only will your site’s store be responsible for charging and collecting the sales taxes, but your bookkeeping and financial departments will need to adjust all their systems in order to track, and subsequently pay all that collected tax to all those states and agencies.

If your company has been doing Internet sales to the United Kingdom you have some small idea how badly this will shake up operations. This past year the U.K. changed their Value Added Tax, V.A.T., from 17.5% to 15%, on short notice. Many businesses are still struggling to bring their sales and accounting systems into compliance.

Of course, there is a small bright side to this. Here’s an opportunity for some entrepreneurs to set themselves up as tax rate by ZIP code databases, or info clearinghouses, or systems upgrade specialists, etc.

We are living in a new economic landscape. The old assumptions no longer apply. Internet sales taxes are coming. Start planning and implementing your system upgrade changes NOW.

Steve Lange
Senior Editor
Palo Alto Software

Tags: , collecting tax online, Internet, Internet sales tax, online taxes, sales tax
Posted on January 13th, 2009 | No Comments »

(Note: this is from my business plans coaching column this month at Entrepreneur.com. I’m reposting it here, with permission, for convenience of our BIG blog readers. Tim.)

Plans are wrong, but nonetheless vital. There’s a paradox for you. It’s a simple statement, one that I hope is somewhat surprising coming from a business planning expert; but it’s still very important. And it gets right to the heart of what business planning is all about.

More than ever, those who plan look to projections that often miss the mark. Nobody I know, and in fact nobody I’ve even heard about, accurately predicted the sharp plunge in the economy last fall. So of course those who actually use a business planning process are implementing a lot of course corrections, reviews and revisions.

It’s a great example of how this paradoxical statement — plans are wrong, but nonetheless vital — makes sense. As we look at the year to come, most of us are dialing down our forecasts. Does that mean we wasted our time making them? Not at all. How do we even make sense of where we are if we don’t have a map that shows us how we got there?

If you had a plan earlier this year and results differed greatly from what was expected, I hope you’re taking the time to compare those results, in detail, to the earlier plan. Look for where the differences were greatest. Look for where expenses were tied to sales. Look for the bright spots where sales held up. Look for how the numbers were supposed to come together, and not just how they didn’t.

And if you didn’t have a plan, then think of this as a good time to get a planning process started so you have a better view of your business in the future. Start making simple sales and expense projections. Don’t worry that they’re wrong; just make sure you go back each month and plot where and how and in which direction they were wrong so you can correct them.

You should only be wrong a month at a time, and as you use that plan-vs.-results analysis to look more closely at how things are going, you adjust again and improve results for the next time around. With each month, your grasp on reality gets better.

And then, as things go back up — and they will — you’ll be able to use what you learned to see the signs, anticipate and act accordingly.

This kind of planning process is what’s meant by the phrase, “The plan may be wrong, but planning is essential.” Then there’s another old military saying: “No battle plan ever survived the first encounter with the enemy.” What does happen, though, with battle plans as well as business plans, is you don’t know how to recover or how to adjust the plan if you didn’t have a plan in the first place.

Tim Berry
President and Founder
Palo Alto Software

Tags: business plan, business plan course correction, business plan review, business planning, plan-as-you-go business plan, Tim Berry
Posted on January 9th, 2009 | 1 Comment »

It is a New Year and time to …

Yes, yes, you’ve heard that a lot lately. Still, it is no less valuable nor less appropriate for having been used before. Prior to becoming a cliche, it was good advice.

The other morning the snow and ice convinced me to work from home for a few hours before driving into the office. So I assumed that I could simply sign-in to my office computer using our virtual network. Dang! That didn’t work. It turns out I didn’t know that my new office computer has a different IP address, and my log-in wasn’t recognized. I just assumed it was the same as my old computer.

Next I decided that I’d edit our company blogs using WordPress on the Internet. I assumed I could pull out my old laptop, set up the wireless connection, then sit back with a big cup of caffeinated black cup filler and start reading. Rats! That didn’t work either. The plug-in wireless card for my old laptop has given up the ghost. I just assumed that it would connect as it had last month.

So I rummaged around for another CAT 5 cable and strung it around the room to plug in next to my chair by the fireplace. Arrrrgh! I assumed the cable was good. Nope. I remember now! The window installation contractor told me last summer he’d dropped a chisel on the cable and cut it part way through. No problem. I’ll just crimp a new end onto it.

Blast it! I assumed I had a supply of crimp-on plugs. Plenty of 4-wire and 6-wire, but not a single 8-wire plug to be found. Grrrrrrrrrr.

I assume you can see where I’m going with this anecdote of assuming I could work from home? Yes? No? It’s the presumptuous assumptions we make about our businesses.

When we start a business we make a number of important assumptions. We assume our location will attract customers. We make a variety of assumptions about the demographics, lifestyle attributes, and trends of our target customers. We assume that our target customers will buy our products and services. We assume that our suppliers will be able to keep us stocked with goods at a certain price. We assume that our bank will continue to approve our line-of-credit. We assume that our hot, innovative, cutting-edge product will stay on top of the everyone-must-have-one list. And so on.

So now we’ve been in business for a while, and it is a new year. I recommend, I implore, I insist, I cajole, I triple-dog-dare you to take a close hard look at all those assumptions. Are they still applicable? In a sense, they shouldn’t be assumptions any longer. They should be verifiable facts.

Ask your bank if the line-of-credit is still available. Check with your suppliers. Can they still deliver and at the same price? Who are your real customers? (NOT who you assume they are, but who actually comes through your door and gives you money.) Ask them for feedback and suggestions and compare that with what you assumed. What’s changed in your area that might affect your business? For example, did your floor traffic increase or decrease when that new movie theater complex opened down the street? Did a new techno-gadget consign your product to instant obsolescence?

In Location, Location, Location Tim Berry posted about a venue that was a successful restaurant for 30 years, and then had a series of failed eateries in the same space. It would seem that a basic assumption had changed.

You and your business cannot afford to blindly trust that the assumptions accepted as true once will remain true always.

• Confirm what still holds true
• Identify old assumptions which are false
• Determine, if you can, why these assumptions were incorrect
• Make new assumptions where necessary
• Incorporate these changes into your monthly and annual business planning.

Steve Lange
Senior Editor
Palo Alto Software

My thanks to my co-editor Sara Prentice Manela for suggesting this post to me, after patiently listening to me whine tale of woeful assumptions.

Tags: assume, assumptions, business startups, established business, startups
Posted on January 8th, 2009 | No Comments »