Small businesses, individually owned or family-owned, are really the backbone of this country’s economy, employing more people nationwide than the big-name giant corporations, and serving most of our daily living needs.

For many of these businesses, family continuity, the transition/succession of ownership/management from one generation to the next, is a huge issue. I’ve worked for four different family businesses in four very different industries, and have seen four different approaches to generation transition.

The most interesting I think was a local grocery store chain. The company was owned by several brothers, was a couple of decades old and had been holding its own, and expanding, in the face of pressure from the big national chains.

As a family business, it was not surprising that many of the brothers’ family (wives, kids, and siblings) worked there. What was surprising was the family employment structure. Each of the brothers managed different stores. When a family member wanted to work in the company they got jobs with their in-laws, as it were.

The short story is that the kids my age all worked for their uncles, not their dads. The process was interesting to watch as a young employee, and over the years I’ve become impressed by the brothers’ wisdom. These guys were shrewd businessmen and canny managers.

When their kids began working, they started at the bottom of the heap, waiting the bakery counter, stocking shelves, bagging groceries, etc. In working at their uncles’ stores, each of the next generation got to choose whether they would apply themselves, simply work for some cash, or screw off.

The uncles were able to objectively supervise their young kin, while listening to and supporting their department managers (who could give honest feedback without falling afoul of the “nobody-can-criticize-the-boss’-kid-trap”), and showed very little favoritism or preferential treatment that I could see. I don’t recall any of the kids who were my peers being jumped up to better jobs or inflated pay rates. If they worked hard, they were trained and tutored. When they slacked off they got chewed out, just like me, or they got canned.

A couple of the kids who were a few years older than me seemed to be genuinely interested in the business. After working in several departments at one store, one of the boys had been moved to the store where I worked to start his training as assistant manager, again, with his uncle. Having worked up from the inside and the bottom, this scion, as near as I could tell, encountered minimal resistance or resentment from other current employees and department managers, when he eventually became general manager. He was not there simply because he was the boss’ kid. He’d worked and earned his way there.

For this company, the conscious, planned, process of testing and training (and weeding out) of their children as participants in the family business paid off as the brothers, in their turn, handed off management of this successful grocery business to the next generation.

Steve Lange
Palo Alto Software

Tags: business planning, family business, growing a business, growth strategy, news, Success, succession, training
Posted on September 24th, 2009 | 1 Comment »

A tall but mostly true tale by Tim Berry-

Once upon a time there were three entrepreneurs who set out to seek their fortunes. Each of them developed a business plan.

The first business plan was built of straw. It was easy to complete, but it was mostly just puffery. It had objectives like “being the best” and “excellence in customer satisfaction” and “create a revolutionary product” and “Google killer!!!” without any way to measure results or milestones to make anything happen. It had a lot of talk, but very few specifics.

The second business plan was built of sticks. Most specifically, “hockey stick” forecasts. The plan showed sales growing slowly to a point, then forecasting a radical shoot upward, boldly showing a huge growth rate, with no real defined reason for the growth. The sticks piled up higher and higher, neatly stacked but not grounded in any kind of fact.

The third business plan was built of bricks. Bricks were specifics, especially “ownership” as in specific job responsibilities, specific people in charge of well-defined activities. Bricks were milestone dates, deadlines, budgets, and concrete, measurable objectives.

Then came the big bad real world, as awesome and fierce as any wolf. The real world was phone calls and daily routine. It was business problems and changes in economic environment, customers paying slower than expected, costs going up on one product, down on another. In business school they called it the RW, pronounced “are-dub”. Suffice to say there was a lot of huffing and puffing.

The real world blew the plan of straw and the plan of sticks apart in an instant. The plan of bricks, however, stood up to the real world. As each month closed, the plan of bricks absorbed plan-vs-actual results. Managers looked at the variance. They made adjustments. Each manager kept track of milestones and budgets, and at the end of each month the actual results were compared to the plan.

Managers saw the performance of their peers. Changes were made in the plan–organized, rational changes–to accommodate changes in actual conditions. Managers were proud of their performance, and good performances were shared with all.

And the company who made their plan out of bricks?  Well, they lived happily ever after.

Tags: business planning, news, Tim Berry
Posted on July 22nd, 2009 | 1 Comment »

Tim Berry’s new video talks about the basics for a good Elevator Pitch in this month’s video.

If you can’t view the video here, then check it out on our YouTube channel along with the rest of our business and marketing focused videos.

Palo Alto Software’s YouTube Videos

Tags: Ask Tim Berry, Business Plan Competitions, business planning
Posted on May 5th, 2009 | 1 Comment »

The New York Times had an article last week about how laid-off workers are taking matters into their own hands. The article talks about when, in a recession, do people start thinking about starting a company vs. just sending out resumes and trying to get a job:

Economists say that when the economy takes a dive, it is common for people to turn to their inner entrepreneur to try to make their own work. But they say that it takes months for that mentality to sink in, and that this is about the time in the economic cycle when it really starts to happen — when the formerly employed realize that traditional job searches are not working, and that they are running out of time and money.

I know there are a lot of people in this boat right now – laid off for a few months, no prospects in sight, and money is starting to run out. If you find yourself in this situation, why not think about starting a new company? What do you have to lose? Think about what skills you bring to the table, what you are REALLY good at, and figure out what services or potential products you can offer to people. It’s better than sitting around waiting for something to happen to you. Funny how people say that the harder they work, the luckier they get!

Food for thought!

Sabrina Parsons aka Mommy CEO

Tags: business planning, start up, starting your business, Success, unemployment
Posted on March 17th, 2009 | No 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 »

Brian Roger of MyVenturePad.com has interviewed Palo Alto Software’s Tim Berry on a topic he loves best. Business planning.

In this interview, Tim admits, “in truth, a great product, great marketing and a genius entrepreneur can achieve success without planning.” But for the mere mortals among us, he advises, “If you don’t enjoy planning – and I mean the real planning, not the fake planning – then maybe you should keep your day job.”

You can catch the whole interview by heading over to the MyVenturePad.com website

Tags: Add new tag, business planning, interview, Tim Berry
Posted on March 13th, 2009 | No Comments »

Palo Alto Software CEO, Sabrina Parsons will be one of the guests on Friday’s Business Insanity Talk Radio with host Barry Moltz tomorrow morning.

Barry Moltz has founded and run small businesses with a great deal of success and failure for more than 15 years. This is a business radio show where we talk about all the craziness of small business. It’s that craziness that actually makes it exciting, interesting and totally unpredictable.

Sabrina, Parsons,  Columnist Penelope Trunk and Advanta Bank CIO. Ami Kassar will be on hand to talk Business Planning, Innovation and Your Career.

Tune in and listen

Call-in Number: (347) 426-3202
Upcoming Show: 3/13/2009 7:00 AM

Tags: business planning, media, palo alto software, sabrina parsons
Posted on March 12th, 2009 | 2 Comments »

Our guest author today is Barry Moltz. Barry 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.

8 Things You Need To Start a Business During a Recession

1. Sell Painkillers. During difficult economic times, people only buy when they are in pain or have a very great need. Focus on selling the painkillers in business not vitamins. Understand who is in pain and who has the money to solve that pain. Understand who solves that pain for them now and why they will switch to you. (hint: the answer can’t always be price!)

2. Find Lunatics Like You. Business’ ideas are meaningless. It’s all in the execution which means that it’s only about people. Find the people that you want to start a business with and stick with them. Build a strong personal and professional support structure — you will need it.

3. Show Me the Customers. Forget about the fancy business plans or the extended analysis. Go out and ask prospects “Will you buy my products?” That answer will be the only one your business needs.

4. It’s Cash Flow, Stupid. Get customers to pay in advance or with cash when they buy. Start-up business is about your cash flow not profit. If you can get your customers to pay a deposit or pay you when you deliver your product your company will be stronger.

5. Pick the Niche. In the beginning, focus on being the best at delivering one thing. Don’t stretch yourself and your resources too thin.

6. Give Crazy Customer Service. Outstanding customer service, unless you are a utility company, is the only sustainable competitive advantage. Do it!

7. Be Cheap. It’s your money. Spend no dollar before its time. Find resources that are both variable and available. Don’t grow yourself broke by increasing your fixed overhead costs.

8. Don’t Bet the Farm (or any other part of your property). Many times, businesses need to evolve and change. Don’t bet all of your money on the initial vision of your company. Keep some of your money in reserve in case you need to alter your direction.

Barry Moltz
www.barrymoltz.com
Twitter: barrymoltz

Tags: Barry Moltz, business planning, start a business, tips
Posted on February 19th, 2009 | 3 Comments »

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 »

(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 »