June 2011

After taking a look at Business Plan Writer as one option for business planning software, I thought I would review Sage Planning For Business which is again developed primarily for the UK market.

Sage Planning For Business Review

Sage is a big company and provides the most popular small business accounting programs in the UK so I had high hopes for their business planning software although I’ve been disappointed in the past by the accounting software.

Sage Planning For Business is available from directly from Sage (£25 plus VAT at the time of writing) or you can pick it up from various retailers like Staples (£30) and Currys (£39.99).

What I Liked About Sage Planning For Business

1. I got my copy for free from Lloyds TSB and this version has business plans in the standard Sage format and the preferred Lloyds TSB version. I haven’t spotted the subtle differences yet. Just because you can get Sage Planning For Business free of charge doesn’t mean it’s good value since you have to factor in the cost of your time to use it.
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2. It allows you to build up financial projections over 3 years. I know this seems ridiculous when you don’t really have much of a clue what your business is going to do over the few months but it seems to make bank managers feel good.
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3. You can predict sales per product per customer/customer type. This is useful if your margins are likely to be very different depending on the type of customer since it captures your underlying assumptions of what you expect to do when.
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   For example, I used to work for a company that sold cutlery and silverware, and we’d get 40% margin on sales to independent shops, 25% to departments stores and 15% on mail order. You can also have different sales prices and margins for different months of the year, perhaps reflecting the retail sales in January.
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4. You can vary payment assumptions on your sales by customer type and even by month and also factor in a payment discount for prompt settlement.
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5. There are useful business tips throughout the program explaining how things work. For example there are explanations about PAYE and how to employ people.
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6. The Sage Planning For Business software links into other Sage programs like Sage Start Up and Sage Instant Accounts. I haven’t tried it myself but if Sage says it does, it will.
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7. It calculates summary reports by month for the Cash Flow, Profit & Loss Account and Balance Sheet. A little niggle but I’d have preferred that the numbers were formatted with the normal convention of negatives in brackets and with a comma to separate the thousands.
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8. It has an executive summary which automatically brings in graphs and key number summaries from the financial forecasts which is neat.

What I Don’t Like About Sage Planning For Business

1. It feels much more complicated and less intuitive to use than Business Plan Writer. If you’re nervous about preparing a business plan then I think you’ll find Sage Planning For Business scary.
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2. I found the way Sage Planning For Business treated wages and salaries as very simplistic after the sophistication of Business Plan Writer. My preferred way in practice is to build up the costs based on position/person name since you’ve got full flexibility over what they get paid and you have an audit trail for the build up of costs. In Sage Planning For Business, there are the number of people and an average monthly cost for each.
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   That sounds simple until you start thinking about how you want to add people to your business. It starts with you, then you might want someone in the warehouse on minimum wage from month 3, then some part-time administration help from month 6 and a sales person and another warehouse person in month 9. I think there’s going to be a lot of head scratching going on as you try to recalculate your average monthly cost per person. And it gets worse when you change your sales force and decide that you don’t need that second warehouse person for two more months.
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   I later found out that you could add extra categories of wages which gets around the problem but it shows what I mean by saying that Sage Planning For Business doesn’t seem that intuitive. Because I was only trying to do a one-year plan, I also got myself confused when I added a cost of £1,500 for month 5 and the software shows that this is an average cost of £333 per month. I thought I’d made a mistake.
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3. I can’t see any way to deal with the rent quarterly payment in advance problem without sacrificing the Profit & Loss account and forcing the payments into the quarterly months. For a big company like Sage I expected better for a predictable problem that has a significant impact on the numbers. The same problem happens in reverse for fees like accountancy where the charge for the year should be spread over the months but you may not receive and pay for the service until well into the second year.
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4. I can’t see any way of dealing with stock in the business planning software. I don’t understand this since it is a major factor for many businesses.

Overall Thoughts On Sage Planning For Business

Sage Planning for Business does the majority of things that I’d expect done by business planning software.

It is more complicated that Business Plan Writer and it feels it when you are using it.

Since you can get a copy of Sage Planning For Business for free from Lloyds TSB, it has to be worth a look to see how you feel about the complexity. If Lloyds is your preferred bank, then it is worth persevering with since you can produce a business plan in their preferred format.

If you don’t feel comfortable using it and you feel it is inhibiting your creativity and thinking, then try one of the other business planning software programs. Your time matters because, as a small business owner, there will always be more things that you could do.

Promotional Video For Sage Planning For Business

Here is a video to promote Sage Planning For Business

Have You Tried Sage Planning For Business?

If you have used Sage Planning For Business, I’d like to hear your opinions.

Did you find it easy to prepare a business plan?

Was there anything you particularly liked or didn’t like?

“Paul I don’t agree with your idea that you have to be different to succeed” said a business owner I was speaking to last week.

His idea was that if he could make his business as much like the market leader as possible, he’d get some of the sales.

And his logic was fascinating because it was based on the idea that most of us would date a Brad Pitt or Angelina Jolie lookalike (depending on your sexual preferences).It’s an interesting idea.

Since Brad and Angelina are busy keeping each other warm at night and if you have a big crush on one or the other, then the best you can do is to date a lookalike.

It’s not genuine of course… and you’d know it.

Nor would your life come with the money or the celebrity lifestyle (happy to give that a miss).

So you can imagine that a Brad-alike or Angelina-alike would be very popular on the dating circuit.

But it doesn’t work so well in business for two very important reasons.

• Brad and Angelina are unique – each is a one-off.

• Demand massively exceeds supply.

That’s not the case in business.

If you have a resemblance to Brad or Angelina, then strengthening that resemblance should work fine in the local pick-up bar but things are different when it comes to customers.

Businesses don’t usually sell one-offs – they sell products or services that they can duplicate again and again.

And that means that supply isn’t so out of balance with demand.

In fact, if the star business isn’t working at capacity, it can keep on supplying because people prefer to buy the real thing rather than a lookalike unless there’s a huge price difference. Why buy a $25 imitation Rolex if you can afford $10,000 for the real thing?

The lookalike strategy works if the star business can’t supply any more. Buyers will turn to the next best alternative to what they really want.

But you’re in trouble if the real Brad and Angelina walk into the bar and have a blazing row in front of you and one dumps the other very publicly. The lookalike doesn’t seem so hot any more.

So if the star business gets capacity (either because they’ve expanded because of the unsatisfied demand or trade turns down because of the economy), they win the business back because the lookalike isn’t as good as the real thing.

Do you want to bet your business and your future on the fact that your competitor whom you’re copying is going to stay too busy?

Or do you want people to choose you because you’re unique? The best you can be.

Sure there may still be a passing resemblance to Brad or Angelina but if you’re nicer, kinder, friendlier, more interesting…

The full title of this book by Richard Walsh is

The Start Your Own Business Bible: 501 New Ventures You Can Launch Today

In my review on Amazon.co.uk, I rated the book at 4 Stars. This means it is good to very good.

Here is my review.

As a business coach, I sometimes get calls that start with “I want to start a business but I don’t know what kind. Can you tell me a business where I can make a lot of money?”

The short answer is No. It depends so much on you and where your skills, interests and passions lie.

But this book gives you some answers to that question. It tells you about 501 different ideas for starting a business separated into categories based on how much money is needed.

For each business idea, you get a concise summary of what’s required which will help you to narrow your focus. Then you can start to research deeper into the particular business types that interest you. Not all the businesses will be practical. You can’t suddenly become a lawyer, an accountant or architect because you normally need to get a degree and then take professional qualifications. The journey can be long before you reach the end. Other types of business, including what I do as a business coach, don’t have any of these mandatory qualifications but it’s still best to get relevant experience before you risk starting a business.

As a general rule, the harder it is to get into a particular type of business, the more money you can make. That’s a simple application of supply and demand. If demand is high and supply is short, prices are high but it will attract new people unless it’s tough to break through and become established.

If you already know what business you want to start, then this book isn’t for you. If you see it in a bookshop, it’s worth reading what it says. When you already know the business type, there are plenty of niche specific business books on Amazon so search for the “(trade or profession) + marketing” or “starting a (trade or profession) business”. Just be wary of authors who take a cookie cutter approach and have written the same book for many types of businesses by using the find and replace facility in Word. With care, you can find books written by genuine experts in the trade you’re interested in.

I don’t understand why there are so many bad reviews. What can people expect from a book that takes a short look at so many types of business.

I originated rated this book with Five Stars but because time has passed with an update, I’ve knocked one star off.

You can buy the book from Amazon.co.uk or Amazon.com

Specialist business planning software is a great way to help you to out together a business plan to take to a bank or other financial backer.

I’ve written before about the different types of business plans.

It’s The Thinking In Business Planning That’s So Important

I believe in the thinking that goes into preparing a business plan and I believe in capturing the assumptions for what you thought would happen at a particular time. It’s a great way to see how you are learning and how the business environment is changing.

I also know that your business plan is going to be wrong – and it may even be out of date before the ink has dried.

Business Planning Software Makes The Thinking Easier By Automating The Process

It therefore makes sense to take way the pain of business planning by using specialist software which helps you to combine words and numbers. If you know what you are doing, you can do it in Word and Excel but it gets complicated very quickly.

I’m going to buy and review various business planning software solutions designed for small businesses so that I can help you and also be in a better position to make recommendations to clients and prospective clients.

You Need A Business Plan

I want to help you to plan your business.

I don’t want to do the business planning for you.

In fact, I believe very strongly that it’s a bad idea unless you struggle with words and numbers.

It’s a matter of ownership.

You need to own the plan – it must be yours and not the person who wrote the words or cranked out the numbers.

The Problems Of Lack of Ownership Of Business Plan

I saw the problems of lack of ownership too often in the bigger businesses I’ve worked in where managers say things that contradict both the words and the numbers in the plan.

The inevitable result is a complete lack of credibility.

Either the plan or wrong or the managers are saying what they think the other side wants to hear… and they believe neither. This is one of the reasons why Business Start-Ups Fail To Get Cash From Banks.

Business Planning Software I’ve Reviewed So Far

Business Planning Software Option 1

Business Plan Writer Review

Low cost, easy to use but limited functionality.

Business Planning Software Option 2

Sage Planning For Business

More comprehensive but more complicated. More expensive but you may be able to get a free copy. It may not be a bargain if it takes a lot of your time.

Business Plan Writer is the first business planning software I’ve reviewed with the start-up business owner in mind.

It is available from http://businessplanwriter.co.uk/ and has been written for the UK market but before you jump in and buy, you should read my review.

What I Like About Business Plan Writer

1. The cost of Business Plan Writer is very low – I paid less than £40 for the one year small business version. There are also versions for Co-operatives and Social Enterprises.
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2. It is intuitive to use for writing the words and doing the numbers. You don’t have to be a business planning expert and it has sample plans to help guide you along the way.
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3. The words and numbers are combined into one plan for export into Word (if you want to make it look pretty) or directly into a pdf.
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4. I like the idea of the mini-plan which helps you to plan the plan. If you’ve ever written a business plan, you’ll know that it can be very daunting.
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5. The words and numbers are both broken down into separate smaller sections. This is the old “How do you eat an elephant? One bite at a time.” approach and it works.
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6. The sales forecast can be built up from 20 different products/product groups where you forecast the quantity sold, sales prices and direct variable costs. This gives you a choice to choose between cash and credit assumptions for sales and costs. This area for the product sales and margins is the critical section and I have a bee in my bonnet that it is too often skimped over by professional accountants in planning and reporting. I like the way that Business Plan Writer encourages you to think carefully and also focuses on the drivers – units and prices – rather than total values.
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7. The plan saves itself each time you update it.

What I Don’t Like About Business Plan Writer

What I Don’t Like About Business Plan Writer – Words

1. The size of the fonts is too small for me. I’m finding that I’m having to squint at my PC when I can normally read the screen fine. This makes using Business Plan Writer tiring and uncomfortable if you no longer have 20/20 vision but are too vain to have glasses.

What I Don’t Like About Business Plan Writer – Numbers

My accountant hat has come out – I am a chartered accountant, even if I don’t trade as one.

That means I know that I can do anything I want with a spreadsheet although it can take many hours to build a complex model tailored to a particular client or business sector. Unfortunately for Business Plan Writer this means that I’m a hard taskmaster on the numbers.

There is a big trade-off between being simple to use and creating valid information which presents a meaningful picture. Business Plan Writer keeps things simple, I’d have added some more complexity to give more flexibility.

1. The months are headed 1, 2, 3, 4 rather than January, February etc. This has the advantage that you can start in any month but if you have a seasonal business (e.g. retailer and Christmas) and it takes you longer than you expect to prepare and present your business plan, you may be shuffling your numbers along and you may get confused. I’d have liked to have seen a table where you can define the months to make the plan easier to review.
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2. You can set a flag for whether your business is registered for VAT or not but I’ve tried it twice now and neither time did it work out the VAT correctly -although the rate is set at 20%, it is only calculating at 1%. I’ reported this to the author of the Business Plan Writer who accepted it as a bug which was fixed within 24 hours. I’m impressed. Bugs happen – if Microsoft can’t get it right with their huge resources for developing and testing software, then smaller developers will also have the occasional problem – what’s important is that they get them fixed.
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3. I like the simple way you can set up the model per product for cash or credit sales and purchases. If you think you’ll have both, you can set up cash products and credit products. The standard assumption is you’ll be paid in the following month – that’s sales in June will be paid in July – and you can’t change it. Most businesses I see have Days Sales Outstanding of between 60 and 90 days because of the standard net 30 day terms – items sold on 15th June become due on 31 July and most of the money from the good customers comes in the first two weeks of the next month. Other customers have to be chased hard. It’s an added complexity but I’d have liked to have been able to choose between more credit options.
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4. The numbers need to be checked after you’ve done your plan – I am sure that a change on one product created a change on another although I couldn’t repeat the experience.
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5. Overheads gives you plenty of flexibility to build in the costs you need but there is the big assumption that expenses for the Profit & Loss account and payments for the cash flow are the same. This is where simplicity causes conflicts with valid information.  For example, if premises are a significant cost for you (e.g. you’re starting a shop) and you have to pay rent on the quarterly days in advance, you’ll either get the cash flow or profit forecast wrong to give a better view of the other. This may dent your credibility with a bank. Since you’re forced to choose, I recommend that you work at getting the cash flow right and let your accountant worry about how costs are spread over the periods in the Profit & loss Account.
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6. I like the fact that you are encouraged to build up your personnel costs by person from their starting dates but I couldn’t get starting dates to stick unless I also set a leaving date first I assumed they left at the end of the year, (just don’t tell the staff). The guidance notes aren’t up-to-date either since the monthly spread of costs seems to be new functionality. There are separate flags for employers national insurance and pension but they are combined into one total. I found it easier to turn these off until I was happy with the numbers and then turned them back on.
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7. You can introduce assets at the beginning e.g. if you have a van which you transfer into the business but this is treated as equity rather than a loan and it is only on these assets introduced that depreciation is calculated. assets bought in month 1 don’t carry any depreciation throughout the year. This is wrong although it doesn’t affect the cash flow as it is a non-cash expense. For some strange reason the depreciation charge all happens in month 12 in the Profit & Loss Account.
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8. I couldn’t find any way to handle stock. I know from my own modelling experience, this can get incredibly complicated but it would have been nice to have a stock build/reduce facility – even if it was one amount up or down each month – to make the cash flow more representative. Again using a shop as an example, you’re going to need stock when it opens and you will probably increase the value as the store gets more established and sales grow.
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9. The numbers are built up in detail but the reporting is done as a high level summary for the Profit & Loss account. I like the summaries since they don’t overwhelm you with numbers but I would like to be able to print out the details and choose which to include in the business plan. When you get asked a question like “What assumptions did you make about rent and rates in these property costs of £6,500 per month”, it’s nice to be able to show the detailed analysis without having to flounder around with “I think I assumed rent of £3,500 and rates of 40% of the rental cost.”
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10. You can have two loans in the business which I think is good but I’d have liked to have been able to give them labels to make it clearer what money is coming from whom.
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11. The Profit & Loss account and cash flow are monthly, the balance sheet is just for the end of the year [even though it doesn’t say]. Personally I’d have liked to see a monthly balance sheet although this is another complexity. It’s just that it helps to show how any cash problems have arisen.

Business Plan Writer doesn’t split the direct labour and salary costs between the net payment in the month and the payment of PAYE tax and national insurance to HM Revenue & Customs the following month but I don’t have an issue with that. It keeps things simple and it is prudent on the cash which is the way to be.

Despite my concerns on the numbers forecasting, I do think that Business Plan Writer is useful if you want to get a broad-brush view of the financial feasibility of a business idea. The challenge for any business start-up is to build up sales and margins fast enough to stop the start-up costs and day to day expenses causing the business to run out of money.

Overall Thoughts On Business Plan Writer

It is easy to use and if you want business planning software to help you to focus and write the words in your business plan, then Business Plan Writer will be a big help.

Unfortunately I have significant concerns on the numbers side for anything but the simplest of businesses. It would be OK for me with my business coaching and training because I don’t have to worry about stock/work in progress or equipment.

It will work less well for consultants and designers who build up work in progress on projects and only invoice when stages are complete and the lack of stock means it’s not suitable for retailers, distributors or manufacturers unless you process other people’s materials or receive it on free issue.

I had hoped Business Plan Writer would do a bit more to help small business owners get to grips with their numbers.

I’m a bit believer in the “do it yourself” approach to business planning and then having it reviewed by a professional. This way it is your plan.

Business Plan Writer is at the cheap and cheerful end of the market for business planning software. It is very useful if your needs are simple.

Business Plan Writer Is Recommended

Recommended for those business owners who:

• want to work on the business planning words and will let someone else worry about the numbers or
• for those whose financial requirements are very straightforward or
• who want to get a broad-brush view on the feasibility of a business idea.

Have You Used Business Plan Writer?

If you have used Business Plan Writer, then I’d like to hear what you think of the software.

Did it help you to write a business plan or did it frustrate or confuse you?

Update On Business Plan Writer

Following my review I had a good chat with the software author, Dave Kilroy and he’s taken many of the points on board.

There is a multi year version of Business Plan Writer coming out in the next few weeks and then in the winter, there will be a version that deals with the issues that I’ve raised.

I think it’s important that Business Plan Writer stays simple to use.

These details on the Product Launch Formula from Jeff Walker used to be a popular lens on Squidoo. Unfortunately they’ve tightened their policy about affiliate marketing and I expect it to be deleted. Rather than delete the information which has attracted a lot of traffic, I have decided to move it to this blog.

Jeff Walker & the Product Launch Formula 3 [continue reading…]

The Aston Martin Cygnet is a small, luxurious car based on the Toyota IQ which will cost £30,000 to £40,000 new.

Aston have taken the IQ and given it a new grill, door handles, leather interior and the prestigious Aston Martin badge (and probably a few other little extras).

I have mixed feelings about this.

Is There A Market For A Small Extremely Luxurious Car?

I believe there is a market for a luxury small car. Not sure about something this small but I always liked the idea behind the Panther Rio, a car from the seventies based on the Triumph Dolomite.

I think the baby Aston will sell.

The Cygnet is a well differentiated product – there’s nothing out there in the market that can be easily compared.

I fancy having an Aston Martin keyring myself although I won’t be buying a Cygnet.

But I also believe that it tarnishes the Aston Martin brand name.

What Does The Aston Martin Brand Stand For?

Play the word association game with me on Aston Martin.

If you’re like me, you probably get words like…

• Fast
• Expensive
• British
• Sporty
• James Bond (from the films and not the books).

The Aston Martin Cygnet

So how does the Cygnet do?

Well it’s certainly expensive for a small car but it’s not in the £100,000 plus range.

But it’s not fast or sporty.  It only has a 1.3 litre four-cylinder engine. I read that 0-60 mph was in about 11.5 seconds.

And it’s not British. When I checked on the Internet, it seems that the IQ is made in Japan.

Aston spend 150 man-hours to convert the IQ into a Cygnet so you can see where a lot of the cost comes from.

As for James Bond?

Well I can’t imagine him trading in the DB9 for a Cygnet.

Buying An Aston Martin Cygnet With A One-77

I’ve read that a lot of people who have bought the £1 million plus Aston Martin One-77 have also bought a Cygnet in a “his’n’hers” style deal.

But I think it will damage the allure of the brand.

Why The Car Damages The Brand

“I drive an Aston” will no longer create a mental picture of the beautiful, sleek DB9 or a Vantage. People are going to assume that you’re a wannabee with a Cygnet.

It would make me less likely to buy a proper Aston Martin although I can’t see me rushing into the market in the foreseeable future.

This branding move by Aston Martin with the Cygnet is the opposite to that done by Audi when they introduced the R8.

Aston Martin Branding vs Audi Branding Changes

I had the pleasure of taking a close look at an R8 last week and there’s no doubt that it looks a great car and again it seems to be differentiated as a practical super-car you can drive every day. But even if I was in the market, I have my doubts on whether I’d ant to spend £100k plus on an Audi.

However, having the R8 in the range has added to the prestige of owning an Audi and would add to the appeal of a TT, even if I prefer the design of the old model.

It’s a tough choice at the top end of the car market.

What Super-Car Brand Would You Choose?

How do you choose between an Aston, a Ferrari or a Lamborghini?

Brand image matters and this is an even bigger stretch than Porsche with the Cayenne, which has been a big seller.

Sure the Aston Martin Cygnet may sell plenty but it damages the brand.

What do you think?

If You’re Interested In the Aston Martin Cygnet Car And Not The Brand…

Here are some links for anyone interested in the Cygnet as a car

Aston Martin website

First drive on Autoexpress

Car review

Autocar news

I’m interested when the ordinary becomes extraordinary so this story caught my eye.

It is reported that a lap dancer from Stringfellows club in London has a pair of knickers that have been valued at £15,000.

What makes this pair of panties so special and different from all the others? It is an example of differentiation by what and especially who.

A guest at Stringfellows  signed and drew butterflies on them.

Still not so special but when I tell you that the guest was Turner Prize winning artist Damien Hirst, thing start to make a bit more sense.

Here’s the news story from The Sun with a photo of the pink knickers.

It’s money I wouldn’t pay personally but it’s a useful reminder that value, like beauty, is very much in the eye of the beholder.

I’ve seen the problem where business owners are constrained by their own beliefs.

If things are a bit tight financially, you can project that thought onto your customers and you can try to scrimp and save on their behalf. Sometimes it may be appropriate but other times they may want to splash the cash.

Rich Schefren was one of the very first Internet marketing gurus I encountered online.

Unusually it wasn’t through his legendary free reports that I became a customer. I went straight into the Business Growth System after seeing the product launch email. I had no choice but to buy the day before I went on a two week safari holiday.

Like most people who get caught up in the Internet marketing world, I then indulged myself on plenty of other gurus but I’ve always kept a close eye on what Rich is doing.

These days I have learnt to focus my attention on just three – Rich, Glenn Livingston and Ryan Deiss.

They are three different characters with different perspectives but if they don’t have an opinion about a subject, it’s probably much more hype than substance and therefore not worthy of my time.

[continue reading…]