Map a strategy for success - Dynamic Pathways' Success Inc 5.1 business-planning software - includes related article on top choice Destiny - Software Review - also, Jian Tools for Sales' BizPlanBuilder 4.1, Palo Alto Software's Business Plan Toolkit 4.1, Planet Corp's Destiny Business Information and Planning System 1.06, SoftKey International's PFS:Business Plan 1.1, PowerSolutions for Business' PlanMaker 1.03 and Business Resource Software's PlanWrite 3.0 - Evaluation

Home Office Computing, Sept, 1994 by Stephen L. Nelson

A GOOD BUSINESS TEXTBOOK WILL TELL YOU THAT FORmal business planning is essential. Not only do you need to do it to succeed, you need to do it to survive. Business plan software publishers and consulting services echo the same refrain--plan your work and then work your plan.

Business plans encompass two things: a set of financial statements and a 25- to 50-page report that describes your business in detail. In essence, a business plan is a document that attempts to get the reader excited about your business--usually excited enough to invest or lend money. but don't think that a business plan is something you'll do only once and only when you're starting up. A good business plan is something you'll revise and use over and over.

The pro forma financial statements in a business plan include an income statement, cash flow statement, and balance sheet for each of the next five years or so. In addition, cash flow statements are often (and should be) prepared monthly, to make sure that a business isn't coming up short some months.

The business plan report describes your company, where it's going, and how it's going to get there. Ideally, the report also addresses the reader's specific concerns. A business plan report for lenders, for example, would probably explain why the lender doesn't need to worry about the loan being repaid. (There's lots of collateral, for instance.) A business plan report intended for venture capital investors, on the other hand, would probably explain how such an investor will ultimately be cashed out. (The owners plan an initial public offering in, say, five years.)

Choosing Business Plan Software

Even though you can prepare a business plan from scratch by using a spreadsheet and word processor, it's easier and faster to do with business plan software. Some of these products provide templates that plug into your regular spreadsheet and word processor; others handle the work in their own environments. (One product we didn't have in time for this review, Mighty Information's $100 Plan A for the PC and Mac, follows the first approach.)

Every program provides a useful framework for describing your business and for forecasting its financial future. Certain features--such as the ability to forecast monthly cash flows accurately--make some products clearly superor. A forecast works best if the business plan software can build integrated financial statements, which create a cash flow statement at the same time as the income statement and the balance sheet.

None of the programs, however, did a very good job addressing the unique problems of starting a new business. Perhaps the most serious deficiency is that they don't forecast cash flows by month over the entire forecasting horizon--at best, they do so only for the first year. Implicitly, the financial forecasting templates provided by all of the models conclude that if you collect, say, $120,000 in cash over the year and spend only $60,000, you'll be fine. The problem with this approach is that if you need to pay employees and vendors before you collect from customers--as almost always happens if you are starting or growing a business--you might have real trouble getting through the year. To work around this, you need to use one of the packages that supports mothly cash flow forecasting for the first 12 months and then make sure to update you business plan annually.

None of the business plan report outlines asks start-up businesses to think about four critical questions: 1) Can the product be developed or the service provided? In the case of a technology company, for example, can some new technology be turned into a product? 2) Is the product or service one that people want to buy? 3) Can the product or service be sold at a profit? Obviously, just because people will buy a $5,000 sports car doesn't mean you can make money selling them! 4) Is management capable of executing the business plan as described?

New businesses have got to be able to answer each of these questions in the affirmative. So make sure you don't forget to add your own paragraphs that answer these questions with the resounding "Yes" that you and your potential investors or money lenders want and need to hear.

To get a little taste of business planning, log on to America Online and check into HOME OFFICE COMPUTING'S Software Library. There, you'll find business plan templates (PROFITVOL.XLS and PROFITVOL.IMP) that you can download for free and experiment with.

BizPlanBuilder v4.1

Rating: **1/2

WIN / DOS / MAC

BizPlanBuilder (about $89 on the street) provides a set of plug-in documents to use with your word processor and spreadsheet. To fill in the business plan report, the manual provides a questionnaire asking the type of business, a description of products or services, target market, and so on. With this in hand, you're ready to enter core information into the boilerplate documents--one for each chapter in the business plan and a handful of others for front matter, table of contents, appendices, and so on.