Tim Berry, president of Palo Alto Software brings a diverse background to his venture. For most of the 1970s he worked in Latin America as a correspondent with United Press International, Business Week, and other publications. Berry returned to the United States in 1979 to enter Stanford's graduate business program and to work as a consultant with Creative Strategies International. After completing his MBA in 1981, he became a vice president at Creative Strategies, where he started a group to focus on market analysis of the personal computer software market.
In 1983 Berry met Philippe Kahn, who had arrived in the San Jose area to start a company. Berry revised Kahn's business plan for Borland International in return for stock and a position on the board of directors. Borland struggled for months before sales took off with the favorable market reception of Turbo Pascal in late 1983.
Berry began developing market forecasts for Apple Computer's Latin American group, and continued with Apple after starting his own company in 1983. He was the consultant for Apple Latin America's annual business plan from 1983 through 1987, as sales multiplied six times. He was the consultant to Apple Japan's business planning process from 1991 to 1993, as sales quadrupled.
Berry's first business plan software product was published in 1985. Since 1993, he has concentrated primarily on building Palo Alto Software's product business.
The cornerstone of his business is a business plan software product, called Business Plan Pro. The business plan website, BPlans.com, provides a broad spectrum of sample plans plus templates to help you write your own plan. The product line also includes a marketing plan and web strategy software package. With his journalism background, Berry is especially particular about the clarity of the writing in the manuals provided with the programs, perhaps one of the reasons his products are so highly regarded.
I have admired Berry's work for a long time. When I began putting together my series of features on business planning, he was first on my list to ask for an interview. He generously agreed to take time from his busy schedule to share with us some of his thoughts about planning and running a planning business.
Tell us a little bit about yourself. How did you get into the planning business? Were there any particular events in your life that influenced you?
One thing I remember was the discovery of how business truths have two components parts -- the words, and the numbers. You can't separate truth into just words, or just numbers; you need both. I discovered that in the middle 1970s when I was a journalist in Mexico City and I switched from general journalism to business writing. I took night school classes in the business basics -- accounting, finance, marketing, economics, among others.
After a while, I realized that in my day job I had been easier to mislead before I understood the numbers. That was new to me then because I'd been mostly dealing with words. My undergraduate college degree was in literature. Then I got a masters degree in journalism. With the business courses, I began to understand what I was talking (or writing) about, which is generally a good thing.
As an example, at a press conference in the late 1970s a finance minister announced a new fiscal budget. The party line was that this budget would both stimulate the economy and control inflation. Only a few of us, those who had a sense of the numbers, understood that doing both is essentially a contradiction.
By 1979, combining words and numbers got so interesting that I quit my job in Mexico to return to the United States and get an MBA at Stanford. At Stanford, I discovered that math, analysis, and programming could be fascinating, and business planning was the ideal way to combine the creativity of strategy with the practical world of getting things done, throwing numbers and analysis in as well. I liked it. I've been focusing on planning, and software, ever since.
What are some common mistakes that entrepreneurs make in writing a business plan?
I like the answer I've given to that same question, posted on the business planning website.
What kinds of businesses use your services?
We're very much focused on the product, Business Plan Pro, as a tool that empowers the entrepreneur, business owner, or business manager to develop their own plan. Many of them work with consultants -- we have a good database of consultants (we just list, we don't take a cut, and listing is free), but the majority of our customers go through the plan themselves, guided by our product's abundance of help, instructions and guidance. We really do guide them -- there's context-sensitive help, instruction and examples for every table and every topic. Help is provided for every row of the tables, along with audio help, as well.
Our customers tend to be smaller companies, often new businesses or start-ups, but we do run across a wide range. Users include 63 of the Fortune 100. We also get medium companies, consultants, academics -- Wharton bought more than 500 copies, for example -- franchisers (we're not supposed to say which, but one of the top franchise companies in the world bought 500 copies), and lots of businesses.
What other services do you provide besides how to write a business plan?
Besides Business Plan Pro, we also have Marketing Plan Pro, and our newest, Web Strategy Pro. The most common misunderstanding about Marketing Plan Pro and Web Strategy Pro is that because we have those other two products available, Business Plan Pro doesn't include a marketing plan, or isn't suitable for a web or Internet company. Our competitors have hit that with box talk about "also includes marketing plan," as if Business Plan Pro didn't.
To answer that, we like to assure people that Business Plan Pro does include the obvious market analysis and marketing components that are and ought to be a part of every business plan. Marketing Plan Pro is designed for people who want to plan, but don't have the whole business responsibility, just marketing; or they want a specialized marketing-only plan. It is much more specific. Web Strategy Pro is for people who want to put the discipline of business planning into the web area, planning for a website with market analysis, sales forecast, expense budget, and so forth.
Why did you call the book that accompanies the business planning software "Hurdle"?
It's called Hurdle because most of the people who do a business plan see it as an obstacle in their way, not an end in itself, but something they have to get over, like a hurdle. That's not the way I see it. I like planning, and I can't imagine how a real business can live without planning, but I've been in this for more than 20 years now, and I know I'm not typical. Most people avoid it.
If you had the book to write over, what would you change/add?
Actually, this is a particularly hard question because I do in fact write the book over repeatedly. I have the luxury of new editions, and even better, the book is live online (where it is also free to the online reader), so I am frequently in there with new revisions. Ironically, one of the recent changes was changed back. I went into the book in 2000 and added discussions of how Internet companies were getting money for traffic instead of revenues and profits, which seemed to contradict some of the basic common sense in the rest of the book; but this year I was able to get back into it and revise back to the basics and common sense of revenue and profits.
Any advice for people considering starting a business right now? How can entrepreneurs plan for changes in the economy and the marketplace?
First, ignore the big pendulum swinging too far. A while back the world of entrepreneuring was too optimistic. Young Internet companies were getting millions of dollars and lots of publicity for new plans without solid revenue foundations. Today people are too discouraged, too negative. Business success isn't a matter of fashion. It's a matter of giving people value for their money, thinking of the customers, providing a product or service that offers people benefits for a fair price. That's still true and will always be true.
Second, don't wait for the next great idea. New businesses and business success in general are rarely based on ideas, they are rarely unique, and they don't have to be. It doesn't matter that somebody else has done it already. Just make sure you want to do it, and that people want to pay money for it. Give them value -- most businesses succeed or fail based on following through, getting into the office very day, returning phone calls, giving value. The plan is essential, but a plan alone won't do it. You have to follow through and give people something that makes them better off for spending their money with you.
What's next? Any great ventures on the horizon for you?
Palo Alto Software, more and better. I want to keep it focused on what it does right, which is great business planning products, and not get distracted trying to invent something new for it.