The Plan-as-You-Go Business Plan

I found this article very interesting.  I hope you will like it too...

 

Source: Enterpreneur.com by Tim Berry

This year, consider a new approach that could change how you plan--and manage--your business.

 

As we roll into 2008, I believe it's time to adapt a new kind of business planning that I want to call plan-as-you-go business planning. The idea is to integrate the concept of the business plan with the flexibility and power today's business tools offer. At the same time, you'll focus on management, tracking and accountability and concern yourself more with function than with form.  

What's Different
Here's how the PAYG plan differs from the standard business plan: 

1. It's a process, not just a plan. Every PAYG plan has a review schedule built in from the beginning. It sets the dates and participants for future review meetings, taking 60 to 90 minutes once a month and 2 to 3 hours once per quarter. PAYG planning is about process, including the regular review and management of the plan.
2. Form follows function. The PAYG plan isn't necessarily the same kind of formal business plan document you did in business school or have read about. It doesn't necessarily follow a recipe. Every PAYG plan is unique. It might generate a formal document at some point, but until you need the formal plan document to show somebody, it lives on your computer. You pull from the plan to make a pitch presentation, elevator speech, summary memo or detailed business plan document as required for business purposes.
3. It assumes and manages change. The PAYG plan is about navigation, not just a static map. It assumes that assumptions will change. That's why it includes a built-in review schedule. Assumptions must always be visible, on top, where they can be reviewed. Unlike the misunderstood formal business plan, the PAYG plan is a way to keep your long-term goals in sight while also managing the short-term surprises.

You might read this list and say "But those things are true for any good planning; your concept isn't so new and different." And I'd say "That's right, you're getting it." What's most important about PAYG planning is that people in the real world, startups and growing companies alike can actually use it. It gets people out of the silly talk about how a business plan isn't useful because they misunderstand how a business plan is supposed to be used. 

The Essentials

1. Start with the review schedule. If you don't have a plan review schedule, you don't have PAYG planning. Set the dates from the very beginning. As you develop the plan, keep the people involved aware of when and how you're going to track.
2. Develop useful metrics. PAYG planning is about actually managing, not just planning. The main metrics involve money--the most important being cash flow--but look for metrics that involve the team, such as calls, presentations, visitors, inquiries, average time of calls and downloads. Ideally, everybody on the team deserves metrics.
3. Identify the assumptions. Effective PAYG planning keeps the assumptions on top, where you can revisit them with every review meeting. We assume things change and that the planning is about navigation, not just a static map. This is how you keep your plan alive and active.
4. Every plan has a heart and flesh and bones. The heart is strategy, market need, differentiation and focus. This is as true with PAYG planning as with traditional planning. The flesh and bones are just as important; in PAYG planning they're the metrics, milestones, tasks, dates, deadlines, responsibility assignments and, most important, cash flow planning.

Important Principles of PAYG Planning

1. Start anywhere. Get going. The plan is a matter of interlocking blocks, so some people start with a numbers task, like a sales forecast, and others start conceptually with a vision, a strategy or focus. Just get started. Don't wait until your plan is finished to get going. Start today and start using it tomorrow.
2. All business plans are wrong--but still vital. You're predicting the future, which means you'll be wrong. But you set down tracks so you can follow up and revise without losing sight of the long-term goals and directions.
3. Good business plans are never done. My company's business plan started in the late 1980s and it's still a work in progress. If your plan is finished, your company is finished. Instead, you revise as needed. The core of the plan is the collection of heart and flesh and bones; it's content, thinking and specifics. From that you spin out a document or presentation or elevator speech when needed.
4. Form follows function. Do only as much as you need to run your company, to manage and to build strategy. If you don't need to create a formal plan, don't; keep it on your computer.
5. Keep it alive and spin the output as needed. Don't ever let your plan become static. Keep it active and alive, not forgotten in a drawer.
6. Planning is worth the implementation it causes. You measure a plan by results. It's as good as the decisions it guides.

For more information on this method of planning, look for Tim Berry book The Plan-as-you-go Business Plan due out later this year from Entrepreneur Press.

--
Rama Ramidi

another link

http://www.sharebazaaronline.blogspot.com/

 

G Anil Kumar | Amba Research

Ph +91 80 39808027 | Mob +91 9242496790

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One more link to add

http://www.paisacontrol.com/

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The Three Stages of Primary Bull Markets and Primary Bear Markets

Hamilton identified three stages to both primary bull markets and primary
bear markets. These stages relate as much to the psychological state of the
market as to the movement of prices. A primary bull market is defined as a
long sustained advance marked by improving business conditions that elicit
increased speculation and demand for stocks. A primary bear market is
defined as a long sustained decline marked by deteriorating business
conditions and subsequent decrease in demand for stocks. In both primary
bull markets and primary bear markets, there will be secondary movements
that run counter to the major trend.

Primary Bull Market - Stage 1 - Accumulation

Hamilton noted that the first stage of a bull market was largely
indistinguishable from the last reaction rally of a bear market. Pessimism,
which was excessive at the end of the bear market, still reigns at the
beginning of a bull market. It is a period when the public is out of stocks,
the news from corporate America is bad and valuations are usually at
historical lows. However, it is at this stage that the so-called "smart
money" begins to accumulate stocks. This is the stage of the market when
those with patience see value in owning stocks for the long haul. Stocks are
cheap, but nobody seems to want them. This is the stage where Warren Buffet
stated in the summer of 1974 that now was the time to buy stocks and become
rich. Everyone else thought he was crazy.

In the first stage of a bull market, stocks begin to find a bottom and
quietly firm up. When the market starts to rise, there is widespread
disbelief that a bull market has begun. After the first leg peaks and starts
to head back down, the bears come out proclaiming that the bear market is
not over. It is at this stage that careful analysis is warranted to
determine if the decline is a secondary movement (a correction of the first
leg up). If it is a secondary move, then the low forms above the previous
low, a quiet period will ensue as the market firms and then an advance will
begin. When the previous peak is surpassed, the beginning of the second leg
and a primary bull will be confirmed.

Primary Bull Market - Stage 2 - Big Move

The second stage of a primary bull market is usually the longest, and sees
the largest advance in prices. It is a period marked by improving business
conditions and increased valuations in stocks. Earnings begin to rise again
and confidence starts to mend. This is considered the easiest stage to make
money as participation is broad and the trend followers begin to
participate.

Primary Bull Market - Stage 3 - Excess

The third stage of a primary bull market is marked by excessive speculation
and the appearance of inflationary pressures. (Dow formed these theorems
about 100 years ago, but this scenario is certainly familiar.) During the
third and final stage, the public is fully involved in the market,
valuations are excessive and confidence is extraordinarily high. This is the
mirror image to the first stage of the bull market. A Wall Street axiom:
When the taxi cab drivers begin to offer tips, the top cannot be far off.

Primary Bear Market - Stage 1 - Distribution

Just as accumulation is the hallmark of the first stage of a primary bull
market, distribution marks the beginning of a bear market. As the "smart
money" begins to realize that business conditions are not quite as good as
once thought, they start to sell stocks. The public is still involved in the
market at this stage and become willing buyers. There is little in the
headlines to indicate a bear market is at hand and general business
conditions remain good. However, stocks begin to lose a bit of their luster
and the decline begins to take hold.

While the market declines, there is little belief that a bear market has
started and most forecasters remain bullish. After a moderate decline, there
is a reaction rally (secondary move) that retraces a portion of the decline.
Hamilton noted that reaction rallies during bear markets were quite swift
and sharp. As with his analysis of secondary moves in general, Hamilton
noted that a large percentage of the losses would be recouped in a matter of
days or perhaps weeks. This quick and sudden movement would invigorate the
bulls to proclaim the bull market alive and well. However, the reaction high
of the secondary move would form and be lower than the previous high. After
making a lower high, a break below the previous low would confirm that this
was the second stage of a bear market.**

Primary Bear Market - Stage 2 - Big Move

As with the primary bull market, stage two of a primary bear market provides
the largest move. This is when the trend has been identified as down and
business conditions begin to deteriorate. Earnings estimates are reduced,
shortfalls occur, profit margins shrink and revenues fall. As business
conditions worsen, the sell-off continues.

Primary Bear Market - Stage 3 - Despair

At the top of a primary bull market, hope springs eternal and excess is the
order of the day. By the final stage of a bear market, all hope is lost and
stocks are frowned upon. Valuations are low, but the selling continues as
participants seek to sell no matter what. The news from corporate America is
bad, the economic outlook bleak and not a buyer is to be found. The market
will continue to decline until all the bad news is fully priced into stocks.
Once stocks fully reflect the worst possible outcome, the cycle begins
again.

The Three Stages of Primary Bull Markets and Primary Bear Markets

The Three Stages of Primary Bull Markets and Primary Bear Markets

Hamilton identified three stages to both primary bull markets and primary
bear markets. These stages relate as much to the psychological state of the
market as to the movement of prices. A primary bull market is defined as a
long sustained advance marked by improving business conditions that elicit
increased speculation and demand for stocks. A primary bear market is
defined as a long sustained decline marked by deteriorating business
conditions and subsequent decrease in demand for stocks. In both primary
bull markets and primary bear markets, there will be secondary movements
that run counter to the major trend.

Primary Bull Market - Stage 1 - Accumulation

Hamilton noted that the first stage of a bull market was largely
indistinguishable from the last reaction rally of a bear market. Pessimism,
which was excessive at the end of the bear market, still reigns at the
beginning of a bull market. It is a period when the public is out of stocks,
the news from corporate America is bad and valuations are usually at
historical lows. However, it is at this stage that the so-called "smart
money" begins to accumulate stocks. This is the stage of the market when
those with patience see value in owning stocks for the long haul. Stocks are
cheap, but nobody seems to want them. This is the stage where Warren Buffet
stated in the summer of 1974 that now was the time to buy stocks and become
rich. Everyone else thought he was crazy.

In the first stage of a bull market, stocks begin to find a bottom and
quietly firm up. When the market starts to rise, there is widespread
disbelief that a bull market has begun. After the first leg peaks and starts
to head back down, the bears come out proclaiming that the bear market is
not over. It is at this stage that careful analysis is warranted to
determine if the decline is a secondary movement (a correction of the first
leg up). If it is a secondary move, then the low forms above the previous
low, a quiet period will ensue as the market firms and then an advance will
begin. When the previous peak is surpassed, the beginning of the second leg
and a primary bull will be confirmed.

Primary Bull Market - Stage 2 - Big Move

The second stage of a primary bull market is usually the longest, and sees
the largest advance in prices. It is a period marked by improving business
conditions and increased valuations in stocks. Earnings begin to rise again
and confidence starts to mend. This is considered the easiest stage to make
money as participation is broad and the trend followers begin to
participate.

Primary Bull Market - Stage 3 - Excess

The third stage of a primary bull market is marked by excessive speculation
and the appearance of inflationary pressures. (Dow formed these theorems
about 100 years ago, but this scenario is certainly familiar.) During the
third and final stage, the public is fully involved in the market,
valuations are excessive and confidence is extraordinarily high. This is the
mirror image to the first stage of the bull market. A Wall Street axiom:
When the taxi cab drivers begin to offer tips, the top cannot be far off.

Primary Bear Market - Stage 1 - Distribution

Just as accumulation is the hallmark of the first stage of a primary bull
market, distribution marks the beginning of a bear market. As the "smart
money" begins to realize that business conditions are not quite as good as
once thought, they start to sell stocks. The public is still involved in the
market at this stage and become willing buyers. There is little in the
headlines to indicate a bear market is at hand and general business
conditions remain good. However, stocks begin to lose a bit of their luster
and the decline begins to take hold.

While the market declines, there is little belief that a bear market has
started and most forecasters remain bullish. After a moderate decline, there
is a reaction rally (secondary move) that retraces a portion of the decline.
Hamilton noted that reaction rallies during bear markets were quite swift
and sharp. As with his analysis of secondary moves in general, Hamilton
noted that a large percentage of the losses would be recouped in a matter of
days or perhaps weeks. This quick and sudden movement would invigorate the
bulls to proclaim the bull market alive and well. However, the reaction high
of the secondary move would form and be lower than the previous high. After
making a lower high, a break below the previous low would confirm that this
was the second stage of a bear market.**

Primary Bear Market - Stage 2 - Big Move

As with the primary bull market, stage two of a primary bear market provides
the largest move. This is when the trend has been identified as down and
business conditions begin to deteriorate. Earnings estimates are reduced,
shortfalls occur, profit margins shrink and revenues fall. As business
conditions worsen, the sell-off continues.

Primary Bear Market - Stage 3 - Despair

At the top of a primary bull market, hope springs eternal and excess is the
order of the day. By the final stage of a bear market, all hope is lost and
stocks are frowned upon. Valuations are low, but the selling continues as
participants seek to sell no matter what. The news from corporate America is
bad, the economic outlook bleak and not a buyer is to be found. The market
will continue to decline until all the bad news is fully priced into stocks.
Once stocks fully reflect the worst possible outcome, the cycle begins
again.

 

This e-mail may contain confidential and/or privileged information. If you are not the intended recipient (or have received this e-mail in error) please notify the sender immediately and destroy this e-mail. Any unauthorized copying, disclosure or distribution of the material in this e-mail is strictly forbidden.  Any views or opinions presented are solely those of the author and do not necessarily represent those of Amba Holdings Inc., and/or its affiliates.  Important additional terms relating to this email can be obtained at  http://www.ambaresearch.com/disclaimer