LivePlan is a new Web-based business planning service from Palo Alto Software, best known for its established Business Plan software. As any professional advisor will tell you, business planning is essential for all businesses. It helps you work out whether and how your business will make money, and enables you track the progress of your business against your plan. And it is almost impossible to persuade people to invest in your business if you can’t show them a viable business plan.
LivePlan helps you to do all of this online, and then keep your business plan updated as your business progresses. The service costs $19.95 (around £14.95) per month. There is no minimum contract period so it’s possible to use LivePlan to create a business plan, download it and cancel your subscription. However, doing that means you won’t be able to use the service to monitor the progress of your business.
LivePlan is divided into sections. These sections cover general information about your company and its management team, your company’s products and/or services, and its target market, strategy and financial plan. You can add extra users to your account so different people can work on different areas of the business plan.
Each section contains instructions telling you what details are required. In addition, examples are given so you can see the sort of things that you should consider including. These examples cover a wide range of business sectors, so there should be one suitable for your business. Having said that, LivePlan recommends that you use the examples as reference material rather than simply copying them.
There are also links to short videos where business planning expert Tim Berry gives advice. These videos talk you through general business plan creation issues, rather than being system specific instructions. However, using the system is intuitive.
Once you have completed each section, you are automatically taken to the next section, but you can go back and edit previously completed sections whenever you want. You can also save your work and come back to it later if you don’t have time to complete your business plan in one session.
The financial plan
Arguably, the financial element of a business plan is the important part. And it’s often the part of the plan that scares most business owners because most business owners are entrepreneurs rather than accountants. Creating the financial section of your business plan is simplified by LivePlan because the system guides you step-by-step through the process.
First, it asks you to list your products or services. Then you enter how many units of each you expect to sell, how much you expect to sell each unit for, and how much you expect each unit will cost to produce.
Next, you enter your anticipated expenses, broken down by category. LivePlan already has the main expenses categories as defaults, but you can add others. Expenses can be either fixed costs or a percentage of sales. You can also enter funding sources such as investments, bank loans, and so on at this point.
LivePlan then generates a profit and loss statement, a balance sheet and a cash flow statement. It automatically generates graphs to go with these which make the business plan look more professional.
Reviewing your business progress
One of the main mistakes businesses make is preparing a business plan to secure investment, and then filing it away somewhere, never to be seen again. However, business plans become even more useful when you regularly review them. LivePlan has a Scorecard function where you can enter each month’s figures to update your plan. This lets you see whether or not you’re on track so you can react accordingly.
There is also a scheduling feature which lets you enter important business milestones. This is designed to be used for key events rather than day-to-day tasks. Email reminders can be set to remind you of these milestones.
On the road to riches
Your business plan can be downloaded in either PDF format or Microsoft Word format. It looks extremely professional and it is in the format that is preferred by banks and other investors. Being template based, though, you are restricted to the standard font and there is no way to include a logo on the cover page.
Is this something you could do yourself using Microsoft Office? Well, yes, possibly. In fact, Microsoft Office comes with business plan templates that you can use. But it’s the fact that this tool guides you through the planning process and helps you keep your plan up-to-date that makes it so useful.
LivePlan is an excellent way to create a business plan, and once created, to monitor and regularly update it. Unless you are really confident with business planning, the guidance that you get from LivePlan makes it well worth spending the fairly minimal £14.95 per month subscription.