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Tim Berry explains why your business plan is a living document and how it guides management.
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Beth Haselhorst: In order for your business to succeed, you have to be realistic about your strength and weaknesses. That’s why it’s a good idea to periodically take stock with the situational analysis. Joining us today to talk about that is Tim Berry, an expert on business planning and founder Palo Alto Software, the nation’s leading business planning software, welcome to SBTV.com Tim.
Tim Berry: Thank you.
Beth Haselhorst: Why is it so important to access your business from time to time?
Tim Berry: Because things change and you really have to be careful that you have a way to alert yourself to change. The enemy of planning is thinking that plan somehow means that’s the way it’s going to happen. It’s going to change so you have to do a lot of assessment and that’s really what planning is about is, managing change.
Beth Haselhorst: You have a valuable process to access your company’s strength and weaknesses called the SWOT. What does that stand for and how does it work?
Tim Berry: I really like the SWOT analysis, particularly for established companies that want to grow. SWOT is S.W.O.T and it stands for Strengths, Weaknesses, Opportunities and Threats. And what I love about this is it’s an easy way for people to get together and start thinking strategically. You start your business planning process, particularly when it’s an established company and will get together and the SWOT, people who care about the company, people who work there. They’re going to come out what are our strengths, what are our weaknesses, what are our opportunities, what are our threats? And it gets people talking and thinking so you can move towards the core strategy market identity complex of business planning.
Beth Haselhorst: What are some of the things you can learn from the SWOT process?
Tim Berry: Well, I hope I could tell a story and I hope Kale isn’t embarrass if he sees this eventually, may be we won’t show him this afterwards but it’s just such a great example of the way communication works in companies. In one of our SWOT analysis, Kale who was still with us, that’s Kale Bratner he’s in his early 30’s, married, three kids, but he started with us as an under graduate at the University of Oregon and a very talented young man. After three or four years, he was full time with us and he was running our product development. So how does this relate to SWOT? Well in one SWOT analysis, one of the weaknesses that came up and Kale was so embarrassed, he turned red. He was like 25 and he was dealing with the 50’s President and Founder, namely me and he said “Well, one of the weaknesses of the Company is the President won’t stay out of code”.
I love the example because it’s the format allows brainstorming and Kale was kind of embarrassed and it was a weakness. My company grew like so many organically; I did a lot of the early programming for it. But by the time Kale brought this up, we had full time people. I had my own job as President and I couldn’t resist messing with it and Kale hadn’t found the way to tell me and it was very valuable. It’s a great example of how the SWOT can get people who are running a company, communicating and it gives a form for brainstorming.
Beth Haselhorst: That’s a great story. So, when do you know it’s time to conduct a situational analysis of your business?
Tim Berry: You should do it regularly. Situation analysis is it includes the SWOT. But also looking at the market, looking at your identity and the danger is, as time passes, you can begin to trust all the assumptions. And the situational analysis is something at least one’s a year. I mean, we really do it and we do as I say, I practice what I preach. We do actually once a year go through, we review the plan every month but once a year, we step back and we look at our brought our situation including market and our SWOT and opportunities and threats get to market. I just really, really would hate to see a company go more than a year without doing that.
Beth Haselhorst: Tim thanks for joining us today. Be sure to visit www.TimBerry.com to learn more about Tim’s books, his work and to read his blog. And you can find more segments with Tim Berry in the Small Business Growth Series here on SBTV.com where small business is our only business.