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SMEs with great ideas are planning for failure

According to an independent survey released today on behalf of business planning software experts Palo Alto Software, entrepreneurs jumping into business without seeking advice on business planning are six times more likely to require additional funding within 36 months of operating, compared to those who seek professional advice or use business planning software.

According to Palo Alto Software, the number of SMEs that don't have a well thought-out and adhered-to cashflow plan is a significant factor that leads to 80 per cent of small businesses failing within two years. Palo Alto Software’s, successive surveys over the last decade in the UK and North America have highlighted that survival and profit-making often depend on how well you plan your business and execute against plan, particularly in the early years.

Tim Berry, founder and president of Palo Alto Software said, “The underlying problem with cash flow is that people think in profits, but they spend cash. Cash is different from profits. For example, sales on credit generate profits but they don't generate money in the bank, at least not until the money owed by a customer is collected.

“Statistically, a significant number of companies that fail are profitable when they fail. They have profits, but not money to pay their bills.”

“The key to cash flow is planning. Working with a plan, businesses can manage cash flow more economically by knowing ahead of time what their cash needs are, so that they can provision for cash. Without a plan, businesses can get caught up in cash needs whether or not they are profitable in their accounting.”

The survey conducted by TNS includes 251 UK SMEs. Interviews were conducted between 12th and 16th May 2003.


Notes to the editor:

Palo Alto Software, a developer and publisher of business planning software:
Business Plan Pro 2003
For entrepreneurs, Business Plan Pro 2003 provides a wizard-driven interface from start to finish and the largest single collection of sample plans in the industry, more than 400, which can be read into the software and used as starting points for new plans. Row-by-row help guides the user through every financial entry. Linked spreadsheets with established formulas handle the calculations to create a full set of financial statements. The software promises to save users hundreds of hours through seamless formatting, built-in research data and a myriad of distribution options. Cost: £99.99 (inc. VAT).

Business Plan Pro 2003 PREMIER
For SMEs and partnerships, Business Plan Pro 2003 PREMIER adds a new dimension to the planning process, by including powerful collaboration features and enhanced financial capabilities to meet the power, flexibility and teamwork requirements of the expert planner. In addition to all the features of Business Plan Pro, the PREMIER version offers a unique email collaboration feature allowing users to create a plan in a team environment, combine multiple plans into one and save a unique plan outline to co-ordinate strategies across departments and divisions. Cost: £249.99 (inc. VAT).

Palo Alto Software is also working with leading UK business consultants and trainers to develop a training course based on Business Plan Pro and Business Plan Pro Premier to further help entrepreneurs optimise their business planning process. Both products are endorsed by the Small Firms Enterprise Development Initiative (SFEDI).

Palo Alto Software runs an award-winning site,, to complement its software products. The site includes extensive information, free of charge, on business and marketing planning, as well as real-life business plans and scenarios, practical advice and a panel of experts.

About Palo Alto Software
Palo Alto Software Limited sells, markets, and distributes localised, country specific, international versions of the award-winning business planning software developed by its Oregon, USA-based parent, Palo Alto Software, Inc, founded by president Tim Berry in 1984. Palo Alto Software’s award-winning website continues to be one of the highest traffic sites in the small business arena, offering numerous business planning resources.

For more information, please contact:
Lisa Atherfold/Lena Ahmed
Brodeur Worldwide
Tel: +44 (0)207 298 7116/7097

This press release was distributed by ResponseSource Press Release Wire on behalf of Pleon in the following categories: Consumer Technology, Personal Finance, Business & Finance, Computing & Telecoms, for more information visit