3 reasons why you shouldn’t use on-line business planning tools

There are more business planning templates, outlines, and articles on the Internet than you can shake a stick at. Some are terrific; others, not so much.

But while you can shift through loads of online material and find some useful stuff, I really don’t recommend using the on-line business planning tools that you’ll probably come across.

Sure, these tools do have their advantages. First and foremost, they’re free. And they’re easy to get started using them — no software to install on your PC. Nothing to download. You can use them anywhere you have access to a browser. Lastly, you can collaborate with others; each person can log on and do a section or two.

But… ask yourself these questions before starting.

1. Is the on-line tool really appropriate for your needs?

Many on-line tools are intended for use by someone looking for a personally-backed loan from a bank. This means that their audience is the bank. They tend to be light on strategy, market analysis and other areas, and heavy on the financial information used for risk analysis. There usually is a significant amount of information required about your personal financial situation and that of any other loan guarantors. This is perfectly natural since the most important issue for the bank is to have the loan repaid.

It also means that after you enter your answers to all of the software’s questions, it spits out a business plan in a predetermined format designed for a quick and easy review by your banker. The ones I’ve seen use a format that definitely is NOT appropriate to either show prospective investors or use as an internal document to focus your staff and operations. Even re-use for a loan application from another financial institution may be dodgy — you might think twice about going to XYZ Bank and showing them a business plan with ABC Bank’s name and logo all over it.

2. What about security?

You need to be more than just confident that whatever you  find on the Internet is free of viruses and malware. It’s in your best interest to keep your ideas and information CONFIDENTIAL until you’re ready to unleash your business plan on an unsuspecting world. It may take anywhere from weeks to months to complete your business plan. Are other eyes looking at it in the meantime? Does the web site have good security? The web site operator certainly hasn’t signed a Non-Disclosure Agreement with you.

And tempting as it is, don’t work on your business plan using the Wi-Fi network at your local coffee shop. IT security experts say that it can be risky since eavesdropping on public wireless networks is so easy to do.

3. What about backup?

Your business plan document will be lengthly (even the most minimal business plan is at least a dozen pages long) and you will need to spend a lot of time working on it. That means you’ll want to protect it — and your effort — by having a backup. Does the web site offer any guarantee that your data won’t get lost or deleted? I bet there’s a disclaimer somewhere. Check if you can save your plan off-line, on your own hard disk or flash drive, and restore it later if there is a problem.

OK, but what if my bank insists that I use their on-line tool to apply for a business loan?

Of course, if you do need a business loan from a bank, and they have an on-line business planning tool, they probably would prefer that you use it. In this case, what should you do?

First, we suggest that you download or print out a hard copy of a blank or sample plan. Sometimes you can export a copy to Word. Then, work off-line on your PC developing your answers to all of the questions that the planning tool demands. Take the time that you need to do a good job. When you are finished and happy with the results, have a trusted third party review it. A good proofreader not only turns up any typos, but they will probably also have some valuable comments. 

Only then should you log on. Fill out the entire plan all at once, or at least over the course of just a day or two. Print a hard copy for the bank and make an appointment to see your banker ASAP. This will keep your plan confidential and avoid security concerns. And don’t forget — after you get the loan, log back on and delete your plan! You don’t want to take a chance of any copies floating around online.

About Market Metrics

Market Metrics Inc. helps knowledge-based businesses with strategy, planning and innovation. We offer our clients a unique combination of top-shelf professional skills, competitive pricing, and real-world industry experience in business planning, marketing, and technology.

The consultancy was founded in 2003 by Greg Graham, a seasoned strategic marketing professional. Greg is a Certified Management Consultant (CMC), a Fellow of the Ontario Institute of Management Consultants (FCMC), and an Accredited Small Business Consultant (ASMEC) in the United States. He holds MBA/BEE degrees plus a Certificate in Strategic Management.

Prior to founding Market Metrics, Greg's 21 years of corporate experience encompassed tech start-ups through Fortune 500 companies. He is an expert in subscription-based business models (including SaaS). Greg frequently performs consulting engagements on behalf of the National Research Council's Industrial Research Assistance Program (NRC-IRAP).