Get a solid foundation

By Beth Pratt
Small Business

The first time many folks hear about a business plan is when an investor or lender asks them to create one in order to get business funding. This process of presenting your vision in precise descriptive terms, and then quantifying it in a budget, is incredibly valuable. By having a solid business plan, you have a foundation that will provide you with the roadmap and the credibility to grow your business. A solid foundation will also eliminate confusion, barriers and keep you on track.

Business plans include several different elements. The four essential parts of a business plan are the company description, marketing, financials, and management/operations section. For many business planners, the easiest part is describing what you will do and how you will do it. The challenging part is justifying how you will get this done.

The company description is the basic overview of what the business will do. This section may also include information about the company’s legal structure, goals and objectives and the mission statement.

The marketing section is divided into two areas: marketing analysis and marketing strategies. The analysis includes research on your potential market niche, competition and how you will position your product or service. This research will build the case for your products desirability. The marketing strategy section describes how you plan to reach your potential customers, make them want it and then sell it to them.

The financial section will include detailed reports that translate the narrative sections of the plan into the language of numbers. This will provide a standard for you and your investors to judge your progress toward your business goals. It will include one- time startup costs, how you set prices and financial projections. This information should clearly describe when the business will be profitable and how the debt will be repaid. This section is  scrutinized by investors and is extremely useful in setting milestones to help the business stay on track.

The fourth essential section of a business plan is the management plan. Experience and expertise in the product or services being offered, management, accounting, and marketing are critical to business success. This section describes how you, your management team, and other experts (like your accountant) fulfill the needs of your business.

 The most important element of business planning is to understand that it is a process. Successful business owners “plan their work and then work their plan.” Too often the plan is forgotten after funding has been obtained. Ongoing business planning can be difficult with the myriad of demands on a business owner’s time. A business plan provides a framework to constantly refine your mission, your market and your goals.

The Napa Valley College offers basic business planning and foundation classes in marketing, recordkeeping, financing and business planning to help get your business off on the right track.

Participants who complete all classes are given a Business Foundation Certificate of Completion. Classes are offered on Wednesday or Thursdays from noon to 2 p.m. at the SBDC Center downtown.

For information on these low cost trainings, call the SBDC at 253-3210 or visit napasbdc.org.

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