Carson Valley Chamber of Commerce Director Bill Chernock told about a dozen small business owners and Main Street Gardnerville members on Thursday that with Walmart coming to town, "now is a good time to check how everyone operates their business."
"Starting with a business plan couldn't be more logical," Chernock said. "Whether you are a single service shop or a retailer, you need a blueprint."
The meeting was the first in a series of "business builder" seminars designed to help small businesses navigate the recession's economically challenging terrain.
Free for chamber and Main Street members, the seminars will take place on the fourth Thursday of the month with breakfast at 7:30 a.m. and presentations beginning at 8 a.m.
Chernock said formalized business plans are often required by lenders and investors who want to see where their money is going.
"You want to update your financials each month and revisit the plan at least annually," he said. "A plan creates the value of thinking ahead, to get out of the day-to-day coping mode."
Chernock said a good business plan reflects reality.
"Walmart is a reality, the economy in 2010 is a reality and the current lending climate is a reality," he said. "A good plan will have a contingency plan that allows for a worse-case scenario before it arrives."
Chernock laid out the fundamentals of a written business plan as follows: Section one should include an executive summary or overview; section two should include the mission statement, vision, goals, objectives and a general description of the business; section three should entail background information on the industry and how the business fits in that industry; section four should describe the business structure, management, personnel and operating controls; section five should include a marketing plan, products/services, market analysis and marketing strategies; and section six should detail a financial plan, profit and loss, balance sheets, cash flow projections and supporting schedules/key ratios.
"Section three is enormously important for start-up, when you're going out looking for financing," Chernock said. "It's hard to say one section is more important than the other, but if you're lacking six, the financials, the others might not matter much."
Chernock said operating a business is all about allocating resources, and urged business owners to follow the acronym S.M.A.R.T. when setting goals, which stands for specific, measurable, attainable, realistic and time-sensitive.
"When you set goals, make them hit all five statements," Chernock said. "A good goal is to increase top-line sales 12 percent year-over-year in the third quarter, versus just saying you're going to double business this year."
Moving on to marketing strategies, Kathy Halbardier of the Nevada Small Business Development Center said business owners need to revisit their product or service and determine exactly what it is they're selling.
"You don't want to be a one-time hit and not come back," she said. "Determine your competitive advantage."
Co-owner of Tahoe Ridge Winery, Halbardier said she and her husband used to survey people in the wine section of a grocery store to figure out why they'd chosen a certain label over another.
"Constantly analyze your customers," she said. "The big key is figuring out what people want, what your customers want."
Halbardier said marketing is about more than selling a product or service - it's about selling "the benefit" of that product or service.
"The benefit is what the feature (product) gives the customer," she said. "You're selling the benefit as defined by the customer."
Once the benefit is identified, a business can find its "niche," that spot in the market that no one else may be going after.
"Re-evaluate how your customer base grows and changes," Halbardier said. "Ask why customers choose your company and product?"
Halbardier said businesses must constantly reinvent themselves to "still be valuable in the industry." In terms of pricing, she said one must "know what the market will bear."
"Knowing the marketplace, you'll know what your customer is willing to pay," she said.
Quoting Walmart founder Sam Walton, Halbardier said "your only boss is the customer, who can fire everyone in the company from the chairman on down simply by spending their money somewhere else."
The next business builder seminar will be 7:30 a.m. March 25 at Holiday Inn Express in Minden. The subject will be "effective ins and outs of QuickBooks." Presenter Danni Warburton of Patriot Business Services, a certified QuickBooks Proadvisor, will teach participants how to make QuickBooks data-entry tasks simple and effective. To register, contact the chamber at 782-8144 or Main Street Gardnerville at 782-8027.
