Monday, December 9, 2013

Episode 1: Seats of pants don't fly well.

So, part of my reasoning for doing a blog was to update, and inform my family, friends and fans about the progress of the brewery. The other reason was to in someway pass on to others some of the knowledge I have gained from the very generous people who have helped me in my quest to start a brewery.

Previously I had owned a small business. It was a seasonal affair with a very modest income. An income if you calculated the hours worked by the amount paid in the end equated to something like 3-4 dollars an hour. However, it was a labor of love. Anyone who has owned their own business can tell you, don't try to figure out how much per hour you really make, because it will just make you depressed. I owned the business though, I loved being in charge of my destiny, being my own boss, creating a niche, and watching it grow. In a way it was like being a father I suppose.

Now starting your own business is a daunting affair. There is a lot of planning, no make that a $#!t-ton of planning to do. Whether your business idea is selling chocolates at the Farmer's market, running your own clinic or starting a software company, you need to start in the same place, the beginning. Where is the beginning you ask? I believe most business owners would agree with me, that the beginning is the business plan.

The business plan can be very simple, like a 7 page document if you have a simple concept like selling chocolates at the Farmer's Market, or a tome if you are going to be the next Twitter starting a software company. The important thing about a business plan is that it forces you to write down and think through your assumptions. You may know that your friends all love your chocolates, at Christmas time you have to work several extra weekends just to meet family demands, and you've seen some people actually melt when they eat them, but you need to substantiate your market, and have a planned growth.

By writing a business plan, you are forced to think about the present and future of the business, and plan for it. You are forced to think about your market share and how big it is, and therefore how much money you can make, which in turn helps you price your products or services, which enables you to start to plan for how much work you have to do. Without it, you are merely responding to external stimulus that you have created. It's like sailing without a compass or GPS.

Enough of the metaphors, how can it be just as important for selling chocolates as starting a software company? Let's look at it with the example of selling the chocolates. If I sold out of chocolates this weekend at Farmer's Market, and have not done my homework, I might just randomly up next week's amount I produce by 10% figuring that should cover it and if I make 10% more than last week, that's pretty good growth right? But what if you had done your homework and you had figured out your market share, (how many people come to Farmer's Market on an average weekend wanting chocolates) and you figured out that you actually needed to make 20% more? That's a lot better right. By writing a business plan it forces you to check your assumptions and plan for growth. What if you had planned for that 20% increase and on top of that, you were working on a marketing campaign to get your chocolates in stores? We are talking even a larger market share now. Put simply, a business plan makes you do research and to back up your assumptions with sound math. It's the journey, not necessarily the destination that's important here. It's the process of research, planning and implementing that plan, not just going on gut feeling alone.

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