Designing a business plan is one of the most, if not the most important part of starting a business. Whether you are starting a small operation or a large one, determining your market and how you plan to start and grow are important steps in deciding if you want to open the doors in the first place. I will walk through some of our most important components of our business plan, and how you can also apply them to your business, whether that be a brewery or not.
Determine Your Market
You have no business without a market. I REPEAT, you do not have a business without a market. Just because you think you have a great product or idea, doesn’t mean other people also think so. Your product, idea, or service must be in demand. There is a lot of research that surrounds this component. You must dig up sales data, industry trends, global and local demographics (depending on your market), and competitor info. The more information you have, the more informed you will be about your customers wants and needs.
Is it Profitable and Sustainable?
Great! You have a market. But is it profitable to start your business? Is the risk vs. the return? This is an area where I often use Porter’s 5 Forces Analysis. Porter’s Five Forces (power of suppliers, power of buyers, barriers to entry, industry competition, and threats of substitute products) is a framework that analyzes five competitive forces that shape every industry, and helps determine an industry’s weaknesses and strengths. Using this information, combined with your own financial constraints, you can determine whether or not it is worth trying to enter into the desired market.
The Devil is in the Details
Hopefully by now you have answered the most important question, which is “should I start this business or not?”. If so, you are ready to hash out the details. For us as a brewery, this means size and scope, labor, material, and build-out costs, recipe formation, financial forecasts, and funding considerations.
Somethings that may pop in this phase could be major roadblocks for your business. Sometimes these roadblocks are navigable, others can halt you to a screeching stop, effectively ending your business before it starts. Is it important to prepare for the worst case scenario at all times. Try to be conservative on growth projections, as well as material costs and labor costs. Don’t estimate growth in your business that isn’t attainable or realistic. Play it safe on your projections, because then you will never be caught off guard. Also, if things look good under the worst case scenario, imagine how great they will be in the best case scenario!
Put the Plan into Action
You have done all the research. Now is the time to implement your plan! This could mean pitching your plan to investors, the bank, or other sources, which is what we plan to do. If you have the capital already, now is the time to go invest your hard earned money in your business. The most important thing is that you cannot start a business yourself. There is no person who is an expert in everything. Do not be afraid to ask for help and advice. There a lot of smart people out there that would be more than happy to be a part of what you are doing.