Starting a Small Business/Business Planning
Hello Lee! I'm planning on opening a mid sized brewery here in Florida and I'm really not sure my current plan of action is optimal. I've never started or ran a business of any kind other than a little freelance work, so any advice would be huge. Let me give you a rough outline of what my plan is right now and hopefully you can steer me clear of disaster!
Currently I am writing a business plan. I'm going through the book "Business Plans for Dummies" page by page. I have written a mission statement, a vision statement and a values statement, and I can honestly say those exercises have actually helped me get a better understanding of what I want and why I'm doing this. I have a very very long way to go on this document however, and I'm very nervous about the whole thing.
My plan is to complete my business plan before anything else. I want it to be solid with a complex analysis of the local market (which I'm not 100% sure how to do). The purpose of this business plan is to sell the idea to investors and generate the needed capital. As of right now, my very rough target is $750k to cover the equipment (~$500k) and $250 for salaries (myself, a brewmaster, and possibly one or two part time employees) and all other costs.
One thing I am very unsure about is the order of these three things: Hiring a brewmaster, finding investors, and developing a product line. Do I need a brewmaster and a product line before I approach investors? If so, how can I afford a brewmaster to develop the products? I also need at lest $10k in equipment at a minimum to develop the product (not including a salary for the brewmaster), so I find myself in somewhat of a catch 22.
I do know of a consultant I trust who has opened many breweries before, but his costs are a bit expensive so I'd like to try and get as far as I can on my own if that's possible.
Another option I'm aware of is Kickstarter, which would allow me to generate capital for free (donations as opposed to investments), but I'm not sure I can even use Kickstarter since it would only bring me to a product development stage. I'm quite certain a requirement for Kickstarter is that the end result of the donations must bear a product or service of some sort. Any advice on this?
That is about where I am right now. I'm banking on the fact that craft beer has exploded in Florida over the past few years yet there are very few breweries here. The demand is massive and the supply is almost non existent. I want to capitalize on this before I miss my opportunity. Thank you so much for any advice you can give me. I really don't quite know what I'm doing yet but I want to learn and I think I'm at a point where I really need direction.
David good that you are writing a detailed business plan. This, as you have learnt, helps you set up a good business. Run it by the Small Business Bureau who will help you get it to a good standard.
With respect to obtaining finance, any investor will need proof of concept so they will need:
1) Good financial structure and prospects.
2) Proof that the beer will sell and to whom.
3) Proof that the production structure, distribution chain and selling process is all firmly set up or working. You can take some beer to sample but this makes you a high risk company and money harder to come by. If you have your structure already set up such as your production line makes you a more viable company and less risky to invest in. The less risky you are the cheaper and less of your company you will have to give away.
Now you need to decide how far you structure you company before obtaining your funding. Sometimes proof that you can quickly do this is enough for an investor. I suggest that you go down to the SB Advisor and talk to them.