Business plan. It’s self-descriptive. If you want to open a business, drawing up a road-map to your pending success is a good idea.
Specifically, a business plan is a document explaining what you want to sell and how you’re going to sell it. The two most important sections every business plan has are a financial plan and a marketing plan. Initially, you use this document to round up funding from banks as well as individual investors. Anyone who invests money into your business wants to have some inkling that you know what you’re doing. Yeah, some folks invest simply because they like you, or because they like what you’re doing, but it helps to show even these generous souls that you have concrete plans as to what you’re going to do with their money and more importantly, how you intend to make them more money.
Now, various friends and family members have been in business for decades and I’d be willing to bet that most of them haven’t sweated over cash flow statements or marketing strategies. In fact, they’ve told me as much. And here’s where you might expect me to launch into how successful they’d be if only they’d written a business plan, but I won’t, because I can’t. Many of them have and still run profitable businesses.
But the fact is we can’t run Metropolitan Brewing without a business plan. The Chicago craft beer market is full of savvy, smart drinkers. These people want and deserve fresh, tasty beers (done), that are distributed to places they like to drink and shop (done; with the right distributors), and marketed and sold to them in an appealing manner (um... what?). Breweries on both coasts and everywhere in between long to sell their beers here in this huge, thirsty market and they do so with gusto. See: New Belgium Brewery in Fort Collins, CO. I’ve never, ever seen a shipping palette at the front entrance of my Jewel loaded with craft beer before. My jaw hit the tiled floor and for too short a moment, the muzak ala Phil Collins faded into the shock hissing through my brain. We knew needed to start strong, hit the ground running, and all those other clichés that illustrate the notion of doing business with purpose and precision.
And so, we set about learning how to write a business plan. At first, Doug did all the work. He researched and he read and he wrote. We bought books that he read. We passed links to each other with yet more information to read and assimilate. He read other business plans. Not wishing to hog all the fun to himself, Doug eventually recruited me to lend a hand. We met with experts who helped us for free, and some who helped us for payment. We even went to a workshop or two. And so, we learned lesson #1: while a business plan has some key features, no one agrees on exactly how it should look. It was at this point that we realized that nobody was going to hand us an outline and tell us to insert the word “beer” anywhere the product was mentioned.
With four diplomas between the two of us, we were quite comfortable in a classroom environment, being guided gently through the learning process. But learning how to write this business plan was an agonizing process of self-motivated reading, researching, sifting, guessing, doubting, crying (well, that was mainly me), arguing, and endless hours of typing. Each new section was loaded with new information to learn and new questions to ask. We learned. We asked. And, as each section was finished, we realized that we’d gained more confidence about our brewery and how we planned to run it. I’ll be damned if we weren’t actually gaining confidence in ourselves, too.
Confidence points to the real reason for writing a business plan. Even though this type of writing calls to mind nightmarish all-nighters pounding out term papers in college, it does serve a real-life function. You’re forced to test the viability of your idea. Analyzing each aspect of your particular widget from concept to production to sales shapes the entire process in your mind. Systematically testing each of your assumptions leads to the ability to defend the defensible and dump the bullshit. In the end, you have in your hands this document that is your playbook; your strategy to succeed as a business owner.
And, a final point about your business plan: it lives and breathes with you and your business. All that work you did to plan out the next 10 years of doing business? Well, the reality is that everything can and does change. Stick to your core ideas and philosophy, keep an eye on your accomplishments and projections, but remain flexible. In a free market, the market will let you know what it thinks of your product. It would be wise to keep a proverbial ear to the ground and listen for any movements. You’ll never completely trash your business plan, but you will definitely revise and update it. The upshot is that you can change it as you see fit; as you accomplish what we see as the real American dream: getting paid to do what you love.