distracted_at_work wrote: ↑Tue May 23, 2017 8:11 pm
@BlueNote. Thanks.
Total aside, you took what I wanted to take in University but was directed into engineering instead. "You can be an engineer in business but you can't be a businessman in engineering." Follow your dreams kids
Any practical book recommendations? Talking strategies for doing my cash flow projections, taxes... those types of things.
My full b plan is nearly complete (is it ever?) and I'm having the financials looked at by an industry professional tomorrow morning. I've been warned that under-capitalization sinks the majority of these start-ups and I do not want that to be my primary concern. To your questions about my entry wedge, let me try to answer with my plan, at least, the plan right now. If I linked you to a map of micro-breweries in
large oil city you would see that they are all in the eastern (undesirable, industrial) side of town due to cheap rent. I believe I can get into one of the nicer inner city neighborhoods due to using the smaller set-up. I'd go for targeted advertising to the immediate neighborhood as well as to the celiac population to get into the market. Be the local beer guy for the rich kids and an important destination for those physically needing my product. As for the movers and shakers in the marketing side.. I hadn't considered that yet nor have I met any of them. I will ask about this during my meeting tomorrow.
That's sort of funny because when I started university I wanted to do "Computer science" and essentially become a software engineer or something like that. However I got rerouted into the business stream for various reasons.
Starting a business like this is probably a better business education than what is offered in University. You'll learn things that are impossible to teach in that sort of environment. The things you won't learn you can fill in with free online university courses.
In my experience any sort of pro forma financial statement(Cash flow, income statement, balance sheet etc.) Is going to be very inaccurate because you have no history. It's still a very good idea to do the pro-formas because it forces you to think about the whole business financially which makes you a better business person. In order to keep your Business plan useful for its audience I'd suggest you use whatever method ,for pro-forma estimates , that is recommended by the bank or the potential financer if they provide input on that sort of thing. Barring that I'd follow a method where you estimate sales based on market share (potential market share is an estimate which is often wildly optimistic). You can estimate COGS based on the sales volumes that you estimated first and then add your fixed costs. From there you can build a sales growth plan and a balance sheet based on retained earnings and financing. Cash flow can be derived from there. Try to avoid any situation where you have credit sales and if you must have them make sure you know how it impacts cash flow (paying suppliers COD and selling on credit is a recipe for illiquidity). There's lots of excel templates out there that will help with this. Use a wide range of worst and best case scenarios (I imagine your real worst case is a total write off and you fold, but don't tell that to investors!).It's a good thinking exercise to plan on how to handle the worst ,medium, and best case scenarios. So you'll need to think about a graceful exit , executing the "expected" scenario, and high growth (best case).
Your business sounds fairly simple from a taxation point-of-view and you should be able to do the taxes yourself with the guidance of a bookeeper/tax professional. Ask your micro brew buddies who they use for taxes and check out their referrals.
I'd spend most of my time (~80%) on marketing and thus be reading books on those topics :
marketing 7 p's. See if you can find anything online that covers your business specifically, there's often a lot of niche informational products out there that are quite good. The guerrilla marketing series of books occasionally had an interesting idea in them (cheap effective marketing ploys).
Here's some more hole shooting:
- Most small businesses (especially first timers) fail therefore almost everyone will expect you too fail too!
- You business sounds like a me-too idealistic fantasy (however almost all small business ideas are like this!) and I think you'll get to a point where you'll deeply regret doing this, the hours will get long and the money may get short. However you'll probably see it as a great learning experience later in life.
- Canada is legalizing pot in about a year. It is a substitute product for beer, wine and spirits. It could put a dent in your industry, how big that dent will be is yet to be seen. I don't see pot, on a net basis, as a complementary product as some would argue.
- If you get too sick to work or have some other life issue that effects your ability to work your business will suffer greatly and could fail incredibly fast. Hopefully your ERE lifestyle will provide a greater margin of safety against this. A Family or partner run business is so much more robust in these scenarios.
- If your business takes off people will copy your ideas to replicate success , if their marketing is better they'll likely beat you at your own game too.