I’ve been incommunicado this week as I’m trying to power my way through the rest of the business plan, I’ve been doing research on a variety of topics, and I’ve been doing a lot of mulling in my head. Let’s discuss.
First, I’m still focusing on the marketing plan portion of the business plan. Because there’s so much material there, I’ll write a different post about all of that shortly, lots of good info to share.
One of the main topics I researched this week is SBA backed loans. I’ve done more digging into that complicated world in order to have a better understanding of what my options are and to be able to speak intelligently with banks when the time comes. The SBA has many products with their “7(a)” loans being their most popular. But they also have another interesting loan product, the “504” loan. This loan has specific requirements for which is can be used but the one relevant to
Panic Alarmist is that it can be used to purchase manufacturing equipment. The program involves participation by a bank, an SBA “Certified Development Company”, and the SBA. Each entity takes on a portion of the risk. Very interesting program and I’ll have much more to say about this in the very near future.
Also related to the SBA, I dug deeper into which banks do the most SBA lending in the Chicago area. Not every bank deals with SBA loans and there are some banks who do a lot of SBA loans which means they have a thorough understanding of the ins and outs of dealing with a large government agency. What did I find? The jackpot! Crain’s Chicago Business has a list from 9/30/11 with the names of all the biggest Chicago SBA lenders, how much they’ve loaned, and how that amount compares to the previous year. Wanna see it? It’s here (skip the ad by clicking the link in the top right corner).
So what am I mulling around in my head? Well, I’m a big fan of options. Options create mitigation of risk and they also provide solutions to potential problems and I’m a big fan of both of those things. What I’m thinking about is what makes the most sense financially: buying a canning line on day one or opening a retail store on day one? Canning line = $70,000+, retail store = ???+. Could I get the loan for the construction build out for the retail space? My guess is no, not for a start up (that collateral thing again). So can I get a loan to cover a canning line? Probably easier. But if I open a retail store instead and I have no canning line, then I’ll be selling growler and keg only for awhile in the store and keg only out in the trade. No cans would severely limit my sale of beer initially but then I’d have the excellent revenue generation from the retail store…but with no cans. This is a catch-22. I’ll be creating another spreadsheet to dig into the retail store stuff and talking to some people who might know a bit more about this. Ideally I’d like both the canning line and the retail store, but I’m not convinced that will happen on day one. This is what’s been on my mind this week more than anything. Guess what? It’s a problem and it will get solved.
Finally, the logo is in the final design stages. The colors are being tweaked a bit to better address color matching in the print world. More on that when it’s 100% completed. I have some really talented people working on this and they’re doing it for free, which means they will be VIP’s at
Panic Alarmist for life. As Panic Alarmist grows, I’ll fully intend to be able to pay these same folks for their services in addition to all the beer they will have access to.