Over the last 2 years that I've been serious about getting a brewery up and running, lots and lots of people have asked me questions such as "Do you have a space yet?" or "When do you open?". I wish to god the answers were "Yes" and "Tomorrow", but the real answers are "Not until I have funding" and "Once I get funding and have several months to order equipment, build out the yet unknown space, and get the equipment installed". Those answers are less fun. So, where are we? What's the next step? Well it's all about money now and to get that I need a couple of things: a business plan and an investors prospectus. I'll discuss the investor stuff in great, great detail at a later date. Today we begin what will be a fairly large part of the process: writing a business plan.
A business plan is a document which is used primarily to obtain funding from an institution such as a bank. It's a road map of sorts which tells a potential lender why I need their money and how I'm going to pay it back with interest. There are many components such as an overview of what your business is, how you're going to make money, how you're going to market your product/service, and what the competition looks like. The most important parts of a business plan, however, are the financial projections. These projections tell the real story and those are what the banker understands most of all.
The main financial portions of a business plan are: cash flow statements, break even analysis, profit and loss projections, balance sheets, and finally, the loan amount you are requesting. These financial projections are the heart of the business plan. They let you and your potential loaner understand how much cash is needed up front and how much will be needed until the business begins to make a profit, and how long that will take.
A brewery has an incredible amount of start up expenses including equipment ($$$), build out of a commercial space ($$$), licensing fees, attorney fees, the list goes on. This is the part of the process that manages to scare off most people. Those who are not afraid to continue, well, we're probably insane.
So this is where I am. I'm plugging in numbers, creating and editing spreadsheets, working on equipment quotes, and checking my pulse occasionally. This is the blueprint for the entire enterprise and it's a very important one.
I expect to work on the plan for about 2 months. I know people who have spent months and months working on it, but I've done my research already, I have most of the numbers I need (and they're based on reality), I have great resources for answers, so the final step is to just put it down on paper. Once the first draft of the plan is complete, I will be asking a select few friends to review it and give me some feedback. Once the final business plan is complete, the search for bank funding and investors officially begins.