As I move on to the next and more difficult phase of this endeavor, financing, I thought I would share some goodies I learned from the business plan phase. Here is a link to the template of my business plan. This is simply the business plan with all section and subsections and all content removed, save for an introductory sentence or two in each.
I will not claim to be an expert on writing business plans, but I think I know a lot more now than I did six months ago. The pdf I've included in this post will show how I organized mine. I based it almost completely off of the "Business Plan for a Start Up" template located at the SCORE website. One notable change is that I pulled the "Competitive Analysis" section out of the "Marketing Plan" and made it its own section. I felt this was a better way to organize it and to really emphasize to would be loaners or investors that I've done my research and I'm not expecting to just jump into easy street. There is a lot of competition and it's important that anyone willing to give me money understand that and understand that I understand that. Understand? I really put a lot of work into the competitive analysis.
The business plan was written with the assumption that any commercial banking representatives I meet will not have the faintest idea about the craft beer industry, specifically the growth rate. A big part of my plan is to educate the would be loaner about the industry. Obviously any business plan would need to do that but it would be easy to assume that because of the ubiquitousness of craft beer everyone already knows this, right? (I don't actually know what "ubiquitousness" means, but I see that word everywhere.) I mean, jeez, it's craft beer! Are bankers living under a damn rock? Well, I'm sure there are plenty of Bud Light drinkin' bank folks who will require education and convincing. To help me make these points, I have included numerous facts, tables, and supporting news articles on the industry. Much of the information comes from the Brewers Association. I have an individual membership to the BA which allows access to all of this material, and I highly recommend you do the same. I want to make it really, really apparent that this is not a particularly risky enterprise. At least relative to, say, a new social media website startup or an online pet store. To underscore this, I'm going to work hard to communicate to bankers that I'm not making widgets here, I'm not competing against InBev, and there is a real dearth of craft breweries in Chicago, one of the world's great cities which also happens to have a rich brewing history.
With all of that in mind, I think it's important to note that regardless of what kind of business you're trying to open, the first thing a banker is going to do is open your business plan and turn to the financial sections. Your friendly banker wants to know how much money you're asking for before anything else. After that, they're going to look at your profit and loss and cash flow statements. They need to know that they're going to get their money back and they need to know they're going to make a profit. So although educating a banker about the craft beer industry is important, they're first concern is the numbers. I've learned this because I have a friend who used to be commercial loan banker for a locally owned bank. When I showed him my business plan, he went right to the numbers and ignored "the fluff", his words, not mine. That's something that will be at the forefront of my mind as I navigate these waters.
In the next few posts I'll delve into the financial sections and I'll talk about some of the other important sections.
Note: I've had quite a few people ask me for my business plan. Complete strangers who've read this blog and have emailed me requesting it. Now, if you read the FAQ you'll see that I'm not freely sharing the entire business plan. I would expect most people to understand why that is but there are a few folks who seem to think that it's a legitimate request. For those few let me ask you this: would you want to give away something that required months and months of work? Or something that contains confidential information about you and your family? Exactly. The only people with whom I've shared the business plan are advisors, trusted acquaintances, and a few close friends. All sharing was done quid pro quo. Each person has provided me helpful insight in some form or other. Another valid reason for not sharing is that my business plan is exactly that, mine. It reflects my viewpoints, my research, and my environment. Opening a brewery in Chicago is probably quite a bit different than opening one in a rural area. Opening a 15 bbl brewery is quite a bit different than opening a nanobrewery. So I say to you here today, go forth and write your own business plan. You will learn so much about the business when you do. And you'll tailor your business plan to your situation which is completely different from mine. Then there's the possibility that my business plan isn't very good. Right? I've never written one before. There are assumptions in there that might be completely wrong. Who knows? I've done everything I know how to mitigate mistakes but I am human and I don't have a crystal ball. Finally, remember I've just shared the template. C'mon man, that's pretty generous, ain't it? ;-)