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Robert S. Duxstad
Daniel P. Bestul
Lance A. McNaughton

From Beer to Eternity: What's the Plan?

Posted: 9.24.2018  |  Author: 

 

If I have one wish for budding entrepreneurs, it’s that you’ll never wake up at 2:30 in the morning and start thinking about your new business. There is no fear or failure that does not seem 1,000 times worse at 2:30 in the morning than it does in the bright of day, and starting a new business is going to scare you even then, at high noon, on the summer solstice. If it doesn’t, just understand that it should. A healthy level of fear is what keeps us on our guard and, hopefully, fends off the failures that would only worsen a night’s sleep.

 

As it’s said, a strong defense is a good offense. The best way to defend against failure is to anticipate it and plan against it. For business startups, that means creating a solid business plan. Too many think a business plan is just an irritating formality to getting a bank loan, but it can and should be much more. At its best, a business plan forces a start-up to define what its product or service will be; what its audience or target market will be; where its competition lays and how the business will distinguish itself from that competition; how it intends to market its product; what it reasonably expects to generate in revenue and profit; how the business will be structured; what it will need in terms of workforce and management; what could go wrong and how the business will respond. In short, a business plan forces you to think about all the things that go into starting and operating a successful business.

 

Whether you have a business plan or not, those are all things you’ll want to know. Imagine the woman with a gift for making sensational hand-crafted ice cream, and a plan to sell it to the best restaurants in Chicago. That was the plan, at least, until she went and talked to the restaurant managers and learned that none of them wanted her ice cream. The ice cream they had was good enough, sold well enough, and cost them less than she needed to charge. A big investment in a doomed venture was avoided thanks to some careful marketing research. Instead, she scaled back her vision, opened a small creamery on her family’s farm and now, like an Iowa baseball field, the ice cream draws thousands from miles away, down country roads, to her creamery in a field. Not a skyscraper in sight; no reservation required; sales through the roof.  A final business plan, then, doesn’t always reflect your original idea. Instead, it might force you to realize early on that your original idea won’t work, to rethink it, and to figure out what will work.

 

Once you form the right plan, the challenge is sticking to it. When planning the brewery, Kevin and I spent hours scouring over marketing data before concluding that millennials were most likely to buy our beers, particularly beers with “sophisticated and nuanced flavor profiles.”We also realized that our brewery and taproom had to be carefully located, ideally within an area densely populated with 24 to 35-year old emerging professionals. Then we’d find a great building with lots of character at an affordable price. We’d get excited by the vision of what the building could look like; we could see the brick walls, stainless-steel tanks, and the bar and taps. The problem was that there wasn’t a millennial within 20 miles of the building. The people we wanted to drink our beer weren’t going to travel to that location, and those who were close weren’t going to buy our beer. Then we’d remember our business plan and everything we’d learned while preparing it, and we’d start the search for a location all over again. Ultimately, we found what he needed: a large space with wood flooring and an industrial chic potential, directly across the street from two brand new apartment developments full of millennials. We stuck to the plan, and it saw us through to the perfect location.

 

That’s not to say that plans can’t change; often they should in the face of changing circumstances. But the enormous thought that goes into an original business plan encourages thoughtful changes – no knee-jerk reactions here! Nor, I suppose, does a business plan seem like much of a legal issue, raising the question of why this discussion appears on a law firm’s website. Here, though, ARE some legal issues: partnership and corporate dissolutions; bankruptcy; and collection, foreclosure and replevin actions. All are possible in the wake of a business’s failure. To the extent that a smart business plan helps avoid that failure, then a business plan becomes a smart bit of legal advice.

 

Also, Duxstad & Bestul is excited to be part of the new Entrepreneurial Training Program being coordinated through the Green County Development Corporation and the Southwest Wisconsin Small Business Development Center. The program is an 8-week series of classes that will cover a wide range of important subject areas: Developing Your Business Model; Getting to Know Your Customer Segment; Understanding Your Industry and Market; Legal Issues in Small Business; Marketing Basics; Human Resources Management; Business Management; Accounting and Record-Keeping; and Obtaining a Bank Loan and Alternative Financing. Consultants from the Southwest Wisconsin Small Business Development Center will lead sessions and other professionals will join to share their expertise. Bob Duxstad and I are excited to participate in the Legal Issues in Small Businesses session.

 

Classes will meet each Tuesday, beginning September 18 through November 6, at the Enterprise Center at 210 4th Ave., in Monroe. Most relevant to my discussion here is that by the end of the eight-week training, each participant will have created a high-quality business plan under the guidance of SBDC consultants, which can, in part, qualify participants for significant tuition reimbursement. More information about the program is available at www.greencountyedc.com, or by contacting the Green County Development Corporation at (608) 328-9452 or gcdc@tds.net.If you’re thinking about starting your own business, I can’t encourage you enough to enroll in this great new program. It’ll greatly improve the odds of your business succeeding and, hopefully, in doing that, ensure you a good night’s sleep.

 

 

Lance A. McNaughton practices estate planning, probate, business, and real estate law in both Lafayette and Green Counties in Wisconsin. He can be reached by e-mail at mcnaughton@duxstadlaw.com.


 

 

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