Back in the dot-com bubble, every cabbie in Silicon Valley had a business plan, we’re told. The venture capital folks, and the vulture capital folks, were all hot to trot. That was back when people still believed in the American dream–the Clinton Presidency. Things are different now.
Some folks still do want to start their own business. Or at least they say they do. But they never do it. I once wrote seven different business plans for one group of farmers. They found fault with every single one–even when I found them a free facility for their processing plant.
So I finally got it through my thick head that they really didn’t want to create a new business. They thought they did, they knew they should, but, when push came to shove, they wouldn’t ever do it. So we made a film documentary on their plight and sent it to all the state legislators.
The documentary, called “Spilled Milk,” got awards at New York and Los Angeles film festivals and was even invited to the Cannes Film Festival in France. Legislators also liked it and passed a bill to help dairy farmers in Arkansas. So dairy farmers went on the government teat.
That’s not the sort of ending I like. Sure it was fun to be Executive Producer of an award-winning documentary. That’s all some people notice on my resume. But, man-o-man, i want to be a wealth creator instead of facilitating welfare.
Besides, all being Executive Producer means is that you secured funding for the film. Doesn’t mean I have any skill in making movies. So it was my one and only foray on the silver screen. After we finished that project I went back to something I like more: helping farmers establish resilient processing and marketing businesses.
What do you need to do to have a business which lasts? Well, first you gotta have motivation, and markets, and resources. If you have all those, then we can teach you how to do a feasibility analysis. If the feasibility analysis indicates you have a viable business idea, we can help you plan your business.
There are still a few folks who seem to be really serious about jumping the hurdles of government regulation, securing financing, and actually learning about invoices and accounts receivable and cash flow and breakeven and income statements and balance sheets.
That’s because they a motivated, committed to an idea. And committed like the hog is to bacon, not like the chicken is to eggs. They wake up in the middle of the night with ideas for their project. They can’t wait to get out of bed in the morning and get to work on the project.
If you are that motivated, you might have a chance. If you have a good market. The market test is a tough one because markets change and you can grow the market if you know your customers inside out. Many nascent entrepreneurs, however, don’t really know their customers. They think their customers think like they do. If they like spinach/arugula mix, then of course everyone will like it and buy it.
What is your specific product or service? What does it sell for in your market? How much of it can you sell per day, month, year, five years?
OK, if you made the motivation and market cuts, then look at resources. Do you have what you need, or can you get it? Sometimes this is the toughest one to analyze. When you want to do something so bad you can taste it, it’s tough to admit you don’t have the resources to make it happen. Lots of people want to be pro basketball players. They’d like to be paid for providing the service of providing entertainment on the basketball court. But they aren’t very tall. Or I love Lebanese food and Southern food and want to create a Southern Lebanese Fusion restaurant. Gravy and hummous and biscuits and lamb. But the only spot suitable for the restaurant is on a gravel road 45 minutes from the nearest major highway and all the people within an hour’s drive would never eat a sheep or a chickpea, don’t know or care about any of that foreign food. Meat and potatoes, please. Or you hate accounting and don’t like people who like accounting.
If you’re pretty sure you have or can get the resources you need, then you’ve made the resources cut. Now, with market, motivation and resources, you actually have everything you need to generate a business plan, believe it or not.
Just list every task from where you are now to when you get paid for your first delivery. Then beside every task note all the supplies or equipment required to accomplish that task. Then attached a reasonable cost to each of those items.
Then divide the items into initial costs (things you have to buy before you ever sell anything, also called fixed costs) and on-going costs (expenses you will incur time and time again, such as for ingredients or utilities or paying off the sheriff, also called variable costs).
Then arrange everything on a spread sheet and you’ve got a cash flow analysis. And every thing you need for projected income statements and balance sheets.
We’ll be learning how to do that this Halloween at Meadowcreek. Come dressed as your favorite product or service (preferably one you could base a resilient business on. Be prepared with you voluminous knowledge of your prospective enterprise.
You’ll leave with a business plan. Or you will fall in love with Meadowcreek and never leave.
Saturday October 31. Just before dark. At the spooky conference center