SYWTOABP: Writing a Business Plan
This may not be the final post in the series, but writing a business plan is one of the key steps necessary to opening a brew pub or starting most any business. You need the business plan to apply for financing or perhaps to secure a lease or even a key permit or license. Writing a business plan is work. A great amount of time can be spent refining a business plan and more business plans get written than get financed.
Writing an entire business plan was never a goal of this blog series, but providing some of the numbers, resources, and information that goes into a business plan was among the goals. I found a pub business plan posted online that was made available for free, specifically to help others open a bar. Brewing beer was not part of this business plan. It is dated but with the exception of including brewing as part of the operations and brewmaster among the key staff it has all the major sections you can expect to see in the average business plan.
It is still available on the forum I found it, but I also put a copy on WordPress.com to ensure that it remains available as long as this blog is online. The numbers are mostly all there, but need to be revised and adapted for the new decade and British Columbia. Part of that work was done by me in my big spreadsheet post. I thought we should look at the major sections of an actual business plan and the information they should contain. Potential investors and funders will want answers and if you don’t even know the questions, you will look foolish in a key meeting that may determine the future of your dream.
You can’t anticipate every question, but the most important questions such as the experience of the team, the depth of the market and industry research, the veracity of the sales forecasts, the details of the startup costs, these can be researched and written up prior to any important meetings.
Sections of Sample Business Plan
- Executive Summary: the most important section in the entire document, write it last, and make sure it doesn’t suck.
- Business Summary: describe your business idea, why it is unique and will be successful.
- Industry Description: demonstrate you’ve throughly researched and understand the industry.
- Business Description: another summary of your business idea, includes market demographics, possibly redundant.
- Facilities Analysis: details on the location and operations of your proposed business.
- Market Analysis Summary: why your local market is attractive and how your research will enable you to succeed.
- Strategy and Implementation Summary: there are only three main strategies, yours is differentiation, explain it well.
- Management Summary: who you are and why people should believe you can create and run this business.
- Financial Planning: most of your numbers and why you believe they are achievable and worth investing in.
- Appendices: more numbers, graphs, survey summaries; whatever is most likely to get you to yes.
It isn’t perhaps the world’s most innovative business plan, but all the major information required is included and the author by numbering and ordering the sections made it easy to discuss/analyze.
There is no shortage of online business planning resources. I used to write and maintain a collection, which I guess I still do but it is far from exhaustive. While working on this series of posts another series of blog postings on business planning was being written over at the Inc. Magazines website. It seems to be written by consultants to encourage you to take their course. Always consider the bias of the person writing, that is something I learned in an elective during my undergraduate degree. Their series breaks business planning down into three parts (Take the Pain Out of Writing a Business Plan, The Second Part of Your Business Plan: How You’ll Do It, and The Third Part of Your Business Plan: How You’ll Fund Your Idea). The posts read a lot like a brochure, our series went into just a tad more detail and is focused exclusively on brew pubs in BC, though a lot of the information is useful to anyone starting a cafe, restaurant, or pub. I’ve tried to be honest about any bias or conflicts of interest I may have. Using their “what”, “how” and “need” deconstruction of the business planning process, here is how to leverage the “So You Want To Open A Brew Pub” blog post series in your business planning process:
This series didn’t go over what your business hopes to accomplish in much detail, it should be self evident to the readership. Opening a brew pub in BC, one that brews fresh, craft beer, is the goal of your business plan and the series was written to assist people in achieving that goal.
How to brew beer wasn’t the focus of this series either. Experts were consulted to fill in my own considerable gaps in knowledge on this and other topics. You should do the same thing when you write a business plan. Whether it is lawyers, accountants, or real estate professionals, they make a living because they know more about a topic than the average person. You will need to consult with these individuals and a dozen other consultants and contractors over the course of opening a brew pub.
The most important thing you need to determine is will demand be sufficient for your product, at the location you’re considering, to pay for all your inputs & ingredients, staff, rent, and other expenses including repaying any money you need to borrow. Remember the industry average Cost of Goods Sold is 35.5%. Your pub needs to be profitable at and even a little above the industry average. This series included a number of Microsoft Excel spreadsheets, one of which can be used to quickly determine if your pub can turn a profit during an average month as well as answer some other key questions assuming you enter well thought out estimates.
Financial requirements along with market research and sales forecasts is where I usually make contributions in the business planning process. I’m also a good ideas person and pitch person. When volunteering I tend to take on whatever role needs doing, even if it isn’t particularly glamorous or fun. For this series I pretty much did everything but I was helped along the way by friends, colleagues, and supporters. Your brew pub will need all the help it can get too.
Reread the following posts when fine tuning your numbers:
- Market Research for opening a brew pub in BC
- More on market research and cash flows
- SYWTOABP 4: How much does it cost to open a brew pub?
- SYWTOABP 5: How much does a bar cost?
- SYWTOABP 6: How much does a commercial kitchen cost?
- SYWTOABP 7: How much does commercial brewing equipment cost?
- SYWTOABP 8: How much does it cost to have a stage in my pub?
- SYWTOABP: Spreadsheets
Yet More Business Planning Resources
- Small Business BC
- BC Government Business & Investing website
- Women’s Enterprise Centre’s online business planning library
- Canada Business (Federal Government) guide to Writing a Business Plan
- Guy Kawasaki’s latest business plan writing advice
- A Brewpub Feasibility Study Is the First Step to Liquid Gold (written circa 1998)
- My Brewpub (not literally mine, but thoughts on opening a brewpub by Pete & Nate)
- 5 Brewpub Success Tips
- Seven secrets of brewpub success
- The last two were both written by Teri Fahrendorf she is available to consult on brewpubs
- Inc.com guide to “How to open a bar”
- Another guide on how to open a bar (from Australia)