We all know the value of hard work, especially in one’s own ventures. There’s a slippery slope to avoid with it too, and that’s where hard work becomes more than just something to keep you up at night, it becomes an Art form. I spend a significant amount of time consulting and restructuring business plans to whittle down and refocus clients so they don’t spin their wheels.
One of the first things you can do to prevent yourself from falling into the cycle of never ending roadblocks is to separate what you need to do right now verses what you think you’ll need in the future. It sounds easy enough, but most people zoom from step 1 to step 7 without really considering what step 1 entails.
Say you want to open up your own pub; you’ve got your own recipes that you know people love. You know where you want to open up shop, you know what equipment you need, and you know how many people you need to manage it. You know how long it will take to break even, and how long it will take to become profitable. Now all you need is financing to pay for it all. Stop there. Now can you answer this question with a definitive “yes”: Do you have any beer right now?
If the answer is “no” because your product is contingent on getting the financing to get equipment to brew, then you’ve got to reassess your step 1: Make beer now, immediately. Not thousands of bottles, but enough to put it to a small market. To make your beer, you’ll need to borrow some equipment, preferably with some of your existing contacts in your industry who can lend you some time and space to do so. Yes, you’ll be paying out of your pocket to buy bottles, labels etc. Prove that you can sell your beer, calculate your results and make your business plan from there. At that point, you have proven that your own efforts, capital, and team have produced something that brings revenue. Step 2 then becomes making a plan to borrow your own equipment. Now you’re in a much better position to go through the trenches of capital raising instead of grasping for investors who are angelic enough to believe that the recipe scrawled on a piece of paper in your pocket will return millions of dollars after some theoretical time as passed.
For some people it’s hard to get past the idea that your business plan which you probably spent an inordinate amount of time crafting can’t be funded the way it is. Funding doesn’t happen because you think you can, it happens when you can prove you can. Proving it is your step 1. The feedback you get from your product at this stage becomes the groundwork for the rest of your business plan.
I once knew a person who spent 4 years making a business plan; it was magnificent, detailed and excruciating to review. He had spun his wheels for all those years without addressing the first step: make your product. The craft of planning goes beyond the ideas floating in one’s head, the craft involves execution at every stage. Remove yourself from the bigger picture just for a moment, and look carefully at your first required step. It’s not a chore; the ability to take a step back is an art.
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