Posted tagged ‘business plan’

Day 532

February 21, 2013

…and the storm hit.

In Sales & Promotions, a mid-term exam. (Hmmm, what ARE three ways to find out what your customers want?)

Then the biggie: A full 20-minute presentation to a panel of experts (Mike Arnold, Trafalgar Brewing; James McConnell, TD Bank; Ron Keefe, Granite Brewpub; Jason Ellesmere, Beau’s Brewing) presenting a business plan for an imaginary brewery, with full details of size, location, production, packaging, distribution, target demographic, marketing plans, competition, SWOT (Strengths, Weaknesses, Opportunities, Threats), start-up costs, how much equity investment we would need, and income statements for the first two years of operations.

We had been arbitrarily split up into teams of seven for this project, but only two from each groups were allowed to enter the sanctum and make the presentation. And so it was, friends, that this poor scribe was chosen by his group to be thrown to the wolves… err… to be one of the lucky presenters.

In reality, it was dead simple: just make your presentation for 20 minutes, then for another 10 minutes,  get grilled on everything you had forgotten, glossed over or hoped the experts wouldn’t notice. No PowerPoint, no flipcharts, not even a smartphone app allowed. Aha, but handouts were admissible, so although we had already handed in a 6-page summary last week, my partner and I arrived armed with multiple copies of a 35-page business plan in full colour  (with “twenty-seven eight-by-ten colour glossy pictures with circles and arrows and a paragraph on the back of each one”, as Arlo Guthrie used to sing in Alice’s Restaurant.) Even if we didn’t know what we were talking about, at least it looked like we knew what we were talking about.

We survived with only a few scrapes and bruises. No time to rest though–the mid-term week storm continues to rage tomorrow in the Teaching Brewery, where I will be brewing for marks.

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Day 491

January 10, 2013

More business-oriented courses today, starting with Beer Sales and Promotion. Our instructor is Whitney Rorison, who has been involved in a number of start-ups in the Niagara region, including Oast House Brewery in Niagara-on-the-Lake and Dillon’s Small Batch Distillers in Beamsville. Although part of this class will deal with developing sales and marketing plans, some or most of us  will be dealing with the banal yet evil provincial bureaucracy that plagues the Ontario craft brewing  industry, so today we worked our way through some of the myriad laws and regulations that govern alcohol and its associated advertising and promotions.

Firstly, if you don’t live in Ontario, you must understand that, according to the provincial government, the consumption of alcohol is a social evil and must be discouraged. Hence the mysterious bureaucratic maze you have to negotiate in order to open a brewery. For instance, you need a Manufacturer’s Permit in order to legally manufacture beer, but as part of the application for the permit, you must provide a sample of your beer to be tested despite the fact that you don’t have a Manufacturer’s Permit to legally manufacture the beer to be tested.

That is only one of several permits you need to obtain. You also need a federal Excise License, a provincial Retail Authorization Permit (allowing you to sell the beer you brew), a provincial Appointment of Agent Permit (to allow a representative to promote and sell your product to bars and restaurants), and a provincial Direct Delivery Authorization (to allow you to sell your product directly to bars and the public without going through the Liquor Control Board of Ontario). The entire application process can take anywhere from three months (rare) to a year (not so rare).

(I feel sorry for the several American students who are taking this course–when they return home they will have to deal with a different bureaucracy and a different set of rules, but in the meantime, they still have to take this very Ontario-centric course. But I digress.)

Then there are the many many advertising guidelines, all meant to discourage over-consumption of alcohol. Among the hundreds of rules:

  • There is a “floor price” for alcohol. You can’t sell a 341 mL (12 oz) bottle of beer for less than $2. (This scales up in direct proportion to the amount of beer, so the minimum price for a 20-oz pint is $3.33.)
  • A bar can’t offer different drink prices to a specific segment of customers such as women or university students–everyone in the bar has to pay the same price for a specific drink. However, you can have different prices for drinks in separate and distinct areas of your establishment; for instance, you can offer cheaper drinks to all customers on the patio.
  • You can’t offer a special price based on the purchase of other drinks, such as a 2-for-1 special.
  • You can’t advertise or promote “Happy Hour” or “Cheap Drinks” since it might promote “immoderate consumption”.
  • You can’t target underage drinkers–and that includes using popular music in advertising that might appeal to underage drinkers. So no Justin Bieber tunes for the foreseeable future.
  • Advertising can’t promote excessive drinking, or give the iompression that drinking makes you more popular, sexier, smarter, happier, etc.
  • Advertising can’t portray anyone actually taking a drink
  • Advertising can’t promote drinking in general–you have to specifically promote your product.
  • In a twist, you can place an ad for your beer on a racing car, but you can’t use the image of the racing car (or any car) in your beer advertising or on your beer label.

And although brewers are allowed to provide beer mats, a few branded beer glasses, branded patio umbrellas or other small amounts of promotional material to a bar or restaurant, the regulations specifically prohibit brewers from offering financial or material incentives to carry their products. Yet, as recently reported in Toronto Life, and as shared anecdotally by several students who have worked in bars, incentives provided by the big players in the Ontario beer industry are a way of life. (Apparently some bars are starting to turn the tables and ask brewers for incentives–usually free equipment or a few free kegs–before agreeing to carry their product.)

If The Toronto Life article and students’ anecdotes are accurate, these laws are being more honoured in the breach than in the observance, to the detriment of small-budget craft brewers.

On to Brewery Management with Mike Arnold. Mike founded Trafalgar Brewery in Oakville 20 years ago,as well as Elora Brewery in 1999 (since folded into the Trafalgar operation), and Black Creek Brewery in 2010. Mike also branched into mead production in 2000, and operated a tied house coupled to the Oakville brewery for a couple of years.

The first thing Mike showed us was a list of all the craft breweries that opened in Ontario from 1984 to 2009. Unfortunately, most of them have closed, especially those that opened during the 1990s. Although it’s possible that some of those closing were unavoidable, it’s also possible that better planning could have made a difference. This course will be all about planning, including the reasons for making a proper business plan, financial statement and marketing plan, building the brewery, developing management, planning for the inevitable catastrophes, planning expansions, moving the brewery, and even how to sell your brewery.

Before we can start planning, we have to decide why we are opening the brewery. Is it to make money? To make good beer? (Mike believes these first two are mutually exclusive.) To satisfy your ego? To get involved in an enjoyable career where you can meet enjoyable people?

Once you have decided why you are opening a brewery, you can now answer the “four P’s”: Product, Place, Price and Promotion.

  • Product: What kind of beer are you going to make, and how will it be packaged?
  • Place: Where your brewery will be located–in an industrial strip mall by the airport, in the city core, or elsewhere?
  • Price: How much will your beer cost–are you going for large volumes of low profit beer, or low volumes of high profit beer–and where will you sell it–through the LCBO, the Beer Store, to bars or in your own brewery retail store?
  • Promotion: how will you promote your product? Is this the best use of your money? Can the benefits be measured?

You plan should also include S.W.O.T.:

  • Strengths: What is the best potential part of your plan that you believe cannot fail?
  • Weaknesses: What is the weakest part of your plan?
  • Opportunities: Where will your beer sell well?
  • Threats: Who’s your competition? Can your product be easily replicated by a competitor?

And that’s just the introduction to the planning process. Goodness.

 

 

 

 

Day 208

April 9, 2012

More business presentations for brewpubs and breweries in Strategic Communications. There was one plan for a brewpub set in northern Ontario, and one for a brewpub in British Columbia–that was mine. However, the rest were set in southern Ontario or “cottage country” north of Toronto.

Creative presentations, but I kept thinking that if all these plans for breweries in southern Ontario come to fruition, there’s gonna be a brewery on every block.

Next week, one last batch of presentations, and then that’s it for Strategic Communications.

Day 189

March 19, 2012

Busy week coming up, especially for a couple of my classmates.

First this Friday (March 23), the college presents another edition of Caps, Corks & Forks, the wine vs. beer dinner. I was part of the beer team for the inaugural edition–as you may recall, we tied with the wine students 3-3, only to lose in a tiebreaker. This time, fellow first-year students Kellye Robertson and Jennifer Nadwodny will be part of the beer team, and I’m sure they and their team-mates have a great selection of beers chosen to be paired with some fantastic food.

The one thing we need is more beer lovers in attendance. At the last event, there were perhaps 5 beer lovers out of 80 in attendance, so it really was remarkable that we convinced enough wine drinkers to choose beer in order to tie the score. If we can get just a few more beer drinkers out, I’m sure Kellye and Jen can sew this one up. For six delicious  courses with fabulous wine and beer–and you get to discuss beer with your tablemates for 3 hours–it’s $80 per person.

Then Jen and Kellye have one day to rest from their labours before they are back at it on Sunday. They and nine other female brewers have created seven special beers, which will be unveiled  at Beer for Boobs, a fundraiser for the Canadian Breast Cancer Foundation happening at barVolo in Toronto. I had a taste of Kellye and Jen’s beer, called Cocoa Inferno, and I don’t want to spoil the surprise, but woo hoo! I fell to the ground, crying with joy. So, $20 gets you in the door, then supplicate yourselves before the goddesses and seek their permission to buy a pint of Cocoa Inferno.

Now that I’ve told you how to spend your weekend and your money, back to our regularly scheduled program.

Blake Landry, Business Aanalyst with nGen (Niagara Interactive Media Generator) visited Strategic Communications to talk to us about what services are available for small business start-ups, including advice on how to draw up a business plan, marketing research, government grants, and making connections with investors. Very interesting, and his material should help immensely as we prepare our own fictional business plans.

…a draft of which is due in a week. Whoops, gotta get back to work!

Day 182

March 12, 2012

In Strategic Communications, we started to deconstruct the business plan, starting with the Executive Summary. This is the opening salvo in your docment–a juicy, tasty, crunchy page or two that outlines what is to follow, using language that will get your potential investor all fired up about reading the entire document, ready to lay down some big bucks just for the pleasure of being a part of your business.

As we have done in the past, we split up into groups to look at examples of executive summaries drawn from actual business plans.

They were all totally lame. Example: An historic Irish pub was losing business to microbreweries, so it was going to convert to a brewpub. No word of why the pub wouldn’t simply carry microbrewed beers on tap, how becoming a brewpub would change its fortunes, who would be hired to buy and install the equipment, who would brew the beer, how much the whole thing would cost, or how long until profits were realized. After reading the summary, I wouldn’t have invested $20 in the venture.

Part of our business plan has to include some financial information. Most business plans go into this very heavily. Since this is not an accounting class, all we will be expcted to include is a one-page income statement for the projected first year of operation of our fictional brewpub.  Even this would have been beyond our ken had not one of the students in the class been an accountant. He quickly ran over the information needed, confirming in my mind that my first order of business in opening a brewpub would be to hire an accountant!

Day 175

March 5, 2012

…and we’re back, as we start the last eight weeks of the semester.

In Strategic Communications, we moved on to our next big assignment, something some of us may be writing for real within a short time: a business plan for a fictional brewpub.

A business plan is what you present to potential investors to outline the product, financing and marketing plan for your proposed venture. In addition to a written package, we will also have to make a presentation to the class, so we started by watching two business presentations from CBC’s popular Dragon’s Den: pitches for Marijuana Macaroons and EcoTraction.

We then dissected both segments–why had one failed, why had one succeeded–before we took a quick look at the various parts of a business plan. We’ll be examining each of those parts in detail over the coming weeks.

Day 124: Start of Second Semester

January 9, 2012

…and we’re back! From the smiles on students’ faces, it seems that the grim memories of final exams have already faded. However, word on the street (from second-year students) is that this semester will be difficult–seven classes, and unlike first semester, apparently not a bird course among them.

(Bird course, n. If you’re breathing, you pass. Consciousness during class is optional. The etymology of “bird course” is uncertain–some authorities suggest it’s because you fly effortlessly through the course; others state that in the 1940s and 50s, as women entered university in greater numbers, “bird course” was a derisive, sexist term for a class that even the “chicks” could pass. But I digress.)

Today’s class was Strategic Communications, a “hybrid” course that requires 2 hours per week of classroom time and another hour per week of on-line work. It was specifically tailored for the Brewmaster program, with the idea that we will come out the other side able to produce a comprehensive media kit for our brewery–including use of social media–as well the ability to design and present a cohesive business plan.

Professor Aleksandra (“Sandra”) Merk admitted to being a big fan of good beer–always a plus to a class full of beer-makers–and recommended a visit to her favourite pub, “Ye Olde Trip to Jerusalem” in Nottingham, England.

( “Ye Old Trip to Jerusalem”, known locally as “The Trip”, was supposedly built in 1189, and  claims to be the oldest pub in England. However, the Guinness Book of Records lists “Ye Olde Fighting Cocks” in St Albans as the oldest. Proponents of “The Trip” point out that  in 1539 “Fighting Cocks” was taken apart and rebuilt at its current location when the nearby St Albans monastery was dissolved by Henry VIII, so technically it’s not the same pub. Drinkers at “Fighting Cocks” respond that  there is no evidence that “The Trip” was established in 1189–other than its current sign–and gleefully wave copies of the Guinness Book of Records. Customers at “Ye Olde Man and Scythe” in Bolton say ‘a curse on both their houses’, claiming that their pub predates both by two centuries. But I digress.)

Prof. Merk was engaging enough that one of the students not only admitted to drinking St. Ambroise Oatmeal Stout for breakfast today, but also later admitted that “breakfast” was not consumed until after noon.

With a writing assignment due every other week and a major presentation at the end of the course, there will be a lot of writing involved. Speaking of which, I must get started on our first bit of homework: adding an entry to a class “wiki”, writing an entry in something called a “blog”–got to find out more about that–and writing an entry in an on-line journal.

But first, a trip to the beer fridge. All this talk of English pubs has me hankering for a pint of bitter…


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