New Venture Lab: Equipping Christian Entrepreneurs

Question

I recently started a food processing business as an educational endeavor after completing 12 years of home education; I have been in business for about a year, but am concerned because I have not yet written out a detailed business plan.  I have no accounting experience at all and am not sure where to start.  Also, I will likely need to rent a larger (and more expensive) kitchen in the near future to meet demand.  Should I set up a small scale investment plan for my family and friends, to raise some capital for this and other expenses?  Lastly, I want to build a team of local mentors/advisors to whom I can turn when in need of counsel.   Who should I have on the team?  How much should I pay them?  How formal should the relationship be?

Answer

In terms of business planning, at your age and stage, the only reason for a full, detailed business plan is if you have to deal with third parties in trying to raise capital.  If you are in business primarily to learn and gain experience, you should not spend your time writing a plan for which you lack a real need, but I recommend that you should be out actually ‘doing’ the business, learning as you go.  Think "fire, adjust, fire, adjust, fire, adjust" rather than "aim, aim, aim, aim..."  Focus on exposing as many people as possible to your product, stir up local enthusiasm, and build a broad consumer base.  Set small manageable goals that are easy to gauge and are clearly attainable.

In terms of renting a larger kitchen, I fear that would be too complicated and time consuming; rather, I would suggest that you focus on what you can do with resources already at your disposal.  Also, do not invest in infrastructure that exists elsewhere which you could utilize -- it is not the best use of your time or money to buy the equipment yourself and make the product yourself.  Anyone can make the product and maintain equipment.  As the entrepreneur, your greatest assets are the recipe, the brand, and your sheer energy and enthusiasm.  Leverage those to the fullest and outsource the rest as much as possible.

In terms of mentors, since you are in the food processing business, find one or two people who have been successful in bringing a food product to market. You should also find someone who is strong in sales and marketing and then someone for general entrepreneurial questions.  They don’t have to be local, but could be on "telephone or email standby" for when you need input.  Then, compensate each member with some upside -- for example, you can give them either a fixed dollar amount or a percentage when you reach X-amount in sales.