"This is to inform you that I have already obtained all the investment funds that I need to launch my project. I thank you for doing all you have done for me. I am thrilled beyond measure. Apparently I have a better idea than even I knew."
Posted on November 30, 2021 @ 06:31:00 AM by Paul Meagher
It is common these days for governments and other organizations to pick a month and promote some cause for that month. If I were going to promote some cause for December it would be to suggest to entrepreneurs that December be viewed as "Business Planning Month".
Selecting December as "Business Planning Month" is not an arbitrary choice for some businesses. If you are operating a market gardening venture that involves growing annual plants, you would be looking to have most of your seeds ordered before the end of December to help ensure you get what you want. That requires planning what types of veggies you will plant, how many and where. In the context of market gardening, using December to do planning is common practice. Even planning for a personal garden is often done in December. Richard Perkins has documented an interesting lego-based approach to planning and managing the garden beds for a market gardening venture.
Another reason why December may not be an arbitrary month to dedicate to planning is because for many businesses the end of 2021 is the end of a fiscal year. It is the last month in the final quarter of the year and you can start to get a sense of what your final numbers will be for
2021 and can use these numbers as a basis to do some planning for next year.
In the remainder of this blog, I want to discuss the types of activities you might engage in as part of the business planning process. Creating a business plan for 2022 "takes time" because it is not just one type of activity but the culmination of many activities taking place at the same time.
In my opinion, the central element of business planning is decision making. The goals you setout to achieve in your business plan for 2022 are bets based on the best information you have available. Selecting those goals involves decision making with a betting aspect. For example, in my first winery application that I hope to submit in 2022 I need to decide whether I want to create just a retail store for our farm winery venture, or if I want to offer a hospitality area as well. Offering hospitality where the customer can sit down and consume glasses of wine involves complying with additional regulations, restrictions, renovation costs, and insurance costs. I am leaning towards only offering a retail store for the business in 2022 with the hospitality aspect a goal for 2023. This decision has a big impact upon what I will try to accomplish in 2022 and sets the tone for the much of the business plan.
There is quite a bit of research that goes into good planning. It is useful to research what the competition is doing, to read about industry trends, and what the best in class are doing. In my case, I need to dedicate a significant amount of time to researching the regulatory requirements that discuss what other government departments (environment dept, fire marshal dept, municipal approvals, etc..) and private companies (commercial insurance) you need to interact with before you can even submit a winery permit application. You then need to research the requirements of these government departments and private companies. Researching regulatory requirements in particular is important because it can deliver information required to make good decisions about goals to pursue given where you are at.
Oftentimes planning and learning are going on at the same time. You may need to learn new ideas, new facts, and new skills in order assess the viability of proceeding in a certain direction. Expect to do a lot of learning as part of the planning process and December can be a good month to learn ideas, facts and skills.
Multi-year plans involve achieving certain milestones each year. By the end of the year you can assess the degree to which you achieved your milestones and what you learned in trying to achieve the milestone. Perhaps you learned that it was more difficult than you thought and/or that perhaps the reward doesn't justify the cost of trying to achieve it. Perhaps a pivot is in order? If you are a driven, focused and perhaps lucky entrepreneur then there is a good chance that you will achieve some of the goals you set out and you are on track with your multi-year plan. December could be the time of year that you allocate to assessing multi-year plans and deciding to adjust the plan to reflect what you have learned and addressing new opportunities. Sometimes you don't need to do anything new that might distract you from the main plan and the most important thing is to stay the course with focus and discipline.
Ultimately planning is about documenting what you are deciding and learning into a formal document that can be shown to business partners who might want to become involved in your business. There are alot of templates you can follow that will guide you on how to structure a business plan. Pick one and go with it or just start working on all the sections that you think are important and need to be in your business document (e.g, executive summary, business structure, implementation plan, costs, marketing plan, financial projections) .
There are alot of different types of activities involved in successful business planning. We have discussed 5 types of activities commonly involved in business planning: decision making, research, learning, replanning, and documenting. All of these activities take time and we might ask whether business planning should be done as needed or when you have some spare time, or perhaps whether it is worth recognizing a certain month of the year, perhaps December, as the time you will dedicate specifically to making business plans and improving your business planning expertise.
Posted on November 11, 2021 @ 07:19:00 AM by Paul Meagher
I was browsing The Lean Farm (2015) by Ben Hartmann this morning and thought I would share his 4 principles for starting a lean farm:
Put in your 10,000 hours (Develop Personal Capacity First)
Test in Small Batches
Add Infrastructure Capacity in Small Increments
Avoid Bad Debt.
Ben and his wife claimed to have followed these principles as they were starting up their farm. They didn't know about lean thinking when they did so but found that their principles jived with lean principles.
Their first principle alludes to the 10,000 hour rule for acquiring expertise and is not unique to this book. You basically have to put in the time acquiring the necessary skills. That
will probably involve making alot of mistakes. The second principle, test in small batches, protects you from making mistakes you can't recover from while you are still learning. The idea of testing in small batches advises you to only develop enough of the product to test your market for the product. Don't plant a field of potatoes without knowing whether you have a customer willing to pay a decent price for them. Start with one or a few customers and a smaller volume of potatoes. Related to testing in small batches is also not adding infrastructure before you need it. Don't buy all that equipment for planting, harvesting, and storing potatoes right away. Use hard labor, cheap equipment and cheap storage to get started and invest more if there is reliable demand for more of what you are selling and ideally some financing from what you have sold. If you test in large batches, add infrastructure capacity in advance of need, chances are you will acquire bad debt. The principles are very interrelated and seem like good advice for those starting up businesses in general.
Chances are you will acquire bad debt along the way because making mistakes, some of them financial, is a part of the process of learning. One of my bad debts was the purchase of a 1985 Massey Ferguson 699 tractor, with a 95 hp motor. I thought I needed the tractor because my smaller 135 Massey Ferguson didn't have enough power to run a 6 foot flail mower I needed to use to mow my wild blueberry fields once a year. I paid $7000 for that tractor and have gotten very little use out of it and a few big repair bills. Currently, I can't use it because the last time I started it the power steering was very slow to respond. Might be air in the lines or it might be something more serious. I thought that being self-sufficient was important, but failed to recognize that I really only needed to use the tractor once a year and I could borrow my father-in-laws tractor when that day came, which I did on tuesday of this week. I thought I was adding infrastructure capacity that I needed when I would have been better off borrowing or renting a tractor/operator for a day of mowing each year. Another issue when you buy a tractor this big is where you will store it inside if you don't want to leave it outside all the time. I didn't really think about that issue when I bought it. This year I allocated the covered space I used to store it to another use so currently, and for awhile, it will reside outdoors.
One unexpected upside of owning this tractor is that, in the context of our heritage farm, it is a photogenic tractor. I have placed the tractor prominently on the concert grounds during our summer concerts and many people have taken pictures while on it and beside it and it has appeared in news stories of the concert and artists promoting themselves. We landed out first wedding in our barn next year and I'm sure they would like to take some pictures on or beside it. Not sure if that delivers enough value to make it worth owning.
Posted on November 3, 2021 @ 11:45:00 AM by Paul Meagher
Over the weekend, the email server that sends out investor proposal notifications to investors stopped working so some proposal notifications that should have went out on the weekend end and early this week did not go out.
I discovered this issue today, Wednesday Nov 3rd, and resolved the issue so unsent proposal notifications started going out this afternoon. The emails that were supposed to go out all went out, but there was a sending delay that was shorter or longer depending on when the proposals were supposed to be sent out.
We apologize to entrepreneurs for the delays in sending proposal mailouts and to investors for receiving greater than normal amounts of proposal notifications.
This issue also affected user registrations because emails were supposed to be sent to the user upon submission but the email server was not responding. I will be following up on some user registrations to let users know the problem has been resolved.
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