Day two we really started to get into learning about how to
be an entrepreneur. We started with one
of the most important things when starting a new business; a business
plan. A business plan is basically an outline
that tells what your business is going to do, what the goals are, and how you
are going to make money. While this isn’t
necessary, as Judy told us about her former student who started that accounting
service company, it usually helps the business run smoother. A business plan is also needed if you are
going to try to borrow money from a bank, it is often the first thing a banker
will ask for. Some of the common parts
of a business plan include mission statement, marketing strategy, and financial
analysis.
Chapter three moves into different decisions you have to
make when starting a new business. The
most important of these is what type of business you are going to start. There are many different factors to consider
when you are starting up a new business.
One of the key factors is who your target market is, or who is the group
or people within the buying radius of your business. This used to just be people within a certain
mile distance of your business, but because of the internet you are now able to
reach people all around the world.
The Market is a very important issue because if there is no
need, then nobody will buy your product.
There are already a bunch of restaurants on Hamilton Avenue in Sioux
City, so would another one be successful.
This is where another very important concept comes in, competitive advantage. There are six different factors that can help
give you a competitive advantage over other business, these are: price,
quality, location, selection, service, and speed/turn around. While there are already plenty of restaurants
on Hamilton, if you open up a fast food restaurant that has much better food
than anywhere else it might be successful.
Chapter three a little bit goes into the actual number crunching
such as figuring out Cost of Goods Sold (COGS) and average gross profit per
customer. Being an accounting major I
already know a fair amount of these terms and a lot of these number
basics. We really did not talk too much
in class about the actual numbers. We
did talk a little bit about the numbers from the “Mango, Mango, Mango”. The guy from Shark Tank did have a good
point when he said they need to lower their costs. There were making it for $2.29 and selling it
for $3.99 which is $1.70 profit. If you
take away one dollar for a distributor you are down to $.70 per jar. I was amazed that on their website it was
$7.99 plus $8 shipping. It did look like
a super good product because all the “sharks” loved it but there is no way I
was paying $16 for a jar of mango jelly.
I learned quite a bit today about some of the important
steps of starting up a small business.
At the end of class I did quite a bit of research about starting a
Pub. I looked at several different
websites and have basically narrowed what I want to do down to two possible scenarios. There are two different paths I can go down
for this business plan. Start a brewery
that is attached to a restaurant or just simply start a brewery and sell to
other businesses. Both have their
advantages and disadvantages. With the restaurant
idea there is a lot more room for profit in the restaurant area, and also you
will get free publicity for your product with the restaurant. But one the main concerns is I know nothing
about the restaurant business. One article
I read online said to get someone who knows the restaurant business to help you
with the restaurant end of the project.
The other idea would be to just simply start a brewing company. The advantages to this is that it would be
cheaper, I literally could start this in my garage. Because I do know nothing about the restaurant
business and I have very little capital to start out with, I think I am going
to stick with just doing the brewery. So
now I can begin working on my outline to my business plan.
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