Get on the Business Plan Band Wagon

When my business partner and I started our first business, we had a (seemingly) great idea to make and sell Italian Ice on the West Coast. We thought it was a foolproof, genius idea since everyone on the East Coast loves water ice in the summer. We assumed that since the weather is nice in CA year-round, that people would go crazy for it here too. We literally thought we hit the jack pot with a great idea that would be easy to implement and make money off of.

We were the poster people for young and naive entrepreneurs.We spoke to a few people who we considered to be business savvy and they told us not to "waste our time" creating a 50-page business plan because it was going to take up too much time and it wasn't really necessary.
They were wrong-- WRONG WRONG WRONG and here lies the crux of my article today.

Everyone who is starting any kind of business should take a moment or two to sketch out, type out, write out, whatever you prefer, some kind of plan. It doesn't have to include pages and pages of text, financial models, and charts, but you should take the time to gather your thoughts about the product/service you plan to build a business around and figure out your approach to making it a success. This "wasted time" on a business plan is just the opposite. The time spent on a business plan will save you lots of money and time in the future.

Many business gurus today suggest just doing an executive summary which is basically a one-page explanation of your business, the market place, and what you intend to do to build the business. I support this as well.

My parents, who own a thriving pet sitting business, only did the executive summary, and it was totally sufficient for their small, local business that was built solely off of word of mouth. He doesn't intend on selling or marketing a product. They have no overhead costs other than gas and the few hundreds of dollars they spent in the beginning for business cards and flyers, and they didn't invest any money into the company, nor do they have any outstanding bills (like a mortgage) that relies on this income. An executive summary is sufficient for this kind of business.

My business, on the other hand, is completely different and I can safely say that we wasted plenty of time and money on our first business model focused on Italian Ice because we never took the time to write out ANY kind of plan--not a 1-pager, not even a sketch-- nothing. Our bank didn't seem to think this was that big of a deal either, and without a single sheet of a plan, they handed us a loan for $25,000.00. We had no clue how we were going to spend the money, how it was going to get paid back, or what the fine print read on interest rates etc. We were probably the least prepared and least deserving of a business loan as there was in that entire year...


We were picturing the world and our business through very rosy colored glasses.

Anyway, we went through the loan money and charged up hefty balances on business credit cards with high interest rates in under a year and realized too late that the money was gone, our business was not growing, and the approach that we were taking was a far cry from what we wanted to do for the rest of our lives. We also realized that while the weather is nice here, it's not really hot enough to spurn people to buy cold treats all day every day. We realized that we were going to need a lot more than 25,000 to make it successful, so bailed on that idea and here we are...

3 years later with a new product that has a ton of potential, a few clients, and a financial model and a business plan. It's not perfect, but it's a start, and a much more solid one at that.

My Point is...
that if we had taken the time to write the business plan for the Italian Ice company, we would have been forced to ask questions like: what are the benefits of the product, how will the product be produced, what kind of equipment will we need, where and how are we going to sell and market the product, who is the competition, what is the competition currently doing in the market etc.
I would have been forced to consider the vital questions that all businesses should consider before spending money and time creating a new business. Going through the grueling process of writing a business plan also forces you to see if you are really passionate about the product, service etc. If you can't even sit down to write the business plan and research for the necessary information, how will you do all of the other grueling tasks in a business like making cold calls all day, dealing with accounting, and banging on doors to sell a product.

I am not saying that writing a business is the be-all end-all to starting a business, nor is it the absolute first thing you must do in the process, however before you spend tons of money, sit down and at least commit to writing a one-page executive plan and you will for sure save money and time in the long run.

I am not saying a business plan ensures success, but it's a step in the right direction

Life as a Business Owner: Day 8

Pick Your Partner Like you Would Pick Your Spouse

I went to bed at 2 last night and woke up at 11. I was supposed to wake up and tutor, one of the many jobs I do to keep a roof over my head, but my student canceled. I knew I should have gotten out of bed when I originally planned, but I couldn’t make myself do it. Sleep is my true vice. It lures me in, makes me comfortable, and tells me entertaining stories. I woke up at 11 to an angry business partner—this time it was my fault. Last week, I found out that he didn’t pay 3 credit card bills on time (I usually take care of the bills but I was away for the weekend). They were late and all of them got fined and went up to a ridiculous 18% APR. I was furious.

However, this weekend, he was going away and asked me to do something for him and I
completely forgot. In my defense, I reminded him of his “chore” three times from three different channels-e-mail, text, and a phone call. He told me over the phone while I was pushing an
angry baby across a busy street in the stroller. I wasn’t able to write it down, so I completely forgot about it. I needed a reminder—that’s all I ask for. So, the day started out on a bad note… I dragged myself to work early so I could work out in the family's personal gym and I watched Oprah and learned how famous models still feel good about themselves even though they're washed up.

I came home to my business partner miraculously answering every e-mail I had written him in the past month. We fight about this all of the time—just communicate! This seems to be a difficult task for him. I think he is trying to prove to me that he is capable now that I have proved myself to be incapable because of my mishap over the weekend. It’s really like a bad marriage.

Lesson for Today: 

Upon starting the business, set specific roles for each person and make sure to set
the standard that those roles must be followed. In turn, make sure to follow them yourself every day. It is very important for everyone to have specific roles in the company
and to stick by and build on those as the business grows.

Most importantly, pick your business partner with the utmost discrepancy. Choose them like you would choose your mate for life. Once you start a business and you are in debt, you are STUCK with them. It can be like a bad marriage. You are tied to each other for as long as it takes to build the business or pay down the debt. They need to either work in the same way you do--you both communicate in the same way and are organized in the same way. OR, you need to complement each other. Maybe, one person thinks strategically and logically, while the other focuses on the creative stuff. Make sure your business partner is diligent, motivated, organized, and perserverant above all because you will need these qualities every single day in your business.

Life as a business owner: Day 3

2/3/11: 

I am actually tired tonight. I haven’t been tired till like 3 AM the last few nights. I think I am letting my brain relax a bit today. I was actually able to sit and watch 20 minutes of Ellen, 5 minutes of Oprah, and like 15 minutes of American Idol tonight without doing anything else! That is a big step for me…well, I did pluck my eyebrows for one of those, but that doesn’t really count. Anyway, I set up my play list on groove shark tonight—what a great invention-- and it has kept my sanity in check. On my playlist tonight, Florence and the Machine (I actually like this weird chic), Ingrid Michaelson, one song of Citizen Cope (Drummer Kick), and Joe Purdy for my really down and out moments. My boyfriend calls Purdy’s songs “Bridge Jumpers,” like it’s considered good music if you want to kill yourself while listening to it. You can see my range of emotions in just my playlist. It is quite a hodgepodge. Anyway, today, I had to get my credit score info, so we can see if there is any chance in hell that any bank or credit card will loan us money. I have been putting this moment off for a few months. I used to have a great credit score until I started a business, took out a loan we couldn’t afford, charged cards we should have never charged, and then only got paid $25,000.00 income for the whole year. Just to be clear, this was money well spent on things we actually needed for the business. We weren’t being irresponsibly at all, but nonetheless, starting a business is costly and we realized that very quickly. I used to be able to pay my credit cards off every month, but those days have been gone for awhile. Anyway, after paying 15.99 for a monthly credit report and all of the bells and whistles through Wells Fargo, I found out that between the 3 agencies, I have ONE discrepancy and it has to do with my bank loan and I don’t even think it’s all my fault. Yes, it’s the bank’s fault. I have decided.

Lesson from today: Don’t be afraid to check your credit score. Most people at some point have had a low score and there are many resources--books and websites to teach you how to increase your score. There is a lot of support out there and it is better to just find out what you are up against and deal with it. Don’t live in the dark regarding money or you will never find your way back out to light again. I also realized today that it is worth it to spend $12.99 a month through a reputable agency and track your spending and credit score. You can stay on top of your financial situation, and you deserve that. Uh oh…I sound like an ad right now. It’s true though. That is advice wish I would have heard earlier. I would have been more aware and made wiser choices.

Life as a Busines Owner: Day 2

2/2/11

We tried to conduct a business meeting last night at 7, but it was after a long day of work for all of us and we were all exhausted. Usually, we can rally, but tonight, there was no cheerleader in the bunch. We got very little accomplished. As usual, I got a bug up my ass around 9 and stayed up till about 3 AM.

I woke up this morning at 8, then 9, and then I finally dragged myself out of bed at 11:11. I had two missed calls from J, our most dedicated salesman (and also friend) at the moment. The only problem is he lives in NYC. Perfect. He knows about the product, he is passionate, largely because he is shamefacedly broke, but nonetheless, he was born to sell and I know he would kick ass if the product was readily available to him in NYC. I don’t know how we will make that happen while he is still interested, but hopefully we will.

Anyway, he coached me on how to conduct a cold call for about a half hour last night and wanted to see how my progress was coming along. I had just woken up. Really? I hadn’t made any progress yet. I still had to wash my face, guzzle some coffee, call my grandmother since I hadn’t picked up her most recent calls, make my appointments for physical therapy, eat some semblance of a normal meal, oh and actually go to my job that pays. I had to fit that in somewhere too.

 So, no I hadn’t picked up the phone and started any cold calls yet. I know most of you are saying, “well get to it” and “why didn’t you wake up earlier?” I hate when I am asked the latter—everyone always wants to ask that. Part of the reason I started a bloody business was to sleep in; it’s the only bonus I get from this meager existence and I am NOT giving it up, so don’t ask anymore.

Lesson from today: Try to avoid calling business meetings when you know everyone is going to be exhausted. It is never that productive. Plan out your day, no matter how many hours you have or don’t have to dedicate to business, and make sure that in those hours, you only do business. Leave all the personal annoyances out of the equation. Make your appointments, pay your bills etc. any other time except that time you allotted solely for business stuff.

Life as a Business Owner: Day 1, Part II

I am still reeling a bit from my mentor’s e-mail (which I asked for in a prior e-mail requesting advice from him on what he really thought about the possibility for success in my business) and I still don’t know what to make of it. He called it “tough love” and that was an understatement. Some would say he was being very negative, others would say he was just being realistic. I appreciated his candor and I had to say that the scariest thing was that I agreed with him to an extent on a lot of the issues he brought up.

In all the books, blogs, articles etc. I had read, I understood the risk we were taking. I understood the odds of it being really successful were slim. I understood that it would take a lot of hard work and late nights and early mornings (which I hate). I just had to figure out whether I was up for this particular challenge, whether I was up for putting my personal life on hold.

This is the age old issue for women that men will always have to hear about, but never really understand. We have to think about our businesses, our careers, our schooling, and how we spend our time dating, dallying, and working because if we want to have babies, we can’t wait forever to do it. And, I knew I wanted to have kids long before I knew I wanted to write or even teach and certainly long before I wanted to start a business, so my answer was simple on that. My priority was starting a family some point soon and if this business was going to drastically hold that up, then I was out.

But, I am not a quitter and this business was a baby of sorts—an ugly one at the moment, but still mine. I had to give it my all, it was who I was. So… we are going to go through with the rebrand, probably spend another $20.000.00 realistically and throw in the towel if it doesn’t work after that. My business partner who I will refer to as F says we will split the debt down the middle and it will be like a car payment for 5 years—not so bad.

I disagree and failing in that way really isn’t an option for me. It never has been and I am not about to start now. I close this day at 2 AM with the hope and prayer that tomorrow will bring a new day of new thinking and positivity and I will be able to recharge and go back to being my normal workaholic self that truly believes deep down that everything will work out in the end.

Life as a Business Owner: What if I Am a BIG FAT Failure?

Day 1:

This is probably somewhere in the 800^th day of my business if you count when we officially started back in the spring of 2008, but as far as my daily writings, this is my first. I couldn’t have started on a worst week. I have had 3 ugly cold sores for all to see, one ulcer on my tongue, and a face rash on one side of my cheek. According to my doctor, these issues have nothing to do with  being physically ill and are a direct result of stress.. I am taking his advice and trying to relax—it is difficult, as most new business owners can attest to. 

In the last 48 hours, I have gotten in two huge fights with my business partner over the phone, have vehemently threatened to leave the business behind and start life over on the East Coast, and have also been told by our first and only mentor that the feat we have taken on is probably insurmountable with no money and neither one of us having the time to do it 24/7 (since we work other jobs to make a living).

He surmised that we do not have the foggiest idea of what it takes to create, brand, sell, and make profit off of a new product that has a vast amount of competition (5,000 was the number he chose when stating about how many competitors we probably have). 

Of course, I tried to take this all in like an adult and calmly rethink our plan. I reasoned that he was of an older generation and probably not as much of a risk taker as many of my peers today are. I made myself feel better at first saying things like, “He doesn’t know what he is talking about. His own business probably stinks.” 

But, the harsh reality came about 4 hours later when I was trying to go to sleep and I had done my last e-mail check for the night. All of a sudden, I started to panic and wonder if all he said was true. Would we be able to do this with no money? Would we be able to get investors of any merit? What if we never get this product off the ground and we are in debt to this company again? What if we never get out of debt? What if I have to go back to doing a 9-5 job and succumb to a miserable existence (in my eyes)? 

What if…what if…what  if…all night long. It was a restless night to say the least. 

Starting a Business- the Good, the Bad, & the Dysfunctional

Starting a Business:
Well, I should be honest. I have technically been in business for about 3 years. I hate to say that because I feel like we don't have much to show for the 3 years we have put in except for a whole lot of debt, old equipment, and aggravation, but some would say we have learned a lot and have come a long way. Before I start to write a daily synopsis on what it's like to run a business, I will at least give you some background on the last 3 years. I will try to be brief.

I went into my first business like many other people--unaware, unafraid, unknowing, basically stupid and naive to the work that it would entail. I had no money, no business schooling, and no experience. I had no business plan, and a business partner who I thought I got along with well because we had known each other since high school and had never had one significant fight in all those years. I had a good idea that I was sure that it would take off. I could not have been more wrong on everything I thought I knew.

The Idea:
Both me and my business partner were from the east coast and we along with many of our friends, enjoyed a sweet, cold product called Italian Ice (fruit, water, and sugar blended and frozen to create an all-natural frozen treat). Haha! Can't believe I remembered that whole tag line. "Water ice" as many east coasters called it was a very popular product and everyone seemed to love it. People would go in droves to Rita's and buy water ice on a hot day. It seemed like the perfect product to bring to the west coast, so we started making it with real fruit in our own kitchen (did I mention my male business partner and I lived together when we started this venture?)

Anyway, we went into our local bank and made friends with one of the head honchos there. He took a liking to us and for our business and gave us 4 business credit cards and 25,000.00 loan without so much as a one-page business plan. We didn't have to talk to anyone else, we didn't have to make any sort of presentation, we didn't have to prove that our business would see growth. This was before the market crashed and banks were apparently just giving out money. How wrong they were to give us money. How wrong we were to take it. We used those credit cards and that credit line pretty quickly to buy all of the equipment that we needed to see this venture to fruition.

We had to figure out how to use the equipment to make the Italian Ice and we had to nail down our recipe. Once we completed that lengthy project, we started going to events to sell our fabulous, all-natural product. We would set up a traveling store front at local street fairs and farmer's markets. We would pay between 300.00 and 500.00 to set up a booth at an event where we would only make 200.00 and not even break even. I had no idea which events would be better for our product and the only way to figure this out was through trial and error.

Every weekend, we would pack the truck with all of our supplies--restaurant grade food tent, plastic card tables, hand washing station, cups, spoons, posters, etc. and then wake up at 5 AM to get to the location on time and set up. We would be all set up by 6:30 AM and then have to wait for 5-6 hours before anyone wanted to start buying our product, and our product sales all depended on the weather. If it was cold or cloudy or rainy, no one would buy our product. If we were unlucky enough to have competition, we found that most people would rather buy the unhealthy version of Italian Ice--the one with all the sugar and food coloring rather than the healthy, all-natural version we were offering. Then, we also had to worry about the demographic of people to come to the event and also the location of our booth. Were we placed in the middle of everything, off at the end, or by the kiddie tent? It was a terrible way to try and make a living. We both hated it and decided that we would be better off attempting to take the lessons we learned and put them into another product.

We took the lessons we learned and the desire to create a product that was healthier than what was currently out there and we made an all-natural, low-calorie sweet and sour mix. At the time, it seemed like a perfect idea. Most people, women especially, love mixed drinks especially margaritas, but they avoid drinking them because they are so high in calories and sugar. I thought this was the perfect option for a new product. Unfortunately, many other people out there were hatching the same idea and developing it at the same time. Thankfully, ours still proves to be the best tasting and the healthiest of the bunch. We launched the new product about 2 years after the genesis of the water ice idea. We had it bottled and labeled by a professional manufacturer in April, 2009 and made our first big sale in June, 2009. Since then, we have decided to re-brand the product to make the bottle, name, and label more appealing on a national level.

So, that brings us to the present time. Now that you know the background, check back in for the daily news on running a business one day at a time.