Time that I spent updating the business plan this week: about six hours.
My deviation started on Monday, when I spent way too much time preparing cost estimates for another commercial brewer. It makes me happy that he thinks my work is thorough enough to apply to his real-world situation, but I should have gotten it done over the weekend.
I did rewrite some of the business plan on Tuesday. That afternoon, I met with an interested homebrewer to give him the lowdown on the project. He raised a lot of issues that'll be better to address now than later. The biggest is that our startup cost is going to be a turn-off to potential investors. That's what I get for thinking "I'll ask for enough to buy all new equipment, then buy as much used gear as I can and return the difference." To an investor, a 1.5-to-1 ratio of annual sales to initial capital may be acceptable but a 1-to-1 ratio may not. I'd been feeling guilty about my generalized startup costs anyway, so I dusted off the old itemized equipment list and gave it a makeover. At first, I wanted to find pieces of used equipment and plug their prices into the list. After a few hours, I realized it would take me years to estimate my costs that way. What I did instead was assume that used equipment will cost 40% of new and that I'll be able to find 50% of my equipment used, which means my expected equipment cost is 70% of all-new. There you have it: our first official business gamble.
Updating the equipment costs didn't take up very much time, but creating an entire year worth of beer recipes did. Why would I do something like that? To figure out my hop needs, silly! It's harvest time and there seem to be some hops available on the spot market (meaning they're not all going to fulfill prior contracts). A while back, New Zealand Hops told me that my chances of getting hops next spring are decent. They even thought that I could get organic hops, which is unheard of these days. The problem is that the hops in New Zealand aren't harvested until March, so I won't know where I truly stand until then - I'm still waiting for them to project their yield and give me a prediction. If I can get my grubby little hands on some hops now, I'm absolutely going to do it. If I don't and New Zealand fails to come through for me (never!), I hope you like guest beers.
Looking a little ways down the road, a future brewery owner who I met at the Craft Brewers Conference was awesome enough to send me his private placement memorandum. My legal paranoia dictates that he'll have to remain anonymous for the time being, but that document is going to be a monster help. Once the business plan is ready to shop around, I'll tailor the document for our needs and have a lawyer review it. Paying a lawyer to write one from scratch would probably cost over ten grand.
Pilot brewing continues, I still need a beer fridge, blah blah blah.