Starting a new business

Business plans are valuable because they help you focus your thinking. They force you to define what you want your company to look like, who your target market is, what you plan to sell, and how you intend to operate.

However, even with your best efforts, you won’t anticipate everything. A business plan should always be treated as a work in progress. A good example comes from when I developed a business plan for a malting firm.

I began by identifying a niche market within the brewing and distilling industry. To better understand customer needs, I attended conferences with brewers and distillers and spoke directly with them about what they were looking for.

I also conducted a quick survey of the Buffalo and upstate New York area to determine how many breweries and distilleries were operating. Next, I connected with Cornell Cooperative Extension, which was conducting research on malting grains that could grow in the upstate New York climate.

Historically, many of the grains used for malting in New York State had disappeared due to a lack of demand. This decline dated back to Prohibition, which had shut down breweries and distilleries for decades.

I chose to focus on malting because New York State had recently enacted a law allowing brewers and distillers to sell their products at farm markets without a liquor license, provided they used New York-grown malt and hops.

This created what seemed like a strong opportunity, as there were over 300 businesses that could potentially use this malted grain. I wasn’t alone in recognizing this opportunity.

At the time, there were nine other individuals or groups developing malting companies. One had a farm and grew their own grain. Seven of us focused strictly on malting operations and purchased grain from local farmers.

In addition, a larger corporation that produced ethanol for gasoline entered the market, leveraging its existing malting capabilities to serve brewers and distillers.

On Thursday, I’ll discuss the challenges of launching a business in a market that hadn’t been actively served in 50 to 75 years.

If you need business advice, contact me at bobchuckpatterson@yahoo.com.

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