The business Plan phase 3

A second area I overlooked was building strong relationships with brewers and distillers after we began production. I would walk into their operations and see one of our grain bags mounted on the wall, yet I knew they hadn’t purchased from us in over six months. That was discouraging.

It was also difficult just to get time with them. I would schedule appointments, drive two hours to a brewery, and then discover the person I was meeting had forgotten to put me on their calendar.

I would have to reschedule and make the trip again on another day. It was extremely frustrating. Marketing and selling proved to be challenging, especially when competitors from the Midwest could offer lower prices than we could.

Even more frustrating was the lack of enforcement behind the New York State law. There was no real penalty for brewers and distillers who only bought a minimal amount, sometimes just one bag per year, and no mechanism to ensure compliance.

The final challenge was personal. I discovered that I could not tolerate the dust generated during the malting process. My eyes would become irritated and caked with dust, and the protective masks available at the time were far from adequate.

We managed to keep the operation running for three years, but by the fourth year, we decided to step away and put the business up for sale. It was eventually auctioned off and purchased by a company out of San Carlos, California.

After paying off the bank line of credit and auction fees, I was left with only a small return for all the work that had gone into the business. So the question becomes: would I do it again?

The answer is yes, but I would approach it very differently. Instead of investing heavily in equipment, I would subcontract the malting process to an established firm in the Midwest.

This would help reduce the cost disadvantage while still allowing the use of New York State grain. It would also significantly lower the upfront investment, limiting my financial exposure to the grain itself and warehouse space for storage.

Next week, I’ll walk through the SWOT analysis and marketing challenges in more detail. I’ll see you then.

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

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