Invest Now. Reap Later
It’s okay to be afraid, the down economy and all things symptomatic such as meeting your payables when customers are stretching you on receivables, cost of goods inching up a percent or two, while sales are slipping a few more percent.
Oh and then there is making payroll, and in some cases wondering if you and your choice of partner will weather the storm. Well here’s the good news, from experience I can tell you that most of your colleagues share similar fears. In a recent Entrepreneur Magazine article Coleen Long a psychologist specializing in entrepreneurship says “95% of all new business fail in the first 5 years” so “it’s okay to be a little freaked out”.
Whenever I get “too many planes in the air”, it’s time for me to lock myself in a room with a dry erase board and hold a self led “think tank session”. It just helps to see and to say these things and commit the exercise to memory, in order to execute results later. Hopefully you went through the proper due diligence of undertaking a strenuous business plan before you opened the doors.
In our industry, it’s fairly common to be so passionate about coffee that the business, especially the financial components are given adequate time and attention. Once the plan is ready and bank is on board, it’s not over; you have to work that plan like a seed in the soil. There are critical stages along the way from nursery to harvest; you did plan for harvest, right? By that I mean an exit plan, somewhat compared to an income statement you can look at the number in the bottom right hand corner and build backwards. Both take continuous reviewing of projections compared to actuals, and budgeting accordingly, both take discipline I suggest daily updates.
Many times, we are busy being passionate about coffee, or chasing a big sale, that the financial reviews are squeezed out. Don’t you really want to know if you are running in place or gaining on your quest or the alternative every week at least? This has to become a behavior, something that is the litmus test for every decision you make. Lou Holtz once said, “the thing we least like to do, is what we need to do the most”.
When Brewed Behavior began, the business plan called for offering comprehensive support to wholesale coffee roasters at every touch point. This past year, we have spent a significant amount of time devoted to something nowhere in the plan but directly related to our mission, raising capital for small to medium roasters looking to push through and gain from the down economy or worse, the alternative. Change your behavior today, invest time now with the finance department and avoid being the latter.
Just a thought.