We recently contributed a piece to an online magazine about realising our dreams to become wine producers in Provence and the journalist gave it this very headline. Sounds quite boring I admit, but after talking a lot about all the funny, romantic and downright crazy moments we’ve lived through in the last five years it seems really the most apt. Everyone who knows Stephen and me is aware that our natural propensity is towards creativity, imagination, people skills and turning a situation every which way to try and get things done. Neither of us is too enamoured with financial planning and we’d always rather be out on the road or talking to customers and suppliers than spending hours behind the computer. In fact our first business presentation consisted almost entirely of pretty pictures, numbers were notably absent.
Yet we’ve realised the business planning that we have forced ourselves to go through, and that we are now taking very seriously, has probably saved our bacon (i.e. our precious savings that we sunk into this venture). With some help we’ve taken number-crunching to a new more grown-up level that helps inform pretty much every decision we will take. I think most people will construct a benign spreadsheet when they set out to start their own business because somehow you must make an optimistic case to give you the confidence to get started. Ours was a little off looking back, but not by too much. We did do a worst case analysis to make sure we wouldn’t flounder at the first obstacle in a very competitive market and tried to put enough fat away in case things didn’t go to plan.
I think the truth is that most business take longer to build and to become profitable than their owners plan. This is largely due to the fact that we have no real means of anticipating changing raw material costs and we tend to underestimate what we need to spend on sales and marketing. In our case some of our costs went up enormously in the first 4 years of trading and seem to have finally now stabilised. We decided consciously not to sacrifice any of our goals for high quality and good design and instead accepted to take more time to get to profitability.
I am also very grateful that Stephen has the energy and the curiosity to talk to as many people in the business without feeling any sense of shame and inadequacy. He often went and talked to others in the wine business with no particular agenda and there were many nuggets of information that were essential when we found ourselves planning for the business we wanted to create. We owe a few people some very good cases of wine for sharing their moments of pain with us to help us not to make the same mistakes and for those shortcuts we will always be grateful (you know who you are!).
So if you’re thinking of building your own business you won’t be able to get around the spreadsheet jockeying for very long. Do try and get as much free consultancy as you can – it’s amazing how much people who don’t really know you are prepared to do for you if asked nicely. Quite often other entrepreneurs were in the same situation once and are happy to do a certain amount of mentoring. And put away a little stash for an extra rainy day, because you can be almost certain an unplanned situation will make you get it out from under the mattress.