Tuesday, April 28, 2009

Here's Where I'm Stumped

So I'm still working on my profit-and-loss spreadsheet, and trying not to melt in this unseasonably warm weather, but I've come upon a quandary.

I am creating three years of projections, but I have NO IDEA what is a reasonable percentage of growth from one year to the next. I want to be optimistic but not ridiculous.

So in case you were just tuning in, here's the gist of the business:
It's a small - 500 square feet or so - shop in a busy somewhat urban downtown location, not far from mass transit in a location with a good amount of foot traffic, car traffic, and parking. It's a cheese and tea shop and cafe. There is no other place in town to buy nice cheese, and other than a few coffee shops selling a few varieties of decent bag tea, there's no real tea shop in town. There's certainly no place else to buy loose tea to brew at home.
The neighborhood is partly gentrified but not entirely, and there are a lot of young people here. It's sort of like the East Village 15 years ago but with fewer muggings and not as much heroin, as far as I can tell. Sometimes I see little glassine bags on the sidewalk but not a ton of them.

So what should I claim in my business plan? A ten-percent increase every year for the first three? Twenty-five percent? Two-hundred?

Honestly, I have no idea about this. I am stumped. If you have any experience or insight, please share it.

Saturday, April 25, 2009

Writing Brain and Math Brain

My Math Brain has been put to the test lately. At the same time I've been working on numbers, they are also conceptual and theoretical numbers. It's a strange combination for me to wrap my mind around. I'm used to dealing with numbers in the concrete form: one apple plus one apple equals two apples, until I eat both apples and then there are none.

But this is different. I have to imagine how many apples I might sell in January, versus how many I might sell in May, and then I have to build an entire business on that supposition, because then I have to make sure all of my costs of doing business (how much I am paying for those apples, how much I'm paying to keep the store open [rent, utilities, supplies, salaries, benefits], unforeseen costs like repairs and theft, etc.) are covered by the theoretical number of apples I'm selling.

Well, okay, not apples. Cheese and tea.

So anyway, these parts of my brain aren't the strongest parts, but they are getting a workout and are getting stronger. This is a good thing, because even though I will have a bookkeeper to help me through the workaday number thing, I still must have a better knowledge (than I do now) of what the numbers mean and should look like for a profitable business. I need to be able to open my books at any given moment and know if I'm doing well, or need to do better.

Some days, though, it's easier for me to still get work done on this biz plan, but use parts of my brain that are much stronger from use. That would be the writing part.

So I'm writing the descriptive sections now. And I will do little chunks of the projections in-between.

My goal is to get this entire thing done by Thursday. It's a crazy deadline, but not really. I've worked under much tougher deadlines, and had to complete far bigger projects. But this time I'm running entirely on self-discipline and that's not my strong suit. I'm not writing this for a professor or a boss or anyone but me.

And the people who might give me some money to make this thing happen.

Money seems to be a good motivator. I'll dangle dollar bills in front of my face instead of carrots.

Wednesday, April 22, 2009

Bid On Me!

My friend Sue works for Playwrights Horizons, and she asked me if I could donate my time and services for an auction item to help raise money for her theatre.

Of course I could, and I did!

Bid on me here, but hurry up because time is running out!


The link will tell you what I'm offering. It will be fun!

Sunday, April 19, 2009

Eins Zwei Drei Vier Fünf Sechs Sieben Acht. One Two!

While my progress has slowed over the last few weeks, it's not like the Curds & Whey wheels have stopped.

Oh no.

I'm writing my business plan now. Oy. It takes a long time and with other things going on here 'n' there, it's taking me longer than I want.

Right now I'm working on my Three-Year Profit and Loss Projections.

Oh boy!

Yes, that means that I have a big ol' Excel Spreadsheet open, with tabs for every month, and I'm filling in the blanks for how much of every little thing I'll sell and how much it costs to sell it. Thirty-six tabs in all!

It's really hard to project how many ounces of loose-leaf tea I'll sell via mailorder in the first February I'm open, or how many plates of cheese, to be eaten in the cafe, I'll sell in the third September I'm open.

BUT, any investor knows these numbers are all projections. And I can estimate these numbers using a combination of guessing and actual empirical data. See, I have been in the business long enough to know I'll sell far more retail cheese (by the pound or piece, rather than on a plate) in November than I will in January, etc.

AND, potential investors are far more interested in my ability to calculate and understand my COST of selling each ounce of tea than they are making sure my projections/predictions come true.

They are also looking to see that I'm realistic about my projections. For instance, if I claim that in a brand new 500 square foot shop I will be able to sell 10,000 lbs of cheese in my first month, they might not take me too seriously. That would mean I expect to sell 333 lbs of cheese every day in that month; more if I plan to open fewer than seven days per week.

As much as this part of the project is time-consuming, I'm finding it strangely fun. I actually like numbers, and it's exciting to numerically - and financially - envision the success of my shop.

Ten cups of iced tea...
$300 of retail merchandise...
Twenty cheese plates...
Thirty-five pounds of mail-order cheese...

Welcome to all Caseophile Readers!

To simplify my life some, I'm posting all future blog articles on cheese here, rather than at my "Caseophile" blog.

I'm not taking it down, at least not in the near future. If I do, I'll probably move all those articles over here.

So if you are new to The Roquefort Files, welcome!