Ted Dako was named World Class Denmark winner 2015. Since then he’s opened a cocktail catering company called We got Spirit, embracing the skills required of a bartender taking an ambitious next step. Here he lays down some great ideas on how to produce a viable business plan.
A good idea is only 5% of the way to a new business.
“I studied service management and business administration for three years while bartending and I’m really glad I did it,” says Ted. “Because although they don’t tell you exactly how to write a business plan, they give you the tools to create one.
“Some bartending friends have good ideas, but no business plan. They don’t see the pitfalls or opportunities, or have an idea of the competing companies that would impact on their idea. This is what a business school gives you – a real entrepreneur’s mindset.
“Because a good idea is only 5% of the way towards a new business. Most of the work is in coming up with a plan. It’s easy to get lost, and a plan gives you direction, so you’re motivated and know where you’re going next – particularly when there’s no money rolling in at the early stages!
Investors aren’t all evil
“A plan gets you thinking about how you’re going to fund any new idea. People tend to see investors in a negative light, but my advice would be to look at investors if you need them. Jim Meehan at PDT really converted me on this. If you have a good relationship, investors shouldn’t be an issue. Just be transparent, talk to them regularly. There are so many bartenders out there who are capable of doing more, but just don’t have the money.
“A good business plan also makes you realise that you can’t do it all by yourself. If I really had to, I could do my own accounts, but it would take me hours. So I might as well pay someone else to do it. Likewise graphic design, and the copy on my website – other people can do it much better, and quicker. I stick to what I’m best at – which is creating drinks, as well as writing business plans!”
Planning it out
Ted divides his plan into five, and for each of these areas he tries to answer as many questions around ‘what?’, ‘how?’, ‘why?’ and ‘who?’ as possible.
1. The Idea
Ted slices up this part into ‘Vision’ and ‘Mission’, with three basic questions around ‘Where do you want to be in three/five years?’, ‘Why do you want to do this?’ and ‘How are you going to get there?’. The second is likely to prompt quite a personal response, and go to the heart of the motivation for creating any new business.
2. Market Research
Probably the most pertinent questions in this second section is Ted’s query: ‘Why is there a need for your idea?’ with a reminder to ‘be objective’ on the form that he fills in. For Ted’s new cocktail catering company he wrote:
“Cocktail culture is booming all over the world. People are getting more and more knowledgeable about cocktails and new cocktail bars are popping up every week. Going out for a cocktail is a trend that is here to stay. It is only natural that people want to be able to have this experience at their business and private parties as well.”
So here Ted is expressing the idea that cocktail culture is growing as a whole, with a next step of private parties that he can exploit.
3. Starting Capital
This section is plain and simply: ‘How much do you need?’ and ‘How will you get the money?’ The source of the finance can be either from savings, a silent investor, a partner or crowdfunding – or a combination of some of these.
4. Designing the Concept
Here we’re going into the nitty gritty detail of the business, with a look at the funding mechanism, the competition, the supply chain, management and marketing.
There are some great questions here that get to the heart of any business, such as ‘How will you actually make money on this?’ and ‘What do you have that will make customers choose you over competitors?’
Then, when it comes to marketing, it very clearly makes you think about what the core element is to your business that you would like to communicate to people.
Very few companies start to turn a profit in the first months of opening, and this section recognises that, with the question ‘How long can you afford to not be profitable?’ There’s also the crucial fact that people have to know that you exist: ‘How will you make people aware that you are opening?’ Ted’s response shows the benefits of social media and also of getting out and meeting people:
“We announced it on Instagram and Facebook and reached out to 15.000+ people. We also told as many people as possible within the industry, in person. This second strategy proved to be successful since many of our bookings have been coming in from recommendations from people within the industry. By networking at events and giving out business cards we hope for more bookings where we can show what we can do.”
Ultimately a business plan helps you win finance if you need it. But it also really helps you clarify your thinking on your business. What type of bartending business do you want to run? Why exactly would people work for you? What competitive edge do you have? And why are you doing it? Answer these, and you’re likely to be on the road to making your dreams happen.