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Archive for March, 2015

Mar
22

Award-Winning Beer: An Entrepreneur’s Handbook

I have to admit upfront that this post is primarily a thinly-veiled excuse to say wonderful things about my husband. However, be assured there is an important life/work lesson here as well. My husband Patrick is in the final stages of setting up his craft brewery, and it’s been fascinating watching him travel down five parallel business-building tracks for the past year. I’m realizing that any successful entrepreneur needs to walk down these same paths.  (He’s doing this much better than I did 25 years ago, when I started Proteus, but still I recognize the pathways from my start-up days.)  Here’s what they are:

Facilities/Physical:  From the moment he rented his brewery-space-to-be last May, Patrick has been focused on a wide variety of physical, object-related tasks, from revamping the space (cleaning, painting, putting in trench drains, having the plumbing and electrical upgraded); to speccing out and ordering the brewing system and deciding how to set it up in the space; to switching our main vehicle from a car to a truck for schlepping purposes. Almost any entrepreneurial venture – even something like a one-person Cloud-based enterprise that seems not physical at all – requires asking and answering questions about physical requirements and doing the associated tasks.  Where are you going to work? What equipment will you need? What work processes will require physical space and how will you set that up?

Relationships: Patrick won’t be hiring any employees during the brewery’s early days – but that doesn’t mean relationships aren’t important to his success. He’s spent more time with his landlord, his plumber and his electrician that with most other people he knows over the past few months.  And he’s working to build good relationships with a much wider group as well: his suppliers, the folks who built his brewing system, and other local brewers, just to name a few.  Even if you’re starting a single-person enterprise (or at least single-person to start with), don’t underestimate the necessity of having a web of people around you who want to do business with you and are supportive of your success.  If you don’t tend to those relationships, it’s really hard to accomplish almost anything.

Organizational/Admin:  I now know that starting a brewery – even a small one – requires jumping through an astonishing variety of administrative hoops.  The federal permitting process was a daunting seven-month journey of frustration and bureaucratic nitpicking through the bowels of the TTB (Alcohol and Tobacco Tax and Trade Bureau). Watching him go through it and listening to his very legitimate complaints, I was astonished that anyone who doesn’t have a fleet of lawyers and accountants to call upon ever ends up opening a brewery.  The two-month long state permitting process was, by comparison, a walk in the park. Then pile on all the local requirements (building codes, business license, city council OK, etc. etc.) and the internal functional questions to be answered (How will we bill customers? What accounting program will we use?). Any entrepreneur who assumes he or she can just start producing their cool thing and make a million is courting disaster.  I think for most people, this is the least fun part of starting a business – but if you don’t think through it in a pretty structured way (or work with someone who can help you to do that), and build the time and effort required into your start-up plan, your business will grind to a halt before it even starts.

Product:  I’ve been truly impressed with the fact that, as he’s been fully immersed in these first three aspects of starting his business, Patrick has also been devoting a lot of time to making sure his product is extraordinary.  He’s spent the whole year doing exhaustive recipe development and testing on each of his four standard beers and two seasonals. Now that his system has arrived, once he gets it set up he’ll be going through a whole new product loop of figuring out how to replicate the quality he’s achieved — at 20x the volume.  He’ll be going from 5 gallon homebrews to 3.5 barrel (108 gallon) production batches.  It’s all too easy as an entrepreneur to think “I’ve got a great thing – it will knock everyone’s socks off.”  And yet – will it?  It’s essential that you build rounds of testing, ramping up and improvement into your pre-sales start-up planning.

Marketing and Sales: And yet, just having a great product or service isn’t enough.  You have to think clearly and practically about who your customers are, how you’ll let them know that you have something they need, and how to communicate that in a compelling way. This is Patrick’s least favorite part, and so the one in which I’ve been involved most involved.  We’ve had many branding discussions: that is, what are we promising, and how do we want to convey that promise in words and images? Based on that, we’ve put lots of thought into naming and labelling for each beer. Since we’re now a couple of months away from having beer to sell, we’re focusing on all the decisions, large and small, needed to connect our product with a delighted customer base. For instance, we’re only selling to restaurants and bars, vs. retail, so we identified the criteria for the hospitality businesses that could be attracted to our product and price point, and then made a list of all those businesses within about a 45-minute drive of the brewery.  Now we’re figuring out how to support and inspire our future customers to let their patrons know they’re carrying our beers. And then how to make it easy for those patrons – once they’ve tasted and liked the beer – to become vocal fans and advocates.  In other words, even great products don’t sell themselves.  Before you have product to sell, think about who your target audience is, why they need your product, and how you’ll let them know it exists and can meet their needs.  And do your best to do some market-testing beforehand: it’s easy to think people will love your thing just because you do, but you need to get some independent confirmation of that love.

And, happily, Patrick just received some great independent confirmation:  he sent his four standard beers (1875 Milk Stout, 1829 IPA, 1758 Witbier, and 1855 Cream Ale) out to six national competitions a few months ago.  Just last week, he found out that he won awards in four of the six: 2 gold, 3 silver, and 3 bronze medals – and each of his four beers won at least once.

All of which goes to show – when you take care to walk down the right paths as an entrepreneur, wonderful things can happen along the way.