Stop Apologizing: Widen Your Focus to Grow in Business and in Life

stop apologizing and grow your business and in life

Life can be crazy and hectic sometimes.

The thing is, finding the right ways to learn while developing your expertise (and yes, adulting and doing life and family) can feel mind-boggling.

I’m beginning to realize that information and industry knowledge can feel so siloed. How do you know where to go to find the right solutions, answers, facts, and so on, to get from point A to point B?

At Palo Alto Software (makers of Bplans), we hear this from small business owners and entrepreneurs a lot too:

What will it take to get my business from where it is now to where it’s going to go?

What if what I really want is to go out on my own and start a business?

What is it like to start a business if I have a family and funding is hard to find?

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The resources and opportunities to learn and grow are out there

The thing is, there are solutions. There are resources. There are places and tools that can help solve them. Take our tools LivePlan and Outpost, for instance, and our blogs, of course—we built these to help small businesses solve their pain points and grow.

If I’m looking for marketing expertise, I have my go-to newsletters, blogs, and podcasts.

If I want to learn about being a mom, I ask my family and friends.

If I’d like to get the best tips for staying healthy and active, I’ll lean on my local athletic club and stand out athletes in and from Eugene.

If I want to get inspired to get involved in the community, I find out what my local Young Professionals network is up to and the organizations they’re involved with.

Do we have to pick just one path to really be happy and successful?

The challenge I keep running into is asking myself—with all the possible places I can direct my attention, do I really have to pick just one? The foundations of a linear trajectory stem back to my childhood. The one question reiterated, “What do you want to be when you grow up?” I selected my courses, extracurriculars, internships, major for one thing. I curated my choices to lend themselves to being good at one thing.

I can be the best job candidate, the best pick, the best teammate—so long as my development points to one thing. Everything else that doesn’t fit in the puzzle could arguably be a distraction.

But why can’t I be this and that? It’s similar to the questions we get asked each day from our community of entrepreneurs and small business owners.

With each publication, source, connection, and more the advice tends to relate to this thing or that thing. You can be great at building your business or your career if you focus all your attention there. You can be a great mom if you purchase all of the top recommended car seats and nursery items. You can be great at staying healthy if you work out at one gym and eat whole foods. You can have a great marriage if you read up on the five languages of love.

But, there aren’t always mentions of how I can try to accomplish this thing—be an X, do Y, and so on, while my husband is building a business. And while I’m still working full time, trying to schedule necessary appointments, and we’re volunteering on committees at lunch and after work. All this while trying to uncover just one single hour to ourselves for self care—and above all right now, while we’re figuring out how to be new parents for our beautiful baby girl.

Stop apologizing for seeking balance

So how do I figure out the balance in all parts of my life?

Again and again, I yearn to learn more, but I feel that different parts of me are advancing because I’m focusing my efforts on them—while others are getting neglected, or left behind. Sometimes it feels overwhelming and I just want to give up.

Until I got my hands on a book that gave me the pep talk I needed.

I finally realized that yes, I can be this and that—I just got stuck in a standstill because I couldn’t let go of apologizing for all the things I identified as. I can be a great mom and work full time. I can be a digital marketing whiz and creative dance instructor. I can be past me while I work on future me.

The book is “Girl, Stop Apologizing” by Rachel Hollis.

Girl, Stop Apologizing book

It’s fitting that my mom gifted me Rachel Hollis’ book for my birthday. I think through osmosis (O.K., but actually my lengthy talks on the phone with her) that she knew this was the book I needed at this point in time of my life.

Here’s the part that really stood out:

“It’s possible to pursue something for yourself while simultaneously showing up well for the people you love.

It’s possible to be a great mother and a great entrepreneur. It’s possible to be an awesome wife and still want to get together regularly with your girlfriends.

It’s possible to be this and that. It’s possible to decide that you’re going to be centered in who you are and what matters most to you and let other people’s opinions fall away.

Don’t buy into the hype or the pressure or the guilt that you’ve got to be one or the other.”

Rachel Hollis—you are speaking my language. I couldn’t have felt more validated in this one paragraph and it was just what I needed to read to feel empowered.

You don’t have to be just one thing or another

Trust me, my husband, friends, and family have all been incredible by giving me messages like this throughout the ebbs and flows of life. But sometimes you just need a moment of solitude and a book straight in your lap to have the exact words you’ve been wanting to see staring you straight in the face.

So here’s my rallying message and fill-in-the-blank template that I’d like you to complete.

“I’m  ________ and  _________.”

That’s it. It’s that simple.

Stop apologizing and grow your business

Maybe yours is:  “I’m running a business and sitting on a nonprofit board, or “I’m trying to get a loan to grow my company and I’m still working full time at a day job.”

Jot it down. Say it out loud in the morning to start your day with intention. Run it through your mind in moments of doubt and uncertainty.

I even give you permission to fill-in-the-blanks more than one time. I believe that versatility and complexity and balance can all co-exist.

Because for me:

I’m a full-time employee and a loving mom.

I’m an all-out extrovert and a quiet puzzle-doer.

I’m a gracious dancer and an absolute klutz in real life.

I’m a daughter, and a wife, and a friend, and a volunteer, and a supporter, and a giver, and a doer, and a maker, and…and…

…and you know what? I’m going to stop apologizing for it.

What are you going to stop apologizing for?

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Alyssa Powell

Alyssa Powell is the Digital Media Marketing Specialist for Palo Alto Software and a mother, dancer, reader, writer—all made possible by cold brew coffee. She has a knack for setting up CRMs and choreographing dances in her sleep. Connect with her on Medium.

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How to Start a Brewery

how to start a brewery

In 2018, there were more than 7,450 breweries in the U.S.—well over than the historic high of 4,131 breweries in 1873, according to the Brewers Association. In such a crowded market, making good beer and opening the doors isn’t enough anymore.

But, the good news is, if all those people could start a brewery, then you can too—as long as you know what you’re getting into and have a solid business plan for your brewery.

From running coolant pipes to navigating regulations, starting a brewery is a messy, convoluted job full of twists, turns, delays, setbacks, and surprises—but it’s also one heck of a ride.

In this guide to starting a brewery, we’re going to talk with brewers who’ve been-there-done-that, and we’ll get insights from experts in supporting industries such as insurance and finance, as well as discuss regulatory issues.

While it may be your dream to brew great beer, this guide will help introduce you to the business side of craft beer.

This guide will cover the seven essential steps to starting a brewery:

  1. Planning a brewery
  2. Finding a brewery location
  3. Choosing brewery equipment
  4. Building relationships with vendors and the local community
  5. Funding a brewery
  6. Obtaining insurance before opening a brewery
  7. Keeping regulations in mind when starting a brewery

Step 1: Planning a brewery

No matter its size or age, every brewery was once a startup.

ColdFire Brewing, a 10-barrel brewery, came online in December 2015, founded by Dan Hughes and his brother Stephen. They’re constantly hard at work on business development and recipe formulation, navigating bureaucracy, and enduring the inevitable delays that come with brewery construction, equipment delivery, and regulatory approval.

“We began to get serious about starting our brewery several years ago, and we were still working out details as we prepared to open our doors,” says Dan.

The Hughes brothers developed a solid business plan and built a core team to bring their vision to reality. Backed by a team of private local investors, ColdFire gained access to additional capital through an SBA loan.

The ColdFire Brewing team meets to plan marketing.

The ColdFire Brewing team meets to plan marketing.

While Dan heads up operations, his brother Stephen is head brewer, and their team also includes directors of finance and brand, respectively.

Watch your finances

Having a key financial person in place has helped them get better at monitoring cash flow and their overall financial status and needs, says Dan. Most small businesses and startups that are looking to grow—hire a new employee, or buy a new piece of equipment, or open a new location—need to think hard about cash flow, or making sure they have enough money in the bank to meet payroll and other financial obligations.

Review your business plan regularly

Committing to regularly reviewing your business plan and financials is a good step toward making more informed, smarter spending decisions, that can have a big impact on a new business’s long term viability. Forcasting, and then comparing your actual results against your projections on a regular basis, will help you spot any issues before it’s too late to do something.

If you don’t have a business plan yet, don’t skip it

If you don’t have a business plan for your brewery just yet, don’t skip it. Planning is proven to help you grow 30 percent faster. Plus, if you’re going to seek a loan or investment, your funders will expect you to have one. If you’re not sure what you should include in your plan, check out brewery sample business plans on Bplans. You can download them for free to help you get started. Here are two of our most popular example plans:

Sedibeng Breweries

About the plan: Sedibeng Breweries is a medium-scale brewery located in the growing industrial center of Selebi Phikwe, Botswana. Initial plans are to produce three main lines of beer. These products will be distributed to remote yet extremely viable areas, where the market is appreciative of readily-available, good-quality brew.

Martin Cove Brewing Company

About the plan: Located in Medford, Oregon, Martin Cove Brewing Company has been a successful microbrewery for the past three years. This year, Martin Cove Brewing Company will gross $520,000 in sales. With this money, they plan to expand its distribution to selected metro areas within the state of Oregon. In addition, they will introduce a new product, a traditional German Marzen-style lager.

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Dan Hughes’ advice on starting a brewery

1. The most important detail is defining a clear vision

“We know what kind of brewery we want to create and we have tried to let that vision drive all of our decisions.”

2. There has to be a commitment to the craft

“We find this opportunity to open a brewery a privilege, and we certainly aren’t doing this for the money. In fact, we’re taking a significant pay cut to have the privilege to open a brewery. We do so with a vision toward creating a quality brewery that honors the traditions of those that have gone before us.”

3. Every relationship is important

“When you build a few good relationships, suddenly they open the door for more relationships, and that pattern has only continued to hold true.

“Our bank had heard of us before we ever met them, and our landlord had been approached by other breweries in the past. Fortunately, we have always found it important to treat people well and listen to good people who have good advice. That has ended up serving us well.”

4. Prepare for license and regulation challenges

“They take time—so much time—to file, follow through, and gain approval. Having been planning this for so long, we kind of knew what we were getting into and have thus far been able to get through most of these challenges to-date. But they all take so much time.

“With that said, the federal license, or TTB [Alcohol and Tobacco Tax and Trade Bureau] permit, was the longest and most arduous. The more complex the operating structure of a business, the more information and time required.”

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Step 2: Finding a brewery location

From land use to public taste, the location where you plan on opening a brewery is a crucial decision. Generally, brewers want to set up shop in their own backyard.

Here are some questions to consider:

  • What are the relevant local and state laws affecting breweries? (And there will be plenty—brewing is one of the most regulated industries in the country.)
  • Where in your area will you find land or a building with the right zoning, size, facilities, and access for bringing in raw materials, attracting customers, and/or shipping out finished beer for distribution?
  • What local favorites will you need on tap to appeal to the market, and where can you innovate to stand out?
  • Will you only brew ales, or will you also make space for lagers, a barrel-aging program, and so on?
  • What type of brewery will you be: production brewery or brewpub?
  • How wide do you want to grow production and distribution, or do you want to focus on selling over your own bar?
  • Do you want to scale to multiple locations?
  • What construction will be needed to get the doors open on your first location?

All these questions and more will influence the right space for your brewery. However, the main thing is to start with the right space—and one that will be bigger than what you think you will need, says Jason Jordan of Propel Insurance.

“I cannot tell you how many brewers I have talked to in year two to three in business,” he says, “and they all said their biggest regret was not getting a bigger space that they could grow into.”

However, brewers also need to be willing to take a hard look at where they want to locate and do their homework to make sure they can establish a successful brewery there. Word of mouth is no substitute for market research, says Ben Price, co-founder of Hard Knocks Brewing, a small brewpub in its second year of operation.

“The single biggest mistake I have made was locating my business in a town that could not care less about craft beer,” says Ben. He recommends brewers use data firms such as Insightics to see where and how people spend their money in an area.

“You’re looking for a number of 70 percent or more within five miles of the zip code you desire,” says Ben. “I made the mistake of trusting in word of mouth. You want locally oriented people, people who want a good product, made local.”

Tending the Hard Knocks Bar

Tending the Hard Knocks Bar.

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Step 3: Choosing brewery equipment

Your initial system will likely be seven to 15 barrels, but run your own numbers. Figure out how much you’ll need to have in production at a time to be profitable.

What you need to know about buying new

A new system might be subject to delays, especially if demand from other breweries is high, but you’ll be able to design to your needs and specifications, and you’ll have support when issues arise (and they will).

“You’ll probably start with a seven-barrel system, spend anywhere between $130,000-$175,000 new,” says Patrick McCarthy, who works in the financial sector and aids breweries with capital and business planning.

Is it a good idea to buy used brewing equipment?

A used system might be through the door quicker and might save you money up front, but make sure you’ve thoroughly reviewed the system and seller—and remember that when you have problems, you’ll likely be on your own to fix them.

“Used systems are almost as expensive, so you’re really not saving anything, but you might get it sooner than ordering new. Some folks cut corners by ordering equipment made offshore. Many brewers avoid that due to perceived qualitative differences,” says Patrick.

How Ninkasi Brewing grew their brewing capacity

Ninkasi Brewing began in 2006 on a 15-barrel system and produced 1,650 barrels. In 2018, Ninkasi sold 90,000 barrels and was the thirty-fifth largest brewery in the U.S., and the fourth largest in its home state of Oregon, after powerhouse brands such as Deschutes, Rogue, and Full Sail. In April, 2019, the brewery sold its majority stake to a larger organization.

Co-founders Jamie Floyd and Nikos Ridge leased their startup system from a family running a German restaurant out of a former brewpub. While brewing and self-distributing their beer, Floyd and Ridge purchased property where they could relocate and expand operations. They moved into their current location with a 20-bbl brew system, three 60-bbl fermenters, and one 20-bbl fermenter. A year later, they replaced the 20-bbl brew system with a 30-bbl system, followed by another expansion a year and a half later to 50 barrels. Today they use an 80-100-bbl brew system, but the 50-bbl is still online for special brewing projects and research-and-development beers.

“We continually planned for growth and capacity, catching up the entire first seven years of being open,” says Jamie. “In a way, it’s easy to build out in this way, as you always need something, so it becomes more about the funding and the logistics.

“We continually made beer while switching out new systems and adding capacity and infrastructure. One of our greatest strengths was our ability to work around the construction we were doing.”

Today, Nikasi has some serious brewing facilities.

Today, Ninkasi has some serious brewing facilities.

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Step 4: Building relationships with vendors and the local community

Starting a microbrewery and brewing great beer is not a solo endeavor. It is a constantly coordinated, ongoing set of relationships with customers, government officials, craftspeople, and your internal people.

Find trusted advisors

“The number one piece of advice I give new brewery clients that are in startup stages is to engage your main business vendors early on in the process and find the right people to serve your needs,” says Jason Jordan.

“You need trusted advisors that are proven in the beverage industry and have a decent portfolio of brewery clients. This would be the architect, business lawyer, intellectual property attorney, banker, insurance broker, real estate agent, label maker, hop grower, malt supplier, tank fabricator, and accountant.”

Hire the right team

Relationships and keeping an ear to the ground are key not only to establishing your brewery, but in how and when you grow. Jason Carriere, the owner of Falling Sky Fermentation Supply Shop and co-founder of Falling Sky Brewing, has gone through many twists and turns since Falling Sky opened its first Eugene, Oregon brewpub location in 2012. Since then they’ve opened a second location, a pourhouse that focuses on food production, and a third location, a pub and pizzeria on the University of Oregon campus.

“I’d been running the homebrew shop for a while,” says Jason. “I’d already seen several of my best employees move on to become brewers around town, so I thought I’d look seriously at making that expansion ourselves, keep the team together, make it so homebrewers who worked at the shop could have a way internally to go pro.”

The new Falling Sky Brewery even opens up onto a garden.

The new Falling Sky Brewery even opens up onto a garden.

In their first year of production, Falling Sky produced 800 barrels, and they produced 1,300 in 2015—and that’s while getting underway on construction for their third location, moving the homebrew shop, and expanding their current brewhouse.

Know your customers and your financials

Jason believes strongly in “knowing who your customers are and what they want,” balanced with skill and consistent craftsmanship instead of novelty. “I’m not a big believer in recipes, or special combinations of hops no one has thought of,” he explains. “Breweries don’t really win customers with one beer, but they can lose customers with one beer.”

When it comes to growth, Jason advises a thorough understanding of the brewery’s production numbers and financials, balanced with an on-the-ground understanding of daily operations.

That then informs your instincts and intuition. And all this must be tied together with ongoing communications with staff, business partners, vendors, and other key people affecting your business.

“You wouldn’t want to expand if your brewery is at 60 percent capacity and you have empty tanks sitting around,” Jason says. “You also have to have your pulse in the community and the industry to know whether or not you’re saturating certain things, or if you hear about people wanting your beer but not getting it. But it’s all about how we’re going to expand. Just because someone in a market wants your beer, doesn’t mean it’s part of your strategy.”

Be open to opportunities

You also have to be aware of opportunities that arise, though, even if it’s unexpected—and that brings intuition, opportunity, and relationships back in play.

“We had no five-year plan to open a third restaurant, but when we got approached by the University of Oregon, we listened,” says Jason. “It was one of those things where we didn’t really want to expand, but it was far enough in the future that we could plan it through without a rush. Our second location was more rushed.

We were busting at the seams at the brewpub, especially with the kitchen, so the deli expansion was more to let the pub do more of what it needed to do again. The second location had a bigger kitchen, cold storage, etc., to handle making fries and ketchup. It was a combination of good opportunity and vision.”

But that doesn’t mean it was easy. “It was scary, I’m not gonna lie,” says Jason. “When we first did the deli, it looked like a very bad idea for a few months. But it turned around.”

Don’t second guess—trust your team

Jason and his team are not prone to regrets or second-guessing. Not that everything has always been easy or rosy, but he credits solid planning and teamwork with being able to make key moves without looking back and wondering.

For Falling Sky, that includes a strategic decision to focus on location sales instead of wider distribution. “I’m not a big second-guesser. When I make a decision, it’s because I feel confident about that decision, and I’ve thought through the consequences and I’ve come to terms with the consequences of choosing one option over another,” says Jason. “I’m confident in our decision to focus on selling beer over our bar versus the shelf wars and SKU wars.”

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Step 5: Funding a brewery

Sure, at its heart beer is made from water, malt, yeast, and hops—but there’s an invisible yet crucial fifth ingredient: money.

Form a relationship with the right bank

Raising capital for any business can be a difficult process, and breweries are no exception. In his various roles in the financial industry, Patrick McCarthy has most recently worked as Vice President Commercial Relationship Manager with Bank of the Cascades, which has 35 companies from the craft beverage industry as customers.

Over the years, institutions he’s worked with have directly banked six breweries, a cidery, and a kombucha producer, and Patrick has also advised dozens of startup breweries, from reviewing business plans to helping prospective brewers network with key people.

Patrick sees his role not just as analyzing a business plan or crunching numbers. “You want to be helpful and move the whole business along,” he says. “If a business comes into the bank that’s wonderful, but at the least you’ve made some friends.”

Here is Patrick’s overall advice for startups to make sure they’re not only brewing quality beer, but keeping solid books:

1. Banks are not consistent sources of startup capital

A new brewery is probably not going to a bank for a startup loan (banks usually come into play for capital to fund growth once a brewery is more established). Friends and family are the most common backers, and many startups bootstrap. Some cities, such as Portland, Oregon also have what Patrick calls “beer angels”—private angel investors who understand the beer business and invest in select breweries and cideries.

Loans from the Small Business Administration (SBA) can also be a good avenue, but from “bank to bank the SBA program is used differently,” says Patrick. “Some bankers have a great deal of interest, knowledge, and depth, and can be a champion for a startup brewery. But a lot of banks look at breweries as restaurants and avoid them, or want to see them in business three to four years before they invest.”

2. Be realistic about your business potential

When Patrick looks at a new business, here are some of the things he looks for to inform his sense of the brewery’s chance of success:

  • Do they know how to make good beer? Have they made good beer elsewhere? Won awards?
  • What is their brewing experience? If someone’s been a garage brewer for five years, that’s different from someone who’s been brewing at an established brewery for the past 15 years.
  • Do they have good credit? If not, why not?
  • How much skin do they have in the game financially? Will they be able to handle delays? Do they have access to contingency capital?

3. There’s no one model—or one business plan—for breweries

Each brewery will have its own unique business model and business plan. Before opening a brewery, prospective brewers have to figure out the right business model for their plans, location, interests, startup resources, and long-term vision.

Typical models include taphouses, production breweries, and full brewpubs. There’s also a new phenomenon called an “alternating proprietorship,” says Patrick, where brewers brew part-time on someone else’s system.

Within any model, there are things breweries can focus on to stand out and increase revenue. “Some brewers emphasize food in part because the food dollar can translate into more dollars profit for beer,” says Patrick. “Managing your own distribution is ideal. There are overhead tradeoffs, but I’m seeing it more and more.” Exports are becoming another component, he observes, with international markets such as Japan becoming thirstier and thirstier for American craft beer.

“Everyone’s trying to find what they can afford, what works,” he explains. “Merely making good beer isn’t enough anymore. There’s way too much good beer out there to stand out immediately.”

Even if you’re not seeking funding, it’s still a really good idea to create a Lean Business Plan that you can use to help navigate your business as challenges and opportunities arise. The benefit of a Lean Plan is that it’s meant to be reviewed and changed regularly, so you’re not just taking a snapshot of your business and goals once, and then shelving it for five years.

4. Cash must be available to cover costs and offset delays

On an industry-wide basis, for small to medium-sized breweries, the ratio between sales and fixed assets is typically for every $6 of sales, a brewery has $1 of fixed assets.

Estimate brewery startup costs

Start with estimating your startup costs. A new and growing brewery’s biggest costs tend to be the brewing system (e.g., $130,000–$175,000 for a new seven-barrel system) and tenant improvements to the property (which in Patrick’s experience in Oregon, including Portland markets, has typically ranged $200,000–$350,000).

“It’s expensive to alter a commercial space that doesn’t have drains, certain water lines, the required electrical, ventilation, etc.,” he explains. “Many also put in a back bar, seating, etc.” Costs vary by scope, location, and market.

Anticipate delays and setbacks

“Problems with licensing or permitting with the city that cause delay of opening can be extremely expensive,” says Patrick. “Every day they can’t pour their own beer is catastrophic financially. That’s the biggest risk I’ve seen in startup stages: timing.”

Delays are a reality in startup breweries. Brew system fabrication and delivery can take longer than the agreed timetable. Regulatory or permit approvals can drag on for months. Construction can hit unexpected snags. Make sure your financial reserves can handle delays and extra costs.

“Seasonality matters too,” explains Patrick. “You want to have the doors open when the beer-drinking season gets started. Winter months are usually the slowest for a brewery. You want to be open by April or May. Ideally, that’s not always in your control due to startup delays, but starting with April to May you want to operate during those busier months.”

5. Treat your accounting with as much respect as your brewing

“I’ve passed on a brewer that didn’t respect the accounting process,” says Patrick. “The brewers are focused on their first love, which is making delicious beer. Accounting isn’t necessarily the top and foremost in everyone’s mind, but in this situation, it was irresponsibly ignored. You can’t let the accounting take a distant back seat.”

Just as quality control is essential for good beer, you have to make sure the books are balanced and the financials are being tracked well. “Accounting keeps you out of trouble,” says Patrick. “It helps you plan, helps you get a return, and ultimately helps you generate revenue.”

Metrics: Know your numbers

Okay, so understanding your financials is important, but what do you need to track in order to understand the financial health of your brewery?

Here are the numbers, metrics, and other indicators Patrick says brewers should monitor:

  • Breweries should typically break even or generate a small profit by the first six to 12 months of operation. “They’re at least breaking even, but they’re not paying themselves much yet.”
  • Between 12 to 18 months, there should be a 10 to 15 percent bottom-line profitability. “If I’m used to seeing all models being profitable two years out by at least 10 to 15 percent,” says Patrick, “then if you’re not, I need to understand why or how you’re going to get there.”
  • Beyond that, examine year-round profitability on a quarterly basis, with a focus on being profitable annually, and at least breaking even quarterly.
  • If food is part of the business, are food costs (food-cost-percent and food labor) being contained at 20 to 25 percent of food revenues?
  • Are you at capacity or will you be at capacity soon? What do you need for equipment for the next six months to keep up with demand?
  • Cash flow. What is your financial liquidity, especially at the end of each quarter and at the beginning of the fourth quarter, given that winter is often a slower season?
  • What is your leverage, the ratio between total liabilities and net worth? “There’s no magic number,” says Patrick, “but the greater the leverage the greater the risk in the business model. If someone is exceeding three-to-one, two-to-one, I have to take a harder look at it. Sometimes that can be a fleeting ratio and adjusts. If the leverage is pushed out, I need to understand why. Is it losses? Is it mismanagement?”
  • Is it time to scale? If the balance sheet is showing that you have $7 to 8 sales for every $1 assets (and $6 sales for every $1 assets is typical), Patrick says it’s time to examine scaling.

As you find your stride in a profitable bottom line, you’ll also examine increasing efficiency. For example, as production volume increases, breweries typically purchase a grain silo. “They can buy in bulk, easily cut grain expense by two-thirds,” says Patrick. “Grain silos tend to pencil out quickly. It’s an exciting step up.”

The same thinking applies across the brewery. “At some point when you get larger, you’ve got more money to squeeze that remaining five percent profit out of your beer.”

Putting together a sales forecast and a cash flow forecast that you monitor at least monthly can be really helpful. Running a business or Lean Plan review meeting that also covers your financials is a great way to hold yourself accountable.

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Step 6: Obtaining insurance before opening a brewery

Breweries need various insurance, just like any other business. A brewery with a large employee roster and a fleet of self-distribution vehicles will have different needs from a three-person production-only startup. Find an insurance agent you can trust who preferably has experience working with breweries or wineries.

No, insurance is not as sexy as deciding which new “it” hop is going to be the feature of your new IPA, but if a brewery doesn’t keep current on their insurance needs, says Jason Jordan at Propel Insurance, then they are asking for trouble.

Note: Insurance and bond requirements vary by state, locality, and type of brewery, so make sure you’re talking with your insurance agent and even your lawyer for what’s right for your operation and where you’re planning on starting a brewery.

The biggest concern is the lease contract with the landlord, says Jordan. “That can be boilerplate or have a myriad of different insurance coverage and limit requirements to comply with.”

Here are other areas of coverage Jordan says a brewery might need, which will vary depending on the operation:

  • Business income and extra expense coverage
  • Backup of sewer and drains
  • Equipment breakdown coverage (depending on the age of their brew system)
  • Property insurance on all equipment and business property
  • Key man insurance via a buy-sell agreement (if the brewery has multiple partners)
  • Market valuation coverage (for offerings such as a barrel aging program)
  • Product recall coverage “is sometimes a concern”
  • Crime coverage for theft of money and securities
  • Commercial auto insurance is key if expanding into or starting to self-distribute product
  • Workers comp is mandatory if employees are on the payroll, which also necessitates employment practices liability insurance (known as EPL insurance or EPLI) to cover hiring and firing practices

A brewery’s most common claims tend to relate to workers comp injuries, such as employees straining a muscle or hurting their back lifting heavy items, says Jordan. Lost product from a power outage or mechanical breakdown of a glycol chiller is another common problem, as are backups of sewers and drains (causing damage to the space and interruption of business, equating to lost revenue.

Luckily, once you are up and running with your insurance, “the needs don’t change a lot from a brewery or brewpub that produces 500 barrels a year to 25,000 barrels a year,” says Jordan. “The biggest concern is keeping up with values on equipment for new purchases and expansions to make sure the brewery is adequately insured at the time of a loss. Brewery owners are notorious for brewing good beer and not for keeping up to speed on calling their agent to make changes.” Stay on top of it to help keep your costs lower in the long run.

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Step 7: Keeping regulations in mind when starting a brewery

Of course, there are laws and regulations—and brewing is a highly regulated industry. Your brewery will need approvals and compliance with relevant local, state, and federal authorities, such as your state’s alcohol oversight organization and the federal Alcohol and Tobacco Tax and Trade Bureau, or TTB.

In Oregon, for example, the Oregon Liquor Control Commission (OLCC) mandates a producer carry a $300,000 limit for liquor liability. At the federal level, the TTB requires all new breweries that want to offer beer for sale to submit a Brewer’s Notice. The TTB has a Brewers Qualification webpage outlining what you’ll need to do when starting a brewery to have the proper federal approvals.

“No matter how much you think you know […] you will have more to learn,” says Jamie Floyd, co-founder of Ninkasi Brewing. “It changes and evolves and you have to know the people who are making the changes and you have to be ready to change as a company. If the FDA decides we need to put nutritional info on our bottles you have to do it. It’s the law. You will have to figure it out and pay for it.”

Get to know your legislators

Jamie also recommends getting to know your legislators at all levels of government and working with trade groups that try to update and influence state and federal policies related to the regulation and taxation of beer.

The growth of the industry is also leading to regulations being modified state to state, says Patrick, “if not to encourage craft beverages then to make it a more viable business model.”

Be ready for compliance and paperwork-based delays

In the meantime, compliance is not necessarily easy or fast. “Some of it is more the tediousness of the paperwork. Make one small change, file everything over again,” says Jason Carriere, co-founder of Falling Sky Brewing.

“TTB is known for a lack of timely responses. We submitted our application for the third expansion nearly two months ago, and we’re not even supposed to call and check the status for ninety days. Then when you do call, you sit on hold for two hours to find out where your application is in someone’s stack.”

Don’t forget federal obligations

Breweries also need the Brewer’s Notice. “That’s a brewery’s permission from the federal government to brew commercially,” says Jason. “It involves taxes, a bond you have to pay that serves as insurance for paying beer taxes. You complete an environmental impact statement for water and environment. It’s permission to make an alcoholic beverage and pay the taxes on it in the U.S.”

While starting a brewery requires lots of dedication, capital, vision, and red-tape navigation, it is also a booming industry and brewers who have a solid plan and stay their course have a solid chance of success. “The numbers are proving themselves: Craft beverages are here to say,” says Patrick. “There’s bound to be a slowdown eventually, but there’s one to two breweries a day opening across the country. People want it, and if people want it, people will supply it.”

And that someone could be you.

Editor’s note: This article originally published in 2016. It was updated in 2019.

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Anthony St. Clair

Anthony St. Clair is a business copywriter, author of the Rucksack Universe travel fantasy series, and a craft beer writer specializing in Oregon. Learn more at

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How to Find Beta Testers to Validate Your Business Idea

beta testers

You’ve got a business idea that’s been burning at the back of your mind for months, and it’s finally time to do something about it. The concept gets you excited—the butterflies in your stomach, sweaty palms kind of excited, and you know that people are going to love it.

But how do you really know that it’s going to be a hit? How do you know that people will get as excited as you do about it?

The truth is, you don’t.

In fact, many startup and small business founders base their ideas on assumptions rather than fact, and that’s the reason a lot fall at the first hurdle. Without people who are interested in your idea and who will find it useful, you’re going to really struggle to get your business off the ground and make a success of it.

So how do you find out whether people are actually going to invest their hard-earned cash in what you’re putting out there?

The answer is beta testers.

These are people who fit your target market audience that try out your product or service for a reduced fee or for free in exchange for feedback and testimonials. As well as getting real-life opinions from potential real-life customers, you’ll also be able to see what works and what doesn’t work within your business. It’s one of the keys to market research.

Then, once it’s all smooth sailing with your beta testers, you can put your product out there for the world to see safe in the knowledge that it does what it says and that there’s a need for it.

Why you need beta testers

When you start a business, it’s really easy to get tunnel vision.

We know what we’re trying to create from the inside out, but no one else does, which means we often overlook important things because we think that others are on the same page as us.

Beta testers help you uncover any issues in your business plan and put your product or service to work before you put it out there. The last thing you want is to launch your lovingly-created business only to be greeted by crickets or, worse, negative comments.

Beta testers help you avoid both these situations.

As well as ensuring that there’s a need for your product in your industry, beta testers will uncover anything that doesn’t work and provide feedback on what you can improve to make your business even better.
Download your free business startup checklist today!

Attracting the right beta testers

Before you even think about going out there to find beta testers, you have to know what kind of beta testers you want—or, more importantly, need.

It’s no good asking friends and family who have no need for your product to be beta testers because they’re not going to know if it gets the results you want it to. In fact, this could be far more detrimental than anything.

Instead, you want to seek out the most relevant feedback possible by making sure your beta testers match your target audience. While you do want people to point out what could be improved, you also want users to provide feedback on what features really worked for them and what didn’t.

But most importantly, you have to remember that beta testers aren’t just sitting around waiting to provide feedback on your new business. While your business might have consumed a lot of your time and be super exciting for you, that’s not necessarily going to be the case for everyone else who’s path you cross.

Your beta testers are busy people, so you need to capture their attention and engage them as best as you can.

To do this, it helps to provide a solid incentive and a clear goal that they will reach when they finish using your product or service. Again, this means it’s important that your beta testers fit your target audience and are actively seeking the end result that your business provides.

To get you started, here are some top ways to find relevant beta testers for your new business idea.

1. Your email list

If you haven’t already started building an email list for your startup, then you should start immediately.

This is one of the most valuable things you’ll have in your business as, unlike social media channels, you own the spreadsheet of contact details rather than a third party that could shut its doors at any moment.

Ideally, you will have started bulking out your email list before you start creating your products and services so you can get validation at every step of the way.

It’s important to keep your subscribers engaged by sending out valuable newsletters, videos, and educational pieces of content. This will build trust and reiterate the value of your products and services when they’re eventually launched.  

By the time you’re ready to launch your business, you’ll have a nicely populated list of relevant subscribers that you can reach out to and invite them to become beta testers. This works particularly well if you segment your list into the most engaged subscribers, as these people are already openly interacting with your brand and clearly like what you’re putting out there.

You can send out a quick email asking for feedback not just when you’re in beta mode. In fact, it can be more beneficial to include your most engaged subscribers throughout the lifecycle of building your business so you can again get validation for each step.

2. Via personal outreach

It’s so easy to access thousands of relevant people through the interconnected nature of the internet, but sometimes it helps to dig a bit deeper than that. If your business is about high-value (read: high-price point) products and services, or you offer a personal, one-to-one type offering, it’s worth reaching out in person to potential beta testers.

For example, if your business is geared toward college students, make a visit to your local college and meet students in person to ask them to be beta testers. Alternatively, if you’re building a localized business, you can hit up networking events and community events to find potential beta testers.

This also provides a more personalized form of feedback and works well if you want just a few beta testers to try out a high-ticket product or service.

3. Through Facebook groups and forums

Otherwise, you can head back online and tap into the well of potential beta testers lurking in Facebook groups and forums like Reddit or Quora.

The great thing about this method is you know these people are open to helping others out because they tend to already spend at least some of their free time answering questions and offering advice on their chosen platform.

Facebook groups, in particular, are a great place to find people within your target audience that want to help out. In fact, there’s pretty much a Facebook group for every kind of interest and geographical area, it’s just a case of finding out where your target audience is hanging out.

The key is to not bowl into these groups and simply shout out for beta testers. Instead, you want to nurture connections with key people by actively participating in conversations and really listening to what dialogue is already happening in your industry.

Get the most out of your beta testers

Finding and working with beta testers is one of the most important parts of starting a new business. If you skip this step, you might find that your product or service is a big flop when you finally launch it, simply because you didn’t take the time to validate whether it was needed or not.

Remember: Find beta testers that fit your target audience, and make the experience an engaging one for them.

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Scott Miraglia

Scott is the CEO of Elevation Marketing. He is a balanced risk-taker with nearly three decades of experience starting and growing advertising and marketing agencies. His business acumen is matched with a drive to build creative teams that thrive in open, collaborative work environments. Scott seeks out the best creative individuals, not only to provide quality service to clients but to also help shape the future direction of Elevation.

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5 People You Should Talk With Before Starting a Business

starting a business

You’re probably mulling over a business idea. It’s probably something you’ve been thinking about for a while. And you’re probably ready to turn your business idea into a reality.

As part of the planning stage, you’ll want to gather information, do research, and make sure that your business idea is viable. During this information-gathering stage, there’s a small list of people you should talk with before you move forward with bigger steps like applying for a bank loan or looking at commercial space.

To help you on your business quest, carve out time to talk with the following five people.

1. Your spouse

One of the first people you should talk with about this new venture is your spouse. It sounds like a no-brainer, right? But some people get so caught up in their business idea that they don’t have a real sit-down conversation about how the business could impact their relationship, finances, and free time.

“Starting a new business can be all-consuming, and the support of your spouse and family will make all the difference,” business mentor and lawyer Anne Sumpter Arney says. “It is best to know whether or not your family is ready for the commitment and time that starting a successful business will take.”

Tim Berry, founder of Palo Alto Software (makers of Bplans), has been open about his experience of bootstrapping his business and its impact on his relationship with his spouse.

As we grew to revenues greater than $5 million in the early days, we had no outside investment, but my wife and I had three mortgages along the way and $65,000 in credit card debt at one point […] in my case, my wife was with me in all the key moments and shared the risk. If I hadn’t had her on board, I wouldn’t have done it.”

2. A lawyer

Starting a business involves a few legal hoops, so you’ll want to talk with a lawyer. For instance, should you start an LLC, an S-Corp, or an Inc.? A lawyer can give you advice and draw up the legal paperwork to make sure your business structure meets your goals and limits liability, Arney says.

A lawyer can also help you define business relationships. Maybe you borrowed money from one of your peers in exchange for equity in the business, or maybe you plan to start a company with several partners—whatever the situation, you’ll want legal documents to set boundaries and minimize future disputes, Arney says. Check out this article for advice on finding the right lawyer for your business.
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3. An accountant and trusted advisor

When you’re just starting out, you’ll need some accounting advice. A lot of new business owners assume an accountant is just someone you call to handle taxes.

But as your business grows, they can also be a trusted advisor—someone to help you make sense of your financial statements, cash flow, and to strategically think through opportunities and challenges. As you start bringing in more customers and doing more business, you’ll probably find yourself wondering whether it’s the right time to buy a new piece of machinery, finance expansion, or hire your first employee. An expert advisor can help you make better business decisions with confidence.

4.  A business coach or mentor

Getting a little advice from someone in the business world is also a good idea. Whether you’re opening your first business or your fifth, talking with someone who can give you independent business advice will go a long way, Arney says.

“You need someone who has been where you are and knows what there is to lose, as well as to win. Business owners need someone who knows them and their business and is independent enough to keep the vision tied to the real world,” she says.

Ideally, this person will be able to give you advice for years to come—not just as you plan your business, but also as your business grows. If you don’t already have a business coach or mentor, check out SCORE. They offer free business mentorship opportunities all around the US.

5. A banker

Entrepreneurs sometimes obtain at least part of their financing through a traditional bank loan. If you plan to borrow money, you’ll want to find a trusted banker to help you through the application process. You may want to ask your business adviser to recommend a banker, or you could ask other business colleagues for a suggestion.

You’ll need to start a business checking account anyway, so start learning about what different banks and credit unions have to offer your business. Having a real relationship with a bank can be helpful if you ever want to apply for that loan or line of credit.

The smart way to start a business is with as much information as possible. By talking with these five people, Arney says you’ll start your business on solid footing.

Editor’s note: This article originally published in 2014. It was updated in 2019.

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Lisa Furgison

Lisa Furgison is a journalist with a decade of experience in all facets of media.

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How to Apply for a Federal Tax ID Number – Bplans Blog

Federal tax identification number employer identification number

This article is part of our Business Startup Guide, a curated list of our articles that will get you up and running in no time!

A federal tax ID number is also known as a federal employer identification number, also called an EIN or FEIN. It’s a 9 digit number assigned to a business by the IRS.

The U.S. Internal Revenue Service uses these numbers to:

  1. Identify businesses located in the United States and its territories
  2. Recognize a business for purposes of tax documentation
  3. Identify what business employees filing taxes work for

Essentially, any business that has employees needs to obtain one, but depending on such things as the type of tax return you file, you may need one even if you have no employees. You can find out whether or not you need to obtain an EIN on the IRS website, or use the checklist here (last updated May 2019).

If you can answer “yes” to any of the IRS’s questions below, you need to apply for an employer identification number:

  • Do you have employees?
  • Do you operate a business as a corporation or a partnership?
  • Do you file an employment, excise, alcohol, tobacco, or firearms tax return?
  • Do you withhold taxes on income paid to a non-resident alien, other than wages?
  • Do you have a Keogh plan?
  • Are you involved with trusts, except certain grantor-owned revocable trusts, IRAs, or exempt organization business income tax returns?
  • Are you involved with estates?
  • Are you involved with real estate or mortgage investment conduits?
  • Are you involved with nonprofit organizations?
  • Are you involved with farmers’ cooperatives?
  • Are you involved with plan administrators?

How to apply for a federal tax ID (FEIN) number:

Applying is a simple process, usually done online. If you prefer to apply via fax, mail, or telephone, you can do this too.

It’s also worth remembering that applying for a tax ID number is free. If you’ve been asked to pay to apply, you’re on the wrong site!

You can apply for your federal tax ID number here.

During the application process, you will be asked to provide basic information including details regarding your business structure or the type of organization you operate, personal information, addresses, and other details relating to your business.

If you are not applying yourself, you will need to select a person designated as the “responsible party” for this application. If you are the small business owner, it will most likely be yourself, but it could also be a business partner if you have one. Whoever the responsible party is, they will need to have a valid taxpayer identification number (such as a social security number) to apply.

Download your free business startup checklist today!

When can I start using my EIN?

Once you have completed the online EIN application, you can begin using the number immediately.

This will come in handy if you are:

That said, it will take a couple of weeks for your EIN to become a part of the IRS’s permanent records. So, if you are looking to make an electronic payment, file an electronic return or pass an IRS taxpayer identification number (TIN) matching program, you will need to wait until you are a part of the permanent record.

I already operate a business, do I need a new tax ID number?

In certain circumstances, you may need to replace your tax ID number. These are situations which affect the structure of your business, such as taking on a partnership or filing for bankruptcy. If your business is going through a structural or organizational shift, look into whether applying for a new EIN is right for your circumstances.

What happens if I lose my federal tax ID number?

Once you receive your number, take a moment to write it down. You will need easy access to this number throughout your business’s life so it’s important you don’t actually lose it!

If you do lose it or forget it, however, you can call (800) 829-4933 and choose EIN from the list of options. Find out more about recovering a federal tax ID number here (last updated May 2019).

Key tax resources

If you are applying for a federal tax ID number with taxes in mind, it may be worth taking a look through some of the following resources:

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Angelique O'Rourke
Angelique O’Rourke

Artistic + intellectual pursuits. Social justice. Actress. Model. Musician. Eugene // Portland.

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Is Your Marketing Plan Aligned With Your Branding Goals?

branding and marketing goals

When your marketing plan aligns with your branding goals, your company becomes memorable to the masses. Nearly every business owner has goals, but how you define and carry them out often makes the difference between success and failure.

Around 84.5 percent of American companies use some type of digital content marketing. Marketing and branding are two different elements of your business’s image, but they also work together toward building an overall picture of who you are as a company.

Make sure branding and marketing align by following the 11 steps below to sync your business branding goals with your actions.

Step 1: Create your branding goals

If you don’t yet have branding goals for your business, your first step is creating a solid plan. If you already have some goals, take a few minutes to re-evaluate them and make sure they still align with your company plan.

Branding goals are tricky because the brand is how others see you. You can control some aspects of this, but not everything. Goals should include things such as how often your brand is presented to consumers and ideas for how you’d like others to see your business.

If you’re doing digital marketing, you’ve probably already aligned your marketing goals with your company’s sales goals and forecast: in order to achieve X percent growth in sales, you’re using a number of different marketing and sales tactics to increase your revenue.

Branding goals are a little different—think more about the top of your sales funnel. You’re looking to increase potential customers’ awareness that you exist. You’re also looking to increase their positive associations with your business.

Then think about the other end of your sales funnel—retaining your customers. We often talk about that in terms of brand loyalty, or more directly, their lifetime value. What will you do to keep them coming back?

Step 2: Align marketing with branding

Once you’ve solidified your branding goals, it’s time to align them with your marketing plan.

First, write out your branding goals so they are near as you work on your marketing plan. Then, create a roadmap for each quarter of the year, making sure each marketing point correlates to branding.

For example, if your branding goal is reaching 100 new people and making sure they know what your business does, then a marketing goal might tap into ways of finding them, such as adding informational videos on social media, or embarking on a PR campaign, or putting together a targeted content marketing strategy, aimed at bringing people to your website through organic search or SEO. If a marketing tactic doesn’t match your overall branding or sales goal, put it on the back burner for another time.

View our Business Branding Guide today!

Step 3: Map out your customer base

If you’re a brick and mortar business, one way to approach identifying your target market—your key customers—is to map out a list of your competitors and their locations and then look at where it makes sense for you to market.

Are there any underserved areas? One technique is starting near your home base and then expanding until your business growth meets your goals. There is little point in marketing to an area that lacks your target audience. A map shows you where you should concentrate your efforts.

Another way to “map” your customers is to develop a user or buyer persona. This means looking at your ideal customer’s demographics—how old are they, where do they live, what’s their income, and so on. Use those demographics to put together a fictional—but very useful—persona. Thinking of your ideal customer as an individual person can help you target your branding voice, tone, and message, and also your marketing spend.

Step 4: Consider your mission

What does your brand stand for? What’s your business’s mission? If your branding and marketing goals don’t align with who you are as a brand, then customers won’t see you as authentic and trustworthy.

Take a step back and study the history of your company and your vision. Look back at the initial business plan you wrote before starting your business. You’ll find clues about why you started the company in the first place, which will point you to your purpose as a brand.

Once you know your purpose, such as helping single moms with childcare solutions, then you’ll understand how you want others to view your brand as well. You can then ensure your marketing and branding goals align with who you are at the core.

Step 5: Utilize current customers

One of the toughest parts of growing a successful business is building a strong customer base. However, once you have those first clients, you should utilize them for information and help. It’s market research.

Poll your current customers. What about your brand attracted them? What would they like to see improved? Take note of raving fans and ask for testimonials to use in your marketing efforts. Also, ask them to tell others who might be interested in your products or services.

Step 6: Measure return on investment (ROI)

As you begin to implement your marketing plans in service of your branding and sales goals, make sure you track metrics so you can measure the success of each campaign.

Conduct A/B testing to see if your efforts result in new customers or sales. The ROI isn’t always monetary—especially with branding goals. You might really be focusing on increasing awareness—a top of sales funnel goal. You might measure and track metrics associated with increased website visits, or video views, or social media engagement.

If your goal is gaining new leads (a middle of the sales funnel goal), then you’ll measure how many new contacts you gain from a campaign. If your goal is to increase your net promoter score, or the likelihood that a customer would recommend you to a friend (a bottom of the sales funnel goal) you might look at the number of referrals that resulted in a sale, or the number of positive reviews.

Branding, or positive association with your company and your product or service, doesn’t stop with the sale. Make sure you’re attributing sales successes to your branding efforts when it makes sense.

Figuring out what result you want and then tracking numbers shows you which efforts need to be repeated and which ones need to be replaced.

Step 7: Set longer-term goals

When you completed the first two steps of setting branding and marketing goals, you likely looked at the next 12 months. Take time to write out some long-term goals, such as where you’d like your brand to be in five years or even 10 years.

Knowing what kind of company you want to build, and what you want it to look like, well into the future can be really useful. If you don’t set a long term trajectory for your business, you’re leaving a lot to chance.

A useful framework for this type of planning is a Lean Plan—a shorter form version of a business plan. If you’ve heard of a business model canvas, a Lean Plan is a better alternative to that. It’s easy to update, and a great place to map your ideas for the long term. You can download a free Lean Plan template here to help you get started.

You must plan if you want to beat the odds, fixing weak areas along the way and adapting to rapid market shifts.

Step 8: Decide on tone

Your business, no matter what industry you’re in, has a unique personality, tone, and voice. If you sell something fun, your voice might be lighthearted and joyful. On the other hand, if you’re in education or financial services, your tone might be a bit more serious.

Choose a tone that aligns with your brand goals and use it in your marketing efforts across all platforms. Users should recognize your personality immediately, whether interacting on social media, reading an email from you, or talking to your team on the phone.

Step 9: Understand your unique value proposition (UVP)

Marketing is about the promise you make to your audience regarding what you’ll bring to the table. You must first figure out what unique advantage you offer that no one else does, and then communicate your UVP, or your unique value proposition.  through all your marketing efforts.

SnackNation is one company with a strong UVP with a highly targeted audience. The brand provides healthy snacks for homes and offices on a subscription-based service. Each week, SnackNation adds about 1,200 new leads segmented into a marketing list that specifically meets the needs of that particular audience.

When you land on the SnackNation website, you’re asked to choose if you want snacks for the home or office. You are then offered a free sampler box to pick one that’s right for your needs. This is just one example of how to use your UVP to help you build a more personalized customer experience.

Step 10: Evaluate the look of your online marketing

Spend time on each platform you market on and make sure the look matches the overall appearance of your brand’s image.

If your branding goal is to show you have higher-quality products than any other competitor, but your website or Facebook page looks cheap with photos that aren’t very good, you are missing an opportunity. Ideally, you’re continuously testing and optimizing your website and digital marketing campaigns.

Step 11: Improve communication on your team

As your business grows, one challenge you might face is keeping your branding and marketing standards consistent between different areas of your team. Who is in charge of your branding? Do you have a branding guide your whole company can refer to as needed?

As a leader, make sure you’re empowering everyone on your team to be a good, consistent steward of your brand and your sales, marketing, and branding goals. Doing something new? Running tests? Let your team know so they can help and support your efforts.  

Re-evaluate often

Over time, you’ll probably come up with fantastic new ideas for marketing your products, but they may not align with your branding or corporate goals.

Every three to six months, spend a little time looking at plans for branding and marketing and making sure everything still meshes together. Make any adjustments as needed and re-evaluate goals as your company grows.

With a little attention to detail and a lot of communication, your marketing and branding will work together and increase your customer base steadily.

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Lexi Lu
Lexi Lu

Lexie Lu is a designer and UX strategist. She enjoys covering topics related to UX design, web design, social media, and branding. Feel free to subscribe to her design blog, Design Roast, or follow her on Twitter @lexieludesigner.

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How a Medical Private Practice Can Overcome Obstacles to Success

As I traverse the medical private practice landscape across the U.S. through consultations and speaking engagements, I’ve observed that private practices suffer from a very high failure rate.

According to Dave Chase, author of CEO’s Guide to Restoring the American Dream, 43 percent of healthcare-related businesses fail within their first five years. The only industry that appears to have a higher failure rate is the restaurant industry.  

The main reasons “private practice-preneurs” fail in today’s environment is that they’re simply not identifying their risk factors. Too many health practitioners underestimate the resources that are needed for a successful practice.

Most healthcare practitioners aren’t trained to develop a business as a successful entrepreneur. They’ve built their careers around their passion for health and wellness—not analyzing financial statements and maximizing profits.

But to succeed at building a financially sustainable business, you need a strong organizational foundation. To protect your private practice from failure, take these essential steps upfront.

1. Define your vision of success

Take a moment to consider your true intentions. It’s essential that you define your professional and personal goals and your ideal vision for success.

Begin the vision process by naming your net financial goals so that they’ll lead you to the follow-up step of identifying the how and the when. Determine whether your private practice vision involves using other practitioners in your service delivery method, or if you intend to be a sole proprietor.

2. Set out to run a profitable business

If I could change one thing about our society’s view on service-based business models related to healthcare, it would be the notion that private healthcare practices operating as successful and profitable businesses runs contrary to their mission.

Still, clinicians and healthcare providers are often so invested in their own passion for their work that they overlook the profitability side of the business.

Borrowing a page from investment legend Warren Buffet: Priority #1 is to never lose money, priority #2 is to never lose money, and priority #3 is to never lose money.

3. Invest the time in a solid business plan

There’s enormous value in articulating your vision of the path forward. Writing a business plan—even a Lean Business Plan that’s short and easy to update—will help. It’s proven that companies that do business planning grow 30% faster. Doing so will help you better determine your specific objectives for the business, as well as give you an understanding of how to support sustained growth.

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Some might be tempted to just launch into action and figure out the process of building a business along the way as they go—what we might call “building the airplane while flying it.” Simply put, this is not the most effective or efficient approach.

Start by clearly understanding why you wish to open your own practice.

Part of defining your why is identifying its relationship to other key questions, including:

  • Who is the target demographic?
  • What is your core service or product?
  • When are you looking to start?
  • And how are you going to execute your vision?

Be as specific as possible with your goals and milestones. A well-constructed business plan helps to ensure that you aren’t just spinning your wheels, but are executing against a clearly drawn strategic roadmap that aligns with specific, measurable goals for your business.

If you’re not sure what a medical practice business plan should look like, check out some examples in Bplans’ sample business plan gallery.

4. Create accountability through metrics

It’s one thing to create a plan, but it’s another to execute it and achieve your goals. The secret to executing your private practice strategy is through metrics. Besides thinking through your who, what, where, when, why, and which questions, define what will be the measurable metrics that will tell you when you’ve arrived at your goal.

They should include a time limit—when are you going to achieve that goal? I recommend that you develop weekly, monthly, and quarterly metrics. Key financial metrics include your balance sheet, income statement, and net income. Others include cash flow statement analysis, payer mix, cancellation report, and marketing/referral effectiveness.

You can set up your financial statements in Excel, and a business management tool like LivePlan that connects to your online accounting system and offers a business dashboard can make it quicker and easier.

The added benefit of using metrics is that they help empower your team to be accountable without having to micromanage their every move. Adding incentives for staff to reach their goals can be a helpful motivator.

5. Understand the funding model of health insurance

A fundamental reality that all private practice entrepreneurs must realize is that there’s never a guarantee of coverage.

Do this: Call the phone number on the back of your health insurance card and verify your own benefits for whatever service you’re offering (occupational therapy, speech therapy, chiropractic, and so on).

The bottom line is that you must understand the limiting factors and trends related to medical billing depending on your patient demographics, diagnosis, service offering, and so on. The rule of thumb is 60 percent of your funding should be cash flow positive in 30 days or less from the date of service. This will keep your private practice financially moving in the right direction.

6. Prepare for worst-case scenarios

As you build your strategy, you must be prepared for conditions that could impact your survival. Ask yourself a variety of questions, spanning from what would happen if your best therapist left to go into competition with you, to what if your funding source stopped making payments (Medicaid, etc.)?

Formulate a strategy to overcome these obstacles before they happen. For example, get out ahead of clinical and personnel issues by clearly communicating your expectations with your staff, and articulate policies in both your employee and client packets on everything from HIPAA to expected response times to inquiries.

7. Hire the best staff you can find

A unified team can transform your practice. Hire the best staff you can find—it will pay off. If you have staff members who aren’t fully behind the mission of the practice and are simply clocking in and clocking out each day, they aren’t contributing to the success of the organization.

In particular, I’ve seen this happen when practitioners recruit their friends to work for them. Employees who have a passion for their work, who always act with the company’s best interests in mind, who look for ways to contribute, and who bring new ideas will be vital team members for ensuring the success of the practice.

8. Build a support team to help with essential decisions

Surround yourself with people who can give moral or professional support. They can be employees, friends, consultants and more. As you build your strategy, you need a team who can watch over your shoulder.

Know when to hire help; there’s no need to tackle every challenge alone. Find those with expertise in the areas you know aren’t your strong points. If you’re not sure where to start, SCORE offers a great mentorship program that can help you build your medical practice with confidence.

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Brandon Seigel
Brandon Seigel

Brandon Seigel is an internationally known business coach and president of Wellness Works Management Partners. He currently manages multiple private practices and consults with entrepreneurs and private practices throughout the world. A recognized leader in today’s private practice environment, he is a frequent keynote speaker and trainer for organizations, associations and universities. His new book, The Private Practice Survival Guide: A Journey to Unlock Your Freedom to Success (Rebel Press, February 5, 2019) covers the essential how-to questions of opening a successful private practice. Learn more at or

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SaaS 101: Starting a Software as a Service Business

starting a SaaS business software as a service business

This article is part of our SaaS Business Startup Guide—expert resources to help you plan, start, and grow your SaaS business!

If you’re interested in starting a software as a service (SaaS) business, you’ll want to start with the basics. Here’s a quick overview of the details, benefits, and risks.

SaaS defined

SaaS (software as a service) means that users access software through their internet browser or a web-based app. The software maker hosts their product on their own servers, which is why SaaS products are sometimes referred to as a “hosted solution” or “web-based solution.”

It’s also common to hear SaaS products talked about as “cloud-based” solutions. In contrast, a desktop-based model is where an individual or company would install software on their computers and run it on their own servers.

Pricing models and customer acquisition

SaaS products often use a subscription-based pricing model. So instead of paying once for a lifetime of use, your customer pays on an ongoing basis—usually monthly or annually. You can think of it as a software license.

It’s a popular model because of the increased potential lifetime value of each customer. Instead of a flat lifetime value—like $120 for the single sale opportunity you have with each customer or user, you might charge $10 a month per user for as long as your customer uses your service. The longer they stick around, the higher their lifetime value.

When you build out your SaaS company’s business plan, spend some time modeling different subscription-based sales forecast scenarios so you can see how reducing churn (the number of canceled subscribers) and other variables can affect your path to profitability.

Download your free subscription sales forecast template today!

Growing SaaS companies are always testing their pricing models. There are a lot of different ways to get customers in the door to kick the tires, from offering free trials, to freemium services with upgrade options. Check out the Bplans guide to SaaS pricing models for more on how to get started.

Security and reliability

One of the objections you’ll probably hear from some prospective customers is that they’re worried about data security with SaaS products, and with apps in general. This is especially true if you’re presenting a cloud-based solution for something that used to only be available as a desktop version.

The concern is that “the cloud” has security vulnerabilities. But in actuality, legacy systems are actually more vulnerable than cloud-based apps. That said, take the responsibility of protecting your customers’ data very seriously.

What if you’re a non-technical founder?

If you have an idea for a software as a service business, but you don’t have the technical expertise to build your app yourself, it’s still possible to run a successful business. In his book “Lost and Founder,” Rand Fishkin talks about his journey as a non-technical CEO of Moz, a service company he founded and transformed into a SaaS company.

He emphasizes how important it was for him to learn (and keep learning) enough about the technical aspects of his business so that he was able to make good hires and understand technical roadblocks when they surfaced. And it’s not completely impossible to learn to code yourself—but it does take time.

Be mindful of your intellectual property—the code—whether you bring on an employee or outsource the technical work. A good contract can go a long way.

Starting with an MVP

There’s a great article in Geekwire on a Seattle founder of an app that helps parents find childcare. One of the best things about it is that it gives a clear example of what an MVP (minimum viable product) might look like for an app. In this case, it was just an Airtable spreadsheet that the founder posted online for free, where it got a lot of traffic in just a few days.

The point is that if you have an idea for a SaaS business, don’t invest all of your time and resources into creating the very best, most perfect version of your app before you start testing it. You want to use a lighter version so you can validate that the solution you’re offering is something people will pay for. You’ll waste a lot of time and energy if you skip validating your idea before you build the full-scale version.

Reid Hoffman famously said, “If you’re not embarrassed by the first version of your product, you launched too late.” The point isn’t to put out a bad product—it’s to see how it does quickly, before you invest a ton into it.

Funding your SaaS startup

Building a successful SaaS business doesn’t happen overnight. More so than in other industries, it’s easy to get the impression that SaaS companies grow very quickly—they just blow up over the course of a year. In reality, Spotify is more than 10 years old. Netflix is over 20 years old. It takes time to scale and grow a business. Keep that in mind when you’re looking for funding.

If you just have a business idea, but you haven’t tested it yet with an MVP or convinced anyone to pay for it, it’s going to be tough to make the case to angel investors or venture capitalists. They’re looking for traction in the marketplace, and that means you’re going to have to demonstrate that you can sell your product.

One of the other things you’ll hear is that some companies that take on investment run huge deficits for years on end—think Uber’s billions of dollars in losses. It’s true that lots of software companies that take on investment aren’t profitable for a long time. But investors are in it to win in the long term. You’re going to need realistic financials in your business plan, and a strategy to eventually be acquired.

But also keep in mind that depending on your end goals, it’s possible to run a profitable, healthy business for a long time without ever seeking outside investment. It all depends on your goals. Tim Berry talks about it in this articlenot all good businesses are good investments. (Full disclosure, Tim founded Palo Alto Software and Bplans; Palo Alto Software makes a SaaS business planning tool called LivePlan, and a shared inbox tool for teams.)

In the meantime, you might be able to fund your business idea with your day job or your savings. Maybe you have personal collateral that you can use to get a loan or line of credit, or maybe crowdfunding is an option.

Just start

One of the best things you can do in the early stages of your SaaS business is to map out a quick business plan. We call this approach a Lean Plan. You can do it quickly, and just by doing the process you’ll have thought through a lot of the most important parts of your business. Also, check out our SaaS and subscription business startup guide for more expert how-tos. 

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Brian MackleyBrian Mackley
Brian Mackley

Brian L. Mackley is a cofounder of the Technology Advocacy Group. His background as a record setting sales professional in the SaaS environment, and as a professional sales trainer enable him to share the inside knowledge with his clients. He has trained thousands of technology sales professionals over the past decade and now shares his secrets with organizations to help level the playing field when buying technology. As an expert in SaaS and negotiation techniques, he teaches executives how to adopt technology without getting taken advantage of by clever commissioned sales reps or purposely confusing contracts. He has developed the sales methods and training for some of the largest technology companies in the U.S.

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How to Start a Digital Marketing Agency Without Outside Funding

how to start a digital marketing agency

It’s easier to start a digital marketing agency without funding than people might think.

In this post, I will cover starting your business on your own—with aspirations of becoming an agency. I will look at how to get your first clients and how to balance your time when finding them—when you start on your own, that is one of the toughest balancing acts.

Setting up

The beauty of setting up a digital marketing agency is that you can start from virtually nothing. I know this from personal experience because my business partner and I did just that with our company, Louder.Online. If you have the expertise, then all you need to get started is a computer and a home office (or at least a space to work). There are not many businesses where that’s all you need.

You don’t need to put it all on a credit card, you don’t need to get a bank loan, you don’t need startup capital—you can just build a website, and you can be on your way. That’s what we did, and we now have a successful digital marketing agency with clients around the world.

Taking on your first employees

Many businesses will hire recruiting and onboarding agencies to find employees for their burgeoning digital marketing agency, but if you’re going to build an agency without funding then you need to be doing this yourself.

Beyond the fact that you won’t need the extra cash from the start to make hires, it will mean that you have control over the kind of employees that you take on. When you’re ready, you can hire the right people for the culture that you create around your business.

Training your team

Training your employees can be a costly business if you are not wise. When building a digital marketing agency without outside funding, you need to make sure you have a plan in place to be able to train people as and when they join you without incurring additional cost to the business.

Something we found invaluable when building our agency was to train the first few staff ourselves and educate them on everything we could. Sure, it meant that we put in some long hours at the start, but it paid off in the long run.

Training our first employees in every area we could think of prepared them to be able to train the next wave of staff. In turn, those staff members were able to teach the team members that joined after them.

As people moved up the ladder in our business, the staff that joined early on were able to train up the juniors that came in after them. Higher paid employees were able to use their time to liaise with clients and strategize rather than spending their time on training—making the business more successful and profitable, while not losing any of the vision that we had for the company or how our digital marketing client work was undertaken.

Documenting your processes and making life easier

If you want to start an agency without having outside funding, you need to find ways to do things in a non-traditional manner.

If your business takes off straight away, then it is likely that you are going to be taking on staff fairly quickly to cope with demand. When you have new staff starting regularly, you need two things in place—process documentation and basic HR functions—preferably avoiding having to hire an HR person too early.

At Louder.Online we made sure that we concentrated on these very early on. We documented our processes from day one in some software called Process Street. The software lets you create checklists and workflows that any of your staff can run at any time.

We use Process Street to document things like:

  • How to answer the phone
  • What to do when you are sick
  • How to put in an expenses report
  • How to book a holiday
  • What is needed before a new employee starts
  • What is required when an employee leaves

Having these processes documented means that everyone knows what they need to do and can follow a standard protocol. They don’t have to ask their manager or other staff.

This saves time and means that the employees that you have at your agency can actually spend more time on billable work for the clients. That, in turn, makes you more profitable. You are saving money that might otherwise have had to have come from outside funding.

We also didn’t want to have to hire an HR person until we really needed to and we certainly didn’t want to outsource that to a third party. They both cost a lot of money, and we didn’t want to have to use outside funding to do that.

After some searching around in the early days, we found some software called AppogeeHR.

The software boasts:

  • Centralized employee information
  • Leave and sickness management
  • Performance and learning tracking
  • Reporting
  • OKR management

It is simple to use, and it means that my business partner and I were able to act as HR without having to spend a lot of time on it. As earlier employees moved up, they were able to take on some of the work as well—and of course, this was all documented in a subsection of Process Street for when they needed it.

There is a saying that “necessity is the mother of invention,” and when we knew we didn’t want to use outside funding we looked for ways that we could make sure we didn’t have to.


If you don’t have that cash injection at the start of your businesses life, then you need to be bootstrapping.

A dictionary definition will tell you that it’s to get oneself into or out of a situation using existing resources. When you read other articles, they will talk about relying on personal income or savings, and they talk about sweat equity.

We think the definition can be a little broader than that—essentially optimizing your current situation. We did this through an intelligent choice of clients and being smart with our cash. We found these to be essential to avoid that outside funding.

Getting good clients

Bad clients bring you down. Bad clients cost you money. Bad clients suck up your time.

If you don’t want to be spending money on additional staff to cover those losses, then you need to know how to spot a good client. Taking on every client that comes your way was never an option for us.

So how do you spot a good client? Here are my tips:

  • Choose clients that will let you do your best work—stay away from the clients that overly worry about cost, because they will cost you in the long run.
  • Choose clients whose business you believe in—the synergy between your agency and their business will lead to a healthy and respectful relationship.
  • Work with clients who understand what you do—if they have some knowledge of the digital marketing landscape then they will be interested in what you do and don’t expect the world.

Being smart with your cash

This one sounds kind of obvious, right? But how many stories in the last few years have you read about businesses going under because of the inordinate amount of cash they spent on offices and perks to try and attract staff?

The employees that join your company are likely to know about these perks and want to see some of them. This is where you have to try and resist. Sure they are fun, but if you don’t want that outside funding, then you need to be sensible.

Company culture is not about the arcade machines and novelty slides from one floor to another. Company culture is about the bonds you create, the work that you do and how comfortable people feel at work.

People want to enjoy their work. When people enjoy their day to day life they produce better work, and they stay with a company longer. Combine these two together, and it cuts down the money you need to spend on recruitment and training—another way to avoid using outside funding.

Financial goal and milestone setting

Being smarter with your cash and spending less is one thing; financial goal and milestone setting is another. We knew we would have to create something scalable from the start and also be able to predict with some degree of accuracy what our potential revenue might be.

As we were starting a digital agency, we knew we were going to be selling hours from the very start. We knew that tracking employee time and client budgets were the way we wanted to head in. Using a project management tool like Liquid Planner or a Harvest/Basecamp combination can really help with this.

We set prices for staff, created client folders and subprojects early on. Every member of staff had tasks assigned that they accurately track time against. This allowed us to make sure we didn’t go over or under for clients and the tools turn the hours into dollars in detailed reports.

We started in a very granular way and had activities set for the different types of work that we were doing. This allowed us to accurately predict how long specific tasks would take and we could pitch accordingly—there was no finger in the air guesswork.

After we had started to collect this data we could predict how much revenue we might bring in per client. From there we created financial milestones based on the close rate of proposals and how much similar projects had cost—and whether they had come under or gone over. We found this to be an accurate way of getting solid estimates on where the business would be in six months, a year, five years and beyond. It’s strategic planning or Lean Business Planning.

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Start small but plan for growth

That’s how we did it at Louder Online, we took a no outside funding stance from the start and made sure we looked for alternative solutions to cut costs. We started small and made sure that there was a culture in place from day one.

We made sure that we documented everything so that new employees would know what they had to do and when.

We enabled the staff to train each other as the agency grew, creating last bonds and teamwork.  

It isn’t for everyone and it was definitely hard for us at the start, but it has made us the profitable digital marketing agency that we are today and we wouldn’t change that for the world.

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Aaron Agius
Aaron Agius

Aaron Agius, CEO of worldwide digital agency Louder Online is, according to Forbes, among the world’s leading digital marketers. Working with clients such as Salesforce, Coca-Cola, IBM, Intel, and scores of stellar brands, Aaron is a growth marketer—a fusion between search, content, social, and PR.

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