Wife: Soooo… You’re quitting your job.
This is not a question. It is most assuredly a statement.
It was 1989 and I had caught the homebrewing bug. I LOVE great beer. The idea of making and having available gallons and gallons of beer at home was almost as good as… well… sex.
But, there was a problem. I need ingredients, equipment, and instructions. Now what? (See, for all of you younger than … say … 50… I couldn’t Google “Homebrew stores”) lol Finding the competition was not easy because they were so small, using their homes, they never advertised.
After driving all over Phoenix Metro I found 3 “homebrew stores”. None was closer than 20+ miles from where I lived in Mesa. The three “stores” were:
- a guy’s living room in a house he shared with his mom
- a small (maybe 600 sq.ft.) storefront in west Phoenix
- a guy’s garage in North Phoenix
Fireworks, lightbulbs flashing, unbridled excitement as I realized the birth of a business idea. I knew I was gonna open a homebrewing retail store. Why was I so sure? The business was viable elsewhere, and the competition in Phoenix was non-existent. (see above)
This goes back to my always being fond of the Japanese way of business, finding a great product or idea, taking it, and making it better. Yamaha did this with their redesign of the Harley Davidson Evo powertrain, creating the most popular and highest selling line of motorcycles in their history.
I did it with the homebrewing retail business. And… using this business idea, I am going to show you how to start a business, almost any business, using what I discuss here and make it work from the get-go.
You should know that according to all the stat geeks out there the majority of small businesses fail. They do. And they do so within the first 3–5 years, if not sooner. You will also be told you need enough money in reserve to pay yourself and keep the business afloat.
My personal opinion is if you follow your heart, follow common sense, follow the rules I teach here … plus hard work and a bit of luck… you won’t need to have the equivalent of a 100k IRA in reserve or an SBA loan of $250k and a banker watching every move. The most money I spent to start a small business was mine and here are the approximated numbers:
- retail store ($2000) $25k/mo. min. after 1st 2 months
- pool service ($1600) $40,000 in first 8 months
- irrigation service ($500) $25k-30k annually
- commercial maintenance ($5000) $6000/mo. by the end of 1st year
You… anyone… can do this.
This is a competition I have won my entire life. Every business I have ever started up has been in the black within 6 months… not a year, not 3 years, not 5 years… 6 MONTHS. Meaning I made enough to take a salary and build the business.
You can also succeed at this. You can hold down a FT job and do this. Are you ready to work? Seriously. ARE you ready to work??
I was a corporate paralegal at the time. I loved my work. During this time I was asked to research (pro-bono) the idea of legalized gambling in Arizona at the request of the Arizona Tribal Council.
The result was a legal memorandum that I researched and wrote. I gave a speech to the members of the Tribal Council at the Capitol Dome, and then presented them with the memorandum.
Used by their legal team, they followed my written advice, sued the State of AZ and Gov. Symington, and soon became very happy casino operators. This is one of the very coolest things I have accomplished in my life time.
Back to the homebrew store. After the pro-bono work I did for the Tribal Council was over, I proceeded to take a couple of courses at MCC in retail marketing and business.
Lesson #1 is to educate yourself in the business first, before spending a penny on the business. You will fail if you don’t know what it is you are about to do.
I also spent a few weeks going back to visit the soon-to-be competition. What products did they carry? What were the prices? What products did they NOT carry? Most of all… what could I do to improve upon what they did or did not do?
Lesson #2 is to know your competition. You will fail if you don’t know who your competition.
Ok then, now what? Well, I had to choose a location. It was unique, so it was a destination business. Visibility was not required. Easy to find and get to was required. But everything else would be determined by my customer demographics.
- What was their age?
- What was their income?
- What was their education?
- Were they male or female?
The retail location had to be close enough to draw from these demographics. Lucky me. Turns out, those demographics happened to be essentially those of the City of Tempe near where I lived.
Seriously, there’s no luck involved here. Just as with copywriting, I had to study and know my market, my audience and my product.
Lesson #3 is to know your customer base. You will fail if you have no clue as to who you are selling to, what they want, and why.
I located the store in a commercial retail building behind a popular sports bar and 2 restaurants and next to another restaurant. Hidden from the street, it remained easy to find (key). And just a 1/4 mile off the freeway coming from the rest of the Valley. Boom!
Lesson #4 is to know the best location, based upon your customer demographics. You will fail with the greatest idea known to mankind if it’s located somewhere your customers will never travel.
NOW you are ready to go into business. You have your location, you know your audience, you know your competitors, and you are now educated in the business. But there’s more hophead.
Something’s missing… Customers!! Now what?! I know who they are, but how do I get them into the store? I can’t afford expensive newspaper or radio advertising!
Remember I mentioned taking a couple of college courses in small business marketing and business management? Here are the lessons from those classes:
- Get media kits from every newspaper, radio station and TV station in the Phoenix Metro area (just call and ask and they will send it to you).
- Send them a fax (remember there is still no digital marketing, no email, no web) once every 9–10 days.
- Keep the faxes short and sweet, with my name, business name, phone, fax and address.
I started sending out faxes every 10 days beginning in Sept. when I opened for a trial run. I remained working full time for the law firm, and opened the store weekday nights from 6–9pm, weekends from 9–6pm.
What did I put in the faxes? What didn’t I put in those faxes? Sales promos. Unlike marketers today I did not offer free stuff with pictures of me on a Yacht. I did not offer “secrets that will show you how I make a million dollars a month”. I did not try to sell or BS anyone.
I did hammer repeatedly on the term homebrewing and my name Brewers Connection. I did offer valid, useable information, such as:
- on Sept 10th Jeff Adams was named CEO of B&J Enterprises dba Brewers Connection
- we now carry Homebrewing Starter Kits
- the extraordinary response to our just-announced evening classes we would be teaching every month
Here’s the payoff from those lessons:
Every 10 days another announcement about Homebrewing, through Sept., October and … one day late October, the phone rings. Channel 5 TV wants to send a writer and camera team to the store.
Holy crap. It works. Those damn faxes worked!!! FREE 60 seconds on prime TV. That is thousands and thousands in FREE MARKETING.
September income was $190 gross. October income was $300 gross. After my store and I were on prime time TV news during the middle of November, my gross income topped out at $25,000+.
I sent more faxes. The phone rings again, first week of December. A competing TV station wants to send a writer and video crew the next day. Far freaking out!! Again on the 6pm and 9pm news, this time on Channel 12. December income topped $35,000.
Brewers Connection never looked back. But there was more and here it is for your business planning. The first year I took a minimal salary and put all the profits back into the business. Why?
I was scared to death someone with money would follow my steps and compete. So I made it look like my funds were unlimited. In a year I grew from 900 sq. ft. to a 2600 sq. ft. retail storefront, fully carpeted, and over $50,000 inventory on the floor (I started with $2000 in inventory).
It became a game when guys would walk in, not buy, and say they were just curious and wanted to look around (pen and paper in hand). I opened a 2nd store in Tucson and plans for another in West Phoenix. Never had anyone try to compete.
Here is your blueprint to follow to open a small business.
The only problem with the business I had and didn’t account for was the rapid growth. I was turning down business opportunities due to lack of employees, materials and room.
Suddenly, things happened totally unforeseen. Like the call and followup meeting with Costco out of California. They wanted to carry my self made Homebrewing StarterKits.
They required several hundred to start with and the ability to maintain their inventory requirements. I had less than a week to accept or decline. I had no choice but to decline.
I mention this so you know that if you do everything right, if you are smart, if you do the work, you can inexpensively start a small business that may have the opportunity to grow into a very large business. You can do very well.
Cool beans eh? Are you ready to tell the wife “I think I’m going to start a business!” Well, are you??
And when she responds with a “sooooo… you quit your job” (again, stated as a comment, not a question) you can simply smile and say “I got this darlin”. Or even “wanna be partners?”