Comments on: Q&A: Seeking Investors, Fill Out the Team http://upandrunning.bplans.com/2009/07/16/product-business-model-but-no-team/ Start, Run, and Grow Your Business Fri, 17 Feb 2012 18:41:05 +0000 hourly 1 http://wordpress.org/?v=3.3 By: Tim Berry http://upandrunning.bplans.com/2009/07/16/product-business-model-but-no-team/#comment-4422 Tim Berry Wed, 08 Jun 2011 03:19:45 +0000 http://upandrunning.entrepreneur.com/2009/07/16/product-business-model-but-no-team/#comment-4422 Dillon, realistically, a coffee bar doesn't offer arms-length investors much to interest them. They put a few hundred thousand into that coffee bar and how do they get that out, doubled or tripled, in five years? Sure, Starbucks was sensational, but Starbucks already happened. You need to think about more mundane financing, maybe SBA loans, partners, people who would want to own and operate the business on the long term. This one isn't about your business plan, really, it's about your business. Owners and operators invest in coffee bars, investors don't. What's really helpful is your on-the-ground experience actually working in one of these places. That does a whole lot for reducing the risk. But it's probably not. I had a student, David Beach, who wanted to be a coffee roaster. So after graduated he worked in a coffee roaster's business for a few years and eventually, with the help of one financial partner who was way more partner than outside investor, and who'd been a friend for years, opened his own place. That place is now several places, Backporch Coffee in Bend, OR. It's doing very well. What made him successful was the combination of his own smarts, sticking to it, a good marriage that meant a lot of help from his wife, and a long-term friendship with one person who wanted to be part owner for the long term, not just get a good return on investment. Tim Dillon, realistically, a coffee bar doesn’t offer arms-length investors much to interest them. They put a few hundred thousand into that coffee bar and how do they get that out, doubled or tripled, in five years? Sure, Starbucks was sensational, but Starbucks already happened. You need to think about more mundane financing, maybe SBA loans, partners, people who would want to own and operate the business on the long term. This one isn’t about your business plan, really, it’s about your business. Owners and operators invest in coffee bars, investors don’t.

What’s really helpful is your on-the-ground experience actually working in one of these places. That does a whole lot for reducing the risk. But it’s probably not. I had a student, David Beach, who wanted to be a coffee roaster. So after graduated he worked in a coffee roaster’s business for a few years and eventually, with the help of one financial partner who was way more partner than outside investor, and who’d been a friend for years, opened his own place. That place is now several places, Backporch Coffee in Bend, OR. It’s doing very well. What made him successful was the combination of his own smarts, sticking to it, a good marriage that meant a lot of help from his wife, and a long-term friendship with one person who wanted to be part owner for the long term, not just get a good return on investment.

Tim

]]> By: Dillon http://upandrunning.bplans.com/2009/07/16/product-business-model-but-no-team/#comment-4420 Dillon Wed, 08 Jun 2011 00:48:21 +0000 http://upandrunning.entrepreneur.com/2009/07/16/product-business-model-but-no-team/#comment-4420 Hi Tim, I am working on a business plan for an espresso bar I've wanted to open for some time now. I am young and ambitious and have no money of my own to invest. I have 6+ years experience working at some of the most reputable, very high-grossing coffee bars in the Pacific Northwest and New York City. So, of course, I'm looking to make my experience stand out in my business plan -- do I need more of a management team than myself? Or, more specifically, will an investor want to see more of a management team given the nature of the business? Dillon Hi Tim,

I am working on a business plan for an espresso bar I’ve wanted to open for some time now. I am young and ambitious and have no money of my own to invest. I have 6+ years experience working at some of the most reputable, very high-grossing coffee bars in the Pacific Northwest and New York City. So, of course, I’m looking to make my experience stand out in my business plan — do I need more of a management team than myself? Or, more specifically, will an investor want to see more of a management team given the nature of the business?

Dillon

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