Small Business, Big Lessons™: Your Million-Dollar Idea!

Your Million-Dollar Idea!

Ever wake up and feel you have the next great thing – but – it will take you 5 years to get off the ground? How do you get funding, pay the bills and keep the lights on today?

Let’s take a few lessons from the world of Spirits on cash flow and long-term results. A good Bourbon can take five plus years to age in a barrel. During that time there is risk of spoilage, normal loss through evaporation in barrel aging, fires, theft, and more. If you were to start a distillery today – can you wait five + years for your first dollar? Will investors be willing to keep pumping in money while you wait for the profits? How do you pay the staff and yourself?

1)    Short Term Wins – The majority of distilleries sell an unaged product that can be sold quickly. They are looking to bring in cash today with a portion of their sales on product that can be created in days or weeks vs years. Examples include vodka, moonshine, and other “non” age products. Others will brew beer or hard seltzer that follows a similar process and use similar equipment. The leftover grains can be sold as feed for livestock. They do this to bring in the cash while starting the aging process for their final product.

2)    Don’t Do it Alone – A famous large London gin distillery runs their entire process with four people. They source the best clear pure 100% grain spirit. Much easier to do today with the overall equipment and quality in the industry. Their “secret” is to add the correct portion of botanicals for correct time to get their famous taste. Once that has been achieved – they send the finished product to a bottler for final packaging and distribution. Imagine running over a billion-dollar business with a handful of people! In full disclosure – four are the number of people involved with the actual distilling but surrounded by all the other critical roles one would expect in any business. In any event – they are leveraging the expertise and equipment of others while focusing on what makes them special in the marketplace.

3)    Keep the End Goal in Mind – Each short-term win allows a reinvestment into the longer term goal. In this case, the long-term goal is to barrel age and create a unique bourbon. It is a distinctive product that creates the brand.

Think through

What is a product or service that could dramatically grow your business? How long will it take you to develop the product or skills to make it a reality? What is the cost to the business (opportunity and real dollars)? Are there short-term wins that you can make incremental progress on today? Example – if a service – as you add skills – can you develop and market a portion of what you plan to offer in the long term? Take the first small step and reinvest for the long-term goal.

You may ask – why not stay focused on just the short terms wins and keep that going? It is a low margin commodity business that does not have competitive differentiation. Most entrepreneurs are looking for higher margin – differentiated products or services.

Have you taken small steps and turned them into hyper growth? Have any best practice you want to share? Feel free to post comments or email them to me. Small Business, Big Lessons™ – Start creating your million dollar small business today!

 

About the Author:

Gregory Woloszczuk is an entrepreneur and experienced tech executive that helps small business owners grow their top and bottom line. Gregory believes in straight talk and helping others see things they need to see but may not want to with a focus on taking responsibly for one’s own business. He and his wife, Maureen, started GMW Carolina in 2006.