Wednesday April 30, 2014

Today I went through and actually fully read a business plan from finish to start (before I had been skipping through to parts that I needed or skimming).  So the plan that I read is from 2001 and it is titled, "Small-Scale Oyster Farming for Chesapeake Watermen: A Sustainable Business Marketing Plan."  There were some thing that I liked about it that I want to adapt and convert for my plan, but there were also some parts that I really didn't like. 

In no particular order, here are the things I didn't like.  One of the first things I noticed about this business plan is that it lacks visual aids (tables, graphs, etc).  The majority of the plan is words, which made it daunting to read.  Not only that, but I found the visuals lacking.  The first table breaks down the start up costs, which is a good place to start.  However the detail is lacking and where there is detail, it seems to be irrelevant.  For example, they have an entire breakdown of the shipping supplies, but don’t even mention the breakdown of the culture floating system.  The next thing I noticed was that the watermen were planning to sell their oysters via Internet retail and wholesale websites.  After reading the breakdown of their distribution setup and their plan to sell online, I realized that it did not sound very feasible, especially since their oysters had no recognition, since they were just starting.  Finally, I found their financial models really terrible.  It only contains 8 tables that show the revenues and expenses for certain market prices that oysters fetch and percent mortality.  (See example below.)  The worst part about it all is that it is missing a lot of relevant information, such as the labor costs of running the business, the taxes involved (Social Security, Medicare, etc.), and worker’s compensation.  To me this indicates a serious lack of proper research and if I were a bank or an investor, I would think twice before making an offer.

Now here are some things that I did like.  I really like that the business in question had a story behind it.  I think that it gave the business a competitive edge, since it makes them more relatable.  Another part I like was the section that covered the risks associated with the product.  It was nice to have the description, because I haven’t considered this much and I found it informative.  I also think that it would be really important from the standpoint of a potential investor.  The final part I liked was the foreign competition.  I actually hadn’t considered this part either, but I discovered that Canada is a pretty large competitor in the half shell market.