Developing a Mission Statement

 Developing a Mission Statement

There are two ways to react when you hear the words MISSION STATEMENT…..the first is to do what I did and become an African history major. If the temptation of retail management is not alluring, you will be forced to think about developing a mission statement. Please do not steal from Tom Cruise and entitle your mission statement “The Things We Think and Do Not Say.” Let’s say it together now, “SHOW ME THE MONEY.” Now that we have that out of our system, we can move on. You MUST not only think about your mission statement, but you must understand what a mission statement is and detail it in writing. While this might sound easy enough, “I want pretty cookies; I am going to kill myself trying to enroll in Cupcake Wars and figure out how Clorox Bleach can be used as their mystery ingredient; I want to feed one person at a time and make the world a better place; and so on.” Please keep in mind that you are not in a beauty pageant and you are no longer meeting at the YMCA for your “baking hobby,” but you have determined that you have a business. This is “your diet starts today.” Please keep in mind when reading this posting that I am not going to use the depth necessary that you will have to use when you actually compose your business plan. Additionally, just because you started without a business plan, does not mean that you don’t need to write one now. Without a business plan, you will have no way to evaluate the day to day opportunities for potential business that knock on your door. The first question is always “where do I begin?” There are three questions that are essential to all business plans.

Let’s start with the three key questions. 1) What are the opportunities or needs that exist that you need to address? (the purpose of your venture). 2) What are you doing to address these needs? (the business of the venture); and 3) What principles or beliefs guide your work? (the values of the venture). Your purpose is as simple as it sounds. Everything else is in place to help you accomplish your mission. The clarity that you use here is important, because all your goals, actions you take and the way you spend your time will be guided by this statement. For those of you who are still awake, we can now begin.

Answering the following questions will help you when developing a mission statement for your business:

Number 1:

1) What are the opportunities or needs that you exist to address. You need to focus on the fact that baking is an opportunity. A niche has been created through television shows such as “Ace of Cakes,” “Cupcake Wars, etc.” for custom cakes, cupcakes and cookies. The reality is that this niche started long before our favorite television show, as cakes became more and more elegant. We have long since graduated from my personal favorite, “the yellow iced smiley faced cookie with the brown features.” Now that you have identified the opportunity: that there is a potential market for customized cakes and cookies. Are you done? No. You will need to identify what is the scope of the opportunity? Is there an opportunity in town for a local brick and mortar bakery and do you want to fill it? Is there an opportunity for a wholesaler? Do I want to be a wholesaler?  Does your state allow for a home based bakery and would this fit your situation better? There are additional factors that we are not going to cover such as potential staffing concerns, insurance and other factors that should be considered if you are going to open a facility. There are many other steps that you would have to take to properly identify what the opportunity is as you are writing a business plan. You may also engage in a demographic study to determine the saturation point based upon demographics and market participants, but this is also outside the scope of both this post as well as a standard business plan. You can now look to how you are going to address these needs. Are you going to limit your reach locally or nationally?

Number 2:

2) What are you doing to address these needs? There are obvious steps that many have taken.
You can incorporate or organize my business using whatever structure is recommended by my attorney, my accountant, or the check-out girl at the local supermarket. You will go out and have business cards printed. Here is where it gets tricky, “do you pay for a website or utilize Facebook and social media?” I would recommend a website. If you are truly trying to launch a business, you need a landing page. It is difficult to find businesses through web based searches without a landing page. Also, as you engage in social media to get word of your endeavor out, you want to have a centralized page that links to all of your social media. There are always local opportunities that will present themselves for advertising. The caveat here would be whether you are going to be a brick and mortar store or a home based business utilizing the internet. If you are a local brick and mortar store, local advertising will probably have more value than if you are a home based business. Social media is a key and many people outsource their social media, but I cannot stress enough that if you don’t learn every step of your business, even the steps you have relegated to employees or third parties, your business will fail. A business owner needs to know every aspect of their business. You will need to learn unit pricing for ingredients and whether it is more cost effective to buy locally or online. You will need to assess labor cost, including your own, and determine the cost of goods sold. You will have to determine your profit margin and what you need to make on each good sold. You need to be cognizant of what you are doing to address the opportunity with your business, while keeping in mind that if you are not making any money “YOU WERE WRONG. THERE WAS NO OPPORTUNITY IN YOUR MARKET.” If you have determined that there is not only an opportunity, but there is a way to address the opportunity in terms of creating a business, you can now move on to step three.

Number 3:

3) What principles or beliefs guide your work? With the proliferation of the internet, people can shop online for baked goods and have them sent directly to your home. Is this enough? No. You now have to identify specifics such as “will I use only organics, will I be known as a local sourcer of ingredients, am I going to focus on local opportunities or national, and so forth.” This is where your values will help you determine not only the potential opportunity, but whether it matches who you are. Please do not misunderstand, your values will not control every aspect of your business, but it will establish who you are as a business. You have to keep to your overall principles not only in terms of how you run your business but also in evaluating potential clients or opportunities in the course and scope of your daily operations. If you have identified that you want to be a niche bakery, don’t buy out the local bakery who operates in a ten thousand square foot space just because it is a cash cow and will put you on the map. If you are not a wholesaler, don’t take the opportunity to be the wholesaler for the local supermarket chain. YOU MUST STICK to your principles. You might as why is this important? I would advise you to look at several companies that are no longer in business because they changed their core principles, such as Circuit City.

As I stated in the beginning, this posting is not to be an exhaustive exercise in how to write a business plan as much as identifying the three key questions to get you started on your way. If you care enough about starting a business, you have to care enough to protect your investment of time, money and energy. This starts with a business plan. If this is not for you, join me with a liberal arts degree and we can co-manage a retail store together.

Did you miss the first blog post? No worries. Here is the link: Building Block Number 1

Have questions? Feel free to leave a blog comment. My husband would love to help answer your questions about building a solid foundation for your business.

developing a mission statement

Starting a Cookie Business

Starting a Cookie Business

Have you been thinking about starting a cookie business? Do you have cookie creations which started as a hobby and then grew into people asking you to make them for their parties? Your love for making cookies which started as a hobby has now morphed into a cookie business. Or has it? Are you struggling to navigate past being a hobby baker to having a cookie business? Do you feel lost trying to figure out the laws?  Have you even defined if you truly want to own a business? My husband and I are going to help you jump through those hurdles in our blog series: Cookie Business 101. While I graduated with a Degree in Organizational Leadership in Business, I sadly threw much of what I knew out the window when I started my cookie business.  It wasn’t until my husband threatened to call the labor board for paying myself under minimum wage. He straight up said, “you have a hobby, you don’t have a business.” Businesses have to pay at least minimum wage, or they get fined by the labor board.  Take your degree and your knowledge and apply it. If not, I am shutting you down. Those who know our family, know my husband was not kidding.  My first response was “if I price my cookies appropriately, no one will buy them.” My husband’s response, “then you don’t have a business.”

farmhouse kitchen

I walked away aggravated, but I knew he was right. We live in a Pinterest world that often tells you to follow your dreams and be passionate. I quickly learned that passion and dreams are not enough to sustain a business over time. Opening a business, even if it is a home based business, is a serious venture. Are you willing to ask yourself the tough questions? Are you willing to let someone else ask them? Over the next couple of weeks you will get to know my brilliant, sarcastic, attorney husband, who happens to be one lab accident away from becoming a super villain. He is going to share his perspective on business and cookies.  Two years ago, I was ready to open a store front. As my husband and I were looking for property, he asked me some probing questions. Once again, I was aggravated and he was right. This happens often. I realized while my passion and dreams of a store front were great, I was not ready to take that leap after contemplating his questions.

My husband’s name is Dann. He is going to take over now. He has successfully started, run and sold three different companies.  He is now currently the Director of Legal and Compliance for a company in Phoenix. He is a wealth of knowledge. Feel free to ask questions. He loves to help.

Many times in business, one looks to the internet to see what other people in their industry are charging.  This is not uncommon if one opens a local hardware store and surveys Wal-Mart, Home Depot, and other supply shops to determine if their prices are in line with their competitors.  However, the small business owner is often left to bemoan that they cannot truly compete on an equal playing field with these businesses as they do not have the distribution lines to buy in the same bulk nor do they have the pull with distributors to actually negotiate their prices.  However, in the field of “home bakeries” we are left to compete not only with Costco, the local supermarket, the brick and mortar bakeries, but also hobbyists.

farmhouse kitchen

I guess the first question you have to ask yourself is “am I a hobbyist?”  Please note that I will not be addressing competing against “competitors” in this blog, but I will touch on this in the next one.  This blog is devoted to “the hobbyist.”  I have nothing against the “hobbyist,” but it is time to ask you to come out of the closet.  The closet is not a scary place, and many of the “hobbyists” don’t even know they are in the closet.  I pause a moment to laugh at this as the room is dark, the light is off, and you should be claustrophobic at this point; this is why I am snickering.  For most snickering is an insult, but don’t be alarmed as my wife states that I am laugh deficient and this is the best that I can do.

A hobbyist has no business plan, they have not determined the cost of goods, they don’t know who their target customer is, and they don’t even notice the creepy music playing next to the stale cookies at the market selling 12 per box for $.99.  If you have never heard the creepy music as the lights glisten off the plastic cookie casing, you are usually the first casualty in the horror movie.  Don’t be alarmed over ninety percent of the teenagers in the movie are killed, and if your contract does not contain a clause for a multi-picture arc, you most likely are one of the first casualties in the horror film titled “These Cookies will Kill You due to Chemicals as well as Pricing.”  Yes, I agree the name of the picture is not catchy but look how many people have fallen prey to this.

The plastic cookie casing is not your competitor.  However, you are not only letting the creepy plastic shell determine your pricing, but your customer as well.  You have priced yourself below market value not only in terms of the cost of goods, but you have not set a wage for your hourly work.  Your clients often ask you vague questions such as “I am throwing a “insert random theme” party here and I have no idea what type of cookies I want but they have to be “amazing, move around without a visible motor and be no more than the cost of the expire cookies found on the “Day-O Bread Rack.”  You are so determined to please said customer that may never use you again or recommend you, that it has not even occurred to you that you are now envying the wages of workers in third world countries.  You often are tucking not only your kids in bed, but your husband as well.  I would say that you would wake up from this nightmare in a cold sweat and realize it is only a dream, but alas, tomorrow starts a fresh new day losing money and working for less than what McDonalds’ cashiers were making in the 1980s.  I have good news for you my friend, you have a hobby.  There is good news, you have choices.  1) You can start treating this like a hobby and not let this consume your life; just think there is room next to your wooden tennis racket, your lace-up ice skates and the bowling ball in the closet as well, 2) You can focus on how to turn this hobby into a business, or 3) You can wait several years until you hit rock bottom and then join a support group.  For the rest of you who are running a business, in the next post I will address who your competition is and how you can react and adapt.

Cookie Business

 

Cookie Business 101 Topics to Come:

  • Why Business Plans are important even if you are a small home based business
  • How to define your mission
  • What is a SWOT Analysis and why it matters?
  • How to properly price your products?
  • How to determine if a “opportunity” is one you should go after or are you better to walk away?