This is Part 4 and final piece of our Growth Guidance Pro Tips series.
And we’re here to discuss risk.
What can we do to improve our decision-making in order to minimize risk while maximizing profitability and long-term growth potential?
It’s not as sexy as talking about more profits, more distribution, more growth…
But in the “real world” it’s the risk-minimization quality of these decisions that will end up ensuring that those things actually get achieved.
From Charlie Munger:
“Invert, always invert: Turn a situation or problem upside down. Look at it backward. What happens if all our plans go wrong? Where don’t we want to go, and how do you get there? Instead of looking for success, make a list of how to fail instead — through sloth, envy, resentment, self-pity, entitlement, all the mental habits of self-defeat. Avoid these qualities and you will succeed. Tell me where I’m going to die, that is, so I don’t go there.”
Amateurs tell themselves they can just focus on the fun stuff. That they should be “taking risks” and the universe will reward them for their so-called courage.
Professionals know that the real courage lies in taking your medicine and addressing risk as you make your forward progress. They’re the hard-working grown-ups in the room who simultaneously push themselves deep into discomfort, while maintaining the wherewithal to buy life insurance.
So as we wrap up the series, our aim is to at least point out the potholes.
And then you can decide whether you want to avoid them.
Pro Tip 16: Start Investing In Humans
Here’s an unpopular idea:
Stop investing in equipment.
Start investing in humans.
In fact, a highly skilled QA/QC member is probably where your head needs to be right now.
Given all the options these days, there’s little room for quality control errors. And any QA/QC issues will lower the confidence of accounts and distributors to keep your product stocked.
Once you have the right person handling QA/QC, keep it rolling and assemble the most diverse brewing team you can afford.
I call this the Option Forward Brewing Team.
Bonus: Now you can brew all sorts of tasty treats well!
That’s a winning combination.
Pro Tip 17: Diversify Your Wholesale
One style should not exceed 30% of overall wholesale sales.
One SKU should not exceed 20% of overall sales.
Example: Is your hazy pale ale generating 50% of your wholesale sales?
How do you balance this out with other styles you have?
Another example: Does the package offering of your hazy pale ale out-sell draught 2:1?
It is very easy to get caught up in the package-heavy game, and I recommend you balance it.
Once a style or SKU exceeds these amounts they it becomes a risk to the brewery.
P.S. The risk goes down with a bad-ass QA/QC person.
Pro Tip 18: Sell Every Ounce
Beer is a consumer goods product.
Consumer goods are sold, not purchased.
I want you to think about the customer experience.
Everything from label design, to marketing, to pricing.
Pro breweries sell their products, and operate with the mindset that every ounce must be sold, not purchased.
This isn’t a matter of being pushy or “selling out.”
It’s a matter of removing luck from the equation and reducing the risk of your product failing to reach the hands of consumers simply because they didn’t receive the nudge they needed to see it, try it, and enjoy it.
PSA: Some joker once taught me the phrase, “If it’s cold, it’s sold!”
…I don’t have time for jokers.
Pro Tip 19: Outsource Your Weaknesses
Amateurs have the hubris to believe they can be good at everything. It’s just that they “haven’t tried to” yet.
Pros are much more objective. They know what they’re good at. They know what they’re not.
They then ruthlessly outsource their weak points so that they can allow their strengths to shine through and amplify their results.
Identify your weaknesses.
Marketing, Accounting, Legal, QA/QC…
Any function where you are “faking it,” it’s time to stop.
Imagine instead, working with a group of experts, who are reliable, accurate, and brilliant at what they do.
And if you’ve achieved any modicum of success so far, it means you can afford to systematically eliminate those risks and buy back your time.
Then focus on what got you here in the first place: quality liquid and sales.
The only thing that’s stopping you now?
The only way to overcome it?
Decide to turn pro.
Pro Tip 20: The Three P’s
In the end, the biggest risk to your brewery isn’t financial, operational, or something within the craft market at large.
Instead it’s something more difficult to measure:
More specifically, your perspective on the “magical trifecta” of The Three P’s:
People are the lifeline of your brewery. Take care of them and they will take care of you. Give them a reason to show up and do their best work.
Product is the liquid. This is the legacy of your brewery. This is how people will remember what you built.
Process is the discipline to do it over and over. Process can be applied to every part of your brewery. We don’t have to perfect it the first time, but we learn from our mistakes and agree on a better way until we nail it.
Lose perspective and poor decisions get made.
And when this happens within any of The Three P’s you’re at risk.
When all three happen in concert.
And you, your team, and your business are in alignment…
You’re well on your way to turning pro.
Next Steps Towards Growth
This is the last of the Pro Tips series…
And I hope it’s been valuable, eye-opening, or at the very least somewhat entertaining.
To wrap it on up, we’re going to bring it back to Pressfield to close it out, this time from The War of Art.
A PROFESSIONAL SEEKS ORDER
The professional… he is on a mission. He will not tolerate disorder. He eliminates chaos from his world in order to banish it from his mind.
There may be gremlins hiding in your books, obsolete inventory cluttering your warehouse, conflicts within your team simmering beneath the surface.
When you partner with us, we bring order along with us.
We clean up your books, identify problems, and help you surface and solve those uncomfortable issues lurking in the back of your mind.
A PROFESSIONAL DEDICATES HIMSELF TO MASTERING TECHNIQUE
The professional respects his craft. He does not consider himself superior to it. He recognizes the contributions of those who have gone before him. He apprentices himself to them.
The professional dedicates himself to mastering technique not because he believes technique is a substitute for inspiration but because he wants to be in possession of the full arsenal of skills when inspiration does come.
You’re the brewmaster, the marketer, the operational wizard.
That’s the technique you need to master to set yourself apart.
We help you achieve financial mastery. We teach, we inform, but ultimately we handle those things you wish you didn’t have to deal with. Those things that we (weirdly) love.
Specialized experts working in concert will always outperform generalists trying to master it all.
A PROFESSIONAL DOES NOT HESITATE TO ASK FOR HELP
Tiger Woods is the consummate professional. It would never occur to him, as it would to an amateur, that he knows everything, or can figure everything out on his own. On the contrary, he seeks out the most knowledgeable teacher and listens with both ears. The student of the game knows that the levels of revelation that can unfold in golf, as in any art, art inexhaustible.
We’ve been students of “the game” in craft for almost a decade. We still are.
But now, having seen the nitty-gritty, evolving, data-rich environment of over a hundred individual breweries… we’re now in the position to act as the knowledgeable teacher as well.
Are you a student of the game too?
A PROFESSIONAL RECOGNIZES HER LIMITATIONS
She gets an agent, she gets a lawyer, she gets an accountant. She knows she can only be a professional at one thing. She brings in other pros and treats them with respect.
We’re professionals at guiding breweries towards profitability.
And in doing so, we enable you to be the professional you know you can be at what you do best:
Creating culture, brewing amazing product, and driving the industry forward.
So the only question left is:
Are you ready to turn pro?
We’re with you each step of the way.