Richard Reed on his ‘kick-arse’ business plan for Innocent Drinks [Video]
"We knew what we wanted to do, but not how to do it," says the co-founder of Innocent
Despite having an “absolute kick-arse business plan” for smoothie brand Innocent Drinks, co-founder Richard Reed is quick to point out that the founding team had some lucky breaks when starting up.
Set up with management accountants Adam Balon and Jon Wright; not some “crazy juice guys”, Reed asserts that Innocent boasted a business plan of “great beauty” and credits it as the thing that got them interviews and opened doors with investors.
Yet much of the juice company’s plan relied on pretending that they “had it covered” with a huge disparity between what they knew they wanted to do and what they knew how to do.
Reed divulges that at a pitching event in front of a room of 50 investors, the Innocent founders were telling the audience that Innocent “was a great business opportunity and were handing out smoothies for them to try”. However, the Innocent trio’s pitch wasn’t as honest as they made out and the smoothies they were passing out had in fact been purchased from a shop that morning and poured into their own bottles as they “still didn’t know how make them”!
Reed’s example is one that will likely ring true with many budding start-ups as he explains that Innocent was “trading on what they said they were capable of doing”. Although they knew their market, economics and strategy, the drinks entrepreneurs didn’t have abrand and didn’t have a way of manufacturing. An issue which Reed regards as “real chicken and egg stuff” as “you’re trying to raise the money but you haven’t got the way to manufacture and you can’t start manufacturing until you’ve got the money”.
Reeds final points on what writing a business plan and creating a successful company requires? “A huge degree of luck, determination, being smart, and making good decisions”.