Once I opened a pretzel store in China.  No, seriously.  Well, sort of.

During the early years in my career I was spending a lot of time in China, focusing on learning the culture and growing my trading company.  There was something interesting I noticed about the Chinese – they love American food chains.  KFC, McDonalds, PizzaHut, HaagenDaaz (yes, its American).  The eating establishments are considered a luxury, whereas in the states it is fast food.  When you go to a KFC, you will see couples on a date.  There are servers who bring you your food, and people are not rushing to stuff their faces to continue on with their day.

If you look at any mass market product in China, if you can get it to catch on, the opportunity is immense.  I was staying in Shenzhen, China at the time.  The city was considered small, yet had a population of 25,000,000 people.  Rent was cheap, as they over developed.  I knew that if I could bring an American tradition to China which would catch on, I could easily franchise the model out.  BTW – Franchising is a huge business in China.

So why pretzels?  It hadn’t been done.  There were dessert treats similar to Churros, but not pretzels.  My theory was simple.  Pretzels can be made quickly.  Overstock can be kept under heat lamps for several hours.  Excess dough could be used the following day.  There was a lot of room for errors, or what I call a learning curve.

I had it all figured out, my pretzel shop was going to also offer soft serve ice cream.  Chinese children love soft serve ice cream.  Many McDonalds have a street side window attached to it that specializes solely in soft serve ice cream.  I remember at one point counting hundreds of ice cream cones in a matter of an hour being served.

I picked out the perfect spot to start my pretzel shop.  The foot traffic was incredible, and it was situated nearby a school.  I had the marketing strategy all figured out.  I was going to incorporate 50’s style US marketing – cute girls on roller skates handing out samples, a Juke Box playing the Chinese kids perception of an American classic (like the back street boys) – the works.

There was one issue at that point – I had no idea how to make pretzels.  I called on a friend of mine who was a chef at a local restaurant that catered towards westerners.  I purchased a ‘Make it yourself’ kit from Auntie Annes and had it shipped to China.  We tried numerous times and simply couldn’t get it right.  I thought, it really can’t be this difficult.  We finally figured it out – the water wasn’t suitable.  We tried making the pretzels with Evian. Boom, it worked!

In the end, I couldn’t get the product pricing low enough to make it feasible for mass market.  I also realized the ice cream market was working on such slim margins, that they were just using it as a branding tool to draw customers in.  While it never worked out for my pretzel store, it was a really good lesson for me.

You need to have every piece of the puzzle work to make a successful business.  I had a perfect marketing plan, location and execution strategy.  There are many people who are quick to jump into a business without fully evaluating every aspect of the business.  When I first started my business, I would have said a business plan is a waste of time.  After countless failures (and successes), I now understand the importance.

I always refer to the saying “Measure twice, cut once”.  In business, your planning and strategy is as important as your execution.  Spend the time to address every component of your business model before jumping in head first.  While I call it a pretzel fail, it could have been a pretzel disaster.

-Mike