Say you enjoy drinking beer. You not only adore beer, but you also want to brew your own. Perhaps you’ve brewed beer at home in the past and are now ready to offer it more widely. Why not attempt to open a brewery? It makes sense that beginning a brewery is similar to opening a bar or pub.
Breweries are much more complicated than bars and pubs, despite the fact that they’re sometimes grouped along with them because they function as both a front-end bar (and possibly restaurant) and an alcohol manufacturer/supplier. There are several challenges and difficulties involved with brewing beer to sell on-site that go much beyond the typical problems in the restaurant business.
In this thorough guide, we’ve outlined all the crucial factors to take into account and the actions you should take if you want to start your own taproom or production facility in 2022.
Step 1: Pick a business strategy
If you don’t know where you’re going, you can’t get there. What do you see when you picture starting your own craft beer company?
Are you offering your distinctive beers to wholesalers for local distribution? Maybe you own a brewery where you provide mouthwatering food along with fine artisan brews. Or do you run a microbrewery with a tap room?
You must first comprehend the end goal you’re going for and build and polish your business idea before you can begin to truly plan your own craft beer business. The first step in that route is selecting your business model.
It’s significant to remember that each nation has its own alcohol regulations. You must also discover the laws in your state in order to fully comprehend your possibilities for doing business.
Read up on the legislation in your state. Microbreweries in one state could be subject to substantially different regulations than those in the state over.
It’s time to become more detailed after you’ve determined which general business structure is best for you. We advise you to create a business plan. Your objectives and strategy for achieving them should be outlined here.
As you embark on the journey of owning and operating your own firm, a business plan will act as your roadmap. Additionally, keep in mind that business plans are not rigid (you should be prepared for them to evolve). However, they provide a crucial foundation for you as you launch your firm.
Step 2: Establish your brand
Your brand development will be a factor in every choice you make for your brewery.
We’ve written extensively on some of the essential elements to creating a distinctive brand because this question is so fundamental. Check out a few of the resources listed below:
- The Best Ways to Build Your Brand and Brewery Logo – Making amazing beer is crucial, but without strong branding that captures the essence of your brewery, no one will know who you are. You need a distinctive viewpoint because there are over 9,000 breweries operating in the US. You won’t be able to stand out with just your beer.
- How to Choose the Best Craft Beer Name: Naming your beer is a creative method to represent your company and its goods. Names help you keep true to your brand while also making you more approachable to the customer.
- What Makes a Great Craft Beer Label – Even if you make the world’s best hazy IPA, your beer won’t stand out on the market if the label doesn’t appeal to consumers. or perhaps even reach the shelf. Simply said, whether or not someone purchases your beer depends on the label.
- Top Design Tips for Restaurants and Breweries – Conceptualizing your space can help you represent your brand and continue to visually tell the tale of your brewery.
You need to determine who you are, which is the primary message behind each of the aforementioned points. What does your business stand for? What is your narrative? Are you vibrant, entertaining, and loud? Or are you a little more sober, considerate, and conventional?
Despite how difficult this process can be, answering these questions is really important. The answers will eventually inform your overall business strategy.
Step 3: Locating a place
The site that will work best for your brewery relies on the type of enterprise you plan to operate.
Finding a suitable structure for production was more important when choosing a location than having a fantastic taproom. High clearance, loading docks, plenty of electricity, and floor drains were all required in the area. Although that differs significantly from how most people operate breweries, it wasn’t about location, location, location.
Matching the place to your aim is the most crucial factor in this situation.
Research the area where you wish to open. Take a peek at the region both during the day and at night. How crowded is it? Is it simple to get to? Is it near a commercial district? Are there any local baseball fields?
As you study each space, bear the following points in mind:
- Is it simple to load and unload goods and supplies at the building?
- Is there space on-site to store goods?
- Is your rent or mortgage cheap enough to cover any necessary repair costs while still staying within your means?
- If you intend to serve onsite visitors, is the neighbourhood pedestrian-friendly and secure?
- Is there space for visitors to park (if necessary)?
- Is there enough room in the building to increase the capacity of your brewing system in a few years, or would you have to move?
You must conduct demographic due diligence.
When you’ve found the ideal location, you may start thinking about furnishing the interior.
Step 4: Calculate the numbers
It’s crucial to comprehend the finances while launching a new firm.
Understanding the figures is even more crucial for craft beer firms because they need to make a sizable initial investment in brewing supplies and equipment.
These expenses for a craft beer brewery will consist of:
- Fees for licenses, bonds, and permits
- rent and prepayment for your actual brewing space
- premiums for insurance
- Brewing gear and bottling or canning gear
- your company’s logo (logo, label or can designs, and website)
- ingredients needed to make beer
- Costs associated with essential infrastructures, such as phone and internet service…
- cleaning products
- The price of marketing and advertising
- remuneration for you and your brewing team
Brewpubs require all the additional start-up expenses associated with restaurants, such as:
- Tablecloths, flatware, and dishes
- kitchen utensils and equipment
- items needed to make your menu
- The price of printing menus
- Pay for waiters, bussers, and cooks
Compare that amount with the money you actually have after learning how much it will truly cost to get you started. Plan how you will make up any difference after that. It’s wonderful that you have savings. However, be ready to obtain a small business loan.
When it comes to your finances, keep the whole picture in mind. Nobody likes surprises, and the worst surprises are the ones that cost money. Plan your budget accordingly to account for all known expenses and provide room for “unknown unknowns” as well.
Step 5: Selecting the Correct Brewing Equipment
The kind of equipment you purchase will depend on the kinds of beer you want to brew, how much you want to make annually, and your available space.
We could definitely discuss equipment for the entire piece. But to make things straightforward, here are the essential components:
- Hash browns
- Steam boilers
- lines for bottling and canning, or you might use mobile canning.
- Cooling mechanisms
- Storage tanks
- Cleaning materials
- A draft system
- Waste treatment systems
- Beer labellers
Of course, the size, amount, and variety of equipment you’ll need will depend on a few variables:
The size and quantity of mash tuns, fermenters, bright tanks, and other pieces of equipment that you purchase will depend on the available square footage.
What kind of beer are you producing? Do you operate a larger-only brewery? Will you produce a wide range of beers? Are you concentrating on symbiotic fermentation? Each may need its own unique sets of tools or supplies.
How many barrels of beer do you anticipate producing annually? The size and capacity of the equipment you buy will depend on this.
What’s your brand? New, used, or a particular business you’d want to cooperate with?
Step 6: Legalizing it
Despite being included later in the game, this portion is one of the most crucial. Your company must abide by numerous local, state, and federal regulations and legislation in the United States.
Generally speaking, a few fundamental licenses and permits are required. Please keep in mind as you read this that this is not legal advice since we are not attorneys.
A federal permit is known as a “federal brewer’s permit” enables you to brew beer and run a restaurant.
- State liquor license – This is necessary in order for you to offer alcoholic beverages to customers. Each state has its own legislation because it is distributed at the state level. Consult the ABC (Alcohol Beverage Control) Board to learn more about the legislation in your area.
- A brewer’s bond– This bond is necessary to guarantee that your brewery will pay all federal, state, and local taxes.
- Operating contract– The LLC’s operating agreement specifies its rules and regulations.
- Insurance – There is a lot to discuss here, from liability to property and casualty. You must ensure that you have coverage everywhere.
- Retailer’s License – This license is necessary if you want to sell merchandise in addition to alcohol.
A wise piece of advice to take into account? Ask if you’re unsure.
Last step: forecasts for sales
You’ll need to make some sales forecasts because you won’t be allowed to throw the doors open without a solid plan to keep the lights on.
When launching a business, people often forget to consider their cash flow, despite the advice to prepare for double which is vital because you never know what it will be at first.
It’s a bit of a living, breathing exercise to calculate sales. Starting out, you won’t be completely correct. As you begin to comprehend your market, you’ll need to continuously adjust these numbers to account for changes.
However, in general, you’ll utilize these figures to aid in obtaining financing, so they must be as accurate as possible given what is currently known.
Bring in someone who enjoys crunching numbers if math isn’t your thing. You can learn how to accurately anticipate your sales with the aid of brewery consultants and accountants. Hiring an expert in this situation is not shameful. In actuality, it’s most likely the responsible course of action. You can avoid frequent difficulties faced by new brewery owners by working with knowledgeable advisors and accountants who have firsthand knowledge.