ENTREPRENEURSHIP / AUG. 14, 2015
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Starting a Small Brewery: What you Need to Know

The craft beer revolution is taking the world by storm. Small microbreweries are popping up all over the globe. The number of craft breweries in the US has gone from eight in 1980, to over 2,300 in 2013. Hundreds more have popped up since and this industry is not slowing down anytime soon.

See AlsoHow to Become a Brewmaster

In fact, the majority of Americans now live within 10 miles of a brewery. For all you passionate home-brewers, you may be wondering if this is the right career move for you. Here are some of the top things you should know before you leap into the business of beer. 

1. Focus on Quality

Before you jump into the business world of brewing, you need to ensure that your beer is a high-quality product. Not only should you create beers that consumers will love, but you also need to be consistent. If you’re an experienced brewer, select your favourite recipes and seek feedback. Your friends won’t mind a weekly tasting. Make sure that you have perfected your recipe(s) before you try to hit the market.

2. Have a Clear Vision

Although your vision will change as time progresses, having a clear vision will help you put your ideas into motion. There will be times when you feel overwhelmed and you’ll be tempted to give up. However, when you have a distinct vision accompanied by goals, you will be able to stay more focused. Concentrate on your goals and you’ll push forward. To keep your vision alive, don’t be afraid to carry around a journal. When ideas pop into your head, write them down! That way, you have all these creative concepts in one place. Go back and reflect and continue to build on these ideas.

3. Create a Detailed Business Plan

Read, read, and read some more. Anything that is going to enhance your knowledge is a bonus. Source surveys, studies, articles, and books. Reach out to others in the industry in order to access beneficial information. Also, research all potential legal aspects of your business. Although your business plan will be never-ending, write a solid 6-month plan to begin. Where will you brew? What will be your cost for raw materials and energy? What are the applicable taxes? Will you require a lawyer? Where will you get your cash flow from? Where will you outsource and sell your beer? These are all the types of questions you need to ask yourself.

4. Understand It's Not all About Drinking and Brewing Beer

If you want to make beer, guess what? You’re going to spend an absurd amount of time cleaning too. In any successful brewery, the day begins and ends with cleaning. There are plenty of parts, tanks, hoses, floors, drains, and kegs to clean on a daily basis. You’ll also need to do a ton of paperwork, specifically within brew logs. It’s critical that you can go back and see what worked and what didn’t. Brewing is a never ending learning process and there’s always room for improvement. You will also want to get detailed spreadsheets regarding costs. Even if you’re organized, it’s in your best interest to hire an accountant. That way, you can spend less time and energy on finances and more time on your business. 

5. Be Social

Within our social world, it’s critical that you nurture relationships with potential consumers and business partners. People like to know the stories behind the beers they drink. Be prepared to provide some transparency regarding your life, brewing process, and evolving concepts. If you would like to market your brand and get to know your customers, you’ll also need to spend some time at social events. Get to know the people that are drinking your beer. Consumers like to put a face to a product, it increases the likelihood that they’ll support you.

6. Have a Hefty Cushion

Based on what most brewers have expressed, whatever you think your brewery will cost you, double it. When it comes to brewing, you can’t be stingy. When profits are made, you’ll want to pour them back into the business so that you’ll always have a comfortable cushion. If possible, start with an additional 30 percent of what your start-up costs will be. This will include your equipment, as you’ll need that extra capital to get you through the first few months. Things will break, labor costs will increase, and you will need that cushion to stay afloat.

7. Legal Issues and Permits May Take Time

The beer industry is highly regulated which can cause a few bumps in the road. It’s important to understand that this may be a lengthy process, so you’ll need to be patient. Don’t get discouraged. Instead, maintain a positive relationship with local professionals and the government, as it will make your life that much easier. At the end of the day, beer is like food and food is one of the most tightly regulated industries. On top of that, you’re dealing with alcohol which creates further responsibility. These are all areas that need to be targeted and handled correctly.

You should also get to know possible zoning regulations, health regulations and codes, permitting for construction, licensing, and any other regulations that may apply in your area. All of this may seem complicated and overwhelming which is why it’s critical to remember, that it takes times. Don’t be surprised if your original timeline doubles or even triples.

8. Plan for Expansion from the Beginning

If your beer is loved by consumers, get ready for expansion. Many brewers find that people simply love their beer too much, especially within this fast growing industry. When you’re in business, always think two steps ahead. Research as you grow so that you can keep up with the demand.

Once again, this is why it’s essential to pour money back into the business. You may need it more rapidly than you’d expect. It’s not uncommon to start with a 3-4 barrel brew-house and suddenly find yourself needing to upgrade to a 20 barrel system. People are thirsty for good beer!

9. Prepare to Be a Mule

In the beginning, you’re going to need to get your product out there. That means that you’ll need to do a lot of the leg work. You’ll need to haul kegs all around, as you grow your business. Many breweries need to reach out to various locations if they want their beer on tap. Others stay strictly within their brewery, filling growlers on-site. When you’re self-distributing, be prepared to work on your salesman skills. This is already becoming a crowded market, what do you have to offer that’s different? Don’t get discouraged if you get rejected, it won’t be the last time. Keep at it, stand behind your product, and get out there. If you become too busy to sell and distribute, you can always find a distributor that fits your plan in the future.

See AlsoHow to Create the One-Page Business Plan 

When it all boils down, if you want to start a brewery, you’ll need to view it as a business. In order to maintain a successful business, you’ll need to raise enough money, hire the right people, take the proper legal steps, and more importantly, sell the right beer.

If you are currently a home-brewer or someone with the right contacts and passion, this could be a bold and rewarding career move. This industry is in need of motivated and creative individuals who love beer, but more importantly love the response they get from the creations they brew. For more information, contact the Brewers Association, as well as local brewers in your area.

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