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Old 07-21-2012, 08:11 AM   #51
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Forgot one last item but remembered after reading about Gordie. Background job. I work 40 hours in three days doing over nights. Gives me 4 days off to brew and numerous hours over night on the internet to do research and work on recipes. The 9-5 is probably not ideal to trying to brew on the side and start a brand.

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Old 07-21-2012, 05:47 PM   #52
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Honestly I think that without a taproom the nano idea has very limited viability. I follow Healdsburg pretty closely on FB and it looks like he is only in two bars on a regular basis. I am guessing that with a 1 bbl system that is about what you could support. A tap room is where the money is being made. Once I realized that I have backed down from starting a nano in the immediate future. It just doesn't make financial sense to spend the time/money making beer but let someone else make the "big" money selling pints to the consumer.
In the meantime though I would suggest just getting your name and beer out there. I give away a lot of beer for other people's functions. It gets me a lot of positive exposure!! People just love to hear about some guy brewing really good beer out of his garage. I also have t-shirts that I sell to help cover the costs of the beer. I tell people that I can't legally sell beer but if you do like the beer to please consider buying a t-shirt. It's a win/win/win!! People get free beer, I sell some shirts that pay for at least some of my costs, and I get the exposure when people wear their shirts around town.

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Old 07-21-2012, 06:21 PM   #53
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I would 100% agree with the last comment on needing a tap room/tasting room. You will find it may be your only business until your name gets out there and are established as well as a tasting room will actually pay for your rent/lease on the building usually if done right. the profit margin on selling your own beer by the pint is much greater than selling it by the keg too. Just to give you a heads up, a bottom level keg washing system starts around 8 to 10 thousand so take that into consideration.

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Old 07-21-2012, 11:55 PM   #54
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In maryland a brewery license costs 4k alone, and has to be renued yearly. Look into a business plan, price things out, see if you can do it. In my opinion "nano brewing" is a waste of time and money, you will never be able to produce enough volume to become profitable. 10k might be close to starting a homebrew store though.

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Old 07-22-2012, 06:57 AM   #55
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So I probably shouldn't share this but after a few IIPA's, what the hell. In Oregon, here is a break down of the costs. Insurance will run between $1,500 to $3000 a year approx., bonding is only about $200. For Workers comp, you will need to pay $3.60 per $100.00 payroll on a brewer, $.80 per $100.00 for outside sales guy (self distribution), $1.70 per $100 for tap room. No application fee for TTB, OLCC is $250.00/year for license code BP or $500/year for license code BRW & BRWNC plus and additional $2.60 per server. Oregon State Business license will run at different costs depending on how you register your business (ie: LLC, corporation, etc.) Keep on mind, on top of this you will need to pay your rent/lease on the building, renovation costs, costs to meet health code regulations, etc. Now once you are up and running you need to pay the man which means federal and state. State taxes are approximately $2.60 per barrel. I have lost the information on federal but it is easily found if you research it. So just to give you an idea, your start up costs not including equipment is easily going to surpass the 10K range. I will repeat what alot of guys have said already. If you want to be successful, get your business plan done and go from there. I am probably on the 20th revision to mine already just to get financials in order. The preparation work will take just as long and be just as hard as it will once you get things physically going. I guess if I was to give any advice it is to make dang sure this is something you really want to do for a living (meaning eat, sleep, breathe beer) before you do it. If you don't want the headaches, just make great beer at home and share with friends.

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Old 07-22-2012, 08:14 AM   #56
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Thought I would post a little write up from Andrew.
Enjoy the read.....

Cheers
Jay

I've operated Parish Brewing Co. for over 2 years now, furiously brewing a nano-amount of beer. I get several emails every week from aspiring nano-brewers from all over the country and they all have the same questions about my experiences, my custom equipment, and other general info about starting a tiny commercial brewery. If the probrewer community would humor me, I'd like to use this as a place to get some FAQs documented since I cannot answer all of the emails I get with the full respect and well thought-out answers they deserve. Hopefully this can help some of you daydreaming out there get some answers. Some of these answers may not be what you want to hear, but they are based in fact and my actual experience. I know I would have appreciated some of this info before I embarked upon the nanobrewery path.

1.) Nanobreweries are not profitable. Well, at least if you have to sell at wholesale. The only way a nano can be in the black is if you can sell most or all of your production at full retail price. Even then the return will not justify spending the capital required to get it going. A nano will never, ever make enough profit to pay for organic growth of the brewery. Period.
1)(b) On the other hand, a nano is a great vehicle to get the investment needed to finance a viable craft brewery. In my opinion, that is the only rational reason to go through all of the trouble to build and operate a nano. If you do not have a plan to finance a viable larger operation, don't build a nano. The nano can be used to show real revenue and cost structure in your market, and can be extrapolated to any project size from there.

2.) You can use cheap equipment, like plastic fermenters, and make great beer. They will not last very long, and you have to be seriously anal-retentive about taking care of them and sanitization, but they work. I used some stainless drums found on craigslist for the brewhouse, etc. There are some creative ways to make brewing equipment in the 50 to 150 gal size range and don't be afraid to try something new. I mean, some of the finest brews in the world are fermented in a wood container. Think about that the next time you drool over that cherry, stainless jacketed conical fermenter that probably costs more than my entire brewhouse and cellar combined. Also, most of the money you will spend getting the nano going will not be on brewing equipment. The cost of kegs, walk-in cooler, operating capital, etc will all be likely more than 50% of your total startup cost.

3.) Save your money for another year or two and buy something bigger. Seriously, this is the best advice I can give. If your beer is halfway decent, you will sell way more than you can ever produce on a nano system. You will bust ass like you've never busted ass before and it will still not be anywhere close to being enough beer. Trust me. If your beer is good you will need more than a nano. If your beer isn't good, you probably wouldn't be reading this. Simply put a nano produces a painfully small amount of beer. Save your money for another year or two, get something at least bigger than 7 bbl brew length, and then send me a case of your finest when you realize I was right.

4.) Permitting is a bitch. There are lots of government agencies, and they all want a piece. Get used to it. You get no special treatment because you are a tiny, low cost operation. If they want you to put covers on your fluorescent lights, you better be ready to shell out for that manlift rental. Start talking to your respective agencies as early as possible. There is no best way to start, there is no road map. Every professional brewer on this forum has had to figure it out on their own, unfortunately. Go forth. Be brave. Approach your various govt agencies, be polite, and you will eventually get all of your permits and licenses in hand.

5.) Operating a nano every day isn't very fun. It makes a really fun hobby a painful job - a 2nd job that you work on the evenings and weekends. I know it seems like fun now. You need to have some serious stamina to keep up the pace required to work a day job and also the nanobrewery. I have a huge amount of respect for any of the other nano owners out there who have made it work. They will never get the credit they deserve from most of the craft brewing community for the pain and sacrifice it takes. Just because its a small brewery doesn't mean its any less work than a larger version. I only recently quit my day job to focus on our new large brewery, but until then I worked every weekend for over 2 years. Think about that for a minute. No more fishing. No Saints games. Countless hours of time lost with my toddler daughter and wonderful wife. Whatever you love to do beside brewing and drinking great craft beer, it will probably have to go on the back burner.

6.) It is incredibly rewarding to brew for a living and to hear someone say they love your beer - and that's totally worth all of the bull**** noted above.

Cheers!

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Old 07-22-2012, 05:20 PM   #57
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That's a great writeup. Thanks for sharing, Jay.

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Old 07-22-2012, 06:39 PM   #58
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Quote:
Originally Posted by ktblunden View Post
That's a great writeup. Thanks for sharing, Jay.
Guess you didn't click the link I posted....
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Old 07-22-2012, 07:41 PM   #59
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Quote:
Originally Posted by Denny View Post
Guess you didn't click the link I posted....
You're correct. I generally don't click on links unless I'm actively looking for information, which I wasn't in this case. But thanks for posting the link, it's great information, regardless of who posted it first.
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Old 07-22-2012, 07:56 PM   #60
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I hear that there are some breweries that produce beer entirely by contract and have no physical location, so it is a feasible model.
We went to a place up in the Finger Lakes a couple weeks back that did that. The beer happened to be atrocious, which is probably not going to be the case with every contract brewery but if you don't have the ability to quality control, that might prove to be an issue.

But, something like that is probably the only way to possibly get off the ground for those kinds of dollars, given the lawyers that you'll have to pay and the equipment that you'll have to buy and rent to be paid up-front and ingredients to be bought and everything else - and no cash coming back through the door for months.

So, I would probably look into contract brewers, but then it's a question of trying to get your beer sold!
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