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Old 04-09-2007, 05:06 PM   #1
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Default Business Idea Question

Has anyone looked into what it takes to sell your homebrew? I had an idea to set up a small business based on brewing small-batch specialty beers, for special occasions. It would be like wedding favors, or milestone birthday parties, where they wanted something unique to serve. It would probably be harder to make the labels than to brew the beer.

I thought this might be more like a catering business, but since alcohol is involved, I'm not sure if this would be worth the trouble. I figured I'd look into it if it meant getting to brew more often. Thanks.

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Old 04-09-2007, 05:11 PM   #2
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Where are you located? It's all going to be based on your local laws and what you need to do to get licensed. I suspect that the answer in 99 out of 100 jurisdications is that there is no way for it to be profitable at such a small scale, but it may be worth checking into. No way of giving a generic answer, though.

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Old 04-09-2007, 05:34 PM   #3
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I'm in Connecticut. I figured the answer would be based on local laws, but I was just wondering if anyone has done the research. (So I won't have to!)

As far as profitability goes, I think there's definitely a possibility. Think about it: You could use your current equipment (no cost), and the cost of ingredients, bottles, labels would be passed on to the consumer. Then add the labor charge to cover overhead (electricity, delivery, etc.), and profit. On top of that, it's a "small-batch craft brew," so you could charge a premium.

Thanks though. I just would love to quit my job and make brewing into a career.

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Old 04-09-2007, 05:37 PM   #4
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Call your city hall to find out how much a liquour license costs...first.

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Old 04-09-2007, 05:40 PM   #5
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I didn't mean to be discouraging, either, I just think you're probably best-off either searching for whatever information is available on the state's website, or calling up whatever department it is that handles these issues. They should be able to say, "yeah, you can do that, but you need this license which costs $xxx per year and we're going to inspect you," or whatever the right answer is for CT.

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Old 04-09-2007, 05:41 PM   #6
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Quote:
Originally Posted by rono73
Thanks though. I just would love to quit my job and make brewing into a career.
If you brewed a batch every day (could you even FIND that many customers?) and you made $100 profit per batch (that's some expensive beer!), you would rake in only $36k a year (before taxes, and taxes would be hefty since there is alcohol involved).

I wish you the best if you choose to give it a go, but "profitable" and "I make my living this way" are quite different things.

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Old 04-09-2007, 05:43 PM   #7
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Quote:
Originally Posted by rono73
I'm in Connecticut.
There is your answer on profitabilty! I am sure the regulatory permits and such would be unbelivable just based on all the "blue laws" in CT.

You can't buy any alcohol on Sundays right? Or after 8 pm? Seems like everytime I am there I am not able to buy any beer for one reason or another...

Maybe you should move first.
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Old 04-09-2007, 06:28 PM   #8
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What's competition like in your area? Could it handle one more producer? Do you know any bar owners that would feature your product? How much would you have to provide them with to keep them stocked?

What you need to do is find one or two bars that will sell your product. From there, build demand. If they like it, keep upping your production until you need to find another bar to distribute. Then look for bars that sell packaged beer and see how well it does. Once you have a guaranteed successful product, approach liquor stores and grocery stores about getting some shelf space. You'll probably only be able to afford a spot on the warm shelf so you'll need to up your marketing expenses.

You can do it, but you need far more than a good product to execute successfully. You need a great promotions team and good investor backing.

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Old 04-09-2007, 07:34 PM   #9
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Boy, it sounds like I hit on an interesting topic. I appreciate the tips. Getting my beer into a bar or a liquor store isn't the goal, at least initially. I think it's a simple business plan, based on owning the brewing equipment. That means no investment necessary for startup.

What I'm envisioning: Someone is getting is married. Instead of spending $500 of bags of Jordan Almonds to give to their guests, they call me and say, "My fiance and I met when she rear-ended my car, can you brew us a beer and call it 'Cupid's Crack-up' so we can give a bottle to each of our guests as a gift." Or whatever people want to do to make their party/wedding/funeral more interesting.

I offer them a few choices (IPA,Porter,etc.) with the option to adjust flavors if they want. If they met in a pumpkin patch and they want pumpkin in their beer, who am I to judge? You can easily brew a 5 gallon batch for less than a dollar a beer. A decent printer and some negligible talent, and you can make custom labels. Bingo, you can make 20 gallons worth of beer, around 200 12-oz bottles, and sell it for $500 to the happy couple, and make $300 in profit, just doing something you like to do anyway.

Doesn't that beat a bag of Jordan Almonds or a mini bottle of Sutter Home wine? Anyone who's been to a wedding knows that most of the stuff you get from a wedding is crap. I also know I woul dhave preferred to give my guests beer.

I agree that there is some initial investment for marketing and advertising, but owning the brewing equipment is the big investment here, and we all already own it. The biggest problem would be a liquor liscense, which makes this cost prohibitive. If it would only require a caterer's liscence, that might make it feasible. I'm going to check with my city. Since we're really only "cooking" ingredients that will end up as beer, does that count as alcohol. I know at my HBS, I'm not charged tax for malt and grain, since they're technically food, not alcohol.

I've written way too much...

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Old 04-09-2007, 07:44 PM   #10
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Quote:
Originally Posted by rono73
What I'm envisioning: Someone is getting is married. Instead of spending $500 of bags of Jordan Almonds to give to their guests, they call me and say, "My fiance and I met when she rear-ended my car, can you brew us a beer and call it 'Cupid's Crack-up' so we can give a bottle to each of our guests as a gift." Or whatever people want to do to make their party/wedding/funeral more interesting.
If you're specifically looking to get into the wedding scene, expect HUGE barriers to entry in the form of high costs to get into catalogs or on websites. And don't negate the effect that the negative stereotype will play on your business. It sounds like a great idea, until you think about Uncle Al, the Alcoholic. Is it appropriate to give booze as a gift considering that your uncle is a recovering alcoholic? A lot of women wouldn't be interested in giving away something as masculine as beer at their wedding.

Here's a great piece of advice: if you're going to start a business, find something where you already have an "in" (someone who will definitely partner with you.) Maybe you know people in the wedding industry who are interested in your idea, or maybe you have a friend who manages a bar and will give you a shot. It makes it a lot easier than trying to build relationships and a product at the same time.
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