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Old 02-01-2013, 05:07 PM   #11
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Apologies... the whole "how are you going to make money" peice is a big hole I left out unintentionally.

We will be profitable very shortly... and when I say "profitable" I mean our monthly revenue will outpace our monthly expenses pretty quickly. Where we WON'T be profitable any time soon is covering our initial start up costs. That'll be a few years given our scale. Also, when I say "profitable" I mean that we will MAKE money... but, again, we're talking about $400 a month between three guys for a lot of work.

Like I was saying before, we absolutely knew this going in and the thinking behind it was....

1) are we going to like commercial brewing?? Who knows. It isn't the same as homebrewing. We can't experiment with every batch. Every batch has to be exactly like the last one and we can't just "get around" to racking, etc.... things have to be done 100% correct 100% of the time.

2) Are we going to be able to actually sell beer? Who knows again.

3) Are we going to be able to build a decent reputation?

4) What is the craft beer market going to look like in 12-18 months.

We have theories on what all of those answers on but we don't know for sure and we weren't willing to bet either our lives savings or the mortgages on our homes to build a to-scale brewery.

We wanted to first start with a "test brewery" if you want to call it that, brew for a year or so, and then see if we have any clearer answers to the questions above. If the answers to all of the above are all positive, THEN we will very seriously think about scaling up. Also... if we are successful in building a reputation and account base with actual cash flow, getting investments and favorable rates on debt (which we REALLY want to avoid) will be dramatically easier than trying to pitch an idea of "but we've been homebrewers for a long time!" argument with investors.

And Jeepdiver... I'm not really worried for two reasons. 1) we WILL be profitable... just not on any scale and 2) we won't be operating this tiny brewery for that period of time. We will either scale up dramatically or just scratch the whole idea well within that time frame.

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Old 02-01-2013, 05:09 PM   #12
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Thanks for the write up, and good luck with everything! I hope this question isn't inappropriate, but would you mind sharing a rough estimate on capital it took to get you where you were today, and what percentage was personal funds vs loans? If you don't want to share no worries. I've always been interested in starting something like this, but really have no idea on the potential costs associated with startup at this point...

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Old 02-01-2013, 05:32 PM   #13
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So you are selling the beer directly to bars with no middle man?

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Old 02-01-2013, 05:37 PM   #14
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Out of curiousity how big is your setup (1bbl, 3bbl etc.)?
Are you brewing strictly for distribution, brewpub, taproom, all of the above?
Do you have a pilot system for smaller test batches to dial in new recipes with a dedicated test tap?

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Old 02-01-2013, 05:53 PM   #15
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Quote:
Originally Posted by Nightshade
Out of curiousity how big is your setup (1bbl, 3bbl etc.)?
Are you brewing strictly for distribution, brewpub, taproom, all of the above?
Do you have a pilot system for smaller test batches to dial in new recipes with a dedicated test tap?
Most of this is answered in the original post.
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Old 02-01-2013, 06:02 PM   #16
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Quote:
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Most of this is answered in the original post.
Wow I totally missed it

There is a guy here who just jumped to a 7bbl system and had been running on a 1.5bbl (White Bluffs Brewing) and did very well with it and profited enough to purchase his new equipment in cash as well as each expansion he has made (two expansions in two years).

So it can be done but he was constantly brewing as well as holding a full time day job. He was getting burnt out a bit over the last year but it is starting to pay off well and has a few employees at the taps as well as himself on brew detail.

He is a good guy and so is his staff, and they make some of the best beer in town by far.
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Old 02-01-2013, 06:11 PM   #17
Cape Brewing
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So you are selling the beer directly to bars with no middle man?
Yes. Under our Massachusetts Farmer-Brewer license, we're allowed to self-distribute, which simply means that we are not required by law to use a distributor and we are allowed to sell directly to bars, restaurants, liquor stores, etc.

Some states don't allow for that, although I think they are in the minority at this point.
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Old 02-01-2013, 06:14 PM   #18
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Damn, now you've got me thinking about this again. What do you ferment in? What is your weekly brew capicity?

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Old 02-01-2013, 06:16 PM   #19
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There is a guy here who just jumped to a 7bbl system and had been running on a 1.5bbl (White Bluffs Brewing) and did very well with it and profited enough to purchase his new equipment in cash as well as each expansion he has made (two expansions in two years).

So it can be done but he was constantly brewing as well as holding a full time day job.
I'm sure it can be done but I can't imagine how difficult that road has been. He must be brewing several times a week with a massive fermenter space capacity.

Our hope is that we basically took our start up costs, dumped it in as a total loss and will make subsequent investments... hopefully... offset to some significant extent by whatever money we can make on the little 1.5 bbl system in the mean time.

We'll see.

The nice thing about our little adventure is that we went into this situation thinking, "if we lose every penny, will it be THAT big of a deal"... and the answer has always been "no". Don't get me wrong... we don't have cash to just light on fire and we sure as hell aren't looking to LOSE money... but if this thing goes south, we'll just divide up the equipment amongst ourselves, brew with it out of our houses, and chalk it up as a fun experiment.
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Old 02-01-2013, 06:17 PM   #20
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The profitability thing is just like he mentioned. It takes a few years to recover you investment in most cases no matter how big you start. The balance sheet will be positive within a couple months most likely.

The thing I like about this is that he has 2 guys to share the load. Managing that is a task, but it means they don't get as burnt out. My guess is, if the beer is any good, they will be brewing on a 8 - 15 bbl system within 2 years.

Cheers!

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