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Old 07-20-2014, 10:10 PM   #1
jacobch
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Default Microbrewery business plan

Hello all,

I don't know if this has been addressed before, if so could someone redirect me?

I am a food science major at Purdue, and I'm wanting to get into the brewing industry. I am working on a project for a class where I have to write a mock business plan for a business. I obviously chose a microbrewery! I am wanting to get some information about the operations and such. If anyone has opened a brewery or knows someone, would you mind answering a few basic questions.

Some things I am looking for are salary statistics. I am trying to put together a financial report and wondering what is a realistic number for sales and profit. Also, what is compensation package for any three employees such as: ceo, brewmaster, bottler/operator, marketing, etc.

If anyone could help that would be appreciated greatly!

Cheers,

JH

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Old 07-20-2014, 11:19 PM   #2
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Have you checked the Brewer's Assoc? There is also the probrewer's forum. Why do a mock plan, if you are gonna do all that work go for the real deal! Lean towards MicroB with taproom and bottle shop, or brewpub if you a decent return faste. More money made on pint sales then dealing with distributors, at least that is what I am exploring.

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Old 07-21-2014, 01:37 AM   #3
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You can't really forecast sales without specifying location. Also CEO seems kinda dumb. It's not some big corporation if there is 3 employees.

Nobody works for less than minimum wage so you could start there. Grain probably costs at least $0.40/LB. Rent is probably at least $1200/month, equipment loan is probably 400k without a bottling line.


Are you really a food science Major? What kind of stuff have you learned so far?

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Old 07-21-2014, 02:16 AM   #4
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I would figure $0.75/# for grain across the board. That includes all specialty. A 7 or 10 barrel direct fired brew house with all controls, pumps, glycol system, plumbing and fermentation vessels and one brite tank will cost about $250k + freight. Building will depend on your location and you will need to call around. You will need to make sure that you have floor drains, adequate sewer, water and natural gas plus electrical service. Do you require fire sprinklers? If your inspector decides that alcohol is a hazmat issue then factor about $30-50k for fire sprinklers. You'll likely need to dig out the concrete and pour a new floor that can support 7000# per vessel. I'd start with $25k for concrete and floor work. Don't forget a PE that can stamp your plans so that the inspector will sign off. I don't know minimum wage there, but I would pay myself $40k as brew master. Maybe the other startup members. I'd got at least $12/hr for bartenders. Plus tips of course. I'd factor in the cost of cicerone training too. Send them to that. It will pay off down the road. You want the people talking to customers to know all about your beer and process and why it is worth $6/pint. I'd aim for $0.05/oz profit on the final beer. I don't know you will hit that for a while but worth a shot. Initially look towards mobile canning or bottling for packaging. A packing line will cost around $50k to start. Likely more.

Finally, what kind of brewery? Are you a taproom? Are you going to focus on packaging for local and statewide bars and liquor stores? Serve food? What credentials will your staff have? Experience costs money. Back to the mobile canning deal, they often have minimums. You can't be a nano with a 3 or 7 bbl brite and use a mobile canner. Doesn't make sense financially.

Lastely, I would plan to brew twice per week. Figure each fermenter will be occupied for 2-weeks for ales and 3-weeks for lagers. One thing I almost forgot: hops.... I would Guess you'll be able to get them for around $6-8/#, but does that mean contracts? Spot buying? Are you using proprietaries? If so, good luck!

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Old 07-21-2014, 02:28 AM   #5
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"Nobody works for less than minimum wage so you could start there"

I have more times than I want to count. If you are trying to get your business up and running you will do long hours at no pay. When you figure your exact hours you will be astounded at what little it pays. But if you hit it big time everybody thinks it's easy.

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Old 07-21-2014, 02:33 AM   #6
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Quote:
Originally Posted by scarekrow View Post
"Nobody works for less than minimum wage so you could start there"

I have more times than I want to count. If you are trying to get your business up and running you will do long hours at no pay. When you figure your exact hours you will be astounded at what little it pays. But if you hit it big time everybody thinks it's easy.
His pinhead professor won't appreciate this. It would erode the basis of his education being the least bit useful. Better to play along and provide decent numbers.
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Old 07-21-2014, 05:38 AM   #7
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The top two books listed on this page will help you immensely and are worth the cost:

http://members.brewersassociation.or...tegory=BUSBEER

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Old 07-21-2014, 05:58 AM   #8
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The top two books listed on this page will help you immensely and are worth the cost:

http://members.brewersassociation.or...tegory=BUSBEER
I wouldn't spend that money for a school project if I were you OP. I've purchased and read them both, and unless you're actually going to start a brewery, and can make the suppliers in the BRD believe it, your call/email is going to get sidelined for paying customers. The first book is good if you literally start from nowhere and don't care to google the topic/spend a litttle online research time to get up to speed, but it didn't teach me anything I couldn't/didn't find for free.

Don't spend a bunch of money on this for a school project. You can find most of your information for free. Here's a hint: this site isn't where you're going to find it.

Your very best resource is local brewers. Make friends. Bring them beers you brewed. Volunteer to help them brew. In short, earn it and other brewers will stop at nothing to help you out. Chances are, 80+% of them have already penciled out a business plan in their head(s), and they have a basis to start from.
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Old 07-22-2014, 05:17 PM   #9
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Quote:
Originally Posted by jacobch View Post
I am trying to put together a financial report and wondering what is a realistic number for sales and profit.
Well, you're clearly not a business major.

That's a pretty vague question. What kind of brewery? A brewpub? Or package for distribution? Are you planning on selling to local bars and package stores, or looking for regional/national distribution? What kind of output are you looking at? 3bbl, 7bbl, 10bbl, 100bbl? What region?

That's like asking what's a realistic revenue/profit figure for a restaurant? Well that can be $500k/$20k or it can be $5,000,000/$500k.... there's too many factors and variation in business types/market/etc to give a number to a question that open ended.

I suggest you find a microbrewery owner near you that's willing to sit down and do some Q&A with you. You can try to tailor your report around their specific situation, instead of asking questions that are too vague to really answer properly.
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