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Old 06-26-2006, 09:35 PM   #1
knewshound
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Default Ever thought about opening your own HBS?

I hate going to my LHBS.

Dark, dreary, poorly arranged, lack of stock, rude owner and on and on.

After going to The Beveradge People in Santa Rosa Ca, I was reminded what a really good HBS was like.

This got SWMBO and I thinking.

We are not the only ones who detest going to the local store, obviously there is a healthy market, so why not open our own?

I was wondering if any of you either own your own HBS or have you looked in to it? If so, what are the pitfalls and hang ups related to owning one?

I am not looking for a business plan, although if you have one you want to send me feel free, but rather I was wondering if there were some issuses specific to a HBS that I need to be aware of that I would not know.

Any and all input would be appreciated.

I have experiance running a sucessful business and I think i can give the local guy a real run for his money.

Thanks in advance.

knewshound

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Old 06-26-2006, 10:05 PM   #2
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First thought that comes to my mind is the real size of your local market - can it support two stores, even if one is crap? I'm not sure the growth rate of this particular hobby, but my sense is that it's not all that great. Even if the competition is weak, you'll have to be able to effectively communicate your presence to the homebrew community and steal some market share. I wonder, too, about the loyalty of homebrewers in general; you may dislike the LHBS guy, but something tells me that brewers may tend to be a loyal bunch. Dunno.

Finally, don't forget about all the conversations that folks around here have about online retailers. Some of the equipment doesn't lend itself too well to shipping cross-country, but that's not necessarily true of supplies.

Not saying that it isn't something you should pursue - hell, nothing better than doing what you love for a career - and all the power to you. My sense, though, is that running a HBS strikes me as a damn hard way to make a dollar. There's only one store that I'm aware of in the Albany, NY region (not a bad sized area), and only a handful in Massachusetts outside of Boston. How big of a local market do you have? How much traffic does the HBS seem to get?

Now, just thinking off the top of my head, seems like you would want to also set up shop online, through eBay or whatever. You're going to have a certain amount of inventory, some of it is perishable, you've got to get that turning over as fast as possible. Another thought; buying or starting a higher-end package store and using part of the space to sell homebrew supplies. Other costs involved for licenses and whatnot, but it has struck me in the past that it might make sense for an HBS to be run as a sideline of a bigger business.

You'll need to have a decent amount of capital, because even if you are successful at driving the other guy out it's not going to happen overnight.

I don't have any particular expertise in this, and I'm still new at this hobby in general - but the fundamental question that needs to be asked in any business venture is exactly how big the market is, and how you can reach it. There are eight million things to think about, but before any of them you've got to be comfortable with that.

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Old 06-26-2006, 10:39 PM   #3
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Have you thought about buying the other guy out? He may be looking to sell, and it would (in the end) be cheaper than trying to run him out of business. You would also aquire his stock and general shop equiptment. Ask him if he's looking to sell his shop. You can always move to a better, brighter location.

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Old 06-26-2006, 10:59 PM   #4
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To answer some of your valid questions;

there was at one time, 3 HBS in the area. One was bought out by the HBS I mentioned and one simply closed. Both were even worse than the existing one.

The area has about 750,000 people in the immediate area with an additional 500,000 in a 50 mile radius.

I know many homebrewers in the area, few choose to go to him except for emergencies, they almost all mailorder due to his poor store.

Finding my target audience is naturally a huge issue. Marketing is crucial. Targeted ads, demonstrations, Homebrewing clubs, CraigsList and others were my first thoughts for advertizing.

Bottom feeder ( you a lawyer by chance?) - Buying him out is not something I would concider. His nasty looking stock is the last thing I would want to bring into a new business. His current sucess (or lack of it) is related to his having NO competition. I aim to possibly change that.

Please understand, I am not thinking this is going to be my sole source of income, I make WAAAAAAAAY too much money to quit my job to do this. It was a supplimental and a possible retirement income for the years ahead.

Keep the ideas coming guys !

Cheers,

knewshound

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Old 06-27-2006, 12:43 AM   #5
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I'm thinking the biggest challenge you will face - if this isn't your full-time gig - is going to be managing / staffing the place. How many hours per week would you be able to dedicate to the store? Would SWMBO be involved? Would she be running the store? Is she a brewer? Another home brew friend you might consider doing a partnership with? Are you going to have to hire someone (at a living wage) to run the place?

When I first went to my preferred HBS, one of the things that the gent told me was that anytime I called, the person answering the phone would be a brewer (they are also open about 360 days a year). Your competition really isn't the other HBS (who sounds like he's on the way out, anyway), it's all the mail order places that people are using instead. The reason they'll start going to YOUR store won't be selection or price (they can get those online), but for advice and comraderie. That means whoever is manning the shop is going to need to be a brewer, meaning that your potential labor pool is that much smaller (not that most homebrewers wouldn't love to work in a shop, but still). The challenge will be - if you AREN'T manning the shop most of the time - making sure that someone is there who can help an idiot noob like myself.

If you haven't already, I'd sit down with a spreadsheet and a piece of paper and draw up your business plan. Make your assumptions as realistic as possible (err on the side of being conservative). Sounds like your market is big enough, although I'm not exactly sure what the concentration of homebrewers is for a given population. Get it all written out like you were bringing it to the bank for a loan. Wish I had more stuff specific to running an HBS to say, hopefully there are some others who either DO runa n HBS or who have some more direct experience.

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Old 06-27-2006, 02:11 AM   #6
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All the HBS's I've seen have been dual purpose: Brew & Grow (HBS with a home-grow shop), Deep Elem Brews (half HBS, half bike shop). Both owners say that there's just not enough of a demand to a full time shop.
These places are barely profitable. Most of us order online, so you're better off setting aside a portion of your basement and starting an online HBS and, if things take off, get a storefront presence.

But remember: you need to be an expert. They'll shop you because you can help them with any question. You need to know every hop and what flavor it has, every yeast and every style of beer. You need to be da man when it comes to homebrewing.

As for buying out the current guy, just remember that EVERYONE is for sale. If he's interested, look at his books and figure out the net present value of his shop and make him an offer. The address inertia will be your biggest asset.

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Old 06-27-2006, 02:42 AM   #7
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Quote:
Originally Posted by Cheesefood
All the HBS's I've seen have been dual purpose: Brew & Grow (HBS with a home-grow shop),

But remember: you need to be an expert. They'll shop you because you can help them with any question. You need to know every hop and what flavor it has, every yeast and every style of beer. You need to be da man when it comes to homebrewing.

I have to say I'm stunned.

Here in Northern California, where we arent exactly strangers to the more potent forms of the hop family, I have never heard of such a thing.

Interesting concept however.

Nearly every major, and many minor cities here in NorCal have a HBS.

The SF Bay where I last lived had as many as 20.

But then, this is where Homebrewing really started along with the resurgance of the craft brewing culture in the early 80's of which I was a part. I used to shoot the breeze with Byron Burch as he rang up my order in his store in San Rafael, and continue to patronize his first class operation to this day.

I do know a bit about brewing and count as one of by best brewing buds my old pal "Woody" Forrest Marsh who worked at numerous NorCal Breweries and adapted his knowledge of brewing on a commercial level down to practical, replicatable processes for homebrewing. I formulate my own recipies, know the chemistry and can bring the efforts of my over 20 years experiance in the hobby.

I hope that my answers do not denote a feeling of trying to brush off your concerns, I do not want to give that impression. I am only trying to honestly answer some of your various points (ALL of you who responded).

Cheers,

knewshound
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Old 06-27-2006, 03:12 AM   #8
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I honestly don't know how my local guy makes it - he has a good selection, good prices, and is very knowledgeable, but he doesn't seem terribly busy. But, he's been around for a long time, so he must be making enough to live on.

I like the idea of doing it as a retirement job - only thing is, I don't want to work full time when I retire some day! I think part of the reason for my local shop's success is that he's the only one who works there - he doesn't have to pay anyone's wages, so it keeps his overhead down.

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Old 06-27-2006, 05:06 AM   #9
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knewshound,


Here is a thread from a while back worth reading through:

How do homebrew stores even stay in business? (1 2 3 ... Last Page)


Much of it contains what people would like to see in a homebrew shop.

Don't forget the winemakers, either. They bring in big bucks, especially as the weather warms each year.

And doing mail orders would be a good idea....


.

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Old 06-27-2006, 05:34 AM   #10
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My local HBS is owned by a homebrewing association and is the meeting place for the local brewing club as well. Everyone working in there is very helpful, knowledgable, and friendly. If you can get a homebrewing club meeting at the store, you have a built-in customer base to start from.

And the store sells wine, soda, and vinegar making supplies as well. When the winemakers come in, they can really drop some coin. I usually spend $20 at a time for ingredients. People that spend $10-15 or more on one bottle of wine don't even blink at spending $100 a pop at the HBS.

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