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Old 11-29-2013, 03:25 AM   #1
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Default How to start a successful nanobrewery

Hey everyone, four months ago I opened a nano. I've been brewing for 5 years and I am 26 years old now. I haven't been open too long but I feel pretty comfortable with the business. I still have a lot to learn and a ways to go, but things are going really well. I wanted to share a bit since this forum was always so helpful to me over the years.

Background: I graduated college during the recession. I couldn't find a job that used my degree. I was following a bill in the state legislature that would make it easier to open a nano in Virginia, and had just won a gold at my first comp. I decided to just give up applying for office jobs and go for it. I took a job at a local farm and began writing a business plan. I raised money on Kickstarter and began building my system, a 1.5 BBL kal clone. I also got a small business loan. I got a great location and after I got my brewery license, I opened my doors on July 19th. It's been pretty crazy and a lot of work, but sales are great and the feedback on the beer has been terrific.

Here's a blog post I did recently with some good ground rules for starting a nano. They might seem a bit harsh, but it's based on experience.

1. Nanos are just like any other business. To be successful, you need to make money. Enough money to cover costs, pay yourself and pay off any loans you have to take in a reasonable amount of time. If you are fine with not making any money and just want to have a go at it as a hobby business, you can ignore the rest of what I have written here if you want.

2. Nanos won’t work as well in every area. In many places on the west coast, there are nanos everywhere. In other places, the laws aren’t friendly enough. Having a high median income helps, too. I can charge $4-7 per pint at my place, and still be cheaper than the two bars next door.

3. You need to sell the majority of your beer for on-premise consumption. Remember when I mentioned unfriendly laws? If you aren’t allowed to sell your beer in pints at your bar, you will have a very hard time being successful. There is no way around this. If you are bottling or kegging and selling to a distributor or retailer, you will most likely not make very much money unless you go with a larger system.

4. Nanos are just like any other business. I say this twice so hopefully it sticks. If you don’t want to research zoning laws, obtain the proper permits and licenses, and practice diligent bookkeeping, I would advise you to stick to brewing as a hobby rather than a business. If you are sinking thousands of dollars into a business venture, you should be willing to spend as long as it takes filling out the paperwork.

5. You need to be able to brew good beer. Notice this is four spaces down from number one. The other rules are more important because all the good beer in the world won’t save you from bad business practices. However, if you can’t brew good beer you shouldn’t be in the business. This means that you should consistently be able to score well at BJCP-sanctioned events. It doesn’t mean that your friends or family like it, or you’ve had people tell you repeatedly that they’d buy your beer. That isn’t good enough. Your process should be close to flawless if you are considering doing it professionally. I homebrewed for five years, but it was really the knowledge that I gained in the last year that meant the difference between success and utter failure. Also, I probably brewed around 200 batches during that period. Many people say they want to start a brewery after their first couple batches. All I can say is, good luck.

6. Prepare to encounter problems, and brew some bad beer. This goes hand-in-hand with number five. Because even if you’re experienced, you are going to encounter problems. I have gained tremendous respect for the brewing industry; brewing good beer consistently is way harder than people realize. I have made friends in the industry and I have learned that even larger breweries with plenty of experience and the latest equipment still encounter problems pretty frequently. You will brew some not-so-good batches from time to time. You will need to identify off-flavors and correct your process. This is very important, and where that experience really pays off. A problem is one thing, but a problem you don't know how to fix is something else entirely. When you have a problem, dump your bad beer if you can. You are doing yourself no favors by serving bad beer. Occasionally you will have to serve some beer that isn’t great, because you have nothing else. I have found honesty is the best policy; if someone comments on it, tell them what’s going on, and what you are doing to fix it. Refusing to acknowledge flaws and getting defensive will make you look arrogant and ignorant. Patiently explain and work to correct the problems.

7. You need a minimum of a one barrel system. Time is money and brewing more often means less money. You will find yourself in a living nightmare with a ten gallon system. “But Sam Calagione started that way!” Doesn’t matter. My starting system was less money than a Sabco and brews over three times as much beer. There is no reason to start smaller.

8. Research every single detail you can. Listen to people with experience. Entrepreneurs aren’t risk takers, they’re risk eliminators. You want to leave no stone unturned so that when you take the plunge, you aren’t leaving anything to chance. Furthermore, ignoring the advice of people with experience and success is the ultimate form of hubris. Be like a sponge and take in all the info you can.

9. Be friendly and courteous. Many people will be coming in your doors not just to have a beer, but to talk to you. You are the face of your business--embrace it. Also, answer emails and voicemails promptly. Strike up conversations with strangers. You can make some great connections this way, too. Sometimes I am not so great with this due to fatigue and stress; it helps if you can hire someone to pour who has a good personality. Also, make friends with the other breweries and restaurant owners in your area. I send people to "competitors" all the time because they have great beer. They do the same for me. We help each other out, too (well mostly they help me.)

10. If you have read through all these and still want to make a go of it, write a detailed business plan. No smart person wouldn’t.


I'll try to check in on this thread periodically and answer questions. If you're in the process or have done it already, best of luck, and may the beer gods smile upon you!

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Old 11-29-2013, 04:43 AM   #2
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Wow, this is extremely helpful info, thank you!

I'm planning to start my own soon with a 7bbl brewhouse. I have questions, but it's late and I'm tired. Would you be willing to share your business plan privately and/or discuss via email?

Thanks,
Jason
Polaris Brewing Company

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Old 11-29-2013, 12:14 PM   #3
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Nice read man. Good luck!
Wifey and I don't make it down to DC often but next time we do we'll stop in for a pint or 5.

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Old 11-29-2013, 06:12 PM   #4
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Originally Posted by TheJasonT View Post
Wow, this is extremely helpful info, thank you!

I'm planning to start my own soon with a 7bbl brewhouse. I have questions, but it's late and I'm tired. Would you be willing to share your business plan privately and/or discuss via email?

Thanks,
Jason
Polaris Brewing Company
I'd rather keep questions and answers here so that others can read them. I will be happy to share details of my business plan, ask away.
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Old 11-29-2013, 11:52 PM   #5
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Thanks for the writeup, subscribing for future questions.

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Old 11-30-2013, 02:42 AM   #6
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Subscribed... currently writing my biz plan.

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Old 11-30-2013, 02:47 AM   #7
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So this has been something I have thought about for the last year and a half. My question how did you come by the research the market ,and if your nano would even work in your area. And just a little info on my area. I live in north texas. Brewery's and brewpubs are far and few.. And up until last month or two, got it's first brewery in my city. Now I even thought of see if I can intern at this said place, and get an idea of the market here and just to see how they ran their business.

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Old 12-01-2013, 04:14 AM   #8
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5. You need to be able to brew good beer. Notice this is four spaces down from number one. The other rules are more important because all the good beer in the world won’t save you from bad business practices. However, if you can’t brew good beer you shouldn’t be in the business. This means that you should consistently be able to score well at BJCP-sanctioned events. It doesn’t mean that your friends or family like it, or you’ve had people tell you repeatedly that they’d buy your beer. That isn’t good enough. Your process should be close to flawless if you are considering doing it professionally. I homebrewed for five years, but it was really the knowledge that I gained in the last year that meant the difference between success and utter failure. Also, I probably brewed around 200 batches during that period. Many people say they want to start a brewery after their first couple batches. All I can say is, good luck.
All due respect to the experience you've gained from opening a brewery (and congrats, BTW), but I emphatically disagree with this. The BJCP judges beer against style guidelines. The general public does not. Regardless of if your beer conforms to style guidelines or not, if people like your beer, they will buy it. I agree with the statement that you need to brew good beer, but performance in BJCP sanctioned competitions is not an accurate measure of how good a beer is, IMHO.
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Old 12-01-2013, 04:30 AM   #9
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So this has been something I have thought about for the last year and a half. My question how did you come by the research the market ,and if your nano would even work in your area. And just a little info on my area. I live in north texas. Brewery's and brewpubs are far and few.. And up until last month or two, got it's first brewery in my city. Now I even thought of see if I can intern at this said place, and get an idea of the market here and just to see how they ran their business.
I had some numbers from a restaurant nearby, and my friend's nano. That helped tremendously.

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All due respect to the experience you've gained from opening a brewery (and congrats, BTW), but I emphatically disagree with this. The BJCP judges beer against style guidelines. The general public does not. Regardless of if your beer conforms to style guidelines or not, if people like your beer, they will buy it. I agree with the statement that you need to brew good beer, but performance in BJCP sanctioned competitions is not an accurate measure of how good a beer is, IMHO.
Ehh, the BJCP also judges beers for off-flavors just as much as style. You'll get valuable feedback regardless.
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Old 12-01-2013, 04:33 AM   #10
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Ehh, the BJCP also judges beers for off-flavors just as much as style. You'll get valuable feedback regardless.
True, I just don't think poor BJCP scores alone should discourage a home brewer considering going pro.
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