Opening a Brewery Licenses and Fees

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Draygon

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Mar 12, 2012
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Location
Greeley, CO
So I have seen a few threads about people opening their nano breweries and have for a while been thinking of doing something like that myself. I am extremely close to obtaining the funding I need to open my nano brewery. What i havent delved into is the cost of the licenses and fees for doing so. I know that the beer I sell has to be taxed per ounce I believe as well.

So my question, can someone who has done this shed some light on these things for me (us) wanting to do this?

Im in Colorado too, for any state specific stuff.
 
For federal check out the TTB website, it's pretty helpful. For state stuff normally the state government site has a page for forms relating to manufacturing and distributing beer. probrewer.com is another helpful resource as well. What I've been having difficulty finding is more information on building requirements regarding drains, ventilation, etc. If anyone has any info/experience I'd like to hear about that.
 
Check out probrewer.com.

Homebrewtalk.com is a forum board for homebrewing.
Probrewer.com is the equivilent for professional brewers.

They'll be able to provide you much more experience on the commercial side.

Asking amatuers how to do something professionally is begging for misinformation! Go ask those who have actually done it, or are currently doing it!
 


Because I know how much it costs for the equipment I need, I know how much it is going to cost me for the building I want, I know how much it is going to cost to brew my beers, I know how much it is going to cost me for construction, and I have $20K left for this stuff...thats how :) I also have enough to cover me for the first year of rent and utilities to make due until we are in full swing of things, but with my estimates if everything goes even close to as planned we could/should be turning a profit in well under a year, with most financing paid off in 26 months.

I know that the ATF is going to require at least a $1k deposit for tax purposes. Creating a corporation costs nothing initially, its the other things that I wasnt sure about, but I will head over to probrewer and ask there.

Thx.
 
Draygon said:
Because I know how much it costs for the equipment I need, I know how much it is going to cost me for the building I want, I know how much it is going to cost to brew my beers, I know how much it is going to cost me for construction, and I have $20K left for this stuff...thats how :) I also have enough to cover me for the first year of rent and utilities to make due until we are in full swing of things, but with my estimates if everything goes even close to as planned we could/should be turning a profit in well under a year, with most financing paid off in 26 months.

I know that the ATF is going to require at least a $1k deposit for tax purposes. Creating a corporation costs nothing initially, its the other things that I wasnt sure about, but I will head over to probrewer and ask there.

Thx.

You must have one hell of a business plan setup to turn a profit that fast. Have you looked into the little things that get over looked like zoning and osha requirements? There is also distributing....
 
Consult with an attorney, you're going to need to set up a corporation at the very least (LLC or Corp.)

I ran a quick search at the Colorado Bar Association for lawyers specializing in business law, view the results here: http://www.cobar.org/directory/search.cfm?areas=4&admitstate=ALL&language=ALL&searchField=&searchButton2.x=53&searchButton2.y=7

You need a lawyer for more than just setting up the business. I am an attorney and have a focus on the alcoholic beverage industries. If you need more info send me a message.
 
I also have enough to cover me for the first year of rent and utilities to make due until we are in full swing of things, but with my estimates if everything goes even close to as planned we could/should be turning a profit in well under a year, with most financing paid off in 26 months.

Thx.

The typical number tossed around for starting a business if 5 years to profit, not one. Granted that is for 'general business' and specific business might go faster or slower. Reading Jamil's blog at byo.com, there is a lot of info about problems that slow them down - like delays on the construction, or permits - effect that 1 year timeline.
 
Yep i know about delays and all that. As far as distribution goes, that aspect we are not looking to do right off the bat, in fact probably wont even look into that for at least a year from when we pour our first glass for sale. We are only opening as a nano with a tap room and will go from there. We will be only the second micro(nano) brewery in town and are 60 miles from the next one (Dry Dock) so we have a good population to draw from. Start small, get a foot in and market share, then look at doing bigger things.
 
Yep i know about delays and all that. As far as distribution goes, that aspect we are not looking to do right off the bat, in fact probably wont even look into that for at least a year from when we pour our first glass for sale. We are only opening as a nano with a tap room and will go from there. We will be only the second micro(nano) brewery in town and are 60 miles from the next one (Dry Dock) so we have a good population to draw from. Start small, get a foot in and market share, then look at doing bigger things.

You're an optimist, that's for sure. A microbrewery, even a popular one, tends to be a money pit for a few years. If you can turn a profit in a year, and pay off financing in 26 months, that is unheard of and an amazing achievement.

I think Colorado's brewery laws are good for you- some states are so restrictive as to be nearly impossible to open a nano/microbrewery. Some require 15% or more of sales to be food, in order to serve beer on-premises and so on.
 
We will be only the second micro(nano) brewery in town and are 60 miles from the next one (Dry Dock) so we have a good population to draw from.
Your profile says you're in Castle Rock, which is 30 miles from the beer mini-mecca of Denver. Have you moved? If not, I'll agree that Rock Bottom is small competition for a well-run and adventurous craft brewery.

You're an optimist, that's for sure.

My thoughts through this whole thread.

And yeah, go over to probrewer.com so's they can talk some sense to you.
 
Yeah, well, Federal and state licensing may be the biggest hurdles, but don't discount local. A micro that's starting up near me has leased space, and put in a lot of work converting it for their brewery / taproom. Now the "neighbors" come out of the woodwork opposing (with no concrete grounds, of course) the special use variance in the local ordinance. The startup brewery made it over the first hurdle (committee) Monday, but have to face the town council for the vote in May. There's many a slip 'twixt the pint and the lip......
 
I am an optimist, but, going off of my business plan its what I show, and we are all keeping our day jobs fir the first few months, going to do our brewing at night (lose out on sleep, but for the greater good) and only be open for afternoons evenings on Fridays and Saturdays for a while till business grows.

Im still in Castle Rock, which is 30 miles from Denver, but if you look at the "Meca" of craft brewing, its further than that, most of that is in Boulder and further north -- Fort Collins Area.
 
Ok, let me first say that no one here is trying to prove you "wrong", least of all me. We just don't want to see a fellow homebrewer take a tilt at The Dream and fail.
I am an optimist, but, going off of my business plan its what I show
How did you construct your business plan? I ask because as others have pointed out, you are talking about an *extremely* quick ROE, especially in a market like the Denver area's.

The common wisdom on opening a brewery is that going production first gets you a profit soonest and gets you brand recognition on top of that. Most people don't spend large amounts of money at a tap room with no food. I know you'll probably toss Great Divide at me as a counter, but they're a production brewery first and foremost.
Im still in Castle Rock, which is 30 miles from Denver, but if you look at the "Meca" of craft brewing, its further than that, most of that is in Boulder and further north -- Fort Collins Area.
Boulder is still within your 60 miles, and anything in CO gets to run the "local" brand just like you do. Those breweries have good distribution, too. I've walked into some of the most random dives in CO and found great beer on tap. Just food for thought.
 
Not arguing with anyone, just saying. I have a degree in business management, focus on marketing, so that should answer the question as to where or how I put my business plan together.

Might do some sort of small menu but not sure yet. And yea boulder is, one of my "silent" partners in this actually works at Avery :)
 
I am an optimist, but, going off of my business plan its what I show, and we are all keeping our day jobs fir the first few months, going to do our brewing at night (lose out on sleep, but for the greater good) and only be open for afternoons evenings on Fridays and Saturdays for a while till business grows.

Im still in Castle Rock, which is 30 miles from Denver, but if you look at the "Meca" of craft brewing, its further than that, most of that is in Boulder and further north -- Fort Collins Area.

Is Pikes Peak Brewing Co. close to you? They seem to he doing well pretty quick. And Bierwerks in Woodland Park is purportedly turning a profit after only a little over a year. Granted, they had their growing pains in Trinidad.

Good luck to you!
 
Sometimes jealousy rears it's ugly head. I wish you the best! The first business is always the one you remember the most!
 
Draygon said:
Not arguing with anyone, just saying. I have a degree in business management, focus on marketing, so that should answer the question as to where or how I put my business plan together.

Might do some sort of small menu but not sure yet. And yea boulder is, one of my "silent" partners in this actually works at Avery :)

Draygon, I wish you all the best! Some background on me...I have been a Vice President for some major Restaurant and Bar concepts, then I left that business to. Buy and sell business's that got liquidated because they couldn't pay there bills....additionally I have a degree in business law.....so my thoughts...when I went to school I realized my professor didn't no crap about running a business, because I was working in bars at that time and the knowledge and experience he communicated was lacking real world experiences...so no offense, but a degree without experience doesn't set you up well for a successful business plan...not because I'm trying to be an ass, but there are things you will no even plan for...now even with experience, murphys law will always kick in! In regards to your plan, if you believe in it then go forward and make it work regardless of what I say....but you should really consider creating a business plan that spreads out over 5 years, year 1 through 3 will give you a roller coaster of highs and lows as you establish a customer base, after year 3 you should be able too understand your baseline and now where your business will perform during different parts of the year (example: November and December may be crazy if you are near a shopping center, but January through March will be dead).
So I didn't say all this stuff to crush your dreams, just hoping you may take a step back and raise more capitol...additionally pro brewer is a great website, you will defiantly want to incorporate your business and in Colorado pay attention to zoning laws around schools, churches, etc.
Good Luck!
 
ReverseApacheMaster said:
lol what is a degree in business law?

A waste of 4 years! At the time I wanted to get in to the FBI, then as I progressed in school I realized that was a poor choice! On the upside, it's probably kept me out of a few sexual harassment lawsuits!
 
First - do NOT let anybody tell you it can not be done.

I'm involved in opening a nano brewpub and I'm glad I'm only an investor. Working 16 hours a day 7 days a week for 5 months before taking a day off is not my view of living a fun life.

However this is a brew pub and not just a brewery. Just getting a liqueur license was $15,000. Getting labels OK'd by the government took 3 months. Getting all the licenses took much much longer the expected. Little things like duct work and exhaust fans can cost another $15,000.

I've talked to a number of brewery's and almost all of them said the cost of transforming a building for a brewery were more then they thought it would be. Grumpy Troll in Wisconsin found that the concrete their floors were more then a foot thick. Hydro Street Brewery found their roof would not hold a 700lb range hood with out extra $$.

Banks will not lend money to fund restaurants even though it was a brew pub which is almost an automatic money maker.

1st quarter report.... They made a profit and are getting ready to expand and will have beer in several bars.

Sometimes jealousy rears it's ugly head

Many times. Lots of local home brewers will tell you all the faults in your beer. One thing we learned is that a large new set-up needs time to get all the tweaks in place. Going larger is not just doubling a recipe but the whole logistics thing on getting things done. What to do with hundreds of pounds of spent grain every day, how go GET hundreds of pounds of grain. Temperature control and the logistics of ALL THAT BEER and trying to get 10 different styles on tap all at the same time.
 
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