Nanobrewery..Road to failure

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Big_Cat

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I've been told so many times that even though my recipes are nice and my brew is a product that people would love to buy that if i go in as a nano brewery of less than 5bbl I will fail and if i don't have the backings to keep me and my bills covered for at least six months that again i will fail...i am so upset and no one to vent with so i decided to vent here... I love this country but its sad that our government (elected officials ) make it so hard for a.starting business to succeed .... I won't give in but today i am a little down..Tomorrow will be another day and i will start my day with a fresh head on my shoulders ...

Thanks for allowing me to vent.
 
They are full of sh*t and talking out their collective a$$e$.

The issue is you will be brewing a lot more often so keeping a 9-5 then heading to brew and still maintaining a life is rough.

A very succesful place here has ran off a 2bbl system for the last two years and has expanded each of those years considerably while still earning enough to recently jump to a 7bbl system in cash.

I wouldn't call that failure, I would call that a lot of hard work that is paying off in spades.
 
They are full of sh*t and talking out their collective a$$e$.

The issue is you will be brewing a lot more often so keeping a 9-5 then heading to brew and still maintaining a life is rough.

A very succesful place here has ran off a 2bbl system for the last two years and has expanded each of those years considerably while still earning enough to recently jump to a 7bbl system in cash.

I wouldn't call that failure, I would call that a lot of hard work that is paying off in spades.

Thank you...i needed to read something like this
 
There are a series of podcasts from the Brewing Network - the Brew Strong podcasts that are on "Going Pro". There was at least one session on nano & micro breweries and it went pretty deep into where the break even points were.

I'm not sure if what they have to say will ease your mind or not but they're worth a listen.
 
Here is one HBT member's experience with going pro. Not to discourage you or anything, but it's better to have a clear picture of everything up front and have all your "Oh @#$%" moments now than to have a bunch of them months into the process.
 
Our local one here started with a 3 barrel system. I think having a tasting room is key $5 dollar pints pay the bills no middleman.
 
It is true though that you need quite a bit of money up front, even for a nano. You can't even apply for a license until you have leased a building. Depending on your state the licensing can easily take 3-6 months. So that is 6 months you are paying rent...but have no income coming in. Again depending on your location that alone can be 10K. I think realistically you should have at least 25k-50k in hand before you even start down that road. Have you considered running a Kickstarter program? Quite a few nano's have gone that route to get the initial 25-50k to get the ball rolling!! It is also a big confidence booster if people are willing to financially support you and your dream. Nano's CAN be financially viable on a small scale....you probably won't be able to raise a family on one but you can absolutely make money.
 
I would HIGHLY recommend working in a craft brewery before even bothering with this dream. I work in one and is NOTHING like home brewing. It is filled full of long days and hard work.
 
I would HIGHLY recommend working in a craft brewery before even bothering with this dream. I work in one and is NOTHING like home brewing. It is filled full of long days and hard work.

That is a good point. A larger production brewery is basically the same as working in any factory.....it's just a little bit cooler since they making beer vs. widgets. Bottomline though it is still a factory. A nanobrewery though doesn't have to be that way and that is the beauty of it. Of course you will still have the long days and hard work....can't get away from that. Somebody operating a 1-3bbl nano has MUCH more flexibility in changing up beer styles, especially if they sell most of their beer via a tap room. There isn't a huge difference in producing 93 gallons of beer vs. 10 gallons. We aren't talking bottling lines, canning lines, hundreds of kegs, etc..
 
Jamil does a "Going Pro" series on Brew Strong. I highly recommend checking it out. He will break it down realistically, and explains why people say you need greater volume, etc, and certainly isn't talking out of his ass.
 
Jamil does a "Going Pro" series on Brew Strong. I highly recommend checking it out. He will break it down realistically, and explains why people say you need greater volume, etc, and certainly isn't talking out of his ass.

He also says in the "Nano Equipment" episode that he no longer believes nanos are an automatic fail. His anti-nano attitude was largely built on two things: nanos meant 1/2-1BBL systems, and assuming distribution.

To the OP: go 2-3BBLs if you can, and sell every drop of beer across your own bar. With that and hard work, i believe you can make it. I'm sure as hell gonna try!
 
Thank you all for.your words.of wisdom... I won't be giving up any time soon but i will plan for hiccups in my path. I do have.a dream to make my brew and serve it to people that will love it and ask for more. I am a hard worker and passionate about my craft but i am not looking to be a slave to the trade since i have a family and that's first in my book....I will proceed with caution and hopefully soon i will be planning a grand opening

Again thanks :)
 
There are a series of podcasts from the Brewing Network - the Brew Strong podcasts that are on "Going Pro". There was at least one session on nano & micro breweries and it went pretty deep into where the break even points were.

I'm not sure if what they have to say will ease your mind or not but they're worth a listen.

Great find thanks for sharing
 
Hi Big Cat,

My buddy and I are talking right now about starting a brewery. Beer is definitely my passion, I am half way done with an MBA and I have a background in business. We are sitting down setting some common goals that we want to hit.

While doing a market analysis, I just found out there are something like 5 micros in the works and one recently up and running in my area.

Develop a business plan. go to score.org and find a business mentor. look at your market, and have a clear understanding of who your customers are and what they want. Are they willing to buy enough 5-6 dollar pints and growlers to have a profitable business?

About the people telling you it will never work, how many of them are small business owners? Most people will project their fears and ASSumptions. Something that has always stuck with me that one drill sgt said when I was in the army. "Lead, follow, or get the F#$@ out of the way."

Good luck and let me know if you have any questions about writing a business plan.
 
Sorry, but I think that the ones talking out of their rears are the majority of the nano-brewery proponents. We're talking about an industry where even the equipment manufacturers think that their customers are being foolish... I've had this argument with a good friend of mine many times (a veteran, as I am, of the dot-com wars, so you'd think he'd know better), and he fails to see the same thing that most of you are: that 999 out of 1000 businesses fail, no matter what the industry is, and that once you are working at something for a living the specific industry ceases to matter because you'll be spending more time managing the business than running the equipment.

The only thing nano-breweries are good for is for losing your passion for beer.
 
Big_Cat said:
Thank you all for.your words.of wisdom... I won't be giving up any time soon but i will plan for hiccups in my path. I do have.a dream to make my brew and serve it to people that will love it and ask for more. I am a hard worker and passionate about my craft but i am not looking to be a slave to the trade since i have a family and that's first in my book....I will proceed with caution and hopefully soon i will be planning a grand opening

Again thanks :)

I've had a few businesses one successful and one that I drained alot of $$ and time into. If you have a family that relies on your paycheck I would reconsider unless you have a minimum of 2 years wages in the bank.

I'm not saying its not possible but I've worked in the craft biz, understand it and have decent business skills and wouldn't touch a brewing business without an investor.

How about throwing $5k at your hobby and build a backyard bar to chill and serve your brews to friends and family?
 
Our new brewPUB will have been open for a year in about 3 months, and they've already had to add 2 or 3 more fermenters just to kinda keep up with the local demand.

If you've got something good that people want, they'll find you. And if any of them are like me, there's a lot of satisfaction in supporting a brewer in your town.
 
Bowing down to these ridiculous laws is tantamount to endorsing them. Brew away and sell whatever you want just be careful about to whom and whatever fine you have to pay will certainly be less than the costs of compliance. I have seen brokers steal a quarter million dollars from their clients and get a $20,000 fine for it. Our laws are oppressive but in shear quantity unenforceable. Rosa Parks refused to give up her seat on a bus and you have the same right to ignore unjust laws. What jury will convict you? Everyone in this country feels this way.
 
KVANTAN said:
Bowing down to these ridiculous laws is tantamount to endorsing them. Brew away and sell whatever you want just be careful about to whom and whatever fine you have to pay will certainly be less than the costs of compliance. I have seen brokers steal a quarter million dollars from their clients and get a $20,000 fine for it. Our laws are oppressive but in shear quantity unenforceable. Rosa Parks refused to give up her seat on a bus and you have the same right to ignore unjust laws. What jury will convict you? Everyone in this country feels this way.

What the heck are you talking about? This is terrible advice. The difficulty of starting a successful business has far less than to do with unjust laws than it has to do with the fact that succeeding in a capitalist system is MEANT to be hard work, and many are going to fail as a result. If OP wants to start a business with every fiber of his being, he should, and if he works hard, and is smart about his business steps, he can make it. He shouldn't risk his enterprise violating laws, and even if he did, in no way is it comparable to Rosa Parks.
 
Bowing down to these ridiculous laws is tantamount to endorsing them. Brew away and sell whatever you want just be careful about to whom and whatever fine you have to pay will certainly be less than the costs of compliance. I have seen brokers steal a quarter million dollars from their clients and get a $20,000 fine for it. Our laws are oppressive but in shear quantity unenforceable. Rosa Parks refused to give up her seat on a bus and you have the same right to ignore unjust laws. What jury will convict you? Everyone in this country feels this way.

Yeah! This is the same philosophy that coke and meth slingers follow, and you never see them getting busted!
 
Bowing down to these ridiculous laws is tantamount to endorsing them. Brew away and sell whatever you want just be careful about to whom and whatever fine you have to pay will certainly be less than the costs of compliance. I have seen brokers steal a quarter million dollars from their clients and get a $20,000 fine for it. Our laws are oppressive but in shear quantity unenforceable. Rosa Parks refused to give up her seat on a bus and you have the same right to ignore unjust laws. What jury will convict you? Everyone in this country feels this way.

What the heck are you talking about? This is terrible advice. The difficulty of starting a successful business has far less than to do with unjust laws than it has to do with the fact that succeeding in a capitalist system is MEANT to be hard work, and many are going to fail as a result. If OP wants to start a business with every fiber of his being, he should, and if he works hard, and is smart about his business steps, he can make it. He shouldn't risk his enterprise violating laws, and even if he did, in no way is it comparable to Rosa Parks.

I couldn't agree more. This is horrible advice.

This is especially irresponsible advice for a brewer. If you are caught ignoring laws, you will not just 'pay a fine that is less than the cost of compliance'. You will lose your business in totality. They will prohibit you from ever brewing for distribution again. Ever.

For the love of all that is fermented and foamy - ignore this Jackass!
 
Bowing down to these ridiculous laws is tantamount to endorsing them. Brew away and sell whatever you want just be careful about to whom and whatever fine you have to pay will certainly be less than the costs of compliance. I have seen brokers steal a quarter million dollars from their clients and get a $20,000 fine for it. Our laws are oppressive but in shear quantity unenforceable. Rosa Parks refused to give up her seat on a bus and you have the same right to ignore unjust laws. What jury will convict you? Everyone in this country feels this way.

I don't agree with you. But you bring up a very valid point.....enforcing homebrewing laws are so far down the priority list for any agency mainly due to the sheer number of laws that are supposed to be enforced. There are people who would argue that that is not the case....but still can't find any evidence of that. It reminds me of law that a local city is putting through regarding outside lightbulbs. You can be fined for not installing the right kind of lightbulb on your front porch!! Of course the city council freely admits that they don't have any money to actually enforce this law. Their feeling is that most people will follow the law...just because it's the law and the "problem" will be solved.
 
The main ingredients in starting any business are:
1) Experience in related field
2) A desirable product or service
3) CASH FLOW/CAPITAL
4) Marketing
5) And in your case, location.

You can create variable operating costs and run lean by starting a nano but I highly recommend more than 6mos salary be set aside if this is to be sole source of income. You can do anything with the proper planning. Following a dream is better than following a nightmare. Good luck with your dream. Oh, and food for thought, it's real difficult to manage a biz and normalcy in your family life.
 
What I want to do (not like it's going to happen) is have a Pub with food and brew on site just for the bar. That way all the money I've spent on brewing will not go to waist. I can still do craft beer and change what I'm making all the time. In some states I think they let bars brew on site?
 
mikescooling said:
What I want to do (not like it's going to happen) is have a Pub with food and brew on site just for the bar. That way all the money I've spent on brewing will not go to waist. I can still do craft beer and change what I'm making all the time. In some states I think they let bars brew on site?

Read Sam Calagione's brewing up a business. That's how he started dogfish head but mind you he had at least 100k in investment from friends & family.

Do you have any experience running a restaurant?
 
I don't agree with you. But you bring up a very valid point.....enforcing homebrewing laws are so far down the priority list for any agency mainly due to the sheer number of laws that are supposed to be enforced. There are people who would argue that that is not the case....but still can't find any evidence of that. It reminds me of law that a local city is putting through regarding outside lightbulbs. You can be fined for not installing the right kind of lightbulb on your front porch!! Of course the city council freely admits that they don't have any money to actually enforce this law. Their feeling is that most people will follow the law...just because it's the law and the "problem" will be solved.

The problem is that once you sell a beer you stop being a "homebrewer" and are then subject to the rules and regulations of the Department of Health and Sanitation, whose very purpose of existence is to travel around and enforce their codes.
 
Bowing down to these ridiculous laws is tantamount to endorsing them. Brew away and sell whatever you want just be careful about to whom and whatever fine you have to pay will certainly be less than the costs of compliance. I have seen brokers steal a quarter million dollars from their clients and get a $20,000 fine for it. Our laws are oppressive but in shear quantity unenforceable. Rosa Parks refused to give up her seat on a bus and you have the same right to ignore unjust laws. What jury will convict you? Everyone in this country feels this way.

What the heck are you talking about? This is terrible advice. The difficulty of starting a successful business has far less than to do with unjust laws than it has to do with the fact that succeeding in a capitalist system is MEANT to be hard work, and many are going to fail as a result. If OP wants to start a business with every fiber of his being, he should, and if he works hard, and is smart about his business steps, he can make it. He shouldn't risk his enterprise violating laws, and even if he did, in no way is it comparable to Rosa Parks.

Dang. And here I was all set to fire up Rosa Parks Brewing! dang.... :D
 
HeavyKettleBrewing said:
The main ingredients in starting any business are:
1) Experience in related field
2) A desirable product or service
3) CASH FLOW/CAPITAL
4) Marketing
5) And in your case, location.

You can create variable operating costs and run lean by starting a nano but I highly recommend more than 6mos salary be set aside if this is to be sole source of income. You can do anything with the proper planning. Following a dream is better than following a nightmare. Good luck with your dream. Oh, and food for thought, it's real difficult to manage a biz and normalcy in your family life.

Don't forget procurement and distribution. Without those you have no product. Easy to look past
 
Bowing down to these ridiculous laws is tantamount to endorsing them. Brew away and sell whatever you want just be careful about to whom and whatever fine you have to pay will certainly be less than the costs of compliance. I have seen brokers steal a quarter million dollars from their clients and get a $20,000 fine for it. Our laws are oppressive but in shear quantity unenforceable. Rosa Parks refused to give up her seat on a bus and you have the same right to ignore unjust laws. What jury will convict you? Everyone in this country feels this way.

Do they have homebrewtalk in the prison computer lab?
 
What the heck are you talking about? This is terrible advice. The difficulty of starting a successful business has far less than to do with unjust laws than it has to do with the fact that succeeding in a capitalist system is MEANT to be hard work, and many are going to fail as a result. If OP wants to start a business with every fiber of his being, he should, and if he works hard, and is smart about his business steps, he can make it. He shouldn't risk his enterprise violating laws, and even if he did, in no way is it comparable to Rosa Parks.

*standing ovation*
 
I don't agree with you. But you bring up a very valid point.....enforcing homebrewing laws are so far down the priority list for any agency mainly due to the sheer number of laws that are supposed to be enforced. There are people who would argue that that is not the case....but still can't find any evidence of that. It reminds me of law that a local city is putting through regarding outside lightbulbs. You can be fined for not installing the right kind of lightbulb on your front porch!! Of course the city council freely admits that they don't have any money to actually enforce this law. Their feeling is that most people will follow the law...just because it's the law and the "problem" will be solved.

I agree with you about homebrewing laws. Bt if you start selling beer, you're not homebrewing and you're asking for trouble.
 
Back to the original topic. I have been to probably the smallest nano I will ever see. He is doing 10 gallon batches! Some of his stuff is interesting but not that good (lemon cream ale) and some are boring but tasty (IPA) but all are made on a 10 gallon system. The tasting room has never been empty when I go in and he has been there for over a year now. I don't know if his financials are good but I don't think he is failing. A 2-3 bbl system would be much more viable but this guy has carved out his niche.
 
I also know a couple 10 gal. nano breweries. The people who run them need to keep their day jobs in order to survive. They spend every spare second brewing, packaging, cleaning, running beer to accounts, etc. for basically no money. Not my idea of how a business should work. BTW, I ran my own biz for 30 years.
 
The world is full of nay sayers, most have no idea what they are talking about. Rather just reguritating some info they read somewhere. The only sucessful people out there are those who get off the couch of life, say f*ck it, and do it anyway!;)
 
patthebrewer said:
The world is full of nay sayers, most have no idea what they are talking about. Rather just reguritating some info they read somewhere. The only sucessful people out there are those who get off the couch of life, say f*ck it, and do it anyway!;)

An idea only works if you're willing to try it, right? I'm cutting my teeth in the craft biz right now, dreaming of the day when I can run my own brew pub, but the road block I will always struggle with is capital. Even here in Portland, finding an investor will be tricky, and a small business loan from a bank looks disgusting right now. I may find a local restaurant to partner with as a way in. having premises already secured is a huge step. A lot of places start as a restaurant first for that reason.
 
The world is full of nay sayers, most have no idea what they are talking about. Rather just reguritating some info they read somewhere. The only sucessful people out there are those who get off the couch of life, say f*ck it, and do it anyway!;)

The world is also full of positive people who have no idea what they're talking about. There is nothing negative about looking at a situation realistically.
 
An idea only works if you're willing to try it, right? I'm cutting my teeth in the craft biz right now, dreaming of the day when I can run my own brew pub, but the road block I will always struggle with is capital. Even here in Portland, finding an investor will be tricky, and a small business loan from a bank looks disgusting right now. I may find a local restaurant to partner with as a way in. having premises already secured is a huge step. A lot of places start as a restaurant first for that reason.

Get out of PDX proper, that place is flooded with breweries, I would look at the outlying areas like Newberg, Sherwood, Tualatin, Wilsonville etc.
 
I agree with you about homebrewing laws. Bt if you start selling beer, you're not homebrewing and you're asking for trouble.

Like I said I agree that it is a bad idea BUT where is the evidence that that you are "asking for trouble"? Why don't we just say that the boogeyman will get you while you are sleeping?:D I am fine with the fact that it is against the law and obey the law. it just makes me cringe when people say things like "you will go to jail" or "you're asking for trouble" when there is ZERO history of anything like that occuring. I also cringe when people are so supportive of homebrewers in Miss. and Alabama when technically speaking they are breaking the law. Seems like a double standard that we support one illegal homebrewing activity but do not approve of another...
 
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