Why don't more of you guys open your own breweries?

remilard said:

Jamil had to buy his own tanks, register, etc, he has high 5 figures in this. In this lending environment that means probably 30% of high 5 figures as equity capital. That's college for one of his kids, he has skin in the game.

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Considering what it takes to start a brewery or brewpub for the ground up, that's chump change. He is very lucky to have the alternating proprietorship arrangement. That cuts his company's overhead and capital investment tremendously. If you have a relationship with a brewery that will allow you such arrangement, you're a step ahead of most startups.

Pick said:

Hey, if anyone wants to open a brewery down here in North Florida, I know where there is a Coca Cola water bottling plant up for sale for $22M. No gas there, but plenty of electric is available for electric brewing equipment.

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And it would please me greatly if the water from the Santa Fe was made into beer instead of drinking water. That way, when the drunks spilled their beer whilst tubing down the river, it would be a complete circle. Plus, glass beer bottles sink to be bottom of the river so that we can clean them up, whereas plastic water bottles float out to the Suwanee, thence to the Gulf, and then the Gulf Stream.......

I always had a passion for opening a bar. I made a fair amount of money 6 years ago when a computer startup of which I was a founder was bought out by a much larger competitor.

I thought the best thing to do was start working in the industry. I went out and got my bartenders license and got a job at a nice bar in back bar Boston. Figured I would learn the industry and go from there. After working as a bartender for over a year I had a chance to get in at the ground level on a new restaurant and bar in Nashua NH. Did that for a year and bailed. Now I am back in the software world.

Nights, weekends and holidays. Kiss them goodbye. Your job is to make sure other people are having fun and enjoying themselves. It was real tough getting home everyday between 2:00 and 3:00 in the morning. Assuming you are open for lunch that means you are back in at say 9:00 or 9:30 the next morning. People don't realize it takes 2 - 3 hours to get ready before you open the door.

Be in good shape. You are on your feet all day and work hard. I am in good shape but it is hard. I never felt so tired after a long day. Try humping kegs, C02 tanks and cases of beer every day. Also your body will break down. My knees and back ached all the time. I got a wicked case of tennis elbow and carpal tunnel that I never got rid of until 6 months after I left the industry. On a busy night I would open 50+ bottles of wine and mix a few hundred drinks. In the end being a bartender was just not fun anymore. I won't even go into serving tables, bussing tables, cleaning/mopping floors, cleaning the kitchen and cleaning the heads. When you own the place, you do everything.

The mental anguish of the money. Have a few slow nights, that leads to a slow week and then skip a few pay checks cause as the boss you always get paid last. Add on that the hassles of finding good help and employee theft, distribution hassles.

I felt I was a slave and then money wasn't that good. I have been out of the business a few years now. Sometimes I think about going back but not for long.

I had fleeting thoughts about commercial brewing. When I looked around there seemed to be plenty of equipment available from failed brewpubs. The fact that they failed didn't make the equipment a cheap investment. The startup costs are pretty daunting.

Remember, once you have produced your beer, you are competing for market share. Will you have enough funds for marketing to stand out enough to get shelf space, to get enough beer sold to keep the business growing? It's not 1990, and the market is now quite busy, with plenty of craft beer options on the shelves. You can't rely on filling a void. Sierra Nevada, New Belgium, Boston Brewing, and about 1600 others are already out there. You'll have to compete with competent existing breweries. It can be done, but I doubt it will be easy. I would come at this with a very sharp pencil, and consider very carefully what it takes to get a decent return on your investment. I would also think about what your next hobby will be, because making it work will quite likely do just that--make it a job that has to be done, and take much of the fun right out of it.

JNye said:

That way I could self distribute on a very small scale, to a few bars maybe

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This is all that I would want to start out with and grow slowly. I would love to brew for a local bar just to see my stuff on tap. Unfortunately it is a nightmare from a legal perspective.

This is my first post on this forum so I guess I'd better make it a good one :0) I have a business partner and the two of us are going down this route. We've been brewing for some time and we believe we can make it happen. That's the first requirement - you need to believe that you can make it where others have failed. And you need to be a little bit crazy. I mean who in their right mind would take hundreds of thousands or more of someone else's money and try to start a business when 7 out of 10 business fail in the first 2 years? Secondly, owning and operating a brewery or brewpub is just like owning and running any other business. Granted you need to know something about beer, but the "business" aspects are the same as any other - managing people, understanding P&L statements, conserving cash, maximizing profits, minimizing expenses, maintaining legality, licenses and fees, etc. That's the boring part, but unfortunately it's the most important part. After all, this is a business. Also, make sure you have a thorough, well thought out business plan that outlines the company's structure, mission statement, start up costs, expected revenues and expenses, advertising and merchandising methods, etc. The more of this you can put in, the better a chance someone will see it as a good investment and will be willing to loan you lots of $$$. And revisit & revise as needed, as markets and demands change.

Here's the good news. There are plenty of investors out there with money on the sidelines that aren't investing in traditional engines - stocks, munis, ETFs, real estate, commodities, etc. They're looking for alternative investment engines, and if you have a great business plan, great products and solid management, they will invest in you. We've learned that first hand! But get help. Find people - business owners, community leaders, etc - who are willing to help get you going and offer their expertise. If yer lucky, all they'll ask in return is free beer. :0)

Just my $.02

Weizenwerks said:

Considering what it takes to start a brewery or brewpub for the ground up, that's chump change. He is very lucky to have the alternating proprietorship arrangement. That cuts his company's overhead and capital investment tremendously. If you have a relationship with a brewery that will allow you such arrangement, you're a step ahead of most startups.

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Sure it is a step ahead. I was disputing the claim that his equity stake, let's call it 20K - I doubt it is any lower, is easy to walk away from.

remilard said:

Sure it is a step ahead. I was disputing the claim that his equity stake, let's call it 20K - I doubt it is any lower, is easy to walk away from.

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If you can't stand to walk away from your investment, business isn't for you. It's a risk that does not forgive and shows no mercy.

I'm not opening a brewery because I'm happier losing a few grand per year instead of a few hundred grand....

AZ_IPA said:

Or become a hell of a brewer and align yourself with business people you trust...

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so, you want to open a brewery together?

You have something you love to do and you're good at, that gives you enjoyment and relaxation during and after the process, allows you to exercise your creativity and experiment however you like, and rewards you with a great finished product that you can enjoy and share with your friends.
Now open a brewpub - take that joyous pursuit and make it so it has to pay your mortgage and living expenses, entangles you in red tape and government interference, exposes you to liability based on the stupidity of others, requires you to work longer days than you ever have before while trying to make sure your employees aren't ripping you off with free pours for their friends.... I think I'll keep my day job and enjoy my hobby.

humann_brewing said:

so, you want to open a brewery together?

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I don't trust you.

cclloyd said:

You have something you love to do and you're good at, that gives you enjoyment and relaxation during and after the process, allows you to exercise your creativity and experiment however you like, and rewards you with a great finished product that you can enjoy and share with your friends.
Now open a brewpub - take that joyous pursuit and make it so it has to pay your mortgage and living expenses, entangles you in red tape and government interference, exposes you to liability based on the stupidity of others, requires you to work longer days than you ever have before while trying to make sure your employees aren't ripping you off with free pours for their friends.... I think I'll keep my day job and enjoy my hobby.

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Exactly. Turning brewing from something that I love to do into something I must do would probably kill my love for it.

I'm content sharing the product of my hobby with friends and family. I don't need to take it further than that.

That would be a dream for me I think. But I'm way to new to brewing. However I want to get into the industry. Right now I'm sick of working away 6+ months of the year and missing my kids birthdays and every holiday. At 29 I might be a bit old for a career change but I'm seriously thinking about trying to get a job heping at one of the brewpubs nearby or the nearest micro to Learn as much as I can and also considering taking a brand new 2 year college course but it will be hard to get in I think. Craft beer seems to be growing in Ontario but is still verry small. It may be a good time to jump avoids and she where it leads me to.

It's all fun and games until you have to make a living at it!

Well, I started a company that basically required no capital to begin and no over head..... While I made money, doing it for other people who are paying you totally took the fun out of a hobby I once enjoyed.

jason81 said:

At 29 I might be a bit old for a career change but

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Hardly. People now a days are doing 3 -4 careers per lifetime.

Yeah it is easy to see the owners of these big (hah) microbreweries on TV traveling the world, sampling the raw materials, being dunked in a vat of outdated beer which looks like a lot of fun!!

A brewery/brewpub or any related business is just that, a business! Making beer and running a business are 2 different animals. Just because you can make world class beer does not mean you can create a world class or even "city" class business!

For anyone who wants to go into business seriously, make up a very realistic business plan, if that does not break you then by all means pursue your dreams!

I say go for it but then again, it is not my money

bah I just cant help but posting again. Third time in just a short bit but entrepreneurship is one of my passions. I work in a small business consulting firm and I can tell you that the number one industry we deal with is restaurants. Everyone wants to start a damn restaurant. It's kinda ridiculous. Then once they have started a business they need our help to stay in business.

However, I don't want to scare ANYONE away from starting their own business. Restaurants are an exciting business to be in. To own the satisfaction that people come to your establishment to eat, socialize and be entertained is a big draw. The main problem from entrepreneurs , besides their lack of business skills, is the inability to remove their emotion from business. Business is an objective art. Plain and simple. this doesn't mean that you can't take pride in your business but that you need to understand that business is business.

So after that I would like to extend my services to anyone who would like help or is curious about entrepreneurship. I'm still an intern but I work under some of the best in the business and all I can say is although my paycheck is decent, my real benefit from this job is learning all that i do in this job.

Tinga said:

Hardly. People now a days are doing 3 -4 careers per lifetime.

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I'm on my 3rd and I own my own business and I'm only 33. You have so much time, why get stuck in one thing.

Tinga said:

Hardly. People now a days are doing 3 -4 careers per lifetime.

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Hmmmmm, I'm only on my second... Been in the IT field for the past ~11 years now, guess it's about time to start looking for the next career then.

Gold,
If you doing something you like that's great! I was "pushed" into a different career twice, but it all worked out.

I'm actually hoping to get a position with a company I'm having a first interview with tomorrow... Mostly because I heard about a meadery that could be in the same area and might be looking for some help... If I could get my foot in the door there, even if it's very part time, I'd do it... Maybe be able to migrate over after enough time in...

At this point, I'm also open to other careers that I can get into, that will be as exciting as IT was when I started out... The main thing keeping me in the IT field is how much it's changing. Just need to get in with a company where you're not locked into a position, or group...

That's tough getting locked into one position, that's precisely why I left my second job. Well, that and the fact I had different beliefs than management and I didn't mind expressing them.

Where did you get the recipe for the Boddington clone?

My last job didn't last since the HR person told me one thing, before I accepted it, for what my role/responsibilities would be, but then the manager said something very different... I called them out on that, and they didn't like it... Plus, I reviewed part of the server environment and pointed out where it had problems (not minor ones either) and said how they should be or needed to be addressed... Think they didn't like hearing that either...

Don't really care what they want me to do at a job, as long as they tell me up front. I could be working on a 6+ month contract right now making an ass-load of money. Basically, I would have made, in 6 months, just a little less than a full year at the job I took... Kicking myself for making that choice...

I make about a years wage in 6 months but I'm gone that whole time. It's not worth it. I'm going home tomorrow morning. Hopfully never to go back. Aparantyl my daughter points to my picture and says dad now.

Tinga said:

bah I just cant help but posting again. Third time in just a short bit but entrepreneurship is one of my passions. I work in a small business consulting firm and I can tell you that the number one industry we deal with is restaurants. Everyone wants to start a damn restaurant. It's kinda ridiculous. Then once they have started a business they need our help to stay in business.

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One of the reasons I've experienced is that most restaurants that fail do because their owner/operators weren't in the restaurant industry prior to their own establishment. The restaurant and food service industry is not an easy industry. Industry specific knowledge is lacking among today's entrepreneurs. I've advised plenty of them. When they tell me they've never worked in the industry they are going to enter, I hand them my uncle's business card. He's a bankruptcy lawyer. "Here. You'll need this." Meeting ended.

What the others have said, in particular.....MONEY, MONEY, MONEY!!

Weizenwerks said:

I've been in the brewing industry for several years in one capacity or another.

Capital, business knowledge (employee hiring, wage laws, labor laws, taxes, marketing, advertising, AP/AR, accounting, sales, etc) brewing science to scale, consistency, customer service, market placement, product placement, taxes, regulations on federal level, state level, local level, politics of being in business. It all comes into play. There are certain people that are cut out for it and most people aren't.

I've seen and worked in more breweries that have come and closed than still exist today. The surest way to ruin a great hobby is to make it a business.

I've seen more brewpubs fail than breweries. In breweries you only focus on the beer. With a brewpub, you focus on a restaurant and a brewery. A restaurant is a headache of its own and you're combining that with a brewery now. Both are separate management problems that must be managed successfully in order for the pair of them to be successful and maintain or grow that success.

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Great post. When I dream of opening a business, this goes through my mind.

-"In breweries you only focus on the beer. With a brewpub, you focus on a restaurant and a brewery. A restaurant is a headache of its own and you're combining that with a brewery now. Both are separate management problems that must be managed successfully in order for the pair of them to be successful and maintain or grow that success"-

I love the beer part. And the brewpub would be cool, but I dont know if it would be worth it.

I just graduated with a business degree and moved to New Zealand to get some overseas experience. Im going to be volunteering at breweries here for a year then going back home where I plan to work (or volunteer if it doesnt work out for me to get a job) at a brewery. Then im going to brew school starting Jan 2013. I hope i will be ready to open a brewery in 5 years because that is the plan. I basically have to force myself into situations where I can learn from people who know the business. That seems to be the best way.

aggiejay06 said:

I think having that customer interaction as they drink your beer would really help keep the passion burning. Well that is unless they hated it .

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Not true... as a business owner you should be excited when people complain. You have to look at every dissatisfied customer as an opportunity of a new market of people like him.

Lack of $30M is the only thing causing me not to open my own brewery.

Irisndfan2 said:

Just curious. Some of you guys on here, based on pics, and comments by others, seem to be able to make incredible beer. Beer as good as a brewery's product. Why don't you guys go into the business? Too hard an industry to get into? Not the right time of your life? Rather just homebrew and enjoy it without having to endure the stress of running a business? Not enough capital?

Just curious?

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Homebrew is a hobby for me, period. I think I'm good at it, but that's not why I got education for. Besides, I don't ever want bring the pressure of exceeding my career expectations into a hobby, which I'm supposed to have fun. Not that I don’t have fun in my job, I love what I do, but it’s different from a hobby.

It's interesting that a lot of people's main concern is the initial capital investments required, but I think that can be acquired by preparing a solid business plan. If you're in an area that could support something like a brewpub/brewery it's likely there are people around who will want to get in on it with you financially you just need to sell them before you can sell the beer.

I work in breweries (packaging engineering) and there is a whole lot that is being pushed as a "secondary" concern that is also a huge piece of the puzzle. Unless you're only going to have beer on tap, you'll need a bottling line. Then you need a constant stream of bottles, labels, and other materials to keep it going. Not to mention all the logistics of distribution, shipping grains/ingredients in, and all the other players in your business (accounting, marketing, etc).

My wife keeps telling me I need to pursue a brewpub (and rope my chef sister into running the restaurant). It's a great idea on paper, but like so many of you have said once your livelihood is based on it I'm not sure the hobby would be so fun. Don't get me wrong though; I'll try anything once so if anyone in WI is looking to make a go at it...

AZ_IPA said:

Making great beer is completely different from running a successful business...

Take food for example. Can you make a meal cheaper than McDonalds that tastes better?

I know I can make a hell'a better hamburger for that price, but I know absolutely nothing about what it takes to run a franchise.

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i might if shoprite sold the lowest grades of beef and chicken but they only sell grade A !!

i'm 29 and working towards my second career (as an RN). One year to go!

what I think a lot this boils down to (heh), is "do YOU want to own a business?" If the answer is yes, then what kind of business would you like to start or buy into? I think if homebrewing is your passion and starting a business works at your point in life, then go for it!

My wife's cousin worked for years as an electrical engineer, now is a patent lawyer, and just bought a brewing kit. His goal is to start his own business, and hopefully as a microbrewery or brewpub. Why not right!?

If all goes well, my wife and I will join in business and try to make it all work out. Really, it comes down to, do you want to be an employer or an employee no matter what business you are in!

Slowfr,
Where ya at in WI?

Steelers77 said:

Slowfr,
Where ya at in WI?

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+1... where are you at?

optimatored said:

i'm 29 and working towards my second career (as an RN). One year to go!

what I think a lot this boils down to (heh), is "do YOU want to own a business?" If the answer is yes, then what kind of business would you like to start or buy into? I think if homebrewing is your passion and starting a business works at your point in life, then go for it!

My wife's cousin worked for years as an electrical engineer, now is a patent lawyer, and just bought a brewing kit. His goal is to start his own business, and hopefully as a microbrewery or brewpub. Why not right!?

If all goes well, my wife and I will join in business and try to make it all work out. Really, it comes down to, do you want to be an employer or an employee no matter what business you are in!

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+100 to this... This is exactly right. I come from a long line of Entrepreneurs (Mom, Dad, 2 Brothers, Sister, Uncle, and Great Uncle)
They all own different businesses too (no one wanted to work for the other lol).

I was the only jack wagon to go to school ,got 2 bachelors and my master's degree (Electrical Engineering) in just 7 years :cross: But ever since I was a kid I knew I wanted to run my own business, I tried to start several companies from elementary school through college. But in the end I was just trying to make money, they failed because it wasn't what I was passionate about.

I actually went to school to be able to find other sectors I could try to start a business in. Then of course once I started I drove myself to my Master's. My wife tells me its all or nothing with me, once I start something I give it my all. And if I feel I can't give it my all, I don't start it until I am at a point that I can. I feel this a characteristic that was ingrained into me from a young age by being exposed to other entrepreneurs.

I started brewing in 2004 (I worked for Anheuser-Busch as a brewing supervisor on the hot side for 8 months while in school and went through their beer school) and ever since then I knew where my passion lied.

I know what it takes to run a successful business and I have plenty of resources to draw upon for information. I know I will own a company one day and by taking my time to plan it out and build up finances for it, I will be ready for the plunge. I know that I have the passion, drive, work ethic, and knowledge to make it successful.

You really need to know yourself, both strengths and weaknesses, before taking this step. Its not to be taken lightly as a lot is at stake in the success of your business. As long as you've planned it out and have saved for it (since you won't be taking a paycheck for some time) then you will be armed with what you need to start. The rest is up to you and your management team.

For me, its only a matter of time...