Cost to start a Nano?

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thisisbeer

thisisbeer

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I have heard from plenty of people, "I heard it's been done for as litle as this!" and "If you dont have at least Bill Gates bank account you wont make it." I was wondering from people that have ACTUALLY started a nano how much capital they started with. What size system they used and if they built it or bought it. I know everyone is very helpful on this forum but it seems like everytime it's brought up theres a hundred people saying why you will/wont fail that have never taken the plunge in the first place.
 
first thing is first look up local cost to incorporate, certify a kitchen, and what is now becoming a niche market for flavor profiles.
 
I'm in the process of starting up a microbrewery. It really depends on the brew house you want. For us, the smallest is 7 Bbl so not quite nano and its pretty expensive (~80-100K for the equipment alone).

If you are talking like 10 gallon magic brew nano and you live in Washington then it can obviously be pretty cheap, like 10K. Otherwise you are probably looking at 25k min. If you get so small, it's not worth the trouble if you live in most of the US states with the licenses and all. If you want to do a tiny nano... I'd argue to just up your homebrew setup and sell to your friends and family on the DL.
 
In theory you could buy a 5bbl system for a reasonable cost and use a bunch of recycled food grade plastic buckets as fermenters and bright tanks...

Or you could find a jack of all trades good old boy redneck and have him fabricate a system for you.

The New Albion Brewery was made out of modified Coca Cola tanks. Have it...don't ask us...just do it.
 
I don't know. But there is a nanobrewery operating here in Rocky Point, in a house. It's a pretty blue collar community. There's another going through the process to start, the brewers are 30-ish diesel mechanics, not wealthy. Like many things, it's got to be a range. I homebrew with less than $200 of equipment. If you were careful, you could do it for less still. But many spend thousands. I've read of micros re-purposing used dairy equipment. I think there are books, and I know there are consultants. Ask a consultant or a nanobrewer.
 
I have a pricing list together for my future nano and it tops out at about 12k.

On this list is the entire Blichmann Top Tier and Tower of Power system, with a 30g HLT, 30g MT with all the trimmings, 55g BK, Tower of Power with two controllers, 10 55g Plastic Inductor Tank fermenters, ice machine, two therminators for chilling, misc pumps and hoses, pro grade refractometer, about 20 1/4bbl kegs (brewpub scale), and the other goodies I would need.

Luckily, I have a restaurant partner that says if my partner and I can raise the money for equipment, he will let us install it in the restaurant.

Remember, always plan for at least double your current budget. I know of a local brewer that spent 9 times what he wanted to, mostly because he had to spend 300k on redoing the plumbing and send the drains all the way to the main line at the street, about 1200 feet away.

So yeah, budget high and be happy you have money in the bank after you're done.
 
This topic would be better asked at www.probrewer.com HBT is for home brewing. Yes some people here also own or work in a brewery but they are the minority.

GL
 
It highly depends on the laws of your state. In some states nanos can be operated out of residential homes, which would cut costs drastically. I know that it's technically possible in CA, but it depends on local zoning laws and I think only a couple cities will actually approve the permits. From what I've heard, the brewery laws in TX are on the less friendly side, so it may be more difficult. The most important component of the law is whether or not you can serve direct to customers. Most of the nano conversations that come up agree that it's very difficult to be profitable through distribution and the real money is in serving the majority of your beer over your own bar counter.
 
Thanks for all the input guys. Brewing laws changed in Texas in early June this year. They passed five new bills. I dont remember details exactly of the top of my head but I know brewpubs can now self distribute, something like 1000 bbls a year. Which should help get some people started due to the fact there are a lot of places in Texas that allow permiting for a brewpub but not a brewery. Also in the past brewpubs could only sale for on premise consumption. I think breweries under 60,000 bbls a year can now self distribute a certain amount but im not sure how much. Its not a lot but it seems Texas is becoming more beer friendly.
 
I would honestly advise you to stay out of probrewer, they really don't like nanobrewers over there. As a bit of anecdotal evidence, I raised about $25k to open my 3bbl nano, and would estimate I've spent about that much more of my own money. We're a 1000sqft space with a 3bbl kettle system, all made from scratch. Our operation has been EXTREMELY frugal- we've done 100% of the construction ourselves, and bought not a single thing new apart from lumber. The brewstand was built by a buddy for 2 cases of beer ($800 in steel) and the kettles were done by a local welder. I don't think anyone could do this more cheaply in so cal, so I would call ~$50k the bottom limit, if you've got the time (every waking moment) and know-how to DIY everything, and buy every single item used.
 
We are looking at a larger brewery and therefore setting the space up and having the right amount of working capital is the dominant portion of our initial investment. Even with new equipment, I'd say that it only accounts for about 30-40% of our cost. This is for a 15 bbl system though
 
I'm in the process of reading: http://breweryoperationsmanual.com/ (it was worth the price of the book) and in it he says you can start one up for $50,000 - $100,000. Granted, he's not using the top of the line fermenters, mashtuns or anything like that but more of a "frankenbrew" setup mostly out of old dairy equipment... but in theory you could be setup and running in under $100k (including licensing, facility and equipment)
 
I've read that book twice. I want to meet the guy that setup and opened a 7bbl brewpub for 100K total pre-revenue cost in the last 3 years.
 
thisisbeer said:
What has been your most expensive cost. Setting the space up? The brewing equipment?
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I guess it depends on what you define as a single cost. As far as line-items go, the biggest cost has been RENT. You can expect to pay rent for at least 3 months while having zero income, if you send in both your state and fed applications the DAY you sign a lease, which you can't really do as you need a whole bunch of info about the layout and other building info you can't get without a lease. Even then, you can't buy ingredients from major suppliers until you get your brewer's notice, which means you might not even be able to brew for 2 weeks after you get your licenses. All told, our cobbled together brewhouse will probably be the largest portion of the cost, but construction has not been cheap either and we're doing it all ourselves.
 
  • Building - What’s your rent/deposit? That can be a huge cost that comes monthly
  • Insurance / Bonding – Bonding isn’t expensive but insurance depending on your plan can be monthly or a decent up front expense
  • What Tenant Improvements needed at the building? Tap Room? Drainage, waste – Both liquids and solids. Hot water on demand or boiling it? Gas? Sink, Mill/mill area, electrical, hvac.
  • Cold storage? Insulating a framed room with using an AC or small to large walk in?
  • Cooperage, Cooperage, Cooperage. It’s expensive, used will eventually break, new will require deposits to rent/purchase. Making sure you get them back will become a headache.
  • Keg washing, goes back to what kind of cooperage. Sanke or no? properly cleaning kegs takes time if you’re doing it right and depending on type not having some kind of keg washer will suck
  • Brewing equipment can actually be cheap if you source used, but realize depending on quality it can come back and bite you with micro fractures or plain cracking. (this is worse case, doesn’t always happen or right away)
  • Chilling, how you going to chill, with water from a hose through plate chiller or use a good radiator or cold liquor tank? There is some cheaper ways if you’re not moving too much liquid but if you go for even a 3hp glycol system for any tanks or even cooling, that’s 8k+ expense.
  • Licenses – Business License, State Liquor, Depart of Ag will probably want a piece and if you have a tap room good chance your Depart of Health will want some as well. There are more but these are the ones usually with fees
  • Then if you want to even think of web presence, domains and hosting isn’t huge but adds up. Trademarking is a decent cost that can add up (325 per category just up front) and if you’re going to be serious about it, you will want to do it.
  • Legal fees, depending on if you want to have someone look at your lease, if you start an LLC you will want an operating agreement, partnership I believe there is docs you want as well. Heaven forbid you need legal counsel for anything else at the beginning, because it will add up.
  • Merch isn’t required but is nice.
So really, just pick what you want to be your biggest expense, some of this you can be cheap or even ignore others you can’t. If you do a tap room, then there will be more costs added along with just needing working capital in general for operations and ingredients.
This isn’t to discourage anyone, just be thinking ahead, this is a business not a hobby, it’s not just about brewing.
 
greatschmaltez said:
Right now this is our plan to avoid the keg headache altogether:

http://www.petainer.com/Large-Containers/Keg-Family.aspx

I saw one of these when I met with our distributor and I had a sigh of relief because it gets rid of a decent capital investment and the nightmare of getting them back. The ones I'm looking at are 1/4 and 1/6 barrel.
Click to expand...

Not sure what the costs are but in your decision making process, you should factor in storage space(-), shipping(+ & -, weight vs. Bulk), savings in not having to track and collect ss kegs (+), not having to clean kegs (+)...
 
My friend opened a nano a few months ago. He has a 2bbl brew house and a mix of 6 or so fermenters(stainless TC conicals), probably half require a double brew day to fill. He did some DIY, like a keg washer and stand. He is also using a building in his backyard as his brew space. With that being said he has between 20 and 25k in his set up, including a pallet of sixtels. Kegs are a very large expense, not to be overlooked, BTW.

Demand has been strong for his beer and he is now running into some capacity issues. At less than 6 months in he is already looking at ways to upsize his brewhouse.
 
Again as I pointed out before, it comes down to what exactly you are doing is what will affect your cost not always the State your in though city/state laws can affect cost along with potential market.

Real Estate - If you don't own it then it will cost usually based on size. The variable is too large to give you an amount of cost but expect deposits on the lease as well as monthly rent. That said, in your letter of intent, negotiate - negotiate - negotiate. Price per square foot, tenant improvements and even 60-120 days free rent. You will probably have to pay taxes if its a triple net but your rent could be delayed. If your doing things to a property that will increase its value, negotiate for the land lord to do it or at least get him to help cover the costs. More than enough times I've seen threads with people venting that they got a space and are now paying rent while they start to put this business together.

Another part I want to beat dead is cooperage. Its expensive and can require deposits. The cheaper you go means there are negative factors to it. Those PET kegs can be good but there are draw backs. Brewery I've worked for uses them for strictly out of state distribution. In state they use stainless steel. There is enough debate and some studies that show plastic can not always be good for the beer along with those kegs are being looked it more closely about being rated well enough for the use BUT they can still be used for saving money. Also with buying cooperage you need to plan on turn around; if you are distributing to bars and have a very finite amount, you might not have enough to keep up production at a regular level because you are still waiting on turn around. In turn this causes you to not make money which can severely hurt your business.

All in all, Yes you can make it work for cheaper IF you have the right circumstances but that doesn't mean its the best thing for you or your business with trying to cut corners to save money. The list I posted a few posts back is generic but its honestly a large amount of what you want to consider.

I've seen a lot of nanos for living in Oregon and have a good amount of personal experience in the beer community. Just because you can get the doors open at a lower cost doesn't mean its a good business move and won't find yourself in trouble down the road. This is not to discourage but to educate and help people looking at doing this.

First honestly, start to write a business plan, if your doing it right, it will be one of the hardest parts of starting a business but one of the best resources towards knowing what you need and how much this will cost than asking people on the homebrew forum.
 
Flakk said:
What are some the more nano friendly states in terms of overall cost?
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Got to say CA is very nano friendly. We have self-distribution and tasting room laws; we're not regulated by the health department and we can sell pints at retail at our licensed premises. The fire marshall is not interested in our sepup apart from how many people fit into our space. Apart from expensive rent in So Cal, I can't think of a more friendly environment.
 
^ This. I don't own a brewery but am forecasting to open one in June 2015. Part of the delay is saving, as well as developing a solid business plan. There is a great farm style brewery about 10 miles from me that has started up and really done well. They already owned the land, structure, and have many acres of land to grow hops, and they are planning to grow grain soon as well. They had a lot of resources to start out with... I'm working from the ground up, and frankly, want to compete with these guys. (note: I've talked to the guys and they are top notch, good people.)

I am currently working on my business degree, which requires to write business plans, etc., So I'm in slow progress mode given the family, day job, school, and brewing... Starting to SLOWLY put equipment pieces together, but still is a long way from where I want to be, 2 years away from really opening doors. It is tough, but it is a dream that is getting closer (and more frightening). I realize it a huge risk and will be challenging, but I have a very supportive wife and family, and I'm working many of the details.

Hopefully I will have my own thread someday about the ups and downs of starting up.

Cheers
 
I cannot agree/promote the fundamental idea more of getting your business plan and chronological cash flow model together as step 1. You will not be nearly as "frightened" once you see on paper how all the dimensions of the business are going to work and how the money is going to work. Although things don't always go exactly like they do on paper, doing this sets a good foundation and allows you to understand what you are getting into.

We have looked at the pros and cons of the PET containers in similar fashion to many aspects of our business model. Dead horse dead.
 
greatschmaltez said:
I cannot agree/promote the fundamental idea more of getting your business plan and chronological cash flow model together as step 1. You will not be nearly as "frightened" once you see on paper how all the dimensions of the business are going to work and how the money is going to work. Although things don't always go exactly like they do on paper, doing this sets a good foundation and allows you to understand what you are getting into.

We have looked at the pros and cons of the PET containers in similar fashion to many aspects of our business model. Dead horse dead.
Click to expand...

Have you got a price quote yet for the 30L kegs from them? If so what is a 30L keg cost right now?

Jay
 
I have a 3.5bbl brewhouse from PsychoBrew and 7bbl fermenters from PBST. We have a 4000sq ft building in Chicago. Our building is oversized for right now, but I don't want to move when we buy our 20bbl brewhouse in 2015. We've spent around $60k so far including all equipment, rent/deposit, construction, legal etc. Our official launch is the first week of September. Plan on everything costing way more than you expect and taking twice as long.
 
thisisbeer said:
http://plastickegs.com/product_item/12-bbl/

Actual half barrel plastic kegs. Doesn't say a price except for half the cost of regular kegs. Kinda neat.
Click to expand...

We own 50-60 1/6bbl from there. Got a great deal on some used and picked them up. Pricing new is $91.50 for 1/2bbl and $71 for 1/6bbl, compared to stainless kegs from Gopher Kegs at $114 for 1/2bbl and $74 for 1/6bbl. Prices go down to $68 for a full pallet of 1/6bbl, which is 60 kegs.
 
My buddy who started his own 3BBL microbrewery with a tasting room opened with 30K from kickstarter and about 40-45K of his own money (NO LOANS!!). The brewery is about 2500 SF in a office park off the beaten path.

He was making money week 1. He now employs a head brewer and 4 bartenders. I doubt he's getting rich, but he seems to be doing just fine.
 
TopherM said:
My buddy who started his own 3BBL microbrewery with a tasting room opened with 30K from kickstarter and about 40-45K of his own money (NO LOANS!!).
Click to expand...

Interesting, how did he go about getting that much money from kickstarter for a nanobrewery?
 
Mostly friends and family. We have a pretty strong homebrew and craftbrew community in Tampa Bay, and he's definitely dialed in!

I did just go to the kickstarter page to verify, and it was actually $20,000, not $30,000. He did put up a little over $70K startup money, and didn't borrow any money.
 
For all of those saying $100K, is that with the facility to brew? I can't buy any kind of commercial space for that kind of money.
 
messiah said:
For all of those saying $100K, is that with the facility to brew? I can't buy any kind of commercial space for that kind of money.
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Lease, but plan on 6 months of paying rent without brewing a drop of beer.
 
Leasing seems to cost about the same amount yearly as any of the spaces I thought about purchasing, and its just money lost. I suppose it would cut back on colateral for loans though.
 
I think the main sticking point is your local gubmn't. Most of the town people we dealt with were excited and supportive, but it only takes one A-hole to ruin everythihg.

We tried starting one with 100K and were budgeted well for a 2 bbl system in a 3600 sq.t ft. space. In our area the zoning is very strict and there is no light-manufacturing space <2500 sq. feet. It took us 7 months just to find an acceptable space (zoned for manufacturing AND retail sales) and signed a conditional lease. Then we ran into a huge road-block with the local gas and plumbing inspector. What should have been $5K of equipment and labor turned into about $40-50K of "required safety improvements" to the space. The inspector cited concerns over liability if he approved custom-made equipment that was not on the state approved list, required gas solenoids linked to the vent fan to stop one from operating the burner without the vent on (as if we were complete morons and looking to poison ourselves and haven't been doing this for 15 years), GREASE TRAPS on the sinks (???) and new floor drains as he felt the existing ones in the space were not sufficient. He didn't have a clue, was not interested in a reasonable discussion, wouldn't budge on any ridiculous point and essentially killedus. The rent alone for the extra months required for the "improvements" with labor and applications to the state plumbing board for variances would have broken us before the first drop was brewed. The feds and state were a cake-walk compared to that guy.
 
For all my comments, I was assuming leasing, you don't want to add a real estate loan to this chaos of starting up.

Government can be tough, we plan to get the local guys involved as early as possible.

J-bird, I'm awaiting feedback on a request for pricing I submitted recently. Depending on price we would structure out chronological cash flow to slowly build a keg fleet over time to avoid the additional upfront capital. I will let you know what the price schedule is.
 
Komocabo said:
^ This. I don't own a brewery but am forecasting to open one in June 2015. Part of the delay is saving, as well as developing a solid business plan. There is a great farm style brewery about 10 miles from me that has started up and really done well. They already owned the land, structure, and have many acres of land to grow hops, and they are planning to grow grain soon as well. They had a lot of resources to start out with... I'm working from the ground up, and frankly, want to compete with these guys. (note: I've talked to the guys and they are top notch, good people.)

I am currently working on my business degree, which requires to write business plans, etc., So I'm in slow progress mode given the family, day job, school, and brewing... Starting to SLOWLY put equipment pieces together, but still is a long way from where I want to be, 2 years away from really opening doors. It is tough, but it is a dream that is getting closer (and more frightening). I realize it a huge risk and will be challenging, but I have a very supportive wife and family, and I'm working many of the details.

Hopefully I will have my own thread someday about the ups and downs of starting up.

Cheers
Click to expand...

You description of the fellas in your town sound an a lot like a local brewery here in Springfield. Makes it a bit easier if you already own a building land and have capital!
 

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