Business Ideas: Wanted to hear your thoughts.

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Jul 11, 2011
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Just like a lot of other home-brewers I've dreamed of making a living by selling my beer. Obviously like a lot of home-brewers i also have commitments to my family and banks that prevent me from jumping in the deep end and giving up my job to brew beer for a living. Plus the initial start-up cost to make a brewery big enough to be profitable...anyways. I've had this grand idea for a brewpub and way to build up to that goal and wanted to use you guys as a sounding board and get your thoughts.

Phase 1: Equipment and Permits

Start with a nano sized brewery somewhere in the 3bbl range. I'm thinking electric but i will be looking for used equipment to save money and if the deal is good i may change my mind. I need to get licensed and to make and sell beer off the dock. I have a few businesses interested in carrying the beer but i wouldn't be able to be profitable with a distributor.

Phase 2: Products and Services

After getting settled in a space and getting into a rhythm with new equipment i want to either start or partner with a local home-brewing club to get some brand awareness and support from the local home brewing community. I want to hold meetings, and have home-brew classes for people. I would also like to provide some services as well such as:

Contract Brews for Home-brewers: For home-brewers who want to brew on a bigger scale but cant afford the cost of the equipment. Ideally i want them involved with the brewing process (it is their beer after all) although there may be liability issues...ill have to look into it.

Tap Room/Storefront: To sell my beers sure, but i also want to sell home-brew from other local brewers. That can be one of the Tiers of the contract brew program above. One tier is we brew and you take home. The next is we brew and sell it in the store and you get a cut of profits.

Phase 3:

Brew Pub: I hope at this point to have enough income from the previous phase to afford a >7bbl brew-house to support a brewpub (or enough data to support a bank loan), the refined beers to support beer selection, and the brand recognition to have a good start. I want to keep the trend of featuring local breweries and want to have home-brew competitions where the winner gets served on tap with a cut of profits. I still want to hold homebrew club meetings in the back, homebrew classes, etc.

The contract brewing would still be in effect with the we brew you take home and we brew we sell in bottles with a cut of profits.

I was thinking about getting a Kickstarter going to fund Phase 1 of the project hoping that with the strong home-brewing focus of the business i could get some support from the community. But seeing as I'm considering building a business out of home-brewing, with a focus on home-brewers, and with a clientele of home-brewers i wanted to get the advice and comments of home-brewers.

Kickstarter tiers would range from bottle opener, pint glass, t-shirt to brewing with us to having your own personal mug that we keep at the pub for your use only. I'm open to other ideas as well.

I was nervous to put out this post because i suspect that there will be a good number of people who will say this wont ever work but all advice is welcome.

Thanks in advance for taking the time to listen and comment.
Congrats on developing a plan and looking into going pro.

I'm no expert, but here are a few things that I thought of:

1. Analyze potential profit margins for your various plans. You will make more money selling your beer by the pint directly to consumers, meaning the brew pub. Having local businesses carry your beers is great to make a few bucks, but probably does more to build brand reputation and a customer base than actually help you turn a profit, at least in the beginning.
2. The contract brew thing is a cool idea, but probably a much lower profit margin than selling finished beer directly to customers. I would consider this in conjunction with the brew pub, but not as a stepping off point.

Here's a BBR podcast from a few years ago that interviews 5 pros about their experience, perhaps you'll find it useful. It's the August 12th, 2010 episode, Me personally, I liked the guy who operated his business debt free and grew organically. He suggests finding an existing restaurant space since it's already designed for the food/beverage industry and has things like floor drains already installed. Debt in the forms of bank loans, personal loand, or investors means risk and is usually the number one thing that brings down a small business. If your small business doesn't have debt, the worst thing that happens is you lose a few bucks because you weren't making enough to pay the ongoing bills, but it will not bankrupt you and your family, or leave friends and family members upset because you defaulted on personal loans. If it were me, I would find a way to start small, debt free, and grow from there. People take on debt all the time and think it's no big deal, but that's my opinion. I've been to 1 and 3 BBL nanos that are making money through their brew pubs. It can be done.

Best of luck.
I don't think it wouldn't work because I believe if you work hat enough and do everything right anyone can be successful in anything. But one thing to consider is not just your financial commitment to your family. Running a brew pub involves long, late night strenuous hours. You will have very little time left for your family. Restaurants, bars and brew pubs can be very lucrative but your personal time is a trade off. Down the line, once you're established, you could have others managing and running the place but it takes a while plus you really have to trust those people. In all I think it's a great and adventurous career move, just take into the sacrifices that would be made.
Read this dude's thread:

Long-story-short, he and a couple buddies started a 3 bbl nano in their spare time; they were paying rent, utilities and ingredients in the first month with growler fills and just one or two bar/restaurant contracts, and less than a year in, have made enough to expand their space and upgrade to 7 bbl equipment, still working their day jobs.
Thanks Pie Man for the advice, I will listen to that podcast and try to absorb some knowledge. I am actually in the middle of building a 10gal/batch all electric system but after looking into it, its not really that much more cost to upgrade to 55gal drums and do a 1bbl (besides fermenters). If i start there i may be able to work into the bigger stuff if things start going really well. Worst case is i have a really badass homebrew setup to work with right?
NicoleBrewer, Thanks for taking the time to respond. Yeah i know its going to take a lot of my time, especially in the beginning. At some point i will have to weigh the personal cost into the equation (my wife is very supportive right now but its all hypothetical). Im an engineer so risk management is what i do day to day so im very cautious when it comes to this stuff. Im in the information gathering phase right now. Thanks again.
If i start there i may be able to work into the bigger stuff if things start going really well. Worst case is i have a really badass homebrew setup to work with right?

Haha, exactly.

I meant to say earlier, you may want to consier a weekend road trip to some nano breweries and brew pubs that would not be in direct competition from the area you are thinking of opening in. If you coordinate in advance, you maybe able to meet with the owner and they can give you some pointers, ball park financials, marketing ideas, that sort of thing.

Again, good luck. Let us know how things go.
Assemble yourself a team of experts to fill you in on the the things you may not even know to ask or consider:

  • accountant
  • attorney
  • commercial insurance agent
  • banker/financial adviser for loans, SBA financing, state & federal loans or grants, investment partners
  • code expert(s): (ADA, fire suppression, energy efficiency, etc.)
There are a lot of liabilities and pitfalls out there!

It also may be wise to have your wife be the principle business owner as there may be some special advantages available for businesses owned by minorities & women.
I think your plan is totally viable. One thing, and maybe you are allready doing this, is to get your name out there in the community and in social media before you even start. I follow breweries on Kickstarter pretty close and it always amazes me that people are trying to raise money with zero, or almost zero, social media presense. It's almost impossible to fund raise if only a few people know who you are. The other thing is bring beer EVERYWHERE! It is your business card so the more people who try your beer the better. Have tasting parties, pour your beer and talk up your never know who might be interested in either investing or who might want to help you out (lawyer, contractor, insurance agent, etc..)