costs of opening a brew pub?

[badmajon]

I'm sure it varies state to state due to cost of living and liquor taxation laws, but can anyone point me to a place where I could research this? I am beginning to get very serious about planning to open a brew pub, somewhere, when I retire from the military. That's about 15 years away, but that gives me time to save right?

 

[thezepster]

Have you checked out probrewer.com? the people on that forum are mostly, well... pro brewers. Try searching their forums. Other than that this site usually has some people who know about that kinda stuff

 

[DrawTap88]

There is also a book that is put out by the Brewer's Assosciation that is worth checking out. From the research that I've done, plan on saving close to $100,000.00 (and then some).

 

[Cpt_Kirks]

There is also a book that is put out by the Brewer's Assosciation that is worth checking out. From the research that I've done, plan on saving close to $100,000.00 (and then some).

Closer to $250,000, if you are serious about it.

I've read that $80 book a couple of times (luckily, the library has it here).

 

[Budzu]

Myself and my cousin and partner opened our brewpub in December. We did not put as much focus on the kitchen/dining as many brewpubs do. We instead went for a more "bar" focused brewpub, with an Irish theme, and just some basic pub food.
The kitchen is where you can really dump some money if you want to do it right, and get a bigger customer base. Plan on spending more on the food service etc. than on the brewery if you want to go this way.
With 100k, you can do alot brewery-wise, but not food-wise.

 

[Blackdiamond72]

It depends on the size of your brewery and the size of your kitchen from what I can tell. I come from a restaurant background and know how quickly a kitchen can get expensive. Good used equipment is easy to find for a kitchen, its getting harder for brewing equipment though. I was just looking at a nice 15bbl system that was sold for 25k but that was dirt cheap. With two 30bbl jacketed fermenters and a 30bbl bright tank, the standing system was about 80k but the build out for the rest of the place was pricey. Figure in a walk in cooler, glycol system, hot water, grain mill, grain auger (optional), and bar equipment, you're looking at around 250k or more just for the brewery part.

I would suggest starting with a simple kitchen and building that up. Don't cheap out on the brewery equipment as cheap tools provide poor product in my opinion. Growing a brewery is far more costly later on. Depending on your potential business size, I wouldn't buy equipment smaller than 7.5bbl. That way you can get 15bbl fermenters and only have to brew once to fill them.

 

[Grasslands]

Check out the "Going Pro" group page.

I'm in the process of going professional right now and the path in front of me is certainly intimidating, but I'm looking forward to the challenge. FWIW, I'm planning on a brewery with a tasting room and having it catered during hours of operation - so it isn't officially a brewpub.

 

[badmajon]

Thanks for the replies. I have somewhere to start from now.

 

[Mongrel]

The initial investment for Three Creeks was around $1,000,000. They spent a lot of finishing, and the kitchen, and the land was a lot more expensive when they built a couple years ago. It's doing great business, and they're already looking towards aggressive expansion.

 

[DrawTap88]

Closer to $250,000, if you are serious about it.

I've read that $80 book a couple of times (luckily, the library has it here).

You are correct. The $100,000 is just for the brewery side, and I may have even been a little light with that estimate.

 

[mlyday]

There is a place by me that just went in. Brew-pub, but no kitchen. You can bring your own food in, or they work with a couple local restuant and you can have take out delivered to the bar. May be a way to start, and then add your own food later on.

 

[ayoungrad]

I also scoured the internet looking for an answer to this. Most people that seem to know what they are talking about estimate $1 million as a good initial investment. You need to obtain the rights to do it (lawyers), rent (or buy) a place, have it fitted for brewing/kegging beer, fitted for making food, fitted for selling food and beer, get it inspected and reinspected for codes and sanitation, hire employees etc. And have enough capital to get you through the minimum of 6 weeks before your first beer can be sold and then also through the early (hopefully only early) lean times and still pay your employees and suppliers. And if you do it yourself... your weekdays, weeknights, weekends and holidays are all at your new brewpub.

Don't get me wrong, I'd love to do it. But it involves a lot of time and money even assuming you've got the right market/location.

So I say, RDWHAHB.

 

[rico567]

I also scoured the internet looking for an answer to this. Most people that seem to know what they are talking about estimate $1 million as a good initial investment. You need to obtain the rights to do it (lawyers), rent (or buy) a place, have it fitted for brewing/kegging beer, fitted for making food, fitted for selling food and beer, get it inspected and reinspected for codes and sanitation, hire employees etc. And have enough capital to get you through the minimum of 6 weeks before your first beer can be sold and then also through the early (hopefully only early) lean times and still pay your employees and suppliers. And if you do it yourself... your weekdays, weeknights, weekends and holidays are all at your new brewpub.

Don't get me wrong, I'd love to do it. But it involves a lot of time and money even assuming you've got the right market/location.

So I say, RDWHAHB.

And, since most small businesses fail within a few years, make sure you're doing it with someone else's money {Please note BIG smiley face!!}

I know practically nothing about running a small business, but I read something once that gave what they considered the main reasons for failure of such an enterprise, and among these was undercapitalization. We've been looking at a period of years now when microbreweries, brewpubs, and the whole craft beer phenomenon has been in a steady period of strong growth. This has reached the point where some people seem to think it's a sure thing, and will go on forever. That's what they thought in September 1929, and just before the dot.com crash, too. Everything changes.

 

[Acoma]

I recently listened to a podcast from back in 06 on The Brewing Network and they had Peter Zein from Alesmith featured. He gave an estimate of 150k plus 2 times that in savings. That is to buy a brewery thats already up and running. The cost of the building, equipment, and good faith. He said depending on the location and what not you could maybe shoot for 75 plus double that in savings. It may be worth listening to. Check out their archives. The date of the show was 04/02/06. There may be more current estimates out there but I'm still listening from the beginning and back in 06. Helps pass time listening to brewing podcasts. From what he was saying 100k is way undershooting and 1 million may be a bit of over shooting. All depends on what and where I'm sure.

 

[KevinW]

I am inclined to go with the $250,000 plus crowd due to the initial start-up plus the reserved needed to get through the initial lean times!

I have read that any system smaller than 7bbl is not a wise investment due to handling potential increase in output. Smaller systems require more frequent batches which means more man-hours per batch and smaller profits!!

With a lot of research and patience I bet a person/persons could get a business going for a lot less but I also think it takes some luck too!

Either way I wish you good fortunes and the best of luck!

 

[Sacdan]

In my research, anywhere from $1-4M.

 

[PVH]

Someone in this thread: https://www.homebrewtalk.com/f14/why-dont-more-you-guys-open-your-own-breweries-235137/index6.html opened the doors for under 60k, although it appears the place is not bringing in much at the moment. Thread got killed when someone said that using investors to start up is a stupid idea.

 

[badmajon]

I've done a little more research and some calculations and the most I think I could come up with cash money in 15-17 years is $100-125k. I mean, that's just for the brewpub adventure, the problem is I also have to save up in IRAs and pay off my house early so if the whole thing fails I won't be a senior citizen eating alpo....

I wonder if one can do this with only 100k cash money and not wanting to get into debt.

 

[Mongrel]

I wonder if one can do this with only 100k cash money and not wanting to get into debt.

I'd rather risk someone else's money. You risk your time and labor, the investors risk their money. Debt doesn't have to be a dirty word when you're starting a business. Convincing people that they should believe in you is work too. Hell, it can be the toughest part.

Anyway, if you ever intend to expand, there will come a point where your money isn't enough. So, you convince someone to lend you money, or you convince them to buy a share.

 

[badmajon]

I'd rather risk someone else's money. You risk your time and labor, the investors risk their money. Debt doesn't have to be a dirty word when you're starting a business. Convincing people that they should believe in you is work too. Hell, it can be the toughest part.

Anyway, if you ever intend to expand, there will come a point where your money isn't enough. So, you convince someone to lend you money, or you convince them to buy a share.

Debt isn't bad if its someone elses, but I'm not going to scrimp and save for 20 years to pay off my house and establish a reasonable nest egg, just to throw it all on the line and have nothing more than a brewpub standing between me and a can of Alpo.... sorry, I just have strongly negative feelings towards debt. Plus I've seen enough Ramsay's kitchen nightmares to see the kind of strain having everything wrapped up in the resturaunt puts on people.

 

[SpacemanSpiff]

One thing I haven't seen mentioned here. If you're really thinking 15 years away, don't forget inflation. 250k won't be worth nearly as much 15 years from now. Figure on needing a target number of 50-60% more than what it would be today. That's assuming somewhat "normal" historical inflation of 3%.

 

[Grasslands]

And, since most small businesses fail within a few years, make sure you're doing it with someone else's money {Please note BIG smiley face!!}

I know practically nothing about running a small business, but I read something once that gave what they considered the main reasons for failure of such an enterprise, and among these was undercapitalization. We've been looking at a period of years now when microbreweries, brewpubs, and the whole craft beer phenomenon has been in a steady period of strong growth. This has reached the point where some people seem to think it's a sure thing, and will go on forever. That's what they thought in September 1929, and just before the dot.com crash, too. Everything changes.

One might think that the primary reason most small businesses fail in their first 5 years is undercapitalization, but it's actually the result of poor planning and/or a bad business plan with little-to-no consideration for strategic planning.

You're right, though, that everything changes - however, if you have a solid business plan with a 5-10 year base strategy - you can succeed in the right market. Homebrewers shouldn't assume that they're going to succeed with a brewery/pub in their hometown of 25k people...just because the number of breweries in the US is on the rise. Actually, in small business, nothing should be assumed. Finances are important, but if you have a piss poor business model, your finances won't be worth a darn.

 

[Grasslands]

Debt isn't bad if its someone elses, but I'm not going to scrimp and save for 20 years to pay off my house and establish a reasonable nest egg, just to throw it all on the line and have nothing more than a brewpub standing between me and a can of Alpo.... sorry, I just have strongly negative feelings towards debt. Plus I've seen enough Ramsay's kitchen nightmares to see the kind of strain having everything wrapped up in the resturaunt puts on people.

It is a plunge, but if you do it methodically and with a good model in a good market, the debt can be erased. I echo your thoughts on the restaurant side though - My plan is to open a brewery with an attached taproom (considering state/local regulations) and have it catered to start. Once business improves and expansion is necessary, a separate license for a brewpub would be ideal - if a market can support it.

 

[Mongrel]

It is a plunge, but if you do it methodically and with a good model in a good market, the debt can be erased. I echo your thoughts on the restaurant side though - My plan is to open a brewery with an attached taproom (considering state/local regulations) and have it catered to start. Once business improves and expansion is necessary, a separate license for a brewpub would be ideal - if a market can support it.

This is basically what Ninkasi has done. Nice tap room with a lot of outdoor seating, and the food is brought in from another location. Good selection of t-shirts, hats, etc, and cases of bombers.

The things they do right, and have them growing fast are great beer, and even better marketing. Jamie is everywhere there's a beer festival. Starting up in a college town isn't a bad way to go either. Here's a nice writeup on Ninkasi.

 

[Dunerunner]

Three years ago Vinnie Cilurzo said 1.5 million in an AHA seminar. Although I've thought I could do it for $250,000, I tend to believe Vinnie!

Ninkasi has a constant influx of investor money that seems to be endless. Their outdoor seating leaves much to be desired in the 7 rain filled months we get in Central Oregon.

 

[ViperMan]

badmajon - I see you're from Augusta. Are you stationed at Fort Gordon?

How was Masters traffic last week? I used to live in Augusta from 1991 until about 2003.

Where are you looking to set-up shop? I saw a few brewhouses in Augusta come and go while I was there... Not sure how receptive that area is to uh, "smart beer." Ya know?...

 

[Mongrel]

Ninkasi has a constant influx of investor money that seems to be endless. Their outdoor seating leaves much to be desired in the 7 rain filled months we get in Central Oregon.

I'm sure the rainy days suck out there, but it was great on Saturday. A constant influx of investor money would indicate that Jamie is good at selling his brand.

When did Eugene become part of Central Oregon?

 

[ReverseApacheMaster]

The idea that you can scoop up other people to finance your brewpub, or any other business, is a bit of an illusion. Nobody but maybe your mother is going to invest in a start up if the primary operator is not able to put some money up. At least not anybody with decent business sense. If the operator doesn't believe in the idea enough to take on some risk in the venture it is going to be hard to convince others to do it.

Even if you can, any competent investor is going to want to take equity commensurate with the amount of money put forward and any competent investor putting down a large chunk of cash is going to want some management in the venture. That means sharing management decisions over equipment, location, what beers to brew, processes, ingredients, etc. If you retain any equity without capital, it is unlikely you are going to retain much, so you're going to be a minority owner and you could be voted down on important decisions. You're also going to share profits, which means you may not make enough to live on working full time in the brewpub.

You might get your friends to invest in your business on more generous terms but it's easy for a well intentioned friend to turn into a bitter business partner when things get rough.

You can structure your business to take in cash from investors as debt like a bond -- investors take interest payments until the note comes due and then receive principal at the end -- and either cash them out and keep all the equity or allow them to convert part of the principal to equity and keep a share of your business.

 

[Grasslands]

Three years ago Vinnie Cilurzo said 1.5 million in an AHA seminar. Although I've thought I could do it for $250,000, I tend to believe Vinnie!

Ninkasi has a constant influx of investor money that seems to be endless. Their outdoor seating leaves much to be desired in the 7 rain filled months we get in Central Oregon.

One thing Ninkasi had (has) going for it is that it is the flagship brewery for Eugene. Investment in a brewery is much more attractive when others, particularly an entire town, embraces a brewery - like in Ninkasi's situation. My thought is to approach investors in the same fashion - including the town/city in which I hope to have my brewery located.

 

[Dunerunner]

And, after talking to Jamie Floyd and Nikos Ridge the other day, that is exactly what they have done; coupled with a good working relationship between the partners. They are an absolute inspiration!

 

[HomebrewPadawan]

If this helps anyone...
My partners and I are fortunate, and lucky, and grateful, to be the owners of 4 successful restaurants/pizzerias.
It usually costs us around $150-200k to build-out the restaurant from a blank box. This does not include purchasing the building, or land, it's simply the cost to construct the inside of the building and furnish it with equipment and décor.
The 4 locations are all between 1500-2200 square feet; for a generic estimation, half of the square footage is kitchen and the other half is dining area.

I do not know how much it costs for the brewery side, but am thinking of finding out. My partners and I have dreamed about doing a brewpub for about four years now and are in the process of reading up on it and possibly giving it a shot.

We shall see...a lot more research still needs to be done on our end.

Cheers!

 

[ajdelange]

It, of course, depends on what you pay for rent, utilities, the size of the place, the brewery capacity and so on but figure a couple mil.