How hard is it to actually succeed in opening a micro brewery?
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funkapottomous
Well-Known Member
I know ShortSnout is doing pretty well, I've been following him on facebook and even he seems to have had progress getting set up.
It's do-able. I think the major thing is getting your product out into the consumer's faces. I know guys like Southern Star here in Conroe are booming, but Dave was brewmaster for Saint Arnold's for like, a decade before branching off. So people knew him, and he had connections in the industry.
I think the hardest part about getting up and running is going to be finding the capital. Southern Star has/had investors, so that is an option. Take your product to people who are into beer and have plenty of money and ask them if they'd like to invest.
Either way, you're going to need to save up, get your business plan, and then check out your state Alcohol/beverage code and figure out what permits and fees you'll have to pay.
Also, I asked Jeff from southern star why they didn't self distribute, because they were under the barrel cap and could very well do so, and he basically said that it's just not possible when you're running a small growing brewery, so you're going to have to find a distributor who will carry your products as well, and that can be troublesome because some smaller distributors don't have the manpower to get your beer where people want it.
It's do-able. I think the major thing is getting your product out into the consumer's faces. I know guys like Southern Star here in Conroe are booming, but Dave was brewmaster for Saint Arnold's for like, a decade before branching off. So people knew him, and he had connections in the industry.
I think the hardest part about getting up and running is going to be finding the capital. Southern Star has/had investors, so that is an option. Take your product to people who are into beer and have plenty of money and ask them if they'd like to invest.
Either way, you're going to need to save up, get your business plan, and then check out your state Alcohol/beverage code and figure out what permits and fees you'll have to pay.
Also, I asked Jeff from southern star why they didn't self distribute, because they were under the barrel cap and could very well do so, and he basically said that it's just not possible when you're running a small growing brewery, so you're going to have to find a distributor who will carry your products as well, and that can be troublesome because some smaller distributors don't have the manpower to get your beer where people want it.
JohnTheBrewist
Well-Known Member
Great insights from Funkapottomous. As he mentioned, the first place to start is preparing your business plan. This will require doing a lot of research and putting it down on paper.
Each State, County, and sometimes City, will have their own rules about operating a brewery. This will determine how much you can brew, where you can brew, and how you distribute. In some places, you can brew at the same property as your residence as long as it's in a separate building. Others may require a strictly commercial facility in a specified area of town. Some will even want to regulate your waste products. The regulators will probably be the toughest part of this endeavor.
Once you've determined your potential location, you need to think about equipment and storage needs. How big do you want to be to start? Will you only supply kegs to restaurants and bars or will you bottle for retail? How will you distribute the product? Will your facility allow for expansion? Can you lease time in an existing brewery? Be realistic as to location and equipment costs and pad your estimate by at least 15% for unexpected costs.
Assess the market. Go talk to your prospective clients and be sure they'd be interested in your product (be sure to talk to the people who actually have the decision making authority). What will set your product apart from their current offerings? While I was at Stone Brewing Company on Saturday, we were talking about the pure marketing genius of Greg Koch. After all, the American beer palate is really based more on marketing than taste, and a good marketing plan could make or break you.
All of this will determine your capital needs, and to some extent the potential ROI. Now you know how much money you'll need, it's time to go raise some capital. This is harder than you might think, but you have to be persistent. You have to really want it, and you have to know some people with money. I was suprised to see that Forest Rogness' (from AHS) attempt at a kickstarter campaign for a brewery didn't succeed, because he is somewhat known in beer circles. I think it was probably that he lacked something in the marketing end. But, if you've got a strong business plan and a strong marketing plan, money sources are out there.
Finally, if you don't feel you have the ability to write these plans, you might try to hook up with some grad students at the local university, maybe someone will take it on as a thesis or project.
Good Luck, you've got your work cut out for you!
Each State, County, and sometimes City, will have their own rules about operating a brewery. This will determine how much you can brew, where you can brew, and how you distribute. In some places, you can brew at the same property as your residence as long as it's in a separate building. Others may require a strictly commercial facility in a specified area of town. Some will even want to regulate your waste products. The regulators will probably be the toughest part of this endeavor.
Once you've determined your potential location, you need to think about equipment and storage needs. How big do you want to be to start? Will you only supply kegs to restaurants and bars or will you bottle for retail? How will you distribute the product? Will your facility allow for expansion? Can you lease time in an existing brewery? Be realistic as to location and equipment costs and pad your estimate by at least 15% for unexpected costs.
Assess the market. Go talk to your prospective clients and be sure they'd be interested in your product (be sure to talk to the people who actually have the decision making authority). What will set your product apart from their current offerings? While I was at Stone Brewing Company on Saturday, we were talking about the pure marketing genius of Greg Koch. After all, the American beer palate is really based more on marketing than taste, and a good marketing plan could make or break you.
All of this will determine your capital needs, and to some extent the potential ROI. Now you know how much money you'll need, it's time to go raise some capital. This is harder than you might think, but you have to be persistent. You have to really want it, and you have to know some people with money. I was suprised to see that Forest Rogness' (from AHS) attempt at a kickstarter campaign for a brewery didn't succeed, because he is somewhat known in beer circles. I think it was probably that he lacked something in the marketing end. But, if you've got a strong business plan and a strong marketing plan, money sources are out there.
Finally, if you don't feel you have the ability to write these plans, you might try to hook up with some grad students at the local university, maybe someone will take it on as a thesis or project.
Good Luck, you've got your work cut out for you!
Austinhomebrew
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My Kickstarter campaign did work. I had initially asked for more than the 60 days would bring me. I made adjustments and was succesful.
http://www.kickstarter.com/projects...company-hand-crafted-small-batches-0?ref=live
Forrest
http://www.kickstarter.com/projects...company-hand-crafted-small-batches-0?ref=live
Forrest
JohnTheBrewist
Well-Known Member
Wow, Forrest that's awesome! Congrats! The last time I looked at it, it seemed there was no way it was going to make it, so I didn't bother signing up. (Sorry 'bout that).
Jacob_Marley
Well-Known Member
The Business Plan is your bedrock.
And understand backwards-and-forwards how to perform Breakeven Analysis ... not just the breakeven "number" but the whole analysis. A process which takes you through every single aspect of your business, both before you get going and after you get it off the ground.
And understand backwards-and-forwards how to perform Breakeven Analysis ... not just the breakeven "number" but the whole analysis. A process which takes you through every single aspect of your business, both before you get going and after you get it off the ground.
Catch 22. Reminds me of Mad Men when they lose Lucky Strike. They need to sign other companies to generate capital and keep their agency from going under. The companies won't sign, because they fear the agency doesn't have enough capital, and is going under.
But isn't that the point of kickstart? You can pledge that you will invest but only if the total goal funding is reached. Basically saying "I will if everybody else does"
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