I went "pro" - What it actually takes to do so

[Carlscan26]

Can you expand on what the limitations of your current space are?

 

[Dcpcooks]

No debt and positive growth will look great to a local banker. Pick your spot and keep up the great work!

 

[Cape Brewing]

Can you expand on what the limitations of your current space are?

Our town has almost no sewers and everything is on septic... which is a nightmare to begin with... but... we were under the impression from our landlord that the current septic system was dramatically larger than it actually is. We paid to have the septic surveyed and found out that we are, on paper, at the maximum and can't add another person to our taproom's capacity.

Our taproom is tiny at only about 850 sq ft with a head count capacity of 49 people. That's grossly undersized for what we need. Also, given the layout, it's extremely difficult to maximize the space efficiently and we're running out of operations space fairly quickly.

We have room for three more 20 bbl fermenters and then we'll really be maxed out operationally.... which isn't going to cut it.

When we had intentions of lining up a pile of fermenters, we didn't appreciate that with every fermenter you line up, it's that much more grain you need on hand, that many more kegs you need on hand, another chilling unit, a bigger bottling line, more bottles, etc. There are, admittedly, way to minimize the effects of those ancillary things that eat up space but, over all, it adds up quickly and adds a lot of pressure to just expand square footage if the expense is not prohibitive.

 

[Redtab78]

Subbed to reread. I may have a ton of questions for you, i am in the process of reading and building a buisness plan for 4 years from now when i will be retiring from the navy and starting with a 4bbl.

 

[DC_0602]

Cape - You guys are on septic? We were looking at potential property for a 3bbl brewery here in NC and were turned off by anything that was on septic. Not sure if you spoke about overcoming being on septic in the past 55 pages but I'd like to find out more info!

Awesome to see you grow to what you all are now in such a short time!

 

[Cape Brewing]

Yeah, we're on septic. The building was originally a good sized grocery store and it's a pretty large septic. It's a pain but manageable. We don't put any hops from the boil or trub down the drains. We run all of that off and have a disposal company come and take it all away. We try to put as little as possible down the drain in general. It's been four years now and we've never had a problem... but... it's something that hangs over our head constantly.

I would try to avoid it but at the same time it's not the end of the world either.

 

[TrickyDick]

Thanks for sharing once again. I have a question about applying for the federal portion of the license which I understand comes first and requires you to have land space and appropriate permission if needed in order to brunch at space if you are not the owner.

So my question is once you’ve filled out that paperwork (and by the way where do you get that? ) What is the rule as far as changing the address of your brewing location (can you add others easily)? The reason I ask is obvious in that it would be easy to find an inexpensive parcel of land to use for the fed licensing and wait till the paperwork is approved, then change address to a more expensive location once you have your approval so that you’re not wasting a year or more worth of rent with no income. Did this make sense to everyone?
TD

 

[user 246304]

Thanks for sharing this, CapeBrewing! I will look through this entire thread, but immediately, on page 1 and your first post, this stuck out:

oh...well... the natural gas line in this building isn't rated for the volume of gas you need so you need to run new gas line"... $2,600 to run black pipe across an entire building.

We opened a French place in Marquette, MI, "The U.P." First ever in the region, and as far as we know still none have opened (we closed in 2005). One of the best inspection requirements, LOVED it. They needed hot water at max. draw, for all outlets requiring it. Existing heater just cleared it. So thankfully, if we went around and opened every bathroom faucet, bar faucets, kitchen faucets and let them run hot, we passed code.

UNTIL this awesome inspector declared our lettuce and veggie rinsing sink tipped the heater over the edge. Lettuce rinsing sink. Known for requiring hot water of course, because as we know, wilted, lifeless and hot lettuces are the best in a salad. I tried to explain that was, er, illogical. Nope.

$10,000 later, we had enough hot water to wilt salad lettuces, and then some. That, and needing to cover the linen tables in plastic during service until guests sat down, made me smile broadly and say "OK ma'am."

Anyway, thanks again for the thread, really looking forward to it.

 

[limulus]

Thanks for sharing once again. I have a question about applying for the federal portion of the license which I understand comes first and requires you to have land space and appropriate permission if needed in order to brunch at space if you are not the owner.

So my question is once you’ve filled out that paperwork (and by the way where do you get that? ) What is the rule as far as changing the address of your brewing location (can you add others easily)? The reason I ask is obvious in that it would be easy to find an inexpensive parcel of land to use for the fed licensing and wait till the paperwork is approved, then change address to a more expensive location once you have your approval so that you’re not wasting a year or more worth of rent with no income. Did this make sense to everyone?
TD

TrickyDick,
You can do the Federal permit all on-line. I'm about to open a brewery in the basement of a winery tasting room. I suggest you spend $25 and buy both of these books by Tom Hennessy. I also attended his Brewery Immersion Course which really helped me understand a few more things.
First the Brewery Operation Manual. It has instructions for completing the paperwork you are asking about:
https://www.amazon.com/s/ref=nb_sb_...l-text&field-keywords=tom+hennessy+sop+manual

Second,Tom Hennessy's Colorado Boy Brewery SOP Manual. I find these methods to be so easy to follow. He also has youtube videos:
https://www.amazon.com/s/ref=nb_sb_...l-text&field-keywords=tom+hennessy+sop+manual
https://www.youtube.com/channel/UC-yeJZxk-1d0HPdyd_ZnofA

Also, the videos by Jasper at Brewery Life are as good as they get for brewery operation procedures:
https://www.youtube.com/channel/UC-yeJZxk-1d0HPdyd_ZnofA

 

[Cape Brewing]

I’m not 100% positive but I don’t think the address switcheroo is that simple.

The TTB isn’t going to just want and address, they are going to want floorplans of where everything is located and assurances that taxed and not-taxed beer is separated, etc.

Going from one location to another would require all of the same documentation for both locations.

 

[limulus]

TrickyDick,
You can do the Federal permit all on-line. I'm about to open a brewery in the basement of a winery tasting room. I suggest you spend $25 and buy both of these books by Tom Hennessy. I also attended his Brewery Immersion Course which really helped me understand a few more things.
First the Brewery Operation Manual. It has instructions for completing the paperwork you are asking about:
https://www.amazon.com/s/ref=nb_sb_...l-text&field-keywords=tom+hennessy+sop+manual

Second,Tom Hennessy's Colorado Boy Brewery SOP Manual. I find these methods to be so easy to follow. He also has youtube videos:
https://www.amazon.com/s/ref=nb_sb_...l-text&field-keywords=tom+hennessy+sop+manual
https://www.youtube.com/channel/UC-yeJZxk-1d0HPdyd_ZnofA

Also, the videos by Jasper at Brewery Life are as good as they get for brewery operation procedures:
https://www.youtube.com/channel/UC-yeJZxk-1d0HPdyd_ZnofA

Sorry, I put the operation manual in twice. Here is the SOP book:
http://www.lulu.com/shop/tom-hennessy/colorado-boy-brewery-sop/paperback/product-22693775.html?ppn=1

It looks like the Brewery Operations Manual may only be available in Kindle now. Mine is paperback.

 

[user 246304]

Limulus, I found the Op Manual here.

 

[Punity]

Yea TTB won't accept a placeholder address if you arent going to utilize it. They dont just approve your address, as Cape said they want drawings of where everything will be located and how you plan to separate tax/non tax determined beer.

 

[limulus]

Yep, I agree. The book I recommended will give instructions on how to complete the application for the initial Fed approval. I assume moving to a new location is the same.

 

[paulthenurse]

What in the name of the sweet baby Jeezuz would cause some unholy necromancer to raise this thread back to life?

 

[bob1852]

What in the name of the sweet baby Jeezuz would cause some unholy necromancer to raise this thread back to life?

Says the guy who necro'd his own pizza oven thread?

 

[limulus]

I don't know paulthenurse, but I sure enjoy his posts.

 

[TrickyDick]

What in the name of the sweet baby Jeezuz would cause some unholy necromancer to raise this thread back to life?

Strain all stool for gallstones.

Yes, I can be that ass!

 

[TrickyDick]

I’m not 100% positive but I don’t think the address switcheroo is that simple.

The TTB isn’t going to just want and address, they are going to want floorplans of where everything is located and assurances that taxed and not-taxed beer is separated, etc.

Going from one location to another would require all of the same documentation for both locations.

Seems for me that I'd need a separate production brewery (which I could potentially do on the cheap as far as rent/land) and then do a pub to sell at a higher cost for rent/lease. I think, though am not sure, that the liquor license is more expensive for the stand alone pub than a production tasting room. Lots more research to go... FL is not a self-distribute state, and I think that even tasting room sales must go through a distributor now (possible grandfathered in if you are already doing before they changed). Laws in FL all favor the distributor it seems.

TD

 

[Cape Brewing]

What in the name of the sweet baby Jeezuz would cause some unholy necromancer to raise this thread back to life?

Even your family dislikes you

 

[Melana]

Even your family dislikes you

Fact.

 

[limulus]

Seems for me that I'd need a separate production brewery (which I could potentially do on the cheap as far as rent/land) and then do a pub to sell at a higher cost for rent/lease. I think, though am not sure, that the liquor license is more expensive for the stand alone pub than a production tasting room. Lots more research to go... FL is not a self-distribute state, and I think that even tasting room sales must go through a distributor now (possible grandfathered in if you are already doing before they changed). Laws in FL all favor the distributor it seems.

TD

Tasting room sales have to go through a distributor? Yikes. Here in GA, we had the tour rule where you had to pay for a tour but you got "free" beer and a souvenir glass. That all ended on Sept 1. Now, you can just walk into a tasting room and order a pint without paying $15 for a tour. You can also buy up to a case to go. The whole purpose of the new law is to allow smaller brewers to actually make some money and to encourage a few more to open. However, for distribution, breweries have to use an outside distributor and that will probably never change.

 

[paulthenurse]

Even your family dislikes you

No. My family dislikes you.

 

[cmac62]

OMG this thread was a marathon, but interesting. People have asked me if I want to open a brewery and I always tell them I don't want to work that hard. I make 5-10 gals at a time and I'm done at the end of the day. Cape, I think your model was great, but obviously the beer coming out is good/great. The growth would not have been possible with bad beer. Thanks for all the info. Let us know whey your beer gets to Cali, because I don't think I'll be in Beantown anytime soon.

 

[Schreiner]

subd

 

[joshesmusica]

Time to resurrect this thing. haha

First off, how are you guys doing now? Have you moved to the newest facility? Did you have to reapply through the ttb to do so?

Also, something I don't recall reading (just read it all again today as a couple of friends and I are thinking of taking this nano approach to opening one), but what was your business structure that you went for? Did you just do an LLC?

 

[paulthenurse]

For all that is sweet and holy Nooooooooooooooooo!

 

[Cape Brewing]

Ignore Paul... he is what we New Englanders refer to as “a gigantic jerk off”.

Things are going really well. We have a couple more 20bbl fermenters coming in a couple weeks as we continue to run out of beer. We are about two weeks away from finally putting a deposit down and getting our own in-house canning line instead of using mobile canning (great guys but huge effin nightmare).

We had really high hopes on new space last year and it just wasn’t workable. The land owner ended up being impossible to worth with asking-price-wise and was looking for a dollar figure that everyone in our town (including town officials) laughed at (literally). The good news is we have had another opportunity come up out of no where and we’ve been passing civil engineering drawings with the developer over the last couple weeks. We are scheduled to sit down just after the 4th to talk dollars and financing. That said... we were basically green-lighted financially to go with last year’s project... that... given the ridiculous asking price for the land... it was way more than this opportunity should be. So... we’re optimistic again.

We also just got our final approval and license for our distribution company which is a 50/50 joint venture we’re doing with another brewery.

Oh... and we are in the final stages of another deal that we’re really excited about but... I can’t talk about yet... other to say it’s taken a ton of our time recently. Not trying to be all cloak and dagger... just can’t do details today (hopefully next week or so).

We just went with an LLC. Actually met with our accountant yesterday to talk about possibly moving to a corp but we have some number crunching to do in order to see if its worth it

 

[Cape Brewing]

The nano route is brutally difficult slogging these days. I have said it a bunch of times... we were able to do it with a huge amount of hard work and an even larger amount of pure dumb luck.

We see a ton of tiny places opening with the nano route these days and they all are falling into the same traps.... and 90% of them are going to be out of business in 18-24 months.

... and like I was saying, we sidestepped almost all of those traps out of pure luck.

 

[Cape Brewing]

I’ll give you one basic example... space.

We are seeing a ton of nanos opening up in less than 3k sq ft with no opportunity for physical expansion. That in itself is a death spiral for a brewery.

There is zero chance a brewery is going to spin off the revenue a first-time owner thinks it will and if it is successful, at all, they will need to get out of that space immediately (I personally know half a dozen breweries that are in this exact position).

If they just spent some ridiculous amount of money fitting out a sweet taproom... kiss that money goodbye, then they have to break a lease, find NEW space, and start all over again.... with the tiny amount of revenue a nano system generates.

It’s a dead end... quickly.

We were the poster child for this. Our original space was freakin 399 square feet. But... by just pure luck, every time we needed more space, more opened up, not only in our building, but right freakin’ next to us. This happened twice... almost to the week we needed it. We’re now in about 8,500 sq ft and need to get out of that (hence the new building talk).

That’s just one of several issues nanos are going to face