Opening a Brewpub

[Torchiest]

Wow! I almost left this thread for dead a couple days ago. Glad to see so many people offering advice. To answer some questions and provide more information:

The place I bartend and manage at has been open for nine years, and I've been there since it opened. It was originally a brewpub/pizzeria, but the brewery was closed down after two years due to financial problems and disputes between some of the owners. The restaurant/pub has done amazingly well in the meantime. I've got tons of experience managing the place, although I'm not the GM. My friend has a finance degree and is the GM of a neighboring coffeeshop/winebar that also has a good beer selection, so I think between the two of us, we have the bases covered.

We're both at about the same place financially, and we think that in a year or so we could open a modest yet appealing place for about $60k without having to take any loans whatsoever, and with money to live on in the mean time.

Some legal stuff. In Texas, you can be either a brewery, and are not allowed to sell beer directly to customers, or be a brewpub, and are not allowed to distribute your beer. I don't know if you absolutely HAVE to have food if you're a brewpub; it seems like a lot of people make this assumption but I'm not sure. Another good friend of mine wants to open a BBQ delivery place, and I've considered asking him if he'd want to join up and run the food side for me. And my fiance's brother is lending me his copy of Kitchen Confidential!

Our concept would be a full liquor bar, basic wine, a good selection of bottled beers, and then just my brews on tap. I think if I were running 4-5 brews on a regular basis, and had a 3BBL system, I wouldn't have to brew all that much to keep up, at least not at first. But the place wouldn't be too big.

As for marketing, I already have a kickass (I think) concept for my beers with the World Domination theme. I also have a ton of beer drinking friends from working at this pub for almost a decade, and a mailing list that I use to send out newsletters about the latest beers I'm brewing and such.

Oh yes, Seabrook is about 20 miles southeast of Houston down I-45, near NASA's Johnson Space Center.

Thanks again to everyone for all the position remarks and helpful comments!

 

[Lil' Sparky]

I'm very interested to hear how your experience goes. I'm also considering opening up a brewpub in TX in a few years when I'm done w/ my military career. We're considering Tyler, which is smack dab in the middle of a dry county. Everyone there who wants a beer has to either a) drive to another county to buy from a package store or b) go to a restaurant. There are no brewpubs in that part of the state that I'm aware of. All the good restaurants there stay packed. Done right, it would make a killing, plus I think it would be a great 2nd career! I think a few really good staple beers + a specialty brew, a simple menu of good food, a laid back atmosphere - maybe a lounge area like Starbucks, with live music on the weekends, and you'd have something novel that people would really enjoy.

 

[Catfish]

It will probably cost more to open the brew pub than 60k. I would really consider going with an ugly 50 gallon system long before you get the brew pub 3 vessel 3bbl. You will only be producing 1/2 as much in a single brew but you will also be saving 10s of thousands on equipment and installation etc. You are better of starting small with capital to grow.

 

[ohiobrewtus]

lots of liquor licenses, especially a class 6 (well out this way anyways) require you to sell food along with alcohol. Now that could be frozen pizzas and hot pockets, or a nice restaurant. But why sell great beer with piss poor food?

Licenses can get damn expensive. Here in OH it will cost you $3,975 annually to retain an A1 class license that's required to produce your own beer for sale. Then if you want to offer beer from anyone else you also have to get a C1 (or C3 if you want beer AND wine) for another few hundred a year. On the plus side, OH allows self-distribution.

I haven't been brewing for very long, but this is something that I dream of doing one day as well. I need to get a lot more brewing experience, but I'm in management at a large company so I know how to make the business side work. I also worked 8 years in the restaurant industry and have a sister that's managed a sportsbar for 10 years or so now.

I'm done some preliminary research on this, so here are some links that may help you:

Sample brewpub business plan:

http://www.abtonline.com/busplan.html


Equipment manufacturers:

http://www.jvnw.com/brewing.html

http://www.specific.net/index1.htm

http://www.dciinc.com/food.html



http://www.muel.com/productDivisions/ProcessingSystems_Equipment/Beverage/Beer/

http://www.nabrewing.com/default.asp

 

[FlyingHorse]

Licenses can get damn expensive.

Tell me about it...here in PA, the number of licenses is fixed...you can't just apply for a "new" license, you have to acquire an existing one. You can imagine what that does to the price...six figures in some cases, depending on location and type of license. People will buy whole businesses just to get the liquor license, and there are private companies taht exist solely to help people buy and sell them. Crazy!

The other big cost item you need to consider: liability insurance. Depending on state laws, you might be required to have it, and it will not be cheap.

 

[Nwcw2001]

Hey here is my $.02

First start large and think small. By that I mean, if you want to start making 3bbl at a time is great, you should get a 7bbl system. You can always do smaller batches in a larger system. If your beer is popular, you NEVER want to run out. Most brewpubs in the country are 7-15bbl systems. And like everyone on http://www.probrewer.com likes to say, "it takes the same amout of time to make 500 gallons as it does to make 5." It just make take a bit longer to clean up! Probrewer is a GREAT source of information. Do like I did two years ago and sit down for one or two weekends and read over everything. Pretty much all your questions will be answered and more will arise!

Also get your hands on "Brewer's Association's guide to Starting your own Brewery" It has a lot of great information, albeit it is expensive $50.

http://www.amazon.com/Brewers-Associations-Guide-Starting-Brewery/dp/0937381896/ref=pd_bbs_sr_1/103-4801715-2715024?ie=UTF8&s=books&qid=1183653416&sr=8-1


You really want to keep checking out

http://www.nabrewing.com/products.shtml


They have great deals on used equipment. All sizes.

hope this helps,

John

 

[ohiobrewtus]

Tell me about it...here in PA, the number of licenses is fixed...you can't just apply for a "new" license, you have to acquire an existing one. You can imagine what that does to the price...six figures in some cases, depending on location and type of license. People will buy whole businesses just to get the liquor license, and there are private companies taht exist solely to help people buy and sell them. Crazy!

The other big cost item you need to consider: liability insurance. Depending on state laws, you might be required to have it, and it will not be cheap.

It's similar here in Ohio. The licenses that are available in each county are based upon the population of each township in the county. the county that I live in has been allocated one A1 (brewing) license that is still unclaimed. The city I live in has seen quite a bit of growth over the last few years, but the population of the township has to increase by 1,600 people for a new C3 (beer/wine) license to become available (per license). I looked it up on the state liquor control website and there's something like 8-10 places waiting on liquor licenses to open new restaurants, etc.

One other thing that I would recommend (I believe that someone else mentioned this in a previous reply) is to keep the menu simple. Everyone has their own thoughts on this, but if you're shooting for world class dining you're going to have to need to have a chef or two on staff. I, personally, would want the focus to be on my beers, while at the same time providing good quality 'sportsbar' food - things like all the standard variery of appetizers, burgers, a few steak dinners, ruebens, philly sandwiches, wings, etc.

My local BW3 charges $6.50 for a 22oz draft of swill, $3.25 for a 12 oz bottle of swill, and $7.99 for a crappy burger (French Fries are a $1.99 add-on). With nothing else even resembling a brewpub for 40 miles, my town is ripe for the picking. If only I had a few hundred thousand dollars and I knew how to brew good beer I could make a ton of money by opening a brewpub.

 

[Desert_Sky]

IMHO 60k isnt going to be enough. Spend a little bit of that money and hire a professional to write up a killer business plan for you. With 60k in the bank you can get yourself a nice chunk of change and do this right.

 

[LouT]

IMHO 60k isnt going to be enough. Spend a little bit of that money and hire a professional to write up a killer business plan for you. With 60k in the bank you can get yourself a nice chunk of change and do this right.

I'm on board w/Chimone here. I was going to suggest that you and your partner spend some time yourselves on a business plan. Specifically, 1, 3, and five year projections/goals. Incorporate all of the expenses you anticipate monthly, and projected sales revenues. When you get this all put together, you will see whether or not it is realistic to start with just $60k. You will also be better prepared to approach a bank lending officer for a loan, SBA or otherwise. If you have a potential location, etc., you will be able to accurately assess the cost of a lease, leasehold improvements, local licensing fees, electricity, security, water/sewer, heat/air cond., etc. etc. Don't forget to get some insurance quotes from several commercial agents!

I'll also go as far as to suggest that you involve and accountant and an attorney very early on, so you can structure the business in a way that is most beneficial -- LLC, S-corp, C-corp, etc.

Good luck, awesome endeavor! Many here are jealous!

 

[Dude]

Wow! I almost left this thread for dead a couple days ago. Glad to see so many people offering advice. To answer some questions and provide more information:

The place I bartend and manage at has been open for nine years, and I've been there since it opened. It was originally a brewpub/pizzeria, but the brewery was closed down after two years due to financial problems and disputes between some of the owners. The restaurant/pub has done amazingly well in the meantime. I've got tons of experience managing the place, although I'm not the GM. My friend has a finance degree and is the GM of a neighboring coffeeshop/winebar that also has a good beer selection, so I think between the two of us, we have the bases covered.

We're both at about the same place financially, and we think that in a year or so we could open a modest yet appealing place for about $60k without having to take any loans whatsoever, and with money to live on in the mean time.

Some legal stuff. In Texas, you can be either a brewery, and are not allowed to sell beer directly to customers, or be a brewpub, and are not allowed to distribute your beer. I don't know if you absolutely HAVE to have food if you're a brewpub; it seems like a lot of people make this assumption but I'm not sure. Another good friend of mine wants to open a BBQ delivery place, and I've considered asking him if he'd want to join up and run the food side for me. And my fiance's brother is lending me his copy of Kitchen Confidential!

Our concept would be a full liquor bar, basic wine, a good selection of bottled beers, and then just my brews on tap. I think if I were running 4-5 brews on a regular basis, and had a 3BBL system, I wouldn't have to brew all that much to keep up, at least not at first. But the place wouldn't be too big.

As for marketing, I already have a kickass (I think) concept for my beers with the World Domination theme. I also have a ton of beer drinking friends from working at this pub for almost a decade, and a mailing list that I use to send out newsletters about the latest beers I'm brewing and such.

Oh yes, Seabrook is about 20 miles southeast of Houston down I-45, near NASA's Johnson Space Center.

Thanks again to everyone for all the position remarks and helpful comments!

I don't have anything to add (except jealousy!) but sounds good. I'm watching this thread intently! Are you hiring a mash-tun cleaner? I might need a job!

 

[Alamo_Beer]

I'm just agreeing with LouT...

I'm a managment major and the basic thing I've learned in ALL of my classes is to get an attorney and an accountent as soon as you decide to do ANYTHING...it'll just help in the long run and it would deffinatly make it easier to get a loan..

I'll come see you next time in in houston!

EDIT: Suprised no one has asked....whats the name of the place going to be?

 

[mblakely]

I work at a brew pub that has recently expanded its operation to include an Irish Pub, serving the same beers, in the basement. Both hold a bit over 300 patrons. We have four fermenting tanks and 12 10bbl serving tanks. We serve 5 house beers, and three seasonals. Surprise the Irish Pub is now the new place to be! We have had to halt our keg sales for the summer just to keep up with demand for the beer in our restaurants. Just reinforcing the idea of going big and thinking small. To replace your equipment is very costly, and will take you out of service for a while.

I also have wanted to open my own brewpub. Go to your local book store and look in the entrepreneur section. There are general books on operating businesses and there are some good ones about restaurant operations. Believe me, there are so much more to being successful than you are thinking. Read as much as you can, and talk to those who are doing it. Oh, don't plan to get much sleep, and be sure your family is on board with your dream and will support you. There are so many divorces in the restaurant industry.

Again, I hope you take this thread as helpful suggestions, and not to be a downer. I am sure we all wish you well, because it is quite possible the dream of many on this site. If you make it, we might be able to also.

Congrats, and keep dreaming.

Cheer

 

[Torchiest]

One of the big things we're trying to do is keep our expenses low and do this without getting a loan. We're both pretty smart with our money, and we know a few other people who've been in the bar business for years who saved their money and opened up a place on the cheap, as a way to get started.

The big issue is how much I can get a complete yet modest set of brewing equipment for. If it's more than maybe $30-40 thousand, the brewpub part might not be part of the initial bar. But I think I can get a small setup for well below that.

Also, we don't need a restaurant portion of the place, and neither of us has a big interest in doing that. I want to try something different, a brewpub with a full bar, great selection of liquors, basic wine, and pretty good bottled beer. But all the draft would be my own. The description of the brewpub license I've read says you can sell brew to go in whatever sized containers, but I'm wondering if that isn't allowed along side a liquor license. I'll have to check it out.

The great thing is we have a lot of connections between the two of us. I know a couple lawyers, and he knows a commercial real estate agent, for starters. And he is a finance major, and I almost got a minor in math. My best friend's brother also has a finance degree.

Oh yeah, in keeping with my World Domination Beer theme, I've thought of naming the brewpub HQ. I'd like to have a bunch of video cameras and TVs inside, and various other things to give it a nice dystopian/totalitarian feel.

 

[Catfish]

Oh yeah, in keeping with my World Domination Beer theme, I've thought of naming the brewpub HQ. I'd like to have a bunch of video cameras and TVs inside, and various other things to give it a nice dystopian/totalitarian feel.

Nice name. I think video cameras and tvs would result in zero repeat business... unless there's a big voyuer/ exhibitionist scene where you are.

 

[rdwj]

Nice name. I think video cameras and tvs would result in zero repeat business... unless there's a big voyuer/ exhibitionist scene where you are.

I know that would turn me off for sure. I want to feel comfortable when sipping a pint, not like I'm being watched or recorded.

 

[neckbone]

Oh yeah, in keeping with my World Domination Beer theme, I've thought of naming the brewpub HQ. I'd like to have a bunch of video cameras and TVs inside, and various other things to give it a nice dystopian/totalitarian feel.

Be fully prepared to hand over the video tapes to the local DA the first time someone leaves your bar and is picked up for DUI, or one of your patrons is in a nasty divorce case and there's a rumor that he was seen in your bar w/ a young college girl. That will not go well when your clientele finds that out.

Video cameras in a bar are not a good idea unless you are watching your barstaff.

 

[olllllo]

Be fully prepared to hand over the video tapes to the local DA the first time someone leaves your bar and is picked up for DUI, or one of your patrons is in a nasty divorce case and there's a rumor that he was seen in your bar w/ a young college girl. That will not go well when your clientele finds that out.

Video cameras in a bar are not a good idea unless you are watching your barstaff.

Who said there would be tape?

 

[brewt00l]

Oh yeah, in keeping with my World Domination Beer theme, I've thought of naming the brewpub HQ. I'd like to have a bunch of video cameras and TVs inside, and various other things to give it a nice dystopian/totalitarian feel.

Interesting...though, it doesn't really sound like an atmosphere that would be inviting to a large percentage of the population.

Either way you decide to roll, best of luck!

 

[matt719]

I didn't read all the posts on this thread, so I apologize if someone has already suggested this, but there are alternative ways aside from food to attract people to your brewpub. Music! My favorite brewpub is called Brutopia (in Montreal, www.brutopia.net). They have the best beer I've ever had. They do serve food, but I've never had it (or even seen someone else get it for that matter), and the major attraction to the pub aside from their beer is their live music. They have great bands every night, with open mic nights on Sunday, and trivia nights on Monday. People come to listen to chill music and sip amazing beer.

p.s. You will lose customers if you don't have Guinness on tap

 

[Torchiest]

No no no, the video cameras would just be for show! Haha, there's no way in hell I'd actually tape anything with them. They wouldn't even be wired to anything. And the TVs would all be the cheapest pieces of used junk I could find. My whole world domination theme is the purest satire. I'm actually quite the opposite in my personal beliefs. Thanks for having my back olllllo.

 

[Catfish]

I'm glad to hear that. I was picturing black and white closed circut tv so you could sit in your booth and watch the people in some other part of the bar. I would pick my nose less in such an establishment.

 

[howlinowl]

No no no, the video cameras would just be for show! Haha, there's no way in hell I'd actually tape anything with them. They wouldn't even be wired to anything. And the TVs would all be the cheapest pieces of used junk I could find. My whole world domination theme is the purest satire. I'm actually quite the opposite in my personal beliefs. Thanks for having my back olllllo.

But, how would the customers know they were just for show?? I'd probably think twice before I spent much time there alone, think more than twice if I were the type of person going there to spend time with someone that may not be my wife, ect. I like the totalitarian spin on it, but maybe lose the survellience equipment. Maybe the old TVs could come on every once in a while with a message from "Big Brother"....that might be cool.

Allan

 

[JnJ]

I think you should do some market research on your theme. I know I wouldn't care for a bar like that and most folks I know wouldn't. Justs sounds like your set on this idea you like, but you need to make sure the custom will like it or you wont go anywhere with it....

 

[Torchiest]

All that stuff is not the priority, it's just speculation. The most important thing is finding a good location, getting together the money, and making great beer. I've already been marketing and promoting my World Domination Beer theme for months. I'm a bartender at a pub, and know scores of beer drinkers. I have a mailing list with about fifty people on it who I send newsletters to about my latest brewing activities, and I write the entire thing in character as a fanciful and satirical dictator of some huge amorphous government. Everybody gets a real kick out of it and has been extremely positive about going forth with my plans. Look at some of my beer labels to get an idea of what I mean.

 

[howlinowl]

Yep, but hopefully not all your customers will be just regulars. My first trip to Butuan, Philippines, to meet my now wife, I stayed 1 night in a hostel that had a small bar area in the lobby in Manila waiting for my flight back to the states. I spent the evening knocking back San Migs with a filipino w" profho was waiting to meet his girlfriend. He liked the place because it was out of the way and his wife would never catch him there. Lots of people meet in bars and such and try to keep a "down low" profile. But their money spends just as good as the others, so you may not want to alienate them.

Allan

 

[howlinowl]

Hell, you could have fun with this. I'm picturing a place where the entire wait staff would be dressed in uniform, addressing all the guests as "citizen"....(may have to work on this. Where I may get a kick out of the whole "totalatarian" experience, others may think the wait staff a little on the "unhospitable" side if they carry it a bit too far)... a menu of "state approved" meals and of course, the official "state approved" beer....


Allan

 

[olllllo]

I've been to plenty of bars that had webcams or closed circuit cameras. It's not always obvious that they do.

BTW: Ever go to Vegas?

Just sayin!

 

[brewt00l]

I stumbled across this the other day and thought of this thread...interesting read

http://www.flyingfish.com/fishtales/business1.cfm

 

[Muss]

Have you thought about brewing large baches of beer and trying to distribute them among some pubs? That way you can see if the public really like your beer before you commit to your own pub and it can also build up your brands reputation while you work on the rest of the business.

 

[Jim Karr]

This thread is a shining example of how helpful and cool this brewing community is towards each other.....Where else would you find so many guys (obviously dreaming nearly the same dream) that are willing to offer up some really good contributions of advice to help a fellow homebrewer become successful?

I love you guys!