Opening a Brewpub

[EdWort]

What are the licensing hassles & fees for starting a brewpub in Texas? I'm still dreaming of Bee Cave Brew & Que (my two obsessions in life after SWMBO & my kids)

 

[Muss]

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!

That doesn't sound EAC enough Mr EAC wannabe, you need to tell him to read John Palmers book again.

 

[Torchiest]

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.

Since I already work at a bar, I know tons of people, and I think I could drum up a solid following when the time came. Plus, due to the whole licensing thing, it might not be worth it to do a brewery on a small scale. We also have a major lack of brewpubs in the Houston area.

Still weighing the options for now. I'm buying a house in the near future; after I get settled in there, I'll be ready to start doing some more serious planning. But I do sincerely appreciate all the help I've received here!

 

[5gBrewer]

And for cripes sake have really clean glasses. If I walk into one more brew pub that hands me a beer in a spotty glass I think I'm gonna scream.

Your spotted glass observation is most likely due to the brew pubs not using a JetDry agent in the washers, as the silicones that polish the glasses kill the heads of beers. If the brew pub cares about head, you'll probably be getting spotty glasses. i actually look at the spots as a good thing these days (when I want a beer when I'm out).

5gB

 

[5gBrewer]

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.

This idea could probably be the most realistic for most homebrewers who want to do more than make 5g batches, and make some money. I know that brew distribution laws/permits are very different from state to state so this may work for some, but not for others.

As another homebrewer, who is also seriously considering a career change to brewing, this may actually be my first step, while getting everything else into place for a larger operation. This way you can start off with less-than-glamorous yet fully functional equipment that won't put you in a financial hole if things aren't looking so great at first. In a way, I've spent the last 1.5 years promoting my beers already: giving my beers out to friends/family, bringing my beers to business related events for free, etc. The responce has always been the same... "Where can I buy these? Do you have your own business? Well, you should!"

I think many small businesses are successful because they 'test the waters' for a period of time while holding down another full-time job, rather than chancing it on the whole kit-n-kaboodle. Once things are looking good, then get the big loans, and GO BIG - THINK SMALL (as it has been said a few times in this thread).

My anticipated start time for the actual brewery is to begin full operations within 2 years. This is going to be my comfort zone for building the business, developing a proper action plan, raising capital, finding a proper location, getting insurance, an accountant, a lawyer, etc. etc. etc. All while holding down my 'regular' job, cuz hey... ya gotta have $$$$$$, right?!?!

2 ppl in my family have successfully started small businesses, and the plan always involved an 'At Home' operation for a period of time, and eventually wound up coming back to a 'Live & Work' space business. Needless to say, I'm super psyched!

5gB :rockin:

 

[Torchiest]

Well, I ended up putting most of my savings as a down payment on a house last summer, so I've been rebuilding my savings for the last six months or so. My new plan is to open a small bar first, run it with my friend for a few years, and then try to do a larger place that would have the whole brewpub/restaurant concept in action.

I'm putting together the business plan this year, with the help of my brother. He has an economics degree and put together a business plan for a club about five years ago. Unfortunately, it was a huge concept and he couldn't get enough investors involved to launch it.

That's why I think start small, with something I could almost finance personally, would simplify things a lot. Also, I can learn all the ins and outs of owning a place without the huge burden of a full-size place AND worrying about the brewing.

The cool thing is, my friend and I both work at the same bar together, and we're certain that if we left together and opened our own place, we could snag tons and tons of customers from the place we currently work at.

 

[terrapinbrewer]

brewing up a business and beer school are two books i would reccommend.

 

[paranode]

What are the licensing hassles & fees for starting a brewpub in Texas? I'm still dreaming of Bee Cave Brew & Que (my two obsessions in life after SWMBO & my kids)

Ranges from over $1000/yr at the cheapest to have a brewpub + on-premises license up to like $2300/yr if you live in certain counties (Dallas/Harris/Tarrant) and want to stay open until 2am. If you go to the TABC website under 'Licensing' they have a PDF on 'How to apply for a license/permit' which goes over the requirements.

 

[brandona33]

I commend your venture, and am envious of it as well. Not an expert, but thought I'd throw my 2 cents in.
1. Someone mentioned location/near a University. While that parcel may be pricier, we have a pub like this that sells only micros, 36 on tap. They have a beer tour where you drink 35 and you get the 36th free and in a souvineer glass. In an area where you can get a pint for $2, the cheapest thing on tap is $4.50 and the place is always packed. Then drink 24 bottle, from 15 different countries, you get a sweatshirt and your name on a palque on the wall. THIS PLACE IS ALWAYS PACKED! Mostly college kids running up thier credit cards. Menu is cheese/crackers, ham/cheese sandwich, or pizza. So a gimmick like that could help the process of establishing regular buisness

2. Surround yourself with a great staff. In the 1st year, cash will be tight. You want people who care about your success because it leads to thiers. Money well spent if they make consumers feel good and come back.

Best of Luck

 

[CurtFlood]

This is a quality thread with some really good advice/suggestions. I believe just about every homebrewer has had the dream or desire to get paid for their hobby, so we all wish you the best of luck. Here are a couple suggestions:

1. Set up your business as either an S-corporation or an LLC. I recommend S-corporations since the tax implications are better. A lawyer will probably try to sell you on creating an LLC since they're more concerned with liability, but be sure to look at all the different angles. You should be okay with an S-corp and plenty of liability insurance, but either routes are good since they seperate your personal $ from your business $. Another reason to not set it up as a sole proprietor business is that you'll be paying federal, state, and FICA on every dollar you bring in. Where as in an S-corp you can give yourself a modest salary (which gets fully taxed) and then give yourself and partners dividends (no FICA).

2. Local colleges usually offer continuing education courses on starting your own business, tax regulations, and on obtaining licenses and permits.

3. Read a lot.

4. Network with local business owners and lenders.

5. Be sure to take out a big enough loan to cover the inevitable losses you will sustain over the first 3 years .

 

[Torchiest]

I commend your venture, and am envious of it as well. Not an expert, but thought I'd throw my 2 cents in.
1. Someone mentioned location/near a University. While that parcel may be pricier, we have a pub like this that sells only micros, 36 on tap. They have a beer tour where you drink 35 and you get the 36th free and in a souvineer glass. In an area where you can get a pint for $2, the cheapest thing on tap is $4.50 and the place is always packed. Then drink 24 bottle, from 15 different countries, you get a sweatshirt and your name on a palque on the wall. THIS PLACE IS ALWAYS PACKED! Mostly college kids running up thier credit cards. Menu is cheese/crackers, ham/cheese sandwich, or pizza. So a gimmick like that could help the process of establishing regular buisness

2. Surround yourself with a great staff. In the 1st year, cash will be tight. You want people who care about your success because it leads to thiers. Money well spent if they make consumers feel good and come back.

Best of Luck

See, that's kinda what my concept is. I want to have every Texas beer I can get on tap. There are five Texas breweries, each with four to five beers. I'd like to have about 30 taps, and have about two dozen of them with Texas beers, then use the last half dozen for the hardcore standbys that you have to have at a pub, stuff like guinness and dos equis. Then all the other american microbrews, european beers, and majors would be bottles. And we'd have a basic food menu like pizzas and sandwiches.

Where I work now, we have a mug club, where you spend $75 to get a pewter mug which is numbered on the bottom and has our logo on one side. You can get your name, nickname, catchphrase or whatever engraved on the other side.

Pretty cool idea in theory, but the execution is a major pain in the ass. We have over four hundred of the bastards now, and we've got them all hanging on hooks from the ceiling behind the bar. I'm the only bartender tall enough to reach them all. Everyone else has to stand on a milk crate or step ladder to get them down.

Also, we're running out of room to add more mugs, and hanging them from the handles is bad news, as the handles have a tendency to break off with too much use. Finally, the soft pewter gets scratched and dented easily, and after a few months of use, the mugs look pretty beat up.

Oh yeah, and people will come in and try to scam using mugs by either trying to use a friend's mug or just flat out making up a mug number to use. We actually had an incident a few weeks ago where someone was using a mug at a table, and someone else tried to use the same mug at another table. I had the waitresses go ask them who's mug it really was. Turns out, it was neither of theirs! They had both gotten the number from a mutual friend who told everyone they knew they could use their mug when they went up there.

Wow this turned into a big rant, but the point is, if I do some kind of club, I'd rather do something like what you mentioned, where if you drink every tap beer, you get some kind of souvenir, like a special glass, or a plaque or shirt or whatever.

That's the best thing about the situation. I have tons of experience actually working a bar, and I know what works and what doesn't. I think the best strength of my place would be that it would be ridiculously efficient, and would let the employees focus on doing their jobs, instead of getting bogged down in time-wasting inconveniences such as what I described above.

In fact, my current idea would be to open a place small enough that it could be run with just two bartenders, and one busser. No waitresses required. My friend that I first started talking to about this last year said that he knew two bartenders that went into together on a place and opened it for a mere $60k! Another guy I know that is GM at the place next to where I work told me he knows another guy that opened a beer/wine bar for only $30k!

That's chump change! I'd rather do that than try to open a $400k brewpub/restaurant monstrosity. I think that's why most places fail. The owners bite off way more than they can chew and the place is unable to pay for itself fast enough. Such a small investment could easily be paid back in a year.

 

[Hollow4]

just remember, if you open a small bar to get your feet wet and its successful you will always have that small bar. That way you could expand it, or open a new a location for your brew pub dream. The thought probably went through your head, but i thought i would offer that up since no one else had mentioned that you will always own a business if you open up another one. Could be a nice way to get into multiple businesses.

Also, talk to a lawyer and an accountant about the LLC vs S-Corp debate. The liability protection is the same with either one, and the filings are pretty much the same(both flow through to your tax return). The S-Corp has some extra governance things that you have to do. All of this is fairly easy to find online.

One other thought i had when i saw this, was opening "two" business. One a bar and one a brewery. This would get around not being able to distribute. You would just need to "sell" your beer to yourself at the bar and then you could sell it to others as well. You would need two business licenses and would need to differentiate the businesses as well with bank accounts and tax returns, but could be pretty easy to do. For a few hundred dollars per year in sunk cost and time spent could net you a much larger profit on the distribution level. You just may want to keep that idea in your head when your planning the bar and brewery aspect.

Just some thoughts

Ryan

 

[Torchiest]

One other thought i had when i saw this, was opening "two" business. One a bar and one a brewery. This would get around not being able to distribute. You would just need to "sell" your beer to yourself at the bar and then you could sell it to others as well. You would need two business licenses and would need to differentiate the businesses as well with bank accounts and tax returns, but could be pretty easy to do. For a few hundred dollars per year in sunk cost and time spent could net you a much larger profit on the distribution level. You just may want to keep that idea in your head when your planning the bar and brewery aspect.

Just some thoughts

Ryan

Thanks for the good suggestions, but on this last point, I'm pretty sure it's illegal to do that. I already bartend, as I said, and last summer I applied for a job at the local brewery. The owner/brewmaster and I totally hit it off, and he said I was more than welcome to the job, but I couldn't work both at a brewery and at a point of sale location. So I'm thinking you probably can't own both steps in the process either. Probably some stupid anti-trust law or something. But yeah, I like the idea of starting small and then adding to my empire over time. :rockin:

 

[Brewtopia]

The law was just changed in Washington where brewery owners can now open one offsite Pub. It used to be that if you owned a brewery in the state of Washington and you wanted to open another place, you had to brew at every location.

In Oregon, a brewery owner can own 2 satellite pubs for every one brewery.

 

[Bad Shark Brew]

Where I work now, we have a mug club, where you spend $75 to get a pewter mug which is numbered on the bottom and has our logo on one side. You can get your name, nickname, catchphrase or whatever engraved on the other side.

Pretty cool idea in theory, but the execution is a major pain in the ass. We have over four hundred of the bastards now, and we've got them all hanging on hooks from the ceiling behind the bar. I'm the only bartender tall enough to reach them all. Everyone else has to stand on a milk crate or step ladder to get them down.

Also, we're running out of room to add more mugs, and hanging them from the handles is bad news, as the handles have a tendency to break off with too much use. Finally, the soft pewter gets scratched and dented easily, and after a few months of use, the mugs look pretty beat up.

Oh yeah, and people will come in and try to scam using mugs by either trying to use a friend's mug or just flat out making up a mug number to use. We actually had an incident a few weeks ago where someone was using a mug at a table, and someone else tried to use the same mug at another table. I had the waitresses go ask them who's mug it really was. Turns out, it was neither of theirs! They had both gotten the number from a mutual friend who told everyone they knew they could use their mug when they went up there.

Wow this turned into a big rant, but the point is, if I do some kind of club, I'd rather do something like what you mentioned, where if you drink every tap beer, you get some kind of souvenir, like a special glass, or a plaque or shirt or whatever.

That's the best thing about the situation. I have tons of experience actually working a bar, and I know what works and what doesn't. I think the best strength of my place would be that it would be ridiculously efficient, and would let the employees focus on doing their jobs, instead of getting bogged down in time-wasting inconveniences such as what I described above.

In fact, my current idea would be to open a place small enough that it could be run with just two bartenders, and one busser. No waitresses required. My friend that I first started talking to about this last year said that he knew two bartenders that went into together on a place and opened it for a mere $60k! Another guy I know that is GM at the place next to where I work told me he knows another guy that opened a beer/wine bar for only $30k!

Just wanted to add something here
As far as the 'club' idea, when I lived up north I used to frequent a brewery that what they referred to as the "Passport Club". For $20 bucks, you got a t-shirt and pint glass from the brewery and they gave you a passport type book where you recorded your thoughts on the various brews they served up. They kept the passports in a case at the brewery and once a week the staff would go through and stuff coupons in random passports. These would typically be for things like discounts on beer and merchandise. It actually worked out pretty good, from what I could tell. Plus, it kept me going back on a regular basis to see what I could score from the brewery as far as free stuff.

Good luck to you! Keep us posted on your progress!

 

[explosivebeer]

This is a great thread with a lot of helpful information! Thanks OP for bringing it back up and giving an update.

 

[brandona33]

The club mug idea seems way more classy than where I hang out, this place has checklists on a card the size of a timecard. Behind the timecard there is a rack and the cards are alphabetized. The cards cant leave the premesis, and the bartenders check off and initial every beer you drink. I finished my 1st tour Wed. and started another 8 pints towards the next. Stella Artois, Kells Rogue Chocolate Stout, Saranac Black Forrest, Spaten, etc. Nice mix of beers of the world with beers of the US.

Place seats 50, menu is small, and is run by 1 bartender and the owner or his wife in the kitchen. This could keep initial operating costs low if you and your friend work a small place this way.

 

[vmpolesov]

My advice: forget it. The barrier to entry in this business is ridiculously low. You'll never make a profitable business - the 'micro brew' market is beyond saturated.

 

[Torchiest]

I like the idea of beer tours and item giveaways better than a mug club for the simple fact that, outside of the problems I already mentioned, we've also had more than a dozen mugs lost or stolen, and we've had to replace those as well. It's just a lot of grief. It might work better if we didn't actually store the mugs at the bar, and made people start taking them home with them so we didn't have to worry about keeping track of them all the time.

But yeah, 50-100 seats is what I have in mind. Where I work now, the seating capacity is around 300 or so. We have anywhere from two to four bartenders and up to eight waitresses at any given time. Oh yeah, and half a dozen cooks as well, plus managers. I'd like to get away with a staff of five at most.

 

[Hell Brew]

Interested in how this is going as I live right down the road from you in Clear Lake, I also frequent the bar you work at often, seeing as how you guys have the best beer selection, not to mention badass pizza, in the area. That would make me very happy to have a brewpub nearby so I don' t have to drive to downtown. I would also be available for brewery bit&* jobs. Free of charge of course.(well maybe a growler for trade)