Opening My Own Local Home Brew Shop

[stylus1274]

Just as the title of the thread reads, I am opening a LHBS.

Now, I am not posting this to say hey 'look at me' or promote it. I'm posting this because this journey is just in it's infancy. I'm hoping that by posting info as I go along through this process it will help/aid/benefit someone who wants to do this on their own.

There is no handbook to opening a brew supply store. There are no guides. No advice to seek out or business plans already generated. In the brief 4 weeks that I have engaged in this, I have found out it will be difficult. I have also found out that information to 'guide' you along in the process is scarce.

I may fail miserably at getting this up and running. If that happens, I hope at the very least the info I post over the course of the next 3-5 months helps the next person.

I considered doing a blog on this but it makes more sense to me to post here based on the sheer number of members/visitors.

With that said this is my first entry:
====================================================

I want to open with a few numbers.

First thing is, what is the population of your area/city? This is very important. At a bare minimum you need a populous 250,000 people to support one supply store.

Now this number can be skewed a bit. For instance, my 'city' has 365,000 people. However the general surrounding area is 1.5 million. I can tap into a lot of that populous.

Next thing is how many brew shops are already in place in your area? If you already have a LHBS in your area then you need to factor in the 250K people per LHBS equation.

Next item is wholesale vendors.

This was a b#tch when I first started looking. But I got beyond lucky with this one. I will explain in another update/posting.

You need a good business plan to do this right? I mean a good business plan. That doesn't mean 'hey I got 20K, I'm gonna open a store' and you just jump in. You need a real business plan. And to make that business plan you need to understand how much wholesale beer supplies cost.

Well guess what? Vendors like BSD, LD Carlson and ect. WILL NOT give you a pricing sheet unless you have your business license AND your store front. Yeah, you read that right. You have to actually have a physical store front to just get pricing.

So what that says is take a huge leap of faith, secure your store front and then get a pricing sheet and hope you nail it. Of course that is insane. Anyone who goes about opening a business that way clearly has money to waste.

Oh, I forgot to mention. These vendors also play the distance game. Let's say you want to open a shop 15 minutes away from another supply shop in your area. Well, your supplier will not supply to you based on distance/time of travel. Location is a major deal obviously.

That's it for this posting. I will update next week with more info. Maybe sooner if I get bored

 

[rjolin01]

In your opinion, could a store feasibly work with an area population of say 125,000 across a few counties? I am in northern Wisconsin (Rhinelander) and the closest LHBS is an hour south of me and I am in the largest city north of them. I would basically be closest store for anyone half hour north of Wausau, WI. I believe there really isn't a store in the upper peninsula of Michigan either.

 

[stylus1274]

In your opinion, could a store feasibly work with an area population of say 125,000 across a few counties? I am in northern Wisconsin (Rhinelander) and the closest LHBS is an hour south of me and I am in the largest city north of them. I would basically be closest store for anyone half hour north of Wausau, WI. I believe there really isn't a store in the upper peninsula of Michigan either.

Across a few counties definitely should be your target. However I don't think 125K would cut it if that is your whole number across say 2-4 counties.

First thing is to determine need and then supply that need.

 

[Norselord]

Whats your advice for dealing with perishable goods in terms of spoilage, shelf-life, and investment?

Use products yourself that are about to expire?
Put expiring items on sale?
Use expiring items for on-site brew classes?

 

[mongoose33]

Dubuque IA has a good LHBS and Google says its metro population is 96,370. Now, that reach also extends a bit into Wisconsin, and probably northwest Illinois, but the guy there is making a good go of it. He's been in business a long time. He also sells Wine supplies.

One thing that helps him is he coordinates the local homebrew club.

But the idea you have to have a minimum population depends, I'm sure, on the propensity of the population to brew. Of course, I'm in Wisconsin (so is rjolin), where beer is king. And queen. And the prince and princess.

 

[stylus1274]

Whats your advice for dealing with perishable goods in terms of spoilage, shelf-life, and investment?

Use products yourself that are about to expire?
Put expiring items on sale?
Use expiring items for on-site brew classes?

This will be a trial by error for the first year. But with that said, you are almost spot on in terms of handling it.

It is a guaranteed fact that you will be throwing away liquid yeast. There is no way around it from what I've learned from a successful shop owner. So the best thing would be to brew beer with it, have classes as you suggested and possibly make a 'sale bin'. Basically sell it for super cheap with no guarantee of viability.

Other than yeast I'm not worried about much else. Grains and ect. will be well stored to avoid as much loss as possible.

 

[stylus1274]

Dubuque IA has a good LHBS and Google says its metro population is 96,370. Now, that reach also extends a bit into Wisconsin, and probably northwest Illinois, but the guy there is making a good go of it. He's been in business a long time. He also sells Wine supplies.

One thing that helps him is he coordinates the local homebrew club.

But the idea you have to have a minimum population depends, I'm sure, on the propensity of the population to brew. Of course, I'm in Wisconsin (so is rjolin), where beer is king. And queen. And the prince and princess.

The number of 250K is not an exact science. It is a number suggested by vendors/other brew shops.

So if that guy is doing OK with 100K, then awesome. And you are right, it's the propensity to brew that makes a huge factor in success.

I will say this though. I don't want to 'make a good go of it'. I want to do extremely well. I want to dominate my market. I want to be very financially sound. And, I don't think you can really do all of these things with a population of 100K.

 

[stylus1274]

Posting Update Number 2
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OK to get going with this thing you need a solid business plan (aside from a beer making populous). The most important thing in my opinion is your cost to start this thing up. The easy part is figuring out your commercial property cost, your license cost and your website cost.

The hard part is figuring out costs of supplies and intangibles. By 'intangibles' I mean power bill to your shop, your water bill, your security, shelving for your shop, containers, shop decor (very important) and ect. But before you get to the intangibles you need to find out wholesale pricing on supplies.

Unfortunately places like LD Carlson, Brewcraft or BSG won't just give them to you. You could of course just jump in feet first and secure your location and then get your pricing sheet and hope for the best. Of course, I don't suggest this method.

So how do you get your pricing sheets you may ask? Well I got lucky so to speak. I started emailing brew shops and posting to forums for help. Now most shops won't tell you jack. Not sure why that is. Maybe fear of competition?

Luck have it that a gentleman that owns a shop in Denver gave me access to all his price sheets for all his vendor. As of right now I am ahead of schedule based on this alone. My suggestion here is to contact shops in hops of help. Just don't call the shop in your home town. Safe to say they won't want to help you

Now I did have a backup plan if I was unable to secure wholesale cost. One of the vendors (LD Carlson) told me typically mark up is 30%-50% on items. So I would have based my initial supply cost on this. Not ideal, but definitely enough to get your plan rolling in terms of what you need to spend on supplies to open your shop.

 

[Vandulus]

This will be a trial by error for the first year. But with that said, you are almost spot on in terms of handling it.

It is a guaranteed fact that you will be throwing away liquid yeast. There is no way around it from what I've learned from a successful shop owner. So the best thing would be to brew beer with it, have classes as you suggested and possibly make a 'sale bin'. Basically sell it for super cheap with no guarantee of viability.

Other than yeast I'm not worried about much else. Grains and ect. will be well stored to avoid as much loss as possible.

Instead of throwing away expired yeast, you may want to offer it at a substantial discount (25% for up to 3 months, 50% off for 4+months) for those folks like me who don't mind making a starter.

One other thing to consider with grains is their freshness and the care of the storage containers. You'll want some way to pour the new grains into the bottom of a clean container and any remaining old ones on top. I've noticed some of the grains my LHBS offers smell a bit off. I suspect it's because they never clean and air out the storage containers. I've started rotating my grain storage containers and labeling them with a bought on date.

 

[stylus1274]

Instead of throwing away expired yeast, you may want to offer it at a substantial discount (25% for up to 3 months, 50% off for 4+months) for those folks like me who don't mind making a starter.

One other thing to consider with grains is their freshness and the care of the storage containers. You'll want some way to pour the new grains into the bottom of a clean container and any remaining old ones on top. I've noticed some of the grains my LHBS offers smell a bit off. I suspect it's because they never clean and air out the storage containers. I've started rotating my grain storage containers and labeling them with a bought on date.

That's what I said about the yeast Vandulus Use it or discount it.

Good note on the rotation of grains. Problem is the airing out item. Good idea but unless you keep extra containers it's a tough task. I will definitely note this though as it's a smart idea.

 

[rjolin01]

What's the chance of you sharing the cost sheet? Unless you don't have physical copy? You going to be willing to share yours when/if you get one?

 

[stylus1274]

What's the chance of you sharing the cost sheet? Unless you don't have physical copy? You going to be willing to share yours when/if you get one?

Here is the deal with this. The shop owner in Denver gave me a lot of access to different supplies. I will definitely pay it forward.

I won't list them here in the forum. However, later down the road if someone messages me I will be willing to do so.

 

[rjolin01]

My wife and I have often discussed how it would be so cool for me to open a supply store in my area. Although I currently couldn't afford the capital need to start up, there may be a time in the future where I may be capable to pursue such an endeavor. I am known for over planning and would love to see what I would need to plan for to make this happen. You are awesome for be the guinea pig and making your experience public.

 

[stylus1274]

Dang didn't realize it's been a month since last post. I'm definitely slacking. Well, we just had our 3rd child so I'll blame it on that

Anyways I want to throw so numbers out there at you if you are still following along. Now these are based on what I personally want to do. They clearly do not/would not represent everyone.

My goal is to launch with a nice shop. What I don't want to do is open a store barely stocked and leave the impression that we either won't be in business long or we are half-ass at what we are doing.

Based on what I personally will stock with the number to get that done is $9,200. This does not represent rent, utilities, signage, store furniture and ect.

That number will get me a wide range of grains, hops, yeasts, wine kits, beer kits, extracts, equipment and whatever else.

My goal is to launch with a square footage space between 1000sq-1200sq. I believe the supplies I am ordering will fill in nicely in this amount of space. You don't want to look understocked or overstocked.

In my city that will run in the area of $2000/month. I plan to put away a years worth of rent to cover this. So basically 24K. Of course you hope sales pick up fast enough to cover this.

So basically $33,000 just for rent and supplies. My initial thoughts for around 50K to start this thing. I think once I finish my calculations for the last remaining things (store furniture/utilities/insurance and ect.) I will be pretty close to that amount.


Cheers


Edit: After some consideration and more thought, I've decided to boost my initial stock purchase of $9,200 to an even $15,000.

The reason? I need to heed my advice more closely. I want to jump in with both feet and not half-ass anything. I think bumping the inventory up to start will do that.

 

[Paperman1979]

Giving this the 3 week bump, any chance of seeing a stock list at some point? I own a retail building that just had a space open up, been wanting to fill one of the fronts but was not willing to boot a paying tenant to do it. Now with a space open it may be time to open shop. The space and utilities will be free I just need to man it and keep stock. Thank you for the write-up so far.

 

[IslandLizard]

Giving this the 3 week bump, any chance of seeing a stock list at some point? I own a retail building that just had a space open up, been wanting to fill one of the fronts but was not willing to boot a paying tenant to do it. Now with a space open it may be time to open shop. The space and utilities will be free I just need to man it and keep stock. Thank you for the write-up so far.

That space is not exactly "free" since you won't have a paying tenant in there, being a source of income for you. But you do get your space at "wholesale" price.

 

[kh54s10]

Sounds well thought out. My advice: Plan on everything costing a little more than you think.

Whatever the stock you start with, have a neat, clean and orderly shop. I had several choices when I started. One was always a mess and is no longer in business. The other has a decent supply, a great following. The newest, and closest started out with a relatively decent stock, very neat and very clean. He has added to stock and usually has everything I want. If not he will order it and have it in a couple days.

 

[mongoose33]

Edit: After some consideration and more thought, I've decided to boost my initial stock purchase of $9,200 to an even $15,000.

The reason? I need to heed my advice more closely. I want to jump in with both feet and not half-ass anything. I think bumping the inventory up to start will do that.

As a customer, I hate going to a store expecting to pick up something and finding it's not in stock--so I applaud you for trying to ensure you have everything you need.

If I go to a store for the first time and they have holes in their inventory, it suggests to me that they aren't a reliable source of whatever I might need. That turns me toward other sources such as an online store that can get me things within 24 hours.

 

[Dockside_Brewing]

Any updates?

 

[RevDroz]

I see it has been quite awhile since there were any updates, I am very interested in knowing how things turn out. I have been kicking around the idea of a LHBS here where I live.

 

[kh54s10]

The OP was on HBT in April 2021 but has not been back here since Nov 3, 2016. My guess is that he never opened the LHBS

 

[TxBrew]

The OP was on HBT in April 2021 but has not been back here since Nov 3, 2016. My guess is that he never opened the LHBS

I could see why, homebrew retail is a tough industry.

 

[AkTom]

I moved from Alaska to west Texas. I had options in Alaska... drive 2.5 hours to Anchorage. Shout out to Arctic Brewing. Or a very small shop 10 minutes in Soldotna.
now in Texas it is looking like drive to Dallas, 5 hours or Austin.
Dang, looks like on line for me.
West Texas... flat, dry, hot, snakes, skunks and no home brew store.
Cheers

 

[Steveruch]

I could see why, homebrew retail is a tough industry.

It is. In Fort Wayne, population over 250,000, the homebrew only store closed and a hardware store in town has a small section dedicated to home brew supplies.

 

[MaxStout]

Here in a metro of 3.6 million, we're down to only two. Granted, they are big ones, MW and NB. But up until 2 years ago we had 4 shops: 2 NB, MW, and Brew & Grow. The latter closed fall of '19, and NB closed their south Mpls. store soon after. And this was pre-pandemic.

Then there's Sioux Falls, with about 250K pop. They have 2 stores, but both of those are places that have other business. This might be the model for a small-market LHBS. It needs to be joined at the hip with something else to be viable: liquor store, convenience store, farm store, etc.

 

[easttex]

I moved from Alaska to west Texas. I had options in Alaska... drive 2.5 hours to Anchorage. Shout out to Arctic Brewing. Or a very small shop 10 minutes in Soldotna.
now in Texas it is looking like drive to Dallas, 5 hours or Austin.
Dang, looks like on line for me.
West Texas... flat, dry, hot, snakes, skunks and no home brew store.
Cheers

I have no idea where you are out in West Texas but there's an outfit called Kegconnection that's in Commanche. I've done some business with them before. Just ordered some cleaning supplies, actually.

Either them or one of the shops in Fort Worth is likely your best bet. That, or deal with shipping.

 

[matt_m]

Metro Toledo, pop 507,000 only has a feed store with a homebrewing department. Indianapolis at ~2 million as far as I know only has 1, Great Fermentations, which had 2 locations but closed one a couple years ago (pre-Covid.)

But I'll be honest I'd rather mail order supplies from a higher volume seller where it theoretically should be fresher. Yeast is the main thing I wish I could get very locally but then it would be on them to keep fresh stock. When I'm going to be close to a homebrew shop (AIH or Great Fermentations since it right on the way to my kid's college) I'll take a cooler and stock up on yeast or order in the spring/fall. If it gets older by the time I use it I'll do a starter for sure, newer, maybe.