Should I open a Supply Shop?

[Alamo_Beer]

+1 on getting in with an established brew club

another +1 for either getting in with an established liquor store or starting your own.

The LHBS here in Corpus (well...there's 2 but one of them is SOO bad that I don't even consider them) is part of an existing local chain of liquor stores AND tied into our brew club. It's also kinda cool bc they have a guy come in from the club every Friday and Saturday evening to just hang out and answer questions....to my knowledge they do it for free and rotate who does it.

Good luck!

 

[McGarnigle]

For all the legitimate cautions mentioned, there aren't too many businesses where you can say "I know this will thrive," but someone is opening a new business every day in the US. If after additional research, you're still on the fence, I'd say go for it.

 

[Bobby_M]

If there is no local brewclub (you should know by now as a brewer and if not, shame on you for not wanting to brew socially ;-) then you would want to start one and use the shop as a meeting location for as long as you can.

I'd also offer as many brewing classes as possible to drum up interest.

I'd consider doing it part time if possible so you can work full time to pay the bills. I think you'll be lucky if your HBS income was enough to cover your expenses at first.

 

[Alamo_Beer]

Have you considered any other types of businesses you'd be interested in owning?

 

[batches_brew]

Don't know much about staring legit business, but I'd say if you do it, don't blow your life savings. Get loans and use your savings to pay them off if need be. At least you're still getting interest on your savings. Then again interest on the loan is probably more but at least if you have to cut n run, you'll have some cash in your pocket.

Maybe consider a L.L.C. just incase it fails so you wont be f&$ked for the rest of your life.

I'm taking a business class this fall which means I don't know jack.

 

[bsay]

+1 to the advice to combine homebrew supply with something else. I have personally been to two different homebrew shops, both of which are combined with other things. One is also a coffee shop, the other is also a liquor store.

If you can get a place on main, then I would recommend the coffee shop or ice cream parlor combination. Turn it into a gallery where local artists can hang their work on the walls and sell at a commission. Then your brewing equipment can take up a corner in the shop and you'll be able to give your customers some personal support.

Have an online section and be willing to ship at-cost to your customers. Places that jack up shipping (or their prices to account for shipping) are statistically less-successful. Have a healthy stock of basic equipment, specialty and base grains, dry and liquid malt extracts, and kits (either pre-packaged, or of your own design).

The key will be advertising. Give people a reason to come to your store, rather than go to even a closer store. Be there as often as you can personally, and introduce yourself as the owner. Give some random people discounts, and I guarantee you they'll be coming back. Also, crush their grain for them free.

My 2cents, hope it helps!

 

[Brian S]

How many HB shops are in KC and are they any good? Your close enough to KC that if there arent any good supply shops people will drive out there. Especially if you make it worth their while with good customer service, fresh ingredients and competitive pricing. There is a guy here in STL that has a no store front business. He has quite a large inventory and he buys grain by the pallet for AMAZING bulk rates. (40 bucks for a sack of MO 25 for reg 2 row) He also carries everything else that you would expect a HB shop to supply except he basically runs it out of his basement.

 

[Rudeboy]

Fortunately, my overhead will be fairly cheap. I'll only be paying $500/month for 800 sq ft + the stone cellar.

Stone cellar?
500 bucks a month?
Screw the store you should move in there.

 

[stever]

If there is no local brewclub (you should know by now as a brewer and if not, shame on you for not wanting to brew socially ;-) then you would want to start one and use the shop as a meeting location for as long as you can.

I'd also offer as many brewing classes as possible to drum up interest.

I'd consider doing it part time if possible so you can work full time to pay the bills. I think you'll be lucky if your HBS income was enough to cover your expenses at first.

+eleventymillion

if there is no homebrewclub, start one, get em hooked on brewing beer then supply the drug.. i mean supplies.

 

[AnonyBrew]

Keep in mind with an Internet storefront you have access to customers worldwide & not just locally. Meaning don't let local population sway your decision too much.

I'd assume your highest margins will come from equipment as opposed to ingredients. Newer brewers tend to spend alot of money on upgrading their equipment (I do).

Being a "generic" homebrewing shop will put you in direct competition with all other online homebrew sites. Find a niche within the brewing community. Be the one store everyone goes to for XYZ be it service, specific equipment or otherwise.

There are alot of brilliant minds on HBT and several of them build their own brewing devices. One idea might be to tap into their expertise & labor by helping them sell their parts/services through your storefront.

I'd say building a niche among the brewing world would be the most beneficial for a new homebrew store. Example: I go to store A for most my ingredients & stuff, but Store B (your store) is the best place to get product or service XYZ. Hope that makes sense.

 

[Chriso]

If you need someone to manufacture pre-made MLT's for cheap, let me know. Nebraska's not too far.

 

[AnonyBrew]

If you need someone to manufacture pre-made MLT's for cheap, let me know. Nebraska's not too far.

See. This is my point.

 

[wolf08gang]

Stone cellar?
500 bucks a month?
Screw the store you should move in there.

I must admit, the location and price is a large reason for my daydream becoming a plan.

 

[carnevoodoo]

I would see about acquiring a liquor license too. Fancy beer + stone cellar gets my thoughts racing.

 

[schneemann]

There are two things I think are sorely lacking in most LHBSs that I've been to: Professionalism and marketing.

Professionalism: Don't get me wrong, its a pretty niche market and there's no need to wear a suit & tie to work, but at the same time, its not a record store, either. Some people I've dealt with really don't seem to have much in terms of customer service skills and sales skills.
I used to work retail and I favored a "consultative" approach. My opinion was, if this person I'm talking to leaves happy and with the product that best suits their needs (and nothing more), then they'll come back. And they always did.

Marketing:
There are sooooooo many awesome ways an LHBS could market itself without needing a big budget to do it. It seems like most LHBS I've been to really do little than rely on word-of-mouth

 

[Brew-Happy]

There are two things I think are sorely lacking in most LHBSs that I've been to: Professionalism and marketing.

Professionalism: Don't get me wrong, its a pretty niche market and there's no need to wear a suit & tie to work, but at the same time, its not a record store, either. Some people I've dealt with really don't seem to have much in terms of customer service skills and sales skills.
I used to work retail and I favored a "consultative" approach. My opinion was, if this person I'm talking to leaves happy and with the product that best suits their needs (and nothing more), then they'll come back. And they always did.

+1 I went to a LHBS when I was just researching and the owner was into alternative forms of government! Or anti-gov. There were pamphlets and books left around about anarchism. Turned me off from that store completely!

 

[Yuri_Rage]

fancy beer + stone cellar gets my thoughts racing.

Wouldn't be afraid to venture into the craft/premium wine business, either. Truly "cellar aged" wine will get some attention. With some crafty/knowledgeable marketing, you might gain some new homebrew customers from the wine crowd.

 

[eddie]

I say start a local homebrew club in order to help determine and increase local interest in homebrewing before opening an LHBS. If there's only a handful of people interested locally then it doesn't seem like there would be much need for an supply store. As a club, you can enter contests and support local causes which will help get your name out there and make a good impression on the public. Something else to consider, check out your local chamber of commerce.

 

[hoss75]

A) How is the parking? Seriously, it can make or break a new business.
B) Have you joined homebrew clubs to know for sure that there is a customer base in the area? THis has been pointed out before.
C) It was suggested that wine is important, I would agree. Do you know enough about that to carry those products?
D) What do you know about business? i worked for a very successful homebrew shop owner. but he had an MBA in addition to 30 years of homebrew experience. So he knew how to beat his competition.
E) A successful homebrew shop is more a hobby shop than it is a retail store. You need to give out advice an information all day long. Do you hve the knowledge base and more importantly, patience?
F) Have you also considered a BOP?

 

[AnonyBrew]

Keep in mind with an Internet storefront you have access to customers worldwide & not just locally. Meaning don't let local population sway your decision too much.

I'd assume your highest margins will come from equipment as opposed to ingredients. Newer brewers tend to spend alot of money on upgrading their equipment (I do).

Being a "generic" homebrewing shop will put you in direct competition with all other online homebrew sites. Find a niche within the brewing community. Be the one store everyone goes to for XYZ be it service, specific equipment or otherwise.

There are alot of brilliant minds on HBT and several of them build their own brewing devices. One idea might be to tap into their expertise & labor by helping them sell their parts/services through your storefront.

I'd say building a niche among the brewing world would be the most beneficial for a new homebrew store. Example: I go to store A for most my ingredients & stuff, but Store B (your store) is the best place to get product or service XYZ. Hope that makes sense.

I'll reiterate after the last few posts. If you plan on having a full blown Internet storefront you will have access to more brewers than just the local ones. If you DO have a substantial website set up I wouldn't let locality make or break your decision to open. In fact, since you are MO located you'll be somewhat centralized for shipping to many of your customer base.

 

[avidhomebrewer]

I think you should. If you have the desire to be your own boss, have at it. I didn't read all these posts, but my LHBS owner researched for about 4 months prior to opening his shop (and I wish I could have beat him to it!). You mention that there isn't another HBS for 20-30 miles from your location. What would bring potential customers to your shop? I would provide a great selection (costs a lot of money) and freshness of ingredients. My original HBS was about 40 minutes away and really didn't carry quality ingredients. Now, my LHBS is 10 minutes away at most and carries the freshest grains, hops, etc. Maybe offer how-to shops to draw in other customers. Make your store an attractive establishment to enter. Maybe have hops growing on the side of the building and to top it off, have grain growing in the back! Ok, maybe that's stretching it a bit, but you get the idea. Anyways, if you are interested, drop me a line at [email protected]. I potentially can help you out with the website as I'm a software developer.

Good Luck!

 

[Fat Guy Brewing]

Do you know the triple double of opening your own business? It takes twice as much money as you thought, twice as much time as you thought, and twice as long to make a profit as you thought. I work in commercial real estate in KC, if you send me a PM I can get you some demographic data and commercial real estate rents if you like.

 

[JVD_X]

I have only two things to contribute to this conversation - "bootstrap" and "don't invest money you can't afford to lose".

When you said "life savings" I shuddered. How about investing a PORTION of your "life savings" into an account and use the resulting proceeds to open a web store.

Just an idea.

 

[ifishsum]

My LHBS has a kitchen where they brew beer on premises (so you can taste the recipes), and you can rent the kitchen on certain nights to brew beer there. They also offer an on-site beginner brewing class I think. The more useful services you can offer your customer, the more loyal they will be when it comes to buying supplies and equipment. Free advice and a few perks now and then will get and keep customers, even though it seems like a waste of time at first - for instance, mine gives me a free beer glass with their logo every time I spend over $20-30 or so, and I think that's cool.

 

[billtzk]

COGS, I suspect, is going to be a deal breaker.

COGS. I had to look that one up.

COGS Cost Of Goods Sold
COGS Campaign to Organize Graduate Students
COGS Centre of Geographic Sciences (Annapolis Valley Campus, Lawrencetown, Nova Scotia)
COGS Chesterfield Open Gaming Society
COGS Clarke-Oconee Genealogical Society
COGS College of Geographic Sciences (Lawrencetown, Nova Scotia)
COGS Combat Oriented General Support
COGS Complete Online Gaming System
COGS Computer Oriented Geological Society
COGS Council of General Synod

 

[billtzk]

... shame on you for not wanting to brew socially ...

What shame is there in preferring your own company?

 

[AnonyBrew]

I think you should. If you have the desire to be your own boss, have at it. I didn't read all these posts, but my LHBS owner researched for about 4 months prior to opening his shop (and I wish I could have beat him to it!). You mention that there isn't another HBS for 20-30 miles from your location. What would bring potential customers to your shop? I would provide a great selection (costs a lot of money) and freshness of ingredients. My original HBS was about 40 minutes away and really didn't carry quality ingredients. Now, my LHBS is 10 minutes away at most and carries the freshest grains, hops, etc. Maybe offer how-to shops to draw in other customers. Make your store an attractive establishment to enter. Maybe have hops growing on the side of the building and to top it off, have grain growing in the back! Ok, maybe that's stretching it a bit, but you get the idea. Anyways, if you are interested, drop me a line at [email protected]. I potentially can help you out with the website as I'm a software developer.

Good Luck!

There is a very good point made here for us homebrewers that you could capitalize on. Freshness. Always a big point for me wondering if the grain and hops and yeast are fresh when I buy them. Maybe that's the niche....guaranteed freshness of ingredients.

 

[JimBell]

COGS. I had to look that one up.

Sorry,

it was the first one.

"Cost of Goods Sold"

Not only that, but what is the shelf life for most of the items in the lhbs? Shrink kills.

 

[Laughing_Gnome_Invisible]

My LHBS has a kitchen where they brew beer on premises (so you can taste the recipes), and you can rent the kitchen on certain nights to brew beer there. They also offer an on-site beginner brewing class I think. The more useful services you can offer your customer, the more loyal they will be when it comes to buying supplies and equipment. Free advice and a few perks now and then will get and keep customers, even though it seems like a waste of time at first - for instance, mine gives me a free beer glass with their logo every time I spend over $20-30 or so, and I think that's cool.

I attended a brew class at a farm based LHBS earlier this year. The lesson, just like the store was somewhat unprofessional, but friendly. As it turned out I already knew all the basic extract stuff that was on display from reading this forum, and a couple of us even filled on on some knowledge that the "lecturer" was lacking. I'm not knocking the experience because it was free and casual. Even so, after the event all 15 of us were buying stuff from the store straight after, and half of those 15 were first time brewers.

A properly advertised and run brew class at different experience levels would be a great way to build up the local interest.....And fun too! We all had a good time at ours.

 

[HarvInSTL]

At the very best, if you'd like to open a shop and have it produce meaningful income, you'll need a good quarter million people in your potential customer base, at least in your market area, free of competition.

I've read this before and I agree with it. As an example we have two home brew shops here and we have approx 2.5mil people.

While I think it's a great idea, let me play Devil's Advocate and throw out a few things you need to consider:

1) your profit margin will be minimal, most local LHBS that I have seen are a part time operation with hours in the evenings and weekends.

2) with the continued hop shortage you may have a hard time getting a hops contract and the contract you do get may be extremely limiting in how far you can grow your business

3) with the current economic situation, people are looking for ways to cut down on their spending and hobbies are typically the first things to go.

I'm not saying don't do it, I'm just saying now might not be the most opportune time to start.

+eleven bijillion to all of those points

How about drafting up a business plan, I for one would be interested to see what you come up with.