So you want to go pro?

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Who hasn't gone through the ups and downs of crafting that first successful batch of home-brew and then, satisfied with your work, had that passing thought that you could someday turn around and do this for a living. Well, about that...
The tone of this article is not meant to be rude, condescending or anything other than matter of fact. It is meant to provoke some serious thought into the minds of hopeful entrepreneurs. Consider this a primer to finding more detailed information elsewhere, such as

I started home brewing about the time a childhood friend went off to brewing school. It was his dream of bringing a brewery to our hometown that got me thinking about opening and running a brewery. I have always felt a calling to the business world and pursued that through high school and into college. I have been planning a brewery for three years and am about half way there, I keep hitting roadblocks. Will I succeed? Hopefully, but only time will tell. Hopefully this article will help others with their dreams or kick start new ones.
Am I the absolute expert in running breweries and businesses? NO, but I have spent a considerable amount of time researching, writing business plans and consulting with industry members and experts. Will you agree with everything I say? Probably not.
Will it force you to examine your views of brewing as a hobby vs. a career, some of the facets of running a brewery and perhaps more importantly a small business? Absolutely.
I would like to make this a crowd sourced article, so if I left something out or if I am plain wrong, please point it out and it will be adjusted to serve the greater good. Please include a reference for your information.
With that out of the way, the meat and stout of the article:
Making great beer is a small part of running a brewery; a lot of business knowledge is required to be successful for any length of time. A model built around brewing all day, everyday is not sustainable. As we sometimes forget (some long than others) we are only human and NEED to sleep, relax and spend time away from work, no matter how awesome it may be.
Brewing is not a glamorous job, it is hot, wet, hard work. From cleaning big mash tuns to moving full 1/2 barrel kegs, it is fun as a hobby but would you want to do it everyday? Still thinking yes? Well, the not so fun parts of a business: taxes, accounting, marketing, legal paperwork, handling unhappy customers, dealing with suppliers, shipping companies, retailers and wholesalers is almost a full time job in itself. Don't forget maintaining and fixing anything and everything around the brewery. Want to hire all that out? Can you afford to do so only brewing 1/2 barrel batches and justify doing so?
You are going to self distribute? Who is going to clean those tap lines and ensure your product is fresh, properly rotated and stays on tap when the local wholesaler comes knocking with free concert tickets (or other swag) for the manager? Most retailers won't clean their own lines, they rely on someone else (usually a wholesaler) to clean, maintain and fix their draft system: the kicker: they aren't going to pay for it.
Still sound good? Working 16 hour days brewing, serving and business administration functions? Are you ready to never take a vacation and be married to the brewery? Can you afford on a infinitely small (nano) scale to leave the fate of your business in the hands of another person? You can? Ok, have a relaxing vacation and don't worry about what is going on at the brewery in your non-temperature controlled fermentation tanks.
Still think you have what it will take for the next 5 to 10 years? Congrats! That is the entrepreneurial spirit and you probably have always felt it.
The first question that usually comes up is either: what are the legal requirements or how much will it cost. Professional brewing systems are expensive, not because breweries like spending $300k+ on shiny tanks, it is because that is the ONLY proper way to operate a brewery.
Has it been done for less? Of course, but it probably wasn't much fun.
The answer to both of these "It depends" on your location and desired size of your brewery in planning. (Answers to both may be found below).
So without further delay, some numbers to help crunch some numbers for your business plan
(all numbers approximate and are based on small quantity orders):
Ingredients and consumables:
  • Grain malts, adjuncts: $0.60/lb. plus freight (about $100 per 2,000lb pallet)
  • Hops (spot market): $6.50 to $14/lb plus freight (usually UPS or Fedex)
  • Yeast: Varies, but 7bbl pitchable is around $300 to 500 with next day shipping. Can be used for several generations, but new breweries are warned to use new pitches for each batch so they have one less thing to worry about during commissioning.
  • Water, gas, electricity, labor, taxes, CO2, additives (fining agents, water salts, etc), cleaning chemicals and other consumables add up quick.

Equipment is probably the biggest expense next to real estate or working capital, figures are from a Fall 2012 quote from the Pacific Northwest:
  • 7bbl brewhouse (skid mounted - steam fired, USA built): $72.2k total
  • Rake/Mixer for MT/LT: $8.5k
  • 7bbl Fermenters/Uni-tanks (USA): $12.2k each
  • 7bbl Single wall serving tanks (USA): $6.5 each
  • Steam boiler: $12k plus install.
  • Glycol chiller system for jacketed tanks: $10 to 20k plus install
  • Cold room: Starts at $10k for a decent size.
  • Hoses, fittings, temp. controllers, carbonation stones and portable pumps: approx $10k.
  • Grain crushing/handling: $3k to 10k
  • New kegs run from $93 (China import) to $120 (German import) for 1/6 bbl, $128 (China) to $150 (German) for 1/2 bbl.
  • Keg maintenance: $500 to $1k for spare parts and tools
  • Freight: Varies, a budget of $25k would be a good start (based on my limited experience.
  • Installs: Varies, some are included with purchase of equipment, some is extra $$.
  • Build-out: Varies on location, zoning and design.
  • Water treatment: $3k to 15k, depends on capacity.
  • Lab equipment: $500 to $1k for the basics.
  • Safety equipment and signs: $3k to 5k for wash station, signs, CO2 warning system, etc.
  • Automatic (5 head) canning line: $110k plus install and 135k minimum can order at ~$0.10/can.
  • Bottling line: Varies, but $20k to $60k is a good starting number.
Business Administration expenses:
  • Office equipment: $1k to $10k
  • Insurance: Varies, but usually doubles if you serve on premise. A good estimate is $24k/year.
  • Engineer/architect: Varies. usually a percentage of project bid price. Budgeting at least $10k is a good start.
  • Operating capital: Usually 3 months worth of expenses.
  • Security system: $1k to $10k, alarm, video camera, etc.
  • POS system: $0 to $15k, depending on seating capacity and desired features.
  • Sales taxes: Varies. Yes, you GET to pay another type of tax!
Legal/tax expenses:
  • Permits/licenses: Federal: free (sort of, they require a 28% bond of forecast production in barrels [[$7xN]/0.28] State: Varies
  • Manufacture taxes: Federal: $7/bbl State: Varies
  • Business fillings: Varies, your secretary of state's office does registrations and you may be subject to local registration as well.
  • Legal documents: Varies, operating agreements are usually simple. Private placement memorandums get expensive very quickly (+$10k) to protect your rear from investors.
  • Investment filings: Depending on your business structure and potential investors, you may have to register with the SEC and also any state regulatory agency for securities.
Taproom expenses:
  • Three part sink: $800
  • Dishwasher: $3-4k, may be available for reduced rate through a chemical supplier
  • Glassware: $1k to 10k, depends on style and number of seats. Cool glasses like to walk away or "break".
  • Coasters/napkins/other stuff: Varies. Budget $2k to get started.
  • Food/snack stock: $500 to $1k to get started.
  • Food/snack service: $1k to 2K, microwave/pizza oven, trays, napkins, etc.
  • Kitchen: Varies, I am not going this route but adds at least $20k to the plan.
  • Merchandise: $2k to get started, use profits from sale to order more merchandise.
  • TV/Sound system: Varies
  • Uniforms: Varies, if you are going to go this route.
  • Staff training: Varies, from you teaching to hiring a consultant.
Total estimated cost for start-up (my plans): $830k, without any real estate. I left out some expenses and you will just have to figure some out on your own.
Those are some general numbers that I used in the spread sheets that helped create my business plan. After the first full draft, I reviewed and researched for better numbers from suppliers to create pro forma balance sheet, income statement and cash flow statements.
In figuring loss of product to trub, yeast and spillage: 85% of the batch size will probably be salable. So desired batch size X 0.85 to get racking size. Divide that number by ingredient cost, utilities used, labor and another inputs to reach the cost of the pint/can/bottle/etc. Add up overhead expenses (labor for service, loan service, monthly expenses) and divide by number of units sold per month. Add that on to the unit price.
If after all the numbers are crunched, it still looks good; take it to your local SBA office or SCORE office ( is also a great resource). They may not know anything about making beer, but they can review numbers and help polish that business plan. They can also help you with the local market demographics and help you evaluate your competition. Running your business plan through one bank can also show where the holes are before moving on to a bank you ACTUALLY want to work with.
For industry information; the Brewer's Association is a good start. A limited amount of information is available on their website to the general public. You should probably order a back issue of the latest industry review copy of the "The New Brewer" published in May/June every year for $15 plus shipping. A membership to the BA may also be helpful as it gives access to a members-only forum and other information.
Your state or local professional brewer's guild may also be of help, but I would contact them after becoming familiar with your plans and market.
For laws pertaining to production of beer (should be one of your first stops):
Federal: (Click "Browse Next" to read the next section of Title 27, there are at least 6 sections you should completely read. Do this before reading your state's laws)
States and local jurisdictions: A web search should find state laws and local ordinances. Also be aware of any local zoning requirements in addition to local laws on service, manufacturing and licenses.
For more in depth articles and forum: is a great resource. There is a lot of knowledge over there and those guys have seen the "How much?" threads probably once a month for the past decade. I would suggest reading through the articles over there and then start asking questions.
I hope this forced you to seriously consider your dream of owning a brewery and hopefully INSPIRED you to continue with your dreams.
If you don't try, you have failed before giving yourself a chance. I personally would rather make a good run at something and fail than work a job I hate everyday.
Disclaimer: Your mileage will vary, I am not responsible for any financial problems incurred because of this article. I am not an attorney and no part of this article is to be used or meant as legal advice, please consult an attorney licensed in your jurisdiction. This information is provided for informational purposes only.
No guarantees are made to the accuracy of the information contained, I am just a guy on the internet. I am not responsible for crops failing to germinate or pestilence across the land or locusts. All figures are based on a brewery forecasting 900 barrels first year, 75% in-house sales with an annual growth rate of 5%.
Thank you and have a great day!
Great article. Many, including me, see great breweries and forget the time it took to actually get to that point. A lot of detail that will help people that are thinking about going pro. Good luck on your venture.
Love this article. I absolutely been thinking of getting serious about this.
This in no way stops my progress. Just helps me fine tune it.
Love this article. I absolutely been thinking of getting serious about this.
This in no way stops my progress. Just helps me fine tune it.
I have a friend who started production about 6 months ago. He had to rent his warehouse and have all his equipment set up for inspection for 9 months (without producing a drop) before he got his license.
I think this is a good reality check for people considering opening a brewery - but I think it may be best to break it down into scenarios based on bbl/year and method of distribution. All that greatly affects the total initial investment. We don't want to scare away the people who love brewing and wouldn't need nearly that kind of capital to get running if for example they don't can and have a smaller in-house operation.
Nice, well thought out, down to earth, jargon-free run down. Would love to see more, specifically the on what it is like to make the jump from using homebrew equipment to professional brewing equipment.
Nice article. I've been thinking about going pro, but not actually seriously considering it yet for a lot of those reasons. I'm not too self-deluded, but I get a lot of friends telling me "you make great beer, you/we should open a brewery!" It always sounds nice, but most people don't have much of a clue as to what's actually involved, so now I can show them this for further serious consideration!
Two words. Iterate brewing. I have dreamed of doing this as all homebrewers have. But the cost is daunting at best, crippling at worst. I look at evil twin and mikkeller as examples. Still not easy but it does not seem like mount everest. Cheers off to bed gotta be up early for my day job......hey it pays the bills.
The capital investment and hours needed seems reasonable for any new business startup. My main concern would be the demand piece of the equation. There are lots of good craft breweries to compete with, and the cost and effort associated with sales and marketing is as, if not more important. If I knew there was demand for my product, I would gladly find a way to secure the 830k plus to get this going.
Very good article. I especially like the disclaimer message. :) Also, your message near the end:
"If you don't try, you have failed before giving yourself a chance. I personally would rather make a good run at something and fail than work a job I hate everyday."
Reminded me of one of my favorite Theodore Roosevelt's quotes:
"It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat."
I wish you luck on this road. It would be a dream come true to have a small successful brewery.
It's a good and compressed article that I want to show everyone who likes my beer and tells me I should open a brewery. I have trouble making time to brew once or twice a month sometimes, much less the time it takes to always brew and the capital it takes to set up and operate. Great hobby, and hats off to those that can make it work as a career
Very good article for any homebrewer dreaming of a shiny new brewery while mashing in his/her garage. Really puts the dream into a perspective reality. Thanks for the write up!
Great artical,
I love this hobby, and thats exactly what i want it to stay, a hobby.
I love this hobby and am thoroughly enjoying my product. I have a long way to go before I reach the Pro level and am willing to take the steps to do so.
I see the initial effort that needs to be taken. Also, the startup cost is enormous. That is not the deterrent.
I need to make a living while running my business. I know that initially the pay is going to be below average. However, does anyone know the average income of an owner of a well established brewery?
It's a good article. I have no doubt his figures are correct but it can be done for less...a lot less. Not everyone wants a full packaging brewery( bottling line, keg sales, etc) or another career. There is no reason why someone can't have a nano and sell every drop through the tasting room (you make the most money that way). I have talked to a couple of guys running nano's and their investment has been significantly less than 100K. Now of course you won't be quitting your day job but look at what the author did. He spent over 800K of either his or someone else's money to basically "buy himself a job". I agree that one thing that is never discussed is what is the ROI? How long before the debt is paid off and he/they are actually making money?
This author neglects to identify one strategy that be exercised without a big capitol expenditure, contract brewing. Use breweries that are under capacity to start generating a good reputation and hopefully positive cash flow while you prepare your own facility.
Thinking about a small brew-house? My favorite brewery has a 5bbl boil kettle, no space to expand, and can't keep up with demand. The folks at Sound Brewing Systems have THE MINI-MICRO-, PICO- AND NANO- BREWING SYSTEMS PAGE that you need to read at Radically expanding or re-configuring your equipment is even more expensive and disruptive to your successful small operation.
Two partners and I started a 1.5 bbl nano 16 months ago and have been doing it part time. That small operation has fully funded a 3 bll system and the complete build-out of a taproom where we can sell pints. One us will be full-time at the brewery starting next month and given our cash flow, our strong expectation is that we will be moving up to a 15 bbl commercial system some time in late 2015. It hasn't cost remotely close to any of the numbers being talked about in this article nor has it been remotely as painful. I think saying it is the the "ONLY proper way" is a steaming pile of crap (sorry). Even at our 1.5 bbl size we had glycol temp-controlled fermenters so I don't get the comment on that topic at all. I've never heard of retailers who rely on wholesalers to clean their tap lines (perhaps that's a regional thing but we've never even been hinted to that we would be expected to clean our tap accounts' lines). Lastly... once the business plan is totally done, then what? SBA won't talk to you until you have two years of operating financials to provide with any application. I would be absolutely shocked if a bank simply said, "wow, a business plan with zero operations history? Sure, here's a million dollars". We've been operating for 16 months, have strong, steadily climbing, positive monthly cash flows/profit and are being offered lines of credit of around $100k (which we are turning down). Just a person with a business plan is going to pull $850K out of a bank? Unless you can put up a massive amount of collateral... and even that, I don't see as being realistic because, at least in Massachusetts, an individual can not "co-sign" on a commercial loan... so... that massive collateral would have to become the property of the legal entity (LLC or Corp), and then... I don't know... maybe they would talk to you but without any operational history, I think the notion that the capital can simply be borrowed to launch something like this is flawed.
cape brewing nailed it on the head. I hope this guy doesnt scare too many people away from going pro. His quote for a 7bbl brewery is ridiculous, and absolutely not "the only way to start a brewery."
Jon if you were actually business savvy you would have done something like cape brewing and start small for proof of concept. Even if you've proved it to yourself that you can start a brewery and need an ungodly amount of money to do so, its still a good idea to show the bank that your business is successful. Especially if you need an ungodly amount of money and dont have it. Can you blame the bank? No, its a commercial loan!! they cant get anywhere near that amount of money back out if you go bankrupt.
@bleme This is the truth... the TTB, which issues your "federal brewer's license"... requires floorplans and either a signed lease and/or a copy of the deed to the property before the application will be reviewed. So.. You are required to have your space (and being paying rent) before you can sell a drop. Six months isn't actually that bad. I've heard horror stories of much longer. We were a year.
I was reading an article that talked about the size of a brewery and over time what was cost effective. I really wish I could remember the site or better yet have a link. At any rate if I remember right they said that anything smaller than...I think it was a 10 bbl, maybe 15 bbl was counter productive and the brewer would end up spending too much time brewing instead of keeping up with other parts of the brewery.
Have you looked at what the tipping point is for what size brewery you should have?
@Marc77 The website was already mentioned by Renoun, it is the Sound Brewing System website, and just like their write-up, this article actually tries to scare the potential new brewery owner from starting up. A 'Proof of Concept' Brewery or a Nano Tap Sales Brewery are both extremely viable. I have 8 breweries within 30 miles of me that started off at less than 7 BBL, with at least 5 of them starting smaller than 2 BBL. These all compete with a Regional powerhouse (Hangar 24), a Production Brewery (Ritual & Wild Donkey) and several Brew Pubs. In total there are more than 23 breweries within a 50 mile radius that are all doing *very* well. The smaller ones seem to be the ones selling out more frequently just due to demand.
If you have a good product, it will sell. A Tap Room with a 5 BBL brew plant can be extremely successful without bottling, canning or keg distribution. Having a sound business plan doesn't mean a good business model, nor does it mean a good brewery. Without having knowledge of the processes, business operations and marketing, even a well funded brewery can fail. Having partners that know different parts of the business really helps with the success.
I worked at a nano 2012-2013 that started for $75 k total, including sitting rent, equipment, legal and licence, etc. Granted the nano is a 1.5 BBL brewhouse, but within two years are now expanding to 15 BBL system.
Like anything in life, there are many ways to get to a similar result. You don't need nearly a million dollars to realize your dream. I'd argue that intangibles can make up the difference of $830k - $75k... $755k worth of determination, passion and desire to be the best at what you do.
I also agree with Cape & Djuhnk regarding starting small for proof of concept. A local brewery, Funky Buddha, did this near me & went from a 1 BBL system to now expanding every day and I believe on a 30 BBL system with an insanely fast growing brewery (think Cigar City 2009). Some people have the drive to overwhelmingly succeed with a shoe-string budget, while others can't manage it with million dollar start-ups. The write up is nice & I do appreciate the read, but I often see write ups like this neglect the immense role of intangibles in the whole equation.
@Cape Brewing I agree with you those numbers sound way off to me. If it really was that bad then why is this one of the fastest growing industries around!
I do believe Jon Lakoduk correctly lays out the roadmap for a start-up craft brewery. The road to a successful brewery is laced with many bumps, potholes and detours. We often forget, as pointed out in the article, being a great brewer does not always translate to being a fiscally responsible businessman.
I believe what is missing from the article is the importance of partnership in a brewery start-up (or any start-up for that fact). No one businessman/brewer can start a brewery by him/herself; you need at least one partner that has the same drive and ambition as you have along with complementary skills and knowledge to yours. And of course the "chemistry" between partners must be positive. Because of the difficult struggles (i.e., funding sources, real estate, licensing, etc.) to start a brewery, when one partner is down in the dumps, the other has to pick him/her up and keep the progress moving forward or your dreams will die quickly.
Wow Great Article. I truly want to make the leap but I know just because I love to make beer doesn't mean I will run a functional Brewery. I would love to take some Business management classes to get that aspect under my belt.
But I do still want to do it no matter the hours or the cost. When it comes right down to it even though it seems like "work" if you love doing it you will never "work" a day in your life.
Thanks for the insight. Cheers!!
"Who hasn't gone through the ups and downs of crafting that first successful batch of home-brew and then, satisfied with your work, had that passing thought that you could someday turn around and do this for a living?"
"Me! Me! Pick me, Teacher!" [jumping up and down at his desk]
I haven't; it's never even crossed my mind. Maybe it has something to do with the fact that I'll be 65 years old in a couple of weeks, but since I took up brewing last year it has never even crossed my mind to do it as a living, instead of as a hobby.
Unless I had the money to hire people to do everything for me and let me stick to being the figurehead/spokesman/visionary, starting a brewery would be my nightmare job: unlimited scrubbing and cleaning, lots of paperwork, cold-call wholesale selling,and public relations.
But don't mind me, folks. I remember years ago reading about someone who asked a famous author what it takes to become a writer. The answer was basically, "if you have to ask, you don't have it. A real writer writes because he can't stop himself from writing..."
@troy2000 Well said. Made in America does not just mean the beer. It also means small business people. Yes, it is hard to make a go of business today, but the spirit has to remain. Anyone that wants to be a brewer, my hat is off to you. It is better to try and fail or succeed than to sit back and regret.
Translation if america were a free-market opening a brewery would be within the reach of many more people.
Good write-up.
As an addition to the resource options for wannbe brewers, I offer this link from a local nanobrewer near me. His little book is not much of a detailed how-to guide to prospective Auggie Buschs but it does provide a feel for how this guy does it.
@MVKTR2 I did it at 25, with money raised via Kickstarter. But yeah, it's the government stopping you.
These costs are pretty inflated, but mostly I agree with this post.