Starting a Homebrew Shop

[kh54s10]

I can't say much from experience but I remember reading a thread here of someone opening a micro brewery. It took him almost twice as long as his initial estimate to get opened and it cost almost twice his initial estimate.

Good luck. But I agree with most of the comments that say you are way underestimating the costs. I worked in a shop the size you would need in a small strip center in 1984 that had a monthly rent of $500. I wonder what kind of place you can get for that rent 31 years later.

 

[suprchunk]

I worked in a shop the size you would need in a small strip center in 1984 that had a monthly rent of $500. I wonder what kind of place you can get for that rent 31 years later.

I'm sure it's the same place you worked at in 1984

There are some cheap-ish areas around. But you are correct; if I want a very nice place it is going to cost me. That is a cost I can't actually put a number on yet. This is the only real cost I need to be in there to figure it out. How much I make will ultimately determine how much I can afford. Not to mention that if I go too big I'll be wasting space, and if I go too small everyone will be tripping over everyone and everything. I'm sure once I get settled in and figured out I will have moved a couple times. Not something I'd like to do. But almost every store I've done business with over the years has moved a couple times. I guess it's a blessing and a curse to have your business have a modicum of success?

 

[GHBWNY]

Great post. Thank you for taking the time to type it all out. Very appreciated.

I've been thinking about opening up a shop since I started brewing 22+ years ago. So I've had a couple decades of thinking of most everything. The first few years were thinking about the general overall plan. The last 20 or so were the fine details. I'm sure there is something I missed, nobody is perfect right?

This will also be a part time gig for me until I finally retire in 16 months (wow seems so far away, but keeps getting closer faster and faster). I'm not sure if I'll go full time or not with this venture, but I know it's something I've wanted to do for over half my life now. Hell, I might get another job and hire someone to run the shop during the week.

The crowdfunding angle was just to help offset my actual costs - right now. I'll have more than enough to pull out of my own pocket to get things rolling, but I'll have to wait until the day I retire to use my own cash. I figured I could get started now and get established enough that my costs, both monetarily and timewise, would be minimal. Plus it would be nice to have a year or so of P&L data to look at to see if it would help pay my bills. This would also help if I decided to use an SBA to fund it and not risk all of my money. Like I said earlier, my wife has a decent job, and my retirement (which I also get the day I retire) will be, depending on some issues, close to what I'm making now - just slightly less.

I know there are risks involved. I know there will be something I didn't think about. And believe me when I say I'm my own harshest critic, along with my wife who actually carries a business degree and has worked in the advertising realm for quite a while. So she's set me straight more than once. Everything everyone in here has mentioned has been spoken by her more than once.

There are tons of stuff that I would like to do differently, but they aren't deal breakers. I'd like to be in a better metropolis, but I'll be serving a pretty diverse area. This area in particular is set to grow with a few new distribution hubs coming in and the government doubling one of their special forces groups. I'll either be on the baseline that sees great growth, or I'll have a decent group of people already brewing. Both don't sound bad to me. And I can always make the best of it.

I appreciate all the words. They are helpful and brings some sanity to the situation.

Hey, bro, been following this thread and for what it's worth, here's my 2 cents, none of which is meant to discourage you.

Sounds like a great venture. I get the sense that you are going into this because you 1.) love homebrewing and 2.) perceive there are others just like you who need supplies to support their love of homebrewing. But as you know, a homebrew store is not a necessity of life like a grocery store or an auto repair shop. So, my question is, have you have researched the need for an LHBS in your area? Is the need real or perceived? In a community of 22,000, is there enough community brewing activity to support one? My nearest LHBS serves a community of 15,500 and it survives because it is mainly a beer store. If it were strictly a homebrew supplier, I can tell you for certain it would have died long ago.

I've seen a lot of businesses over the years fail because they tried to survive on a love of what someone loved to do. When reality sets in, a business cannot be sustained by emotion.

I was sole proprietor of a small business for 21 years. It never entered my mind to do this as a living, but someone who had been in the same business before me saw the potential in me and convinced me to consider it. In the process, he came alongside me, apprenticed me, encouraged me, saw me through my mistakes, made connections and worked with me after I was established until I was able to make a viable business of it on my own. While I eventually grew to *love* what I was doing, love did not pay the bills.

Do your demographics; don't assume people will support your business just because you would support the same business. Finally, you absolutely, positively won't survive without good, steady help.

 

[suprchunk]

Is the need real or perceived? In a community of 22,000, is there enough community brewing activity to support one?

Well, I perceive it to be real. Just based on talking to about 40-50 people. And what they've told me others have said. My community is actually about 200K. We have two other counties with similar numbers within 30 minutes. I'm off a major highway (and a ton of traffic), the other two shops within the hour drive are not. They are in the tourist driven area which may help during the season, but I don't see many tourists in there buying brewing stuff while they are on vacation. Although one guy did stop in once while he was down here looking for something pretty common - so I guess there is a chance...

 

[GHBWNY]

Well, I perceive it to be real. Just based on talking to about 40-50 people. And what they've told me others have said. My community is actually about 200K. We have two other counties with similar numbers within 30 minutes. I'm off a major highway (and a ton of traffic), the other two shops within the hour drive are not. They are in the tourist driven area which may help during the season, but I don't see many tourists in there buying brewing stuff while they are on vacation. Although one guy did stop in once while he was down here looking for something pretty common - so I guess there is a chance...

Cool! Go for it!

 

[suprchunk]

Cool! Go for it!

I'm trying, I'm trying.

 

[willnewton]

I have read through this and hope you will spend a lot more time planning this. I hate to say it, but nothing I have read shows me you are ready. I have owned my own retail store for years. You better listen to these folks telling you you are undercapitalized. You keep saying how you have spent years "thinking" about how it is going to work out. Stop thinking, buy a calculator and start figuring out how you are going to get paid.

Do not think you are going to just have fun and money is not important, etc. You will have a job, you will have to work like a dog, you have people hate you, cuss you, steal from you, and take you for granted. They will complain that you don't have this and that and go buy it online, shipped free with no sales tax for less than you can buy it for wholesale.

Do you even know how much it will cost to heat and cool and light and house and show and dust off and market and insure and pay taxes on a single pack of yeast in your store?

You sound as if you are planning on being there for opening day, with little thought to how you will stay afloat for the two+ years it will take you to start making minimum wage on a weekly basis. Do you even know how much inventory you will have to sell to make minimum wage? Do you know how much MORE inventory you will have to have on hand because you will not sell everything in your store every four months, that is not how it works.

The "Aw shucks, I just love beer" attitude is going to end up with you out $30k+ and a year of your life that you would rather forget. Retail sales has nothing to do with how long you have been homebrewing or that your wife went to business school. You close your eyes and imagine how cool it will be to hang around and talk homebrewing, that cool daydream is just under 10% of what your job will really be like. The rest is hard and thankless.

Yes, you will have some nice moments. Yes, you will have loyal wonderful customers. You will not have enough of either of these to keep you fed and make it worth your while. The rest is going to be work and figuring out how to get paid on Friday.

Do not think you will survive without pay, because you are living off a retirement check. Going to work is work. How long are you going to take the day to day of retail ownership as you pump in money for little to no pay. I will tell you. NOT VERY LONG.

You want to make money in retail homebrew supply? Then apply for a job at the other homebrew store in your area and work there for six months. Profit on day one, no money at risk, guaranteed return. If you are still there and haven't returned to retirement after six months to a year (it is required that you work through Christmas season to understand how seasonal sales work), then you will have a more realistic notion of what daily life in retail is like.

I think I could turn this into a book, but I am just going to stop here. I hated to do it, but you needed a "wake up" slap across the face.

 

[chezhed]

willnewton speaks well.
Look, we have been open 8 months....we have made money only once. We will probably lose money for the year....but I figured that would happen. It may be a year from now before we steadily make money...and it won't be much but I never planned to make much. This is a hobby shop and we run it as a hobby, not a source of income. Without the shop we would easily be spending what we lose on entertainment in bars, restaurants, etc. This way, we have friends/customers (and so far all our customers are friendly ) come visit with us, share some beers and stories and have just as much fun.

Our biggest variable cost that we struggle to control is freight. We have limited space so we have limited inventory which means we have more frequent shipments and my freight to cost dollar is the biggest thing I struggle to improve. It becomes a real challenge to determine total cost vs item cost for the same item from three suppliers because the freight can vary so much..... So if you are small, whatever you plan on freight is going to be way, way too low....especially in your location. My freight rates are really good because there is limited incoming but lots of outbound freight here, but still a problem cost. Your freight rates will be even higher to central FL. So either have plenty of capital to pay for inventory and space to store it or double what you model for costs.

 

[sudbuddy]

I have read through this and hope you will spend a lot more time planning this. I hate to say it, but nothing I have read shows me you are ready. I have owned my own retail store for years. You better listen to these folks telling you you are undercapitalized. You keep saying how you have spent years "thinking" about how it is going to work out. Stop thinking, buy a calculator and start figuring out how you are going to get paid.

Do not think you are going to just have fun and money is not important, etc. You will have a job, you will have to work like a dog, you have people hate you, cuss you, steal from you, and take you for granted. They will complain that you don't have this and that and go buy it online, shipped free with no sales tax for less than you can buy it for wholesale.

Do you even know how much it will cost to heat and cool and light and house and show and dust off and market and insure and pay taxes on a single pack of yeast in your store?

You sound as if you are planning on being there for opening day, with little thought to how you will stay afloat for the two+ years it will take you to start making minimum wage on a weekly basis. Do you even know how much inventory you will have to sell to make minimum wage? Do you know how much MORE inventory you will have to have on hand because you will not sell everything in your store every four months, that is not how it works.

The "Aw shucks, I just love beer" attitude is going to end up with you out $30k+ and a year of your life that you would rather forget. Retail sales has nothing to do with how long you have been homebrewing or that your wife went to business school. You close your eyes and imagine how cool it will be to hang around and talk homebrewing, that cool daydream is just under 10% of what your job will really be like. The rest is hard and thankless.

Yes, you will have some nice moments. Yes, you will have loyal wonderful customers. You will not have enough of either of these to keep you fed and make it worth your while. The rest is going to be work and figuring out how to get paid on Friday.

Do not think you will survive without pay, because you are living off a retirement check. Going to work is work. How long are you going to take the day to day of retail ownership as you pump in money for little to no pay. I will tell you. NOT VERY LONG.

You want to make money in retail homebrew supply? Then apply for a job at the other homebrew store in your area and work there for six months. Profit on day one, no money at risk, guaranteed return. If you are still there and haven't returned to retirement after six months to a year (it is required that you work through Christmas season to understand how seasonal sales work), then you will have a more realistic notion of what daily life in retail is like.

I think I could turn this into a book, but I am just going to stop here. I hated to do it, but you needed a "wake up" slap across the face.

Nailed it. Especially the Christmas thing. I was in retail for 7 years before I opened my shop and the learning curve was still pretty steep. Go work in a mom and pop retail store and see what it's like before you want to commit to that kind of life. It definitely isn't for everyone, and competition from the internet has made it infinitely harder

 

[Hello]

Glad this came back up. I will say the most alarming comment, well one of them at least, is the comment where you are admitting that your inventory will sit on shelves for a long time. The complacency surrounding that comment is astounding. Moreover, who wants to buy grain that has sat around in a container for months on end? If I want to use grain that is that old then it better be coming from my own buckets at home. A home brew supply shop doesn't and should never strive or be okay with inventory sitting around. Everything that we brew with should be as fresh as possible. Don't you agree? If you know inventory will sit then this is a business you should either skip or open in a new location (which I believe was mentioned above).

 

[chezhed]

Glad this came back up. I will say the most alarming comment, well one of them at least, is the comment where you are admitting that your inventory will sit on shelves for a long time. The complacency surrounding that comment is astounding. Moreover, who wants to buy grain that has sat around in a container for months on end? If I want to use grain that is that old then it better be coming from my own buckets at home. A home brew supply shop doesn't and should never strive or be okay with inventory sitting around. Everything that we brew with should be as fresh as possible. Don't you agree? If you know inventory will sit then this is a business you should either skip or open in a new location (which I believe was mentioned above).

I'm curious as to how you know how fresh a store's ingredients are. It's dumped from large bags into bins/buckets/whatever....it's not like there is a date code on each grain So I really wonder how you determine that.

And I'm sure all that beer produced over all the eons by the monks in Belgium and the brewhouses in Germany had strict freshness control Sorry, I get all po'd about date codes on things sometimes.....ate canned goods without them most of my life and the cans were worse than they are now....

 

[willnewton]

Complacency about inventory? Do you think the only inventory in a store is a few buckets of grain?

Please, go to a homebrew store, or even easier, open a homebrew supply catalog. You've got about 20-30 SKU's for grain.

Now count the rest of the SKU's. Oh, you can't? That's right because there are THOUSANDS of them.

I can open a single part drawer that has thirty SKU's in it.

Yes, you will have inventory that sits around and does not sell out every few months.

Where is the facepalm emoji? I found it! :smack:

 

[joshjv]

I'm curious as to how you know how fresh a store's ingredients are. It's dumped from large bags into bins/buckets/whatever....it's not like there is a date code on each grain So I really wonder how you determine that.

And I'm sure all that beer produced over all the eons by the monks in Belgium and the brewhouses in Germany had strict freshness control Sorry, I get all po'd about date codes on things sometimes.....ate canned goods without them most of my life and the cans were worse than they are now....

Well, if you know that the store stays busy and has high turn-over, it's safe to assume that the grains are likely fresher than at the store where everything on the shelf has a thick coating of dust accumulated.. Several times that I've been at my LHBS, I've been able to watch them dump a new bag of grains (with a recent date stamp on the bag) into a bin.

 

[chezhed]

Well, if you know that the store stays busy and has high turn-over, it's safe to assume that the grains are likely fresher than at the store where everything on the shelf has a thick coating of dust accumulated.. Several times that I've been at my LHBS, I've been able to watch them dump a new bag of grains (with a recent date stamp on the bag) into a bin.

If the store has things with a thick coating of dust, then I don't care what they sell...I'm going elsewhere. That is a sure sign of retail incompetence and lack of caring....
So you see them dump an occasional bag, probably of 2-row, pilsen, carapils, etc....base and regularly used grains. But how do you know the age of the Naked Oats, the accidulated malt, the melanoiden and other less used grains?

A items move quickly and turns are high (2-row, hydrometers, airlocks) where B items may sit a bit longer and may risk shelf life (Caramel 80L, Biscuit malt, White Labs yeast)
C items can hang around forever without risk...pots, buckets, whirlfloc, PBW
D items may never move and may get old...Carafa III, melanoiden, issinglass.......

Now count the rest of the SKU's. Oh, you can't? That's right because there are THOUSANDS of them.

I only have hundreds and every last one of them is classified as A-B-C-D. But the point is well made....all the other stuff far exceeds the "desired fresh" stuff in most cases. (exception example being the second generation of FastFermet vs the first).

 

[sjporr]

What a interesting and helpful thread. Lots of great information here and lots of it right on point as well. I just recently opened a HBS Store called The Grain Bill located in Red Lion Pa. Our target population base is York and Southern York County at 450,000 with combined household income that ranges from 35,000 in the city to 85,000+ in the out skirts and south. There is another HBS store in more towards the city that has changed ownership, but is well established. So much so that I've had to work around them in order to find suppliers that have what I need. You see LD Carlson and BSG (your 2 big players) have strict rules when it comes to who they will supply. That's a part that hasn't been discussed yet in this thread. When I started the research (2 years ago) that store was just outside the radius and I would have been god. But just a month after I signed the lease they decided to move with in the a radius of 8 miles and now LD Carlson and BSG will not supply me. I have found alternative suppliers that give me a nice variety and provide a great service. This is something you will need to research so you know you have reliable suppliers.
The rent you speak of is unheard of in my area. I have 1,690 sqft in a shopping center and my rent is..... Lets just say it's quite a bit higher then what your being quoted. And in my area I got a extremely great deal on my space, I'm well under the normal for South Central PA. If you have a parking lot you have to figure in those costs as well. Those costs are also based off of your square footage and can really add up.
As for initial start up inventory costs you are a little low depending on what that inventory will be. My very first order was a little over $10,000 of combined goods. Once everything was received in and set on the shelves I realized that I too way under estimated what I really needed. That initial investment didn't even put a dent into filling my shelves to a point that it looked like a HBS store. Good thing for me my wife had a different figure in her head that was more realistic. So when I made that second start up purchase it didn't hurt quite as bad because she already had that figured in.
The freight issues are also very real and will have a huge impact on how you conduct business. If your going to carry low inventory, which is working capitol, then be sure to factor that into your pricing.
A good grain mill is a must!!!!!! This is something I am currently struggling with. One piece of advice I can give everyone is DO NOT UNDER ANY CIRCUMSTANCE PURCHASE A CAPTAIN CRUSH!!!! This was the worse decision I've made so far and am now fighting with Northern to get my money back.
You sound like your heart is in the right place, and that's the first hurdle. If you do move forward with it please keep us (me for sure) up to date. And I'll do the same.
Cheers
Sjporr

Enjoy The Fruits Of Your Labor, Brew Beer

 

[Roadie]

I've thought out-loud about opening a brew shop some day and put some very rough preliminary numbers together and came up to around $40k to open the doors. If someone has the capital, you've done your homework and that is what they want to do then go for it. In the distant past I worked retail for many years and then after I received my degree went into retail management for several years - though not quite on as small a scale as a LHBS.

I've been in multiple brew stores in multiple states and usually immediately look for what I feel they're doing right/wrong when I go in and take my time looking around and talk to them. It's nice to see a handful of people in this thread making a go of it. I was encouraged by the last LHBS I frequented before our cross country move. 4 guys went together for capital and they hired a couple of people to run the store for them and were still into a decent profit in their 2nd year of business. Maybe that's a rarity but it can be done. Their closest competitor was a 30 minute drive away. One thing I enjoyed was the discount for members of our local brew club.

I didn't think so much about freight as some others in the thread had mentioned so I made a couple more mental notes if the day ever arrives when I want to try and make a go of it.

 

[sudbuddy]

A good grain mill is a must!!!!!! This is something I am currently struggling with. One piece of advice I can give everyone is DO NOT UNDER ANY CIRCUMSTANCE PURCHASE A CAPTAIN CRUSH!!!! This was the worse decision I've made so far and am now fighting with Northern to get my money back.

Get a MaltMill from Jack Schmidling. http://schmidling.com/maltmill.htm

I have crushed well over 50,000 lbs of grain with mine, and I got it used. We have the "Bare Bones" Model attached to a flywheel motor housed in a big box and it works great. I'll post pics in a little bit. I highly, highly recommend this mill for large scale, constant use (such as we have in our friendly little LHBS)
It does 10 lbs in about 20-30 seconds, and with the way we have it set up there is very little dust.

 

[sudbuddy]

View attachment ImageUploadedByHome Brew1447796278.051558.jpg

Outside view

View attachment ImageUploadedByHome Brew1447796300.668153.jpg

From above

View attachment ImageUploadedByHome Brew1447796321.520231.jpg

Collection bucket

View attachment ImageUploadedByHome Brew1447796347.340521.jpg

Mill assembly

The whole thing turns on with a light switch. It's pretty slick

 

[sjporr]

View attachment 316697

Outside view

View attachment 316699

From above

View attachment 316700

Collection bucket

View attachment 316702

Mill assembly

The whole thing turns on with a light switch. It's pretty slick

It would be awesome to see that baby run! You could post it as a Homebrew Wednesday video. Send me the link and I would promote it along with your store. That might throw some traffic your way!
Cheers and THANKS

 

[sudbuddy]

It would be awesome to see that baby run! You could post it as a Homebrew Wednesday video. Send me the link and I would promote it along with your store. That might throw some traffic your way!
Cheers and THANKS

Haha that's a good idea. It's honestly not that exciting to see it run, but I'll put a video together and post it here when I get a chance

 

[sudbuddy]

Weird, that picture makes the gap between the rollers look a lot wider than it is in real life. I keep that thing pretty tight and it gives an excellent crush

 

[chezhed]

Sweet setup...similar to mine but my mill and direct drive motor sit on top of cabinet. I collect in a smaller bucket right now because I didn't order large enough bags for more than 4 lbs of crushed grain :smack: so I only do that much at a time....I pour from the bucket into the bags using a large funnel from an auto parts store :wink: It's a bit of a time consumer but I don't have any customers that brew larger than 5 gallon batches.....and my wife likes to do the grain bills!

 

[sudbuddy]

Sweet setup...similar to mine but my mill and direct drive motor sit on top of cabinet. I collect in a smaller bucket right now because I didn't order large enough bags for more than 4 lbs of crushed grain :smack: so I only do that much at a time....I pour from the bucket into the bags using a large funnel from an auto parts store :wink: It's a bit of a time consumer but I don't have any customers that brew larger than 5 gallon batches.....and my wife likes to do the grain bills!

Do you guys have Uline down there? We get rolls of poly tubing from them, cut the bags to size for the grain bill and use the seam sealer to close them up. Real simple, and very effective. It will save you a ton of time, and customers love getting their "grain babies"

 

[sjporr]

That's a great idea!

 

[chezhed]

Do you guys have Uline down there? We get rolls of poly tubing from them, cut the bags to size for the grain bill and use the seam sealer to close them up. Real simple, and very effective. It will save you a ton of time, and customers love getting their "grain babies"

That is a good idea! I have a sealer and if I rotate it on my cabinet, I could just put the roll behind and feed thru....
What thickness and size are you using....Uline is available by shipment.

 

[sudbuddy]

That is a good idea! I have a sealer and if I rotate it on my cabinet, I could just put the roll behind and feed thru....

What thickness and size are you using....Uline is available by shipment.

I'm not sure what part # they are exactly. We have a small one (about 6") for priming sugar, caps, small grain bills, etc. and a big one (10") for larger grain bills. Anything over 20 lbs. goes in a 55 lb grain sack. We use pretty thick tubing. We had a roll of thin stuff once and it sucked. Here's a pic of the setup:

View attachment ImageUploadedByHome Brew1448049011.514465.jpg

 

[14chow]

I

 

[hunter_le five]

I

True.

 

[sudbuddy]

I

That was deep

 

[DurtyChemist]

So did this shop ever open?