Thinking of going pro

[SPLASTiK]

The Brew Strong show on the Brewing Network is going to be doing a new series on starting a brewery... They did the first show live tonight where they talked about a couple things but they plan to delve into the whole paperwork process and other topics related to starting a brewery. The show guest starred another guy who is starting a brewpub (Kinetic Brewing) and they plan to have several guests discussing various topics... they mentioned maybe getting Bamforth on to discuss education as well I think.

Might be worth looking into when the archives get updated.

 

[HokieBrewer]

Still, good beer is good beer. If your making good beer, the people will come. Best of luck to you.

If you forgo the restaurant side, all these new craft beer bars popping up become channels to get your product to the public.

 

[Hokie_Brewer]

If you forgo the restaurant side, all these new craft beer bars popping up become channels to get your product to the public.

Fellow hokie brewer!

We are just as big of foodies as we are beer geeks. So the restaurant side is just as important to us as the brewery.

 

[TopherM]

Hokie.....do you currently have some really good small scale batches of beer that you brew? Your original post makes it sound like you have never brewed before. I would make sure you have the brewing part down before you get anywhere close to moving to a brewpub. The great thing about brewing is that the basics are all the same, so if you can make a good batch in a bucket and repeat the results over and over, you are then on your way to having a good recipie you can repeat at larger scales.

As a brewpub conessiour of sorts, I would discourage you from wanting to be the "corporate" brewpub like BJs, Rock Bottom/Big River, Hops in the 90s that serves generic craft brews (brown, red, stout, porter, blond, ipa) that don't offer anything unique. Have a few staple beers for your everyday BCM customer, but have a heavy rotation of seasonal beers for real craft beer lovers. There are 6 brewpubs here in town, and I've been to all 6. All 6 have great food, but I no longer go to 5 of them because they all have generic beers that taste pretty much the same from brewpub to brewpub. The one that I do still frequent only keeps their blond, brown, and stout as permanent staples, then rotates its other 5 taps with seasonal and experimental beers. I love it, and run into lots of other craft brew conosseurs at that particular brewpub (run by one of Cigar City's founding brewers).

Good luck!

 

[8rnw8]

Congratulations and good luck to you! Keep us posted. I can't think of anything I would rather do, but I need to get quite a few more brews under by belt before I'm ready to make such a step.

 

[Hokie_Brewer]

Hokie.....do you currently have some really good small scale batches of beer that you brew? Your original post makes it sound like you have never brewed before. I would make sure you have the brewing part down before you get anywhere close to moving to a brewpub. The great thing about brewing is that the basics are all the same, so if you can make a good batch in a bucket and repeat the results over and over, you are then on your way to having a good recipie you can repeat at larger scales.

As a brewpub conessiour of sorts, I would discourage you from wanting to be the "corporate" brewpub like BJs, Rock Bottom/Big River, Hops in the 90s that serves generic craft brews (brown, red, stout, porter, blond, ipa) that don't offer anything unique. Have a few staple beers for your everyday BCM customer, but have a heavy rotation of seasonal beers for real craft beer lovers. There are 6 brewpubs here in town, and I've been to all 6. All 6 have great food, but I no longer go to 5 of them because they all have generic beers that taste pretty much the same from brewpub to brewpub. The one that I do still frequent only keeps their blond, brown, and stout as permanent staples, then rotates its other 5 taps with seasonal and experimental beers. I love it, and run into lots of other craft brew conosseurs at that particular brewpub (run by one of Cigar City's founding brewers).

Good luck!

Appreciate the advice. I do have homebrewing experience, just not with the brewpub-scale equipment, which is why I'm on my way to the local brewpub to see their process.

Our initial thoughts are just 2-3 "regular" beers with the other taps constantly being switched around. Also, the other local brewpub is more traditional beer styles, so we would sort of go the other way to distinguish ourselves (DFH-esque, but not as extreme i think)

 

[Guden]

Wow, good luck. I'm at a similar point in my life (22, just about to graduate) and have written up a rough business plan for a brewpub, CADed out the brewery, etc... but just don't think I can justify the risks at this point.

Keep us updated on the progress, I want to check it out when you open.

 

[samc]

I've owned several small businesses and have a business background. OP sounds like he is proceeding along a smart path and at 23 he is in a great time of his life for risk taking. If you have the capital to survive the early stages you should be good to go. Someone mentioned 3 years, honestly I would have shot myself if it took me 3 years to get profitable in my businesses. If you can't justify a faster timetable and it's your $$$, you might want to consider something else.

If I was going to go into the beer business at this point, I'd start by wholesaling my product to bars/restaurants until I built up a following and knew the product had legs. I'd not want to be one of the guys who couldn't make the 1st year anniversary on the 5 year lease.

 

[carnevoodoo]

I've owned several small businesses and have a business background. OP sounds like he is proceeding along a smart path and at 23 he is in a great time of his life for risk taking. If you have the capital to survive the early stages you should be good to go. Someone mentioned 3 years, honestly I would have shot myself if it took me 3 years to get profitable in my businesses. If you can't justify a faster timetable and it's your $$$, you might want to consider something else.

If I was going to go into the beer business at this point, I'd start by wholesaling my product to bars/restaurants until I built up a following and knew the product had legs. I'd not want to be one of the guys who couldn't make the 1st year anniversary on the 5 year lease.

Wholesaling your product to bars is a perfect way to start if you are going to have a production facility. Having a client base established ahead of time is difficult, but if you know the right people, it is possible.

Also, if you are starting a brewpub, your food needs to stand on its own. Yes, you will make a killing selling beer along with the food (highest profit margin is selling pints of beer you make yourself) but if the food sucks, nobody will come for the beer.

 

[Hokie_Brewer]

Wholesaling your product to bars is a perfect way to start if you are going to have a production facility. Having a client base established ahead of time is difficult, but if you know the right people, it is possible.

Also, if you are starting a brewpub, your food needs to stand on its own. Yes, you will make a killing selling beer along with the food (highest profit margin is selling pints of beer you make yourself) but if the food sucks, nobody will come for the beer.

Agreed, the food will be able to stand on its own (if everything goes according to plan!), we will not be a bar that serves food just cause we have to because of VA laws. This will be a restaurant, that happens to make it's own beer as well

 

[Teromous]

Hey man, I know I mentioned a couple of things previously, but I wanted to add a couple more. A guy I know has a good grasp on the business locally, and when I told him about your idea he pointed out a few more things to consider that I thought I'd pass on. For the area where I am, they are only issuing new liquor licenses that allow dispensing until 11pm in certain places like oceanview and VB. The older establishments are grandfathered in and can remain at the old 2am rule. If Falls Church is like this, you might look into buying an already established place. The grandfathered licenses will transfer. Be careful when buying a place though...there were quite a few scams in VB with bars being for sale...I can't remember the details but basically the owner would offer financing, the guy who bought it would miss a payment and the bar would default back to the original owner again. It's happened more than once, so read the contract carefully.

Some legal tidbits: You need to have a wine and beer license before you you can have a liquor license. The city can shut down your bar if you have too many logged incidents. If you call dispatch because of a problem in the bar, don't dial 911. Keep the neighbors happy...I guess a few local places have had issues with their neighbors which resulted in the bar being shut down. Last call is last call...I guess ABC agents (or whatever they are) love to cruise bars at closing time and can fine or shut down bars. I mentioned it before, but being licensed to play music or lease a jukebox that is licensed. I guess a local bar or two got cruised by some lawyer and got fined. Things might be different in Falls Church, but I thought I'd pass on a few things that happen down here just so you're aware of what might happen.

 

[TastySalmon]

People brought up a good point about wholesaling. If Virginia allows self-distribution, this is a better path to take profit-wise. Time-wise it may not be the best.

Wholesalers can skim almost all of your profit off.

 

[Hokie_Brewer]

Hey man, I know I mentioned a couple of things previously, but I wanted to add a couple more. A guy I know has a good grasp on the business locally, and when I told him about your idea he pointed out a few more things to consider that I thought I'd pass on. For the area where I am, they are only issuing new liquor licenses that allow dispensing until 11pm in certain places like oceanview and VB. The older establishments are grandfathered in and can remain at the old 2am rule. If Falls Church is like this, you might look into buying an already established place. The grandfathered licenses will transfer. Be careful when buying a place though...there were quite a few scams in VB with bars being for sale...I can't remember the details but basically the owner would offer financing, the guy who bought it would miss a payment and the bar would default back to the original owner again. It's happened more than once, so read the contract carefully.

Some legal tidbits: You need to have a wine and beer license before you you can have a liquor license. The city can shut down your bar if you have too many logged incidents. If you call dispatch because of a problem in the bar, don't dial 911. Keep the neighbors happy...I guess a few local places have had issues with their neighbors which resulted in the bar being shut down. Last call is last call...I guess ABC agents (or whatever they are) love to cruise bars at closing time and can fine or shut down bars. I mentioned it before, but being licensed to play music or lease a jukebox that is licensed. I guess a local bar or two got cruised by some lawyer and got fined. Things might be different in Falls Church, but I thought I'd pass on a few things that happen down here just so you're aware of what might happen.

Interesting. I'll have to look into this. I do know of a couple new restaurants (in new spaces) that have opened in the last year, so I don't think they are cutting down on liquor licenses. But this is a good thing to know, I will look into it.

 

[appanooserapids]

My advice is meant to show the reality of running a brewpub, not as a vote against it, so don't take this wrong.

My husband and I opened a brewpub and restaurant last August. We live in a small town (25,000 pop). We have a great historic downtown building with 65 seats in the dining room, a patio, a small party room, and a bar area that seats 30. We lease our space, but did most of the renovations ourselves, along with our landlords (friends of ours). In an area similar to ours, you need capital of at least half a million, and that is if you have a wide skill set, and can do lots of things yourself. If you will be hiring it all done, add another million to that.

We did everything from recovering booths, to building a bar and backbar replicating one circa 1890, to painting 5 foot x 8 foot vintage beer posters for the artwork. We designed the menus, typeset them, along with all collateral marketing materials. We did all our own incorporation papers, as well as our application for the TTB.

You and your partner will need to be fluent in marketing, accounting, labor law and human resources, food safety, every position in the kitchen, liquor laws and bartending, etc. We have 22 employees (bartenders/servers/kitchen) to keep track of.

My husband is the manager, but spends his time filling in for kitchen staff, expediting food on weekend nights, booking parties, inventory and ordering for food and liquor, deflecting sales reps, running to the bank, running to the store, cleaning and filling kegs. I was supposed to be a part time bookkeeper D). In reality I am the hostess on Friday and Saturday nights, fill in bartender, pastry chef, payroll processor, tax remitter, quarterly report filer, employee scheduler, ad designer, and brewmaster. I spend more time than you would ever imagine dealing with the unemployment office and dealing with employees who have garnishments out of their paychecks, which have now become my problem.

As you can see, brewing beer falls far down on our list. The brewing part of my job takes less than 10 hours per week. And it is only my job because the first couple people we had in the job didn't work out. The quality/consistency of our beer wasn't matching that of our food, which is very good. We decided we would "standardize" the process by doing it ourselves and document it, and then train someone, and remove it from our job description.

We are in our 40's, and it is hard work. It would be much easier physically when you are in your 20's, but then again, we didn't have all the skill sets we have now that are so important to keeping it all running. We also had to deal with my husband having a stroke the week before we opened. The stress of getting to the opening point is surely what caused it, and he is lucky he fully recovered. He was back 4 days later, and we opened up on time (he is a pretty tough guy).

It would be great to have employees to fill all those roles we have, but we have to keep our labor costs under 25%. We intentionally overstaffed at the beginning to keep the customer experience positive, but that drains all your profit quickly. It is a weekly balancing game, that you will get very good at if you are going to make it.

Good luck, and feel free to PM me if you have any questions.

 

[bartbert]

Thank you for posting that. It was extremely informative, and there is no substitute for hearing the lessons from real life. I have a couple of questions. First, has it all been worth the effort? Second, where are you guys located? If I'm ever in your area I would love to stop by and drink a brew or two.

 

[appanooserapids]

bartbert - It has been worth it, at least on most days. We certainly won't be getting rich quick, but we are able to draw a salary and provide jobs in our community. Our renovation won an award from our state Main Street organization for constructive re-use of a building, which was a nice honor.

We are in Ottumwa, Iowa if you are ever in the neighborhood.

 

[Hokie_Brewer]

My advice is meant to show the reality of running a brewpub, not as a vote against it, so don't take this wrong.

My husband and I opened a brewpub and restaurant last August. We live in a small town (25,000 pop). We have a great historic downtown building with 65 seats in the dining room, a patio, a small party room, and a bar area that seats 30. We lease our space, but did most of the renovations ourselves, along with our landlords (friends of ours). In an area similar to ours, you need capital of at least half a million, and that is if you have a wide skill set, and can do lots of things yourself. If you will be hiring it all done, add another million to that.

We did everything from recovering booths, to building a bar and backbar replicating one circa 1890, to painting 5 foot x 8 foot vintage beer posters for the artwork. We designed the menus, typeset them, along with all collateral marketing materials. We did all our own incorporation papers, as well as our application for the TTB.

You and your partner will need to be fluent in marketing, accounting, labor law and human resources, food safety, every position in the kitchen, liquor laws and bartending, etc. We have 22 employees (bartenders/servers/kitchen) to keep track of.

My husband is the manager, but spends his time filling in for kitchen staff, expediting food on weekend nights, booking parties, inventory and ordering for food and liquor, deflecting sales reps, running to the bank, running to the store, cleaning and filling kegs. I was supposed to be a part time bookkeeper D). In reality I am the hostess on Friday and Saturday nights, fill in bartender, pastry chef, payroll processor, tax remitter, quarterly report filer, employee scheduler, ad designer, and brewmaster. I spend more time than you would ever imagine dealing with the unemployment office and dealing with employees who have garnishments out of their paychecks, which have now become my problem.

As you can see, brewing beer falls far down on our list. The brewing part of my job takes less than 10 hours per week. And it is only my job because the first couple people we had in the job didn't work out. The quality/consistency of our beer wasn't matching that of our food, which is very good. We decided we would "standardize" the process by doing it ourselves and document it, and then train someone, and remove it from our job description.

We are in our 40's, and it is hard work. It would be much easier physically when you are in your 20's, but then again, we didn't have all the skill sets we have now that are so important to keeping it all running. We also had to deal with my husband having a stroke the week before we opened. The stress of getting to the opening point is surely what caused it, and he is lucky he fully recovered. He was back 4 days later, and we opened up on time (he is a pretty tough guy).

It would be great to have employees to fill all those roles we have, but we have to keep our labor costs under 25%. We intentionally overstaffed at the beginning to keep the customer experience positive, but that drains all your profit quickly. It is a weekly balancing game, that you will get very good at if you are going to make it.

Good luck, and feel free to PM me if you have any questions.

I appreciate the help! I definitely may be PM'ing you if I have any more specific questions.

One nice thing in our area though is the location we are looking at has ~683k population with an average HH income of $111,000 within a 5-mile radius (according to real estate statistics we're looking at)

 

[mkwasnie]

I would highly recommend you get a job at a brewery if you're not tied down. I'm 25 and that's what I'm doing until I leave the brewery in October to start on my own place. Right now there are a lot of brewery openings on the West Coast.

At least make sure you know all the jobs that are necessary for running a brewery. Once you are ready to start brewing there will be more than enough questions to find answers to, without wondering "how you clean a keg, or what is CIP?'

I spoke with a person on the phone today that was working on a brewery start up. He was asking about carbonating in kegs, and if he could do it 65F, I told him it would take a long time and would have to pressure the kegs above 30 PSI. I told him he could also use the "shake and bake" method, but he would have to leave head space in the kegs. He then stated "I know a half barrel is 15.5 gallons, but how much extra room are there in kegs?"...the point is, you should not have questions like these if you are already working on your start up.

+1 to what appanooserapids said...great points, and I think it goes to show that a brewpub is more of a restaurant than a brewery, so be prepared for that. I don't think Medieval Times is a jousting arena first and a restaurant second (Yeah I know bad analogy but I think it makes the point I'm trying to get across).

I work in a production brewery, and it is a manufacturing job. Labor intensive...efficiency, punctuality, and consistency are the most important factors. While I don't work at a brewpub, but I think customer service and presentation mean more.

Make sure you read both the state and federal codebook!

Words of wisdom that are paying me big dividends now...Money and Knowledge, get what you think you need and then double it.

 

[dantheman13]

Hokie, are you the same HokieHomeBrew from YouTube?

 

[Weizenwerks]

As I've said before, a brewpub is two businesses in one. Hire someone to manage the restaurant and someone to manage the brewery.

In a brewpub setting, customers come to eat and have a few beers, but make no mistake the money is in the beer. A majority of the profit comes from drink sales, both soda and beer. One marketing trick I use is designated drivers get free soda. They get a wrist band indicating they are a DD for the night. What does that do? Encourage their friends to drink up. I make more money off the friends buying beer than I would for a casual night out that cost a cab right home for them.

Have a kids menu with simple items like cheeseburger, hot dog, mac 'n cheese, spaghetti. Make sure you have sippy cups for kids under four. Seriously. Chocolate milk in a sippy cup makes smiles on kid and parent faces.

The biggest thing has been exposed. Operating a brewery or brewpub is just like any other business. It's more business crap than anything. I spend more time performing administrative tasks than being hands on.

Last, but not least. Get business skills. This cannot be stressed enough. so many people start businesses that have no clue what they are doing. Very, very few people start off the cuff with no knowledge and become successful.