Starting a brewery is a dream come true for thousands of beer-loving American entrepreneurs. If you're interested in following in their footsteps, you'll want to take advantage of the valuable resources available to learn the craft of U.S. brewing and how to grow a thriving brewing business.
The Brewers Association Guide to Starting Your Own Brewery
One important resource available to those hoping to break into the brewery business is the Brewers Association. This is the national association for small brewers, and they have put together The Brewers Association Guide to Starting Your Own Brewery. This helpful publication is written by industry veterans and includes individual experiences of successful brewers with stories about the valuable lessons they learned along the way. It provides insight from:
- Every part of the country
- Every kind of brewery
- Essential industry insight
The book also offers specifics about ingredients and equipment to arm those starting a brewery to be able to speak knowledgeably with brewmasters and industry suppliers, plus it presents ideas for marketing techniques and finances.
Business Plan for Starting a Brewery
Planning is an important part of starting any business if you want it to survive. If a business is to succeed and be profitable, you must bring specifics into focus by answering the following questions:
- Who will your customers be?
- What are the strengths of your business?
- Who is the competition?
Creating a business plan presents you with insight into your business and once you've written it down, you can use your plan as a powerful financing proposal. A business plan for starting a brewery needs to include:
- A sales forecast
- Cash flow forecast
- Projected profit and loss account for three years
Permits and Requirements
Requirements and permits for operating a brewery differ from state to state, but the following resources are provided as a starting place for those planting to start a brewery:
- Brewers Permit
- More Information of Brewer's Permits
- U.S. Government Beer Regulations
- ATF Application Form
Starting a Smaller Microbrewery
A microbrewery is small with a brewing capacity of less that 17,600 Hectoliters and sells its brew:
- In bottles at beer and wine stores
- Through local liquor distribution outlets
A brewpub differs from a microbrewery in that it is required to operate in connection with a pub where it sells 100 percent of it brew.
Choosing a Brewery Location
For microbreweries, because the main business is the sale of kegged and bottled beer, finding the right location differs from those who plan on opening a brewpub. One thing to take into consideration is the influence of location cost on your final product because as a brewery your brew will compete with other bottled beer products. Look for a location that is not only suitable for brewery operations but one that is also as reasonably priced as possible to keep your investment and operation expenses as low as possible. Other criteria to look for include:
- Easy to access
- Positive neighborhood (look into legal restrictions)
- Large enough to provide space for loading and unloading trucks
Start Up Expenses
When writing your business plan, it's important to take a realistic at start up expenses. These figures put out by Sound Brewing Systems, Inc. provide a realistic starting point.
An average budget for a production brewery that takes advantage of used start-up equipment will fall between $150,000-$200,000. A third of this could be used to make improvements necessary to the building. For a mature market the price would be more along the lines of $250,000-$350,000 for a draft-only operation. For those willing to invest sweat equity, starting a brewery may be launched for less, but it's best to raise capital because debt often destroys small brewers.
Brewpub start-up systems are typically a seven barrel system which is sufficient for small to medium-sized, retail only brewpubs which seat up to 125 people. Brewpubs larger than 125 seats or which plan to wholesale their product to other outlets will probably need a ten barrel system or more. Start up budgets for this type of operation will require a minimum of $250,000-$300,000.