Entrepreneurs are a tenacious bunch. Most lay everything, and then some, on the line. They are willing to take on risk in search of seeing a dream come to life. Brewers are no different.
Craft breweries have exploded on the entrepreneurial scene in the past decade. Years of blood, sweat, and many tears go into each pint that is poured today. While each brewer and brewery is unique, there are some general guidelines and considerations that every potential start-up brewery needs to know. Here are our seven must-know tips to consider when starting your own brewery:
Have a Plan and Be Flexible
You will not get far in your endeavor without a business plan. A concise business plan will help to raise start-up capital from investors and lenders. Your business plan should include an Executive Summary, Business Overview, Business Description, Market Analysis, Consumer Analysis, Competitor Analysis, Marketing, Financials, and Operations. If you are unsure on how to create a strong business plan, there are several websites that will guide you through the process.
Part of having a plan is having a realistic grasp on start-up costs. Most small breweries will require $500,000 to $1 million in start-up costs, depending on the location, production size, your own sweat equity, etc. A few baseline considerations would be rent, construction, utilities, ingredients, salaries, legal (permits and licensing, at a minimum), tech and software, marketing, and equipment. Figure out what you need for two years, then double it.
Fund Your Dream
Deciding exactly how to fund your brewery can be a daunting task. One option is applying for SBA (Small Business Association) loans. The SBA has several programs, including the SBA 504 and 7(a) loans. If you choose to go after start-up capital from investors and private lenders, keep in mind that having a federally licensed trademark and well-developed brand helps to increase the asset value of your business. Here is where our next, and most crucial point, comes into play.
Establish a Legal Partner Early in the Process
Having a legal team partner with you through your start-up process is by far the most important component. Having a legal advisor that is versed in the complexities of beer law means you aren’t alone when it comes to establishing your trademark or infringement issues, insurance, establishing your LLC, federal brewer's notice, state and local permits and liquor licenses, calculating a brewer’s bond, and having a solid operating agreement. There are numerous legal pitfalls you can avoid by budgeting for and establishing a legal partner for your brewery right from the beginning.
Build a Unique Brand
Your branding serves as the DNA of your future brewery. A well-thought-out brand helps steer decision making, attracts and connects with your consumers, and communicates your mission to potential investors. In the end, your brand is a unique expression of yourself and the business you create. Your brand should include logos and branding that are cohesive throughout your website, social media, merchandise, and marketing. Additionally, artwork and labels, naming of products, and thoughtful taproom and brewery design go into having a cohesive brand.
The location of your brewery will depend in part on your business model. Are you strictly production or do you want a taproom and restaurant where patrons can watch the magic happen? The choice of location will require you to do some demographic sleuthing in the area you are interested in. Is this location accessible? Is it industrial and not suited for nightlife? Are there nearby sporting or music venues? What is the neighborhood like at night versus daytime? Doing some preliminary footwork will give you a better feel for what you need and want when it comes time to talk about real estate.
Brewing equipment is unique to your business, so it’s important to consider your available space, the type of brewing you plan on doing, and your projected production. Should you buy new? Foreign or domestic equipment? Can you find used equipment or lease from another brewery? Do you need further specialty equipment for niche brews? Our recommendation is to find an equipment company that resonates with your brand and mission. Choosing an equipment provider is as important as choosing your support staff because they will be right beside your company from day one. So, be particular when choosing an equipment company.
Once you persevere through the list above, there are a few other small yet important matters to consider before throwing open the doors.
- Do not underestimate a consistent social media and marketing presence. Hire someone with the mental and emotional bandwidth that can strategically create excitement around your brand and your grand opening. Great social media management stays focused on brand and messaging, has a proven strategy, and connects with fans and followers in a genuine and sincere way.
- Build a workplace culture that centers on your mission and brand from the ground up through your hiring and training processes. Determine what kind of culture you want to cultivate for yourself and your staff and let that be the guiding principle going forward.
- Lastly, on the days when you are overwhelmed and questioning your sanity, remember to keep your eye on what matters most. The great product you produce is ultimately about creating community with the people in your area. Behind every fermenter, every tap, every apron, every comment and like, and every purchase, are people. Never forget that.
The journey to start your own brewery is long, yet rewarding. Are you already feeling lost in the process? Contact us at Beer Law HQ for a free consultation! We want to partner with you to turn your business dreams into reality.