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Best Practices for Starting a Brewery
So you’re opening a brewery! You love your hobby enough to strike out on your own with the encouragement of family and friends. It’s easy to be wide-eyed when the dream is out in front of you. But there are basics behind every business and it’s better to focus on them before you even get out of the gate.
1. Capital is King
Like any business, opening a brewery is replete with the challenges and risks of owning and running any business. The fact is, you can’t have too much cash or other resources at the ready to finance your endeavor. Undercapitalized businesses simply collapse under the strain of getting the business off the ground. Remember, in the beginning there’s a lot of cash going out and very little—if anything—coming in. Equipment, facilities, wages, marketing and let’s be frank—honest mistakes—will consume cash while you get your brewing machine running. Remember, you can always give money back that’s not used or accessed. But you can’t repay creditors, family and friends if you can’t make your brew fast enough—and sell enough of it.
2. Learn the Ropes
There’s nothing like observing a business that works and using that knowledge to develop your plan. So don’t dive in before seeing what a well-run brewery looks like first hand. You have to think of everything, every detail, with the same level of commitment you give to your brew. This includes everything from facility layout, location, parking, production goals, distribution, branding, marketing, staffing, proper labeling, permits, taxes and a few hundred more line items down to the coasters on the tables. You know this deep down already, so get the plan in place, knowing it can and will always be altered. Then there’s the math behind the volume you brew and the prices you’ll charge. In the end, that’s cash flow as we talked about above. Your hobby just got real, and the realities of it becoming a business start with learning.
3. Going to Market
So you’re making the best beer on the planet, but who wants it? Do you handle distribution yourself? Can you self-distribute in your state? Or, do you bring in a distributor who has instant connections to the marketplace? Remember, your distributor has to care about your product as much as you do, but understand that they are in business to generate revenue and they’ll do it where they believe they have a real chance of winning. As much as they will sell for you, you have to sell them. There are contractual details to resolve as well, so always consider professional legal assistance. Protect yourself first.
4. Accounting and Compliance
We get it—you just want to brew a great beer and have your customers enjoy it. But a good accounting person and a sharp CPA will help ensure you’re actually making money. It’s not mandatory, but accounting professionals who understand the food and beverage business will be able to guide you with their experiences. Tap into that! Mistakes avoided means money is saved. After all, that’s the only way you’ll survive to see another day and keep doing what you love to do. And of course, monitoring how you operate will be your friends at the Alcohol and Tobacco Tax and Trade Bureau (TTB.gov). Get to know their expectations from startup through ongoing compliance. As a government entity, everything is clearly spelled out so you just need to stay within the guidelines. Their online resources will help you answer the questions you have, and more important, enumerate the things you need to know that never crossed your mind.
5. Know Your Buyer Persona
You have a unique personality. Your brew will have its own character. Your brand will be a balance of both. And it all has to suit your customer base. So spend some time thinking about who they are, what they want, how to communicate with them. What makes them tick? What makes them want more? What makes them become an advocate for your establishment and your product? That personal appeal is probably the best form of marketing you could imagine. So get to know your customer, and you’ll get to know their friends along the way as well.
Draft a plan for your brewery with help from our handy business guide that covers everything from starting a brewery to product sourcing and custom solutions.
Brewing, Distilling, Vinification—We Serve Your Craft! At Boelter Beverage, we know that what you do encompasses so much more than a beverage. Every day you pour your heart into creating the beer, spirit, wine everyone loves, and every day you’re building a personality, a philosophy, and a culture. As the craft brewing, distilling, and wine industries have grown, we have focused our attention and expertise on mastering what it means to serve your craft. Since 1970, we have been invested in your product, your mission, and your story. We are here to help you sell it and tell it.