Breweries have been around for a long time as part of man’s love for beer. Over the centuries, the humble brewery has transformed from a small, local tap room to a large industry.
In the past years, a new trend has emerged: the rise of the microbrewery. These small breweries create unique craft beers that attract more visitors and sales each year.
Craft breweries are rising in popularity, and that’s why it is the perfect time to set up one of your own!
If you are not sure where to start your own brewery, then read on. We have a list of everything you need to know about starting your own microbrewery.
Plan Your New Brewery
When it comes to setting up your own brewery, it is important that you understand that it is a business.
This means that you need to setup your own business which can be a long processing requiring investment and time.
You will face a lot of challenges which also other business owners face, from finding investors to buying equipment.
This may sound daunting at first but many other micro businesses have done it. You will just need the right skills, resources and support.
When you plan your brewery business, you will need a few basic components:
- Understand starting costs of opening your brewery
- Create a brand for your brewery
- Understand any legal requirements
- Create financial forecasts
- Write a business plan
- Location and equipment for your brewery
The planning process before you start is essential as all the work will be based on this plan. However, you need to make sure that your plan also has enough flexibility, for any unplanned situations.
How Much Does Starting A Brewery Cost?
Starting a brewery is not cheap. You will need a significant amount of money but the exact amount does depend on your location and the production levels.
One of the biggest issues when starting a business, such as a microbrewery, is the hidden costs that will arise here and there. These may just be small amounts of money but they do add up.
As a rule of thumb, you will face two types of expenses. These are major expenses, such as rent and staff salaries, and smaller expenses, such as marketing and obtaining permits.
Create A Brand For Your Microbrewery
The next step is to plan a logo and brand for your brewery. You may already have some design ideas.
Although many craft breweries use a very simplified logo, they often need to be designed professionally.
As the name, logo and brand is what should convince your customers to buy your alcoholic beverages, it is important that the branding is very important and should express the personality of your products.
Write A Brewery Business Plan
Writing a business plan is one of the most difficult things to do for startup businesses but it is vital, especially when you want to raise capital through lenders and investors.
Make sure that you spend some research time on everything you need to include in your business plan.
Buy Your Brewery Equipment
When you start a microbrewery, you need the right brewery equipment. The right kit will depend on a number of different things, such as your planned production levels, specific brands and the material of the equipment.
You may also want to consider saving a bit of cash by buying used equipment as the cost of brewery kit is going to be the largest expense.
As it is such a large investment, you need to do some research on what is right for your brewery setup.
It’s worthwhile speaking to vendors and manufacturers to ensure that you have the right equipment to maintain quality standards and your planned production levels.
Check Legal Requirements Before Setting Up A Brewery
As there are a number of different laws around alcohol sales and alcohol production, you need to do your research on what permits you need to obtain, and what standards you need to adhere to.
Federal and state laws affect the alcohol industry individually, and there are different regulations in place on how exactly to run your brewery.
You need to do a lot of research on these requirements based on where your brewery is. Each state in the US has its own legal requirements for starting and operating a brewery, no matter what size.
Find out about your basic obligations and any legal documents that you need to start your microbrewery.
Financial Forecasts For Your Brewery
The biggest challenge of your new business is the finances. When you want to convince investors that your business is viable, then you need to calculate forecasted sales.
You can ask a financial expert to do the forecasting for you. However, we recommend that you get an overview of your numbers and try to do the forecasting yourself.
It only requires some basic math and a few assumptions that should be well-informed.
It can be difficult to predict exactly how many sales you will make, so it is important to understand that your figures will not be fully accurate.
Make sure that you continually rework your financial forecasting figures. This is especially important in the beginning as you will get a better understanding of your customers and realistic sales numbers.
If you need external financing, for example, from a lender, then your financial documentation needs to be on a high level.
That’s where a financial expert with a background in the brewery industry may be able to help.
Opening a microbrewery can be tough at times as you are suddenly a business owner, and you will need to make important decisions that can affect the future of your business, you and staff.
However, many people run very successful microbreweries, so it can be done. If you need help on your journey, there is a large number of different tools and resources available.
Although it does take a lot of planning up front, the ultimate goal of all your prep-work is that you can do what you love: brewing beer.