How to Start a Brewery
Everything you need to know about starting a brewery
Research & Refine your Business Idea
There has been an increased demand for locally made beer. Unlike what we used to have in the past, Breweries have become more popular, especially breweries that target the locals in an area.
In 2012, the United States had 2,420 breweries. The number had significantly increased to 6,266 by 2017, thanks to a lot of microbreweries joining the fray.
Running a brewery is a wonderful business because you already have a market waiting for your product due to demand outweighing supply in the industry. Majority of locals just want a place to relax, hang out with friends, watch the game and have a drink.
You have to understand that starting a brewery is not child’s play, it is quite an expensive venture if you factor in the required equipment, permits, licenses and insurance before you can start operating.
Starting a brewery requires major investment, you should be ready to invest significant portions of your capital and time.
For starters, you need to find a location. It has to be a fairly big building that can adequately house all the equipment you will use for brewing. The building should also be able to accommodate the electrical and plumbing needs of the brewery.
You have to keep in mind that sooner or later you’ll have to expand, so consider the future potential of the building you’re taking if it can accommodate growth.
The next step is to occupy the space with the needed equipment and for you to start producing your beer. Some of the equipment are kegs, storage tanks, piping and tubing, kettles, waste treatment systems, conveyors, filters and beer-labeling machines, cleaning equipment, cooling systems, boilers, refrigeration equipment, bottling and canning lines, fermentation tanks, and tap handles.
Another thing to put into consideration is an excellent flooring system. This is important in an event where spills occur, the flooring system should be able to comfortably absorb it.
Creating your Business Website
Your brewery needs an internet presence, it also needs a website. This is where your visitors go to learn more about you, products you have to offer, upcoming events and lots more. The content you decide to share will shape your customer’s idea on your brand and product offerings.
You have to keep your visitors up to date with happenings and events happening in your brewery, this is highly essential. Your website even go as far as giving potential customers an idea of what they’ll be getting when they patronize you.
This can be achieved by creating an easy to navigate, user friendly and engaging blog filled with relevant, informative and fun content part of your audience and brand building. We advise that you keep your website as concise, up to date and clear as possible.
Setting up a website isn’t as hard as it may sound, in-fact, many hosting providers have tailored their service around small businesses who may not be tech savvy. We suggest going with BlueHost to host your website, they’re service is simple and easy to use/setup and they’re currently offering 60% off hosting, including free domain registration.
Additionally, creating a blog on your website is also a great way to attract organic traffic and expand your business. Checkout our full guide on the best and easiest way to setup a WordPress blog here.
Get Ideas for your Brewery business name!
Marketing Your Business
No business is immune to the consequences of poor marketing, from startups to established businesses. The success of your brewery business, brand, and customer loyalty is hinged to how good your marketing is.
You have to bear in mind that your marketing should have started even before you’ve launched your product to the public, this is one of the things you should have done first. There are a few things that are key to your branding and marketing, some of which is using social media, creating a website, grassroots marketing, and public relations. Let’s take a look at a few of them.
You need to ask yourself a few questions and answer honestly. What is the name of your product? Is it catchy, can your customers remember it quickly? Does it strike a chord with your customers, especially in your niche market? What is your unique difference, your selling point? What set’s you apart from the competition. All these would determine the perception of your brand, note that you shouldn’t pick a name that would isolate or offend a particular group in the quest to stand out.
Your color scheme, logo design, font, and tagline should come together nicely to form a good image for your brand. Come up with a tagline that people can easily associate with your brand, it should also support your brand.
The next thing for you to do is to use the media, we suggest you do both the traditional and social media. Though the lines between both have become blurred over time, it is important you cover all your bases.
Although buying ads on TV is sometimes unnecessary and is quite expensive for a startup craft brewer, magazines and newspaper can still get you the coverage you need. You can start by being covered in your local publication, then over time, you can move to national magazines or newspapers with nationwide coverage.
Engaging your potential customers on social media is another way to go about it. Create pages on Facebook, Instagram page and Twitter. Your contents should not only be engaging, personal, it must also be of the highest quality because impressions matter a lot here. Email campaigns should also go a long way in for you.
Setting Goals and KPI’s
You have to evaluate your weaknesses and strengths, all of which are contained in your business plan. After that, it is important you set goals for your brewery business. Goals may differ from one person to another, so it is important your business goals are specific, realistic and are short and long-term. It is also important you have indicators to assess your progress.
It is vital you set realistic and attainable goals for your business. There is the temptation of having high hopes, dreams, and goals for your new brewery. You have to keep that in check, by setting realistic and attainable goals, your time and actions can be better organized thereby achieving better results.
A clear understanding of financial ratios for your brewery business and constantly analyzing this information is a must. There are three important statements you have to constantly keep an eye on and they are
Your income statement is basically your cash flow statement and your balance sheet. These statements will show how good or bad your business is performing.
To get a complete picture of how things are with your business you need to always look at you’re your income statement, cash flow statement and balance sheet to see how well you’re meeting your financial goals.
Evaluating these documents monthly will ensure accountability in your brewery while sustaining an accurate and healthy financial perspective as you make important decisions all year.
Plan your Finances
With the huge amount of money a brewery startup requires, you might be wondering where to source the capital from. Well, not to worry let’s see how that can be done.
Friends and family
For entrepreneurs looking for capital, friends and family are the first port of call. First-time brewers looking for finance usually go through this route. If you can succeed in convincing your friends and family to invest in your brewery, then you’ll be able to get at least a certain amount of money with less pressure.
Home equity loan
You could have considerable equity in real estate, which could be your home, piece of land etc. With this, you can take a line of credit or home equity loan, with this you can get capital for your startup.
Dipping into your IRA (individual retirement accounts) or 401(k) is another way to raise the needed capital for your brewery. Although this strategy is a little risky because you set this funds aside for your retirement. This doesn’t mean you’re exempted from taxes and other fees.
There’s another financing strategy allowed by the IRS, it is known as Rollover which Business Start-Ups use to avoid penalties and taxes. The best advice is to hire a professional as this transaction is not for rookies.
Reward crowdfunding has become another way most people raise capital for their businesses. It’s done by getting little donations given online by a large number of people who believe in your cause. Some of the popular crowd funding sites you can use are GoFundMe Kickstarter, Crowdrise and Indiegogo.
Although reward crowdfunding and equity crowdfunding may look similar, they’re quite different. The basic difference between them is you give a certain percentage of ownership to donors rather than giving out rewards.
The aim is to start up no matter how small, once your brewery is running various financing doors will open like the SBA loans, Angel Investors etc.
Adopt an Entrepreneurial Mindset
If you want to really succeed in your new venture, you have to adopt the entrepreneurial mindset. Adopting this mindset will guide you to achieve your dreams, objectives, and goals in business. We’ve listed a few practices below that can help you adopt this mindset.
The first is you have to know what you want. For you to succeed in business, you have to understand the importance of success as it pertains to you. The reason is because everybody has their own definition of success.
For you to do this, you will have to analyze the reasons you’re doing what you are doing, what you intend to achieve and why you’re doing it.
This simple exercise lets you set specific goals for you and your business.
The next thing is for you to be willing to go as far as required. After you’ve listed your goals and things you wish to achieve, your work starts. Your success in business is determined by how far you’re willing to follow up on your dream.
This does not mean you should lack empathy or do unethical things, it simply means you should put in extra work when others are quitting. An entrepreneur adopts the mindset of working in efficient ways.
Another entrepreneurial mindset you should adopt is to always learn from criticism. As you advance in business, you’ll definitely get all types of feedback, both positive and negative. Have a thick skin to negative feedback, filter them and see what lessons you can learn from them.
Entrepreneurs are always consistent. Why because success also rewards consistency. As a startup, nothing is going to be rosy, the urge to quit and go back to a secure job will be highest. You need to adopt the mindset that you’d soldier on and keep going. Network, set new goals, motivate yourself and your team and don’t give up.
Other things to consider when starting your Brewery
Then there are various permits and legal requirements you need before you start your brewery. One of the first things you need to apply for is the federal brewing permit with the Alcohol and Tobacco Tax and Trade Bureau. It takes about four months to process and it’s free.
Keep in mind that the government won’t approve your federal brewing permit if all the necessary equipment is not installed and operational. It implies that you already have recurrent expenditure without making one sale yet. So you have to plan for this in your business plan.
If you want to serve beer to your customers at your Brewery you have to apply for local licensing and state liquor license. How available local inspectors are will determine how long this process takes, although it takes between 45 to 60 days.
Choosing a business structure is also important when setting up your business. Each structure has its inherent advantage and you should consult with a professional to decide which would suit you best. Take for example it is easier to file as a limited liability company when compared to a corporation.
The success of your brewery largely depends on hiring the right employees. A great brewery with a great product and bad employees is bound to fail. As an entrepreneur, you’d be relying upon and trusting your intuition a lot and this comes into play when hiring employees for your brewery.
After checking if the person is a right fit for the position, there are a few things you should consider before you hire like; does the person fit into the vision and culture of your organization? What does he/she like to do most times? Does he/she do it best? Will the person add value to your brewery? All these would guide you in choosing the right employees.