There’s plenty about a local brewery to appeal to its customers. Like pubs, breweries often attract a regular group of people who gather there to meet their friends and enjoy a cold beverage. However, unlike many pubs, a local brewery can offer unique beer blends with locally sourced ingredients. Has this piqued your interest? It is not easy to start a brewery, and there are many things to consider before you do so. However, if you’re serious about the prospect, we have everything you need to help you on your way.
Your business idea
With an increasing demand for locally-made beer free from added preservatives, breweries have really come into their own. People are shying away from the mass-produced products of modern day life, and are harking back to simpler times with custom-made beer. It’s a great market to get into, but consider the following before you set up your business:
- Research the required equipment. Kegs, storage tanks, piping, tubing, kettles, waste treatment systems, conveyors, and filters are just some of what you’ll need before you begin. You will also need apparatuses like beer-labeling machines, cleaning equipment, cooling systems, boilers, refrigeration equipment, bottling lines, canning lines, fermentation tanks, and tap handles.
- Know the costs. Start-up costs are a big factor in starting any business, and the equipment needed in a brewery is often expensive. Additionally, you’ll need permits, licenses, and insurance before you can start operating. A brewery requires a major investment of your capital and time.
- Consider your space. You’ll need to find a location that will house the equipment you will use for brewing, electricity and plumbing, and the needs for the future expansion of your business.
- Ensure the flooring system will stand the test of time. Like a pub, a brewery needs a firm foundation. Spills will occur, and your flooring system will need to be able to absorb them without deteriorating.
- Determine a timeline. Even after you’ve got the required materials, flooring, and space needed, there’s still the beer brewing process to consider. Consequently, you will need to make a schedule to keep your business up and running. You can find some tips on choosing the right business structure here.
Any modern-day business needs a website, and your brewery is no exception. Your visitors want to learn more about you, your products and any upcoming events you may be planning. The look of the website, ease of navigation and content you share will shape your customers’ ideas of your brewery, so it’s essential to get it right. Here are a few tips to help you create your website.
- Educate your customer on what your brewery offers. A key selling point of a brewery is its uniqueness, so let your customers know what products they can expect. Don’t be afraid to get personal – customers love a story and will love to hear what’s behind all your creations.
- Make it easy to read. Create an easy-to-navigate, user-friendly, and engaging site. You don’t have to include too much technical information, simply keeping it relevant, informative, and concise. You do need to keep things current, however – this is how customers will find out about upcoming events and any promotions on offer.
- Purchase an excellent hosting service. Setting up a website doesn’t have to be complicated, and many hosting providers tailor their services around the non-tech-savvy. We suggest using BlueHost to host your website. BlueHost has an easy one-click WordPress installation tool. Get 60% Off hosting and a free domain name here.
- Write a blog to attract customers. Creating a blog on your website is a great way to attract organic traffic to expand your business. This is where the story of your business and the uniqueness of your beers can really come into their own. Community is a key aspect of a brewery, and you can build it here. Why not check out our full guide on how to think of a name for it?
Marketing your business
No matter how small, any business needs a great marketing plan. You may build a loyal base of followers in time, but the initial success of your business will depend on this marketing. Therefore, establishing a strategy is essential before you launch your product to the public. Below are some key elements of a marketing strategy, and you can find some additional tips here as well.
- Who is your target market? Knowing what type of person you’re hoping to attract will help you focus your product advertising and discover your niche. The main goal is understanding who needs your product to make their lives better. Knowing this will help you not only use the right tone and platforms for your marketing – it will also help you in running the business as a whole.
- What is your brand? There is more to branding than a logo. Your logo and brand marketing materials are an extension of your business, but the brand is what makes your brewery original. Why should customers come to your brewery over others? What are your selling points and taglines? The answers to these questions will need to align with your ideal customers to maintain consistent communication. For more tips on how to create a powerful brand identity, check out a few of our blog posts.
- How are you marketing your brand? This is where your logo, name, and brand colors will come into play. Some business owners will revel in the task – after all, your new brewery is essentially a blank canvas – but others will need some help. In the initial stages, don’t be afraid to ask for help from a creative professional. This may raise your start-up costs, but can pay dividends in the long run. The most important thing is to make your brand name memorable. What is your product name? Will your customers remember it quickly? Does it create a connection with your ideal customer? Note that you shouldn’t pick a name that would isolate or offend in the quest to stand out. We’ve made it easy for you to create a name and check if your domain name is available with our business name generator.
- How will you advertise your brand? The next thing for you to do is to use an advertising platform. Social media sites are great for this – Facebook is a fairly universal platform for users across the board. For the local area, traditional media like flyers and pamphlets, magazines and newspaper adverts can also be helpful.
- What social media outlets will you use? Engaging your potential customers on social media is great, plus you may not need paid ads if you have time to create regularly posted content. You can create pages on Facebook, Instagram, and Twitter.
Remember that first impressions can make or break your connection with your customers, so opt for quality content over quantity. Only plan as many social media and blog posts as you can realistically manage in the long term, and consider having a newsletter option on your website, as e-mail campaigns can go a long way.
Setting goals and KPIs
Your business plan contains the evaluation of your weaknesses and strengths, as well as realistic and achievable goals for your brewery. You can organize your time efficiently, creating less work for yourself and achieving better results for your business.
A clear understanding of accounting ratios for your brewery and consistent analyses of this information is paramount. There are three important statements you have to keep an eye on. They include the income statement, cash flow statement, and the balance sheet.
Always look at these three statements to understand where your business stands financially. Monthly evaluations of these documents will stand you in good stead and help you keep track of your finances as you plan the year ahead.
Plan your finances
As a result of the huge financial investment a brewery requires, you will need to source startup capital. We’ve listed a few below:
- Friends and family. For some entrepreneurs, friends and family are the first ones to call. This is a great option for many entrepreneurs if they can get it, as loans are often interest-free and come with far less pressure than traditional bank loans. If you can convince your friends and family to invest in your brewery, then you’re off to a great start.
- Home equity loan. If you have equity in real estate, such as your home or a piece of land, you may be eligible to take a line of credit or home equity loan as startup capital. Use caution when you do this, however, to ensure that you don’t end up losing your home.
- Retirement accounts. Using your IRA (individual retirement accounts) or 401(k) is another way to raise needed capital to startup your brewery. Using this option is risky because the money is designed to be used in your retirement, and it also doesn’t mean you are exempt from taxes and fees. For this reason, there is another financing strategy allowed by the IRS. It is the rollover that business startups use to avoid penalties and taxes. The best advice is to hire a professional to guide you on the right and legal path.
- Reward crowdfunding. This is an increasingly popular way for businesses to raise capital in the short term. Participants can receive small peer-to-peer loans from like-minded people who believe in their companies. Some popular crowdfunding sites are GoFundMe, Kickstarter, Crowdrise, and Indiegogo.
- Equity crowdfunding. Although reward crowdfunding and equity crowdfunding may look similar, they are different. The basic difference is that you give a certain percentage of ownership to donors in equity crowdfunding rather than giving out rewards.
Adopt an entrepreneurial mindset
If you want to be an entrepreneur, you need to think like one – but for many first-time business owners, this will be an entirely new concept. There are plenty of ways to get into the right frame of mind, and doing so will help you to achieve your business’s dreams, objectives, and goals. Here are a few practices that can help.
- Knowing what you want and why. What does success mean to you? Everybody has their own definition of it, and knowing yours is essential. This way, you can tailor your goals to suit your business. Analyze why you want to own a brewery, what you want to achieve with your brewery, and how you will achieve those goals.
- Be willing to do what it takes. Your business success is determined by how much you are willing to follow through on your goals. Any small business owner knows the importance of balancing your head and your heart – the latter is a huge factor, but can’t be allowed to take over all the time. To thrive, an entrepreneur must adopt the mindset of working efficiently as well as being passionate about what they do.
- Learn from all types of criticism. As you advance, you’ll get all types of positive and negative feedback. Learning to develop a thick skin and filter these criticisms will help you learn from your experiences, rather than taking them to heart.
- Consistency is key. Success rewards consistency, especially in the face of adversity. Things aren’t easy for new business owners, particularly those who have come from a high-security job. Ensure that you network with other entrepreneurs, set new goals, and motivate yourself and your team to keep going. There are others in the same boat and they might just have some advice for you.
Other things to consider when starting your brewery
There are a couple more things to consider before you can open your doors to the public. First, you will need to meet the legal requirements to operate in your state, and you will need employees to sell your product.
- Initially, you’ll need to apply for the Alcohol and Tobacco Tax and Trade Bureau’s federal brewing permit. It’s free and takes about four months to process.
- The government won’t approve your permit unless all the necessary equipment is available and operational. Having your brewery fully functional implies that you already have recurrent expenditure.
- You must apply for local and state liquor licenses. The length of this process will depend on the availability of the local inspectors and can take between 45 and 60 days.
- Choose a legal business structure, such as LLC or Corporation. Each structure has its advantages, but you should consult a professional to decide which structure is best for you.
- The success of any business depends on having the right employees, and this is particularly true at a brewery. As an entrepreneur, you will be relying on your intuition to make decisions. Check if the person is right for the position, and consider if they fit into the vision and culture of your brewery. What value will they add to your brewery?
In this article, we have covered everything you need to start a brewery. From researching and refining your idea to creating a website and determining your marketing plan, we have it here.
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