How to Start a Brewery: The Financials
Determine Economic Feasibility
At this point, you’ve likely already started considering how much this venture is going cost you. Before you start laying out any funds, though, be sure you also have a realistic vision of what the profitability of the venture. There are the initial costs to consider:
- The property
- Building or building renovations
- Brewery equipment, install, training
- Décor, including furniture, glassware & dishes, tap system, window treatments, table toppers, etc.
There are also many operating costs to consider.
- Staff salaries
- Marketing, advertising, promotions
- License maintenance
- Inventory (beer supplies, glass replacement, food ingredients, etc)
- Loan payments
Be sure that you are able to invest in a worthwhile team, consultants, and professionals. This area of investment is not one to skimp on.
“Surround yourself with a good team as well as industry partners. There’s a lot more to starting a brewery than just liking beer. You need to know government, engineering, construction, finance, brewing science, management, distribution, hospitality, marketing, among other things. Nobody is a stud in each of those areas, so take the time to learn different parts of the industry and surround yourself with good people. Develop a solid plan, deal with uncomfortable and worrisome situations, and execute. Make sure to enjoy the ride.”
-Drew Wiles, Solace Brewing
Carefully consider how much you could feasibly make each year. What will the cash flow look like? How will your income compare to the debts accumulated? It is so valuable to take the time to assemble a business plan, including financial projections.
The research you did in step one will undoubtedly help you make decisions in this phase. The trends in the brewery industry are ever-changing. Self-pour walls, for instance. This growing trend gained a lot of traction since the onslaught of COVID. It’s a great way to prevent overwhelmed serving staff, and to maximize profitability. Self-serve stations are becoming more commonplace brewery equipment, but there are still elements of customization involved. Likewise, many brewery owners find that tight spaces, unique building layouts, or creative vision require a bit more individuality when it comes time to purchase and install equipment. Fortunately, there is a team at Deutsche Beverage able to help you to realize the potential of the space and of your imagination.
“Buy Deutsche equipment. Yes, I said it. They are the best and the technical support is unmatched. Things will break and you will need help beyond what your brewer can do. Buy more tanks than you think you’ll need. We ordered more tanks two weeks into business. Get the biggest cooler that you can afford and that will fit into your space. Cold storage is a choke point in the brewing business. Buy once, buy quality. We have replaced a few expensive things already because we didn’t follow this philosophy. Most of all, have fun and celebrate the wins along the way. After all, we are making beer!”
– Joe Garcia, Co-Founder of NoFo Brew Co