Starting a Brewery? Your Adventure Starts With This Step-by-Step Guide
You’re starting a brewery! We know you’ll turn out the next best creative brews; we just want you to make money doing it! We got you—check out these top tips.
Maybe you’re a homebrewer with dreams of starting a brewery. Ok, you’re probably a homebrewer, but you also could be a serious craft beer lover with a burning desire to dazzle other beer drinkers with your own brews, or a savvy investor looking to capitalize on craft beer’s ever-growing popularity. You’ve noodled on it, “researched” (and by that we mean visited and drank) at too-numerous-to-count craft beer spots, and you’ve made the decision: You’re starting a brewery.
We salute you! And support you. We also want you to remind you that a brewery is a business, and unlike a hobby, it’s meant to generate revenue. We know you’ll turn out the next best creative brews; we just want you to make money doing it! We got you—check out these top tips for starting a new brewery:
1. Dream Your Possible Dream of Starting a Brewery
Many homebrewers, backed by beer enthusiasts with glasses and wallets in hand, simply want to follow their passion by starting a brewery. We love that! But we also know that those passions must align with customer interest and demand, in order to turn your beloved hobby into a profitable business. So let’s start at the top, first with a business plan for starting your brewery, and then determining how you’ll finance the world’s next greatest line of beers, so you don’t shell out too much of your own savings (or retirement funds!) to make your dream of starting a brewery a reality.
A Dreamer Speaks About Starting a Brewery…
Take a page from beer evangelist Daniel Kause of Dueling Ducks Brewing Company. He’ll confirm that the blood, sweat, tears, sleepless nights, financing and all the rest are more than worth it. Dueling Ducks is a fairly new, 7-barrel, 3,000-square-foot tasting room in Anaheim, California. Daniel’s story is inspiring, and he shared these helpful tips to embolden and encourage you as a brave and visionary aspiring brewery owner:
- Ask questions of other brewers and owners. Craft beer is a tight community and other owners and brewers will answer those questions.
- Volunteer to help in the brewery to become familiar with operations and further pick brains. Tanks need to be cleaned, floors sanitized and much more, and trading labor for a brainstorming sesh is doable.
- Choose a town that wants to support your dream. You can post up in a town that’s already brewery central like Anaheim, or suss out a spot in a brewery desert, if you will. Either way, frequent the area to build connections, community, and support for your plans.
Looking at the mountains from the patio at Cabin Creek Brewing. Image courtesy of Cabin Creek Brewing.
2. Get the Facts about Starting a Brewery—ALL the Facts!
How to begin on your journey of starting a brewery: Roll up your sleeves and start with research. It’s not the sexiest part of starting a brewery but it’s one of the most important—just like these priceless resources. Bookmark StartABrewery and ProBrewer on all your devices for up-to-the-minute info and resources. You’ll also want to be a frequent browser at Craft Beer Professionals to connect with other like-minded pros, and to take advantage of continuing education opportunities; Craft Brewery Financial Training to nail financial best practices; Turn It Up for brand identity, content creating and other marketing genius; and, of course, our website for brewery POS and how it integrates with our many partners.
3. Mandatory: Your Business Plan for Starting a Brewery
LLC? Corporation? Time for some good advice from a professional to determine what’s best for you and your investors. A business plan is the roadmap that steers you through the many steps needed to launch your business. Investors will demand it, so be prepared to outline your concept, customers, market, competition, sales, marketing, financial and other operating considerations.
Be sure to set time aside to work on your business strategy.
4. Know the Costs of Starting a Brewery
Based on your big—or modest!—dream, creating the brewery and taproom alone can be a staggering investment. Learning and knowing your costs will help you seek funding when you’re starting a brewery, and will keep you on track as your venture matures. Here’s a quick checklist:
Stocking the joint can run from $100,000 (for one slightly loved … as in used) barrel, to $2 million or more for 20 or more barrels, plus everything else in the brewing line, bottling and canning lines (if that’s your goal), plus the tap system, cleaning and waste management, and more.
Whether you envision a warehouse/garage-vibe or a stand-alone brewery and taphouse, remember that size matters. It will impact your rent or, if you’ve got your heart set on owning, your mortgage. Like any property, you’ll also need to keep in mind utilities, insurance, permits and the like. Starting from scratch in starting a brewery? Find a good contractor with brewery experience to manage construction like Dustin Huack and team at Huack Architecture. Either way, plan for expansion at some point, when your customer-base and your dreams grow.
Bringing in the best and brightest, in addition to a few good friends, will pay off in the long run when you’re starting your brewery. The amount and type of staffing will vary depending on whether or not you have a kitchen, your floor layout, and service model. Think front-of-house (managers, hosts, servers, bartenders and the like), back-of-house (kitchen staff) and operations (finance, marketing, etc.) in addition to brewers, assistant brewers, cellarmen and others. Having a DEI (diversity, equity and inclusion) strategy from the start is paramount; look for experienced counsel, such as Graci LLC.
The list goes on! You’ll need brewery management software and brewery POS software (see step 5), other brick-and-mortar cost considerations, and legal requirements and fees for your business plan. See step 2 for resources in these areas.
And, Finally, Funding
The good news: You’ve got epic dreams for starting your brewery, so don’t be afraid to pitch your ideas to family and friends first. Getting adequate funding can be a daunting task, but with partners like Jason Sleeman from Craft Beverage Lending, you’ll be on the way to see your dream come to life.
Next, consider crowdfunding, like GoFundMe, and/or a bank or Small Business Administration loan before you tap your own reserves. A good brewery lawyer can help you break it all down, including initial working capital to get the keg (ok, ball!) rolling.
Brewery-specific POS software helps with guest satisfaction and critical decision-making.
5. Software Saves the Day—Every Time
Software is a budget line where you definitely don’t want to skimp when you’re starting a brewery. It’s the backbone of your business, providing you with critical decision-making information at your fingertips.
Brewery Management Software
This helps you manage the business side of things like inventory, production, sales, and accounting, and sales accounting automation. An easy-to-use, cloud-based system with robust support makes day-to-day operations manageable, so you can focus on your craft (your dream!).
Brewery POS Software
Here’s where you dig into data and insights! A real-time, cloud-based brewery POS goes well beyond tabs and what’s on tap. It empowers you with the tools to make immediate decisions based on what’s going on in the taproom; from custom flow and preferences, to taking kicked kegs and sold-out meals off the menu on-the-fly, to loyalty programs, and beyond.
Ecommerce and Online Solutions
Beyond management and POS are more solutions that put your business in front of your audience (websites, beer finders), get beer in their hands (online beer sales) and make your customers feel like they’re “insiders” (membership clubs). You may even want to crush customer engagement—measured through thousands of data points, of course—with Secret Hopper (yes, like a “secret shopper,” but for breweries).
6. The Fine Print (aka Legal Stuff for Starting a Brewery)
There’s a lot of legal stuff when you sell alcohol. You’ll need a federal brewing permit, which can only be approved once all of your equipment is installed and ready to go. You’ll also need a brewer’s bond, so Uncle Sam knows he’ll get your federal taxes. Next up: state and local liquor licensing, which—no surprise!—varies by state and municipality. Some states also require a retailer license, if you’re selling swag and other non-alcohol items. And let’s not forget property, casualty and liability insurance. Your brewery accountant can advise on these items.
With hard work and patience, you’ll be pouring beers in no time!
7. All Things in Good Time…
You’re committed to launching the next must-drink craft beers, so it’s tempting to think you’ll be pulling taps in three or six months. Probably not—because all that we’ve already outlined above is where enthusiasm and innovation end up meeting reality. Licensing alone can take up to four months; when you add up the time it takes to secure consultants, craft a business plan, find a location, renovations and/or construction, securing equipment, processing licensing and permit applications, on-boarding brewery management software and brewery POS system, hiring and training the right staff, brewing beer, marketing … you’re looking at the better part of a year (at least) if all the stars align. But don’t be discouraged, it’s definitely worth it!
Starting a new brewery? Welcome to the craft beer community!
Want more inspiration? Level up your starting a brewery mojo with these entrepreneurial success stories.