I am in the planning stage of opening a small 10 bbl production brewery with a tasting room. We identified investors and presented a pitch to them. They are very interested, but want more solid numbers as far as operating expenses and other financials go. Does anyone have any useful information that they would be willing to share? We did a lot of quotes and references of other breweries that we have spoken with…We could use a little help with the biz aspect if you know what i mean.
these are hard numbers to pin down precisely. Do you have any idea what type of brewery you want to open? What styles are you planning on brewing? What is your flagship going to be? How much will you be pushing high end “specialty” beers? You need to have a good idea of what your focus will be to understand what you will be able to charge for your beer. And I recommend charging a premium if the product is high quality.
I remember reading about when New Belgium started up. The original guy was convinced that his Abbey ale was going to be huge. He took it to all kinds of festivals and events, and couldn’t give the stuff away. Then Fat Tire happened, and we all know the rest of the story.
So it’s good to have plans. It’s better to have backup plans as well.
In addition to making good beer, you need to make beer people like. I’m frequently surprised by which (IMO mediocre) beers I make that get a lot of positive response, and which beers, that I think are great, don’t.
We have been planning on opening a 15 BBL Production brewery with a tasting room that will sell pints (Recently passed bill allows production breweries to sell pints in VA now). We want to set a max production amount to around 4000 bbls.
We will be brewing all Ales, IPA, Pale, Golden, Brown, Porter…IPA to be the flagship (But like nateo said, the customer will decide that).
We will be producing about 35% Seasonal/Specialty Beers, including wild ales and bourbon aged beers
We will be working with a local distributor and selling directly to them. Our wild and bourbon aged beers will be sold at the brewery but seasonals will be sold in 1/6th bbls thru the distributor as well.
How did you go about estimating your Utility/Insurance/Legal and any TI costs?
Utilities: estimate based upon anticipated usage at various levels of production (i.e. break-even, max production, etc.). For example, our break-even is at ~45 BBLs of annual production. Using an estimate of 5-7 BBLs of water used for every BBL of finished beer and the published commercial rate tables from the local water authority, it’s basic math at that point. Same thing for natural gas, electric, etc. You can also speak with local breweries regarding usage and get some really good perspective as well.
Insurance: I obtained quotes/estimates for a local purveyor of business/liquor liability insurance.
Legal: There’s a Garth Brooks song about friends in low places. It’s all in the definition of ‘low’.
TI costs: this will vary from location to location, and finish to finish. I use a per square foot estimate for improvement costs. Certain areas of our facility are going to be higher in per square foot cost (i.e. tap room space, restrooms, etc.), while others are going to be lower (i.e. the walk-in cooler footprint).
My brewery is self-financed, so detailed estimates are more important for my investor ;D. The investor(s) in your brewery may may be higher or lower on the GAS (Give A ****) scale.