Planning a successful start-up brewery may seem like a quite the feat, but getting through your first brew day probably felt that way too. Like most things, it helps to break the project down into smaller steps (and RDWHAHB). In this Brewery Start-up Series, I’m covering some items and questions every future brewery owner will want to consider when planning a brewing business. The list will be by no means exhaustive, but should help get the process rolling—and, as always, Doug and I at Reiser Legal are here as a resource when you’re ready to take that next step or have questions along the way. Today’s topic:
How Will You Handle Brewery Start-up Costs?
Hate to lead with cold hard cash, but the reality of opening a business is that it takes some seed money to get things going. Just how much money you’ll need depends on the kind of brewery you want to open.
Creative Ways to Open a Brewery With Low Start-up Costs.
Are you okay with starting small and growing from there? If so, you might consider getting started without sinking cash into equipment by ordering contract brews, or getting licensed up and becoming a tenant brewer at an existing brewery. More on contract brewing and alternating proprietorships here.
Start as a Nanobrewery.
If you want to dive in and get your own equipment, but are reluctant to amass debt or take on too many investors, opening a nanobrewery is also a viable route that’s proven successful for a number of breweries. You can start with a small system, build a fanbase, and grow at your own rate. What’s more, as you generate interest in the community, you might find that you can generate an even more substantial fundraise for a bigger facility down the line, versus had you raised funds before ever proving yourself as a brewery and business owner. We’ll note that if you have some funds, but need a bit more to build out at the level you want, light fundraises through outlets like Kickstarter have also proven quite successful, and are a great way to garner attention in your community.
Dive in and Open a Packaging or Production Brewery.
So long as you have the funds, aren’t afraid of going big from the start, or don’t mind giving a piece of your future business away, a start-up brewery can go from 0-60 quite quickly. The key to a successful fundraise is a rock-solid business plan. It’s your pitch.
In the end, start-up costs are unavoidable, but through some basic business planning and sometimes creative choices, a start-up brewery need not feel daunted.
Next time, we’ll walk through some business planning strategies, including items you’ll want to address in your brewery’s Operating Agreement.