Today in the Brewery Start-up Series we’re tackling the brewery opening timeline. When you’re opening a brewery, what comes first? When do you need to take serious steps, such as signing a lease? Or, when do you need to apply for a brewing license or permitting? Let’s get to it.
I’ve put together ten steps to opening a brewery, walking through the rough order start-ups tackle important brewery start-up milestones. Keep in mind, this is an overview. Depending on your jurisdiction or the scale of a project, mileage will vary. That’s why, before kicking off the list, it’s wise for start-ups to arm themselves with a team of pros who are one email away, to support the brewing business throughout the process.
Ten Steps to Opening a Brewery: A Brewery Opening Timeline
1. Put together a brewery business plan. This will involve some fringe research into the cost of equipment, facility space, etc., but the start-up doesn’t have to commit just yet. This is the feasibility stage.
6. At the very minimum of 6 months before intended opening date, initiate your licensing process with TTB. An experienced beer attorney can kick off and review all the paperwork it’s possible to complete before you have physical space.
This time in the Brewery Start-up Series, we’re discussing the Brewery Business Plan. I frequently hear from brewery start-ups who know they should have a business plan together, but aren’t sure why or what to include in it. It might be that calling it a “business plan” makes it seem like something fancier than it has to be. I think of a brewery business plan as a roadmap. And, it can be as sexy or as simple as you want. After all, it’s just a personalized tool for your budding business.
If you wanted to take a year to travel around the world, you likely wouldn’t get in your car and start tomorrow. You’d make sure you had enough gas in the tank, and a plan to have enough funds to fuel all the things you wanted and needed to do. You might sketch out the different places you’d head along the way, and how you’d plan to get there. Your brewery’s business plan isn’t much different. You don’t necessarily need to overthink, tracking down every turn, side trip, and adventure. Life happens, things change. However, your business plan helps make sure your planned venture is feasible, profitable, possible—and worth doing. For those thinking about starting a brewery, you’ve likely already put a rough plan together in your head. Now’s the time to put pen to paper (or fingers to keys), and formally think through all the important pieces.
If you’re raising funds, your business plan becomes a pitch. A well-thought-through business plan might be the difference between reaching your fundraising goal and coming short. It could be that the plan itself sells the investor. Or, it’s your ability to readily answer a potential investor’s question, because you’ve already thought it through and have a smart plan in place.
Even if you’ve already got the funds, your business plan can keep you on track. It’s there for morale at times, proving that what you’re doing is possible, and pointing you to the goal—one that may not always feel immediately in sight.
So, what should you include in your brewery business plan? Like most business start-up questions, the answer will be unique to your start-up business, including its financial needs, goals, and objectives. However, these are good starting points:
Numbers. Math. How much money do you need to open the doors? How much to keep the business open? Consider equipment needs, real estate and overhead, costs of production, staff costs, tax liability, pricing your beer, etc. As you formally consider these things, you’ll inevitably reweigh and consider other essential questions, such as the size you want to be, how big of a taproom you want to have, whether having product for distribution is important to you, etc. Is your project realistic, or might contract brewing be a way to get started more quickly?
What’s your timeline?
How will you raise funds?
What kind of personnel/skill-sets/expertise do you need to run the business? And, who do you have on your team to meet those needs? To that, some background on the founders and the start-up team is important in a fundraise scenario.
What’s your brewery identity?
Where are you going to open your brewery, and why there?
What’s your approach to growth?
These are big, sometimes-nebulous questions, and it’s not always easy to track down an answer. However, ultimately, whether your business plan stays internal or is something you use to launch the business itself through investment, it’s an important process that every new venture is well-advised to work through. We’re here to help review your plan, be your sounding board, and make sure you’re ready to present the pitch to investors. More than that, if you’ve set a deadline for your launch date, we’re here to help with the legal end, ensuring you’re licensed up, compliant, and fully ready to kick off your new adventure (and, I hope, ride off into the sunset with beer-in-hand).
Next time on the Brewery Start-up Series we’ll be discussing the timeline of opening a brewery. What comes first? When should you be thinking about licensing? Do you need real estate before you seek a brewing license? More soon.
Here’s the skinny on whyproactive brewery trademark practices are a must. This is as brief-yet-thorough of an overview on brewery trademark law (and why it’s important) as I can muster. The takeaway is the same: (1) clear early and often; (2) file immediately; (3) regularly monitor. Here goes:
Brewery Trademark Law Explained
Federal trademarks are a first-to-file game and they give nationwide rights. If brewery #1 sells branded beer without a registration, brewery #2 (or winery, distillery, meadery…you get it) can register the same or similar name at any time, even if brewery #2 picked the name solely because they saw brewery #1 using it and liked it. Very technically, brewery #2 would take those trademark rights subject to the trading territory brewery #1 had established on the date brewery #2 filed. Realistically, it costs a lot for brewery #1 to enforce even that limited territory it would have priority to—and brewery #1 could never expand beyond that limited territory without risking a cease and desist / litigation / name change, so those so-called priority rights become less attractive. Looking at it another way, even if no one officially registers brewery #1’s beer or brewery name, other breweries would be free to adopt that unregistered name and establish similar limited rights in their respective territories, with no issues unless those territories cross. Brewery #1 couldn’t do anything about that.
Oftentimes the quiet name changes we see aren’t because a brewery failed to be first to market, but first to the register, so brewery #1 changes the name because they’re no longer interested in a brand name if it means they can only sell under the brand in one state, or one pocket of one state.
The takeaway is that, today, if a brewery cares about rights to a beer name, brewery name, series name, what-have-you, best practice is to:
Proactively seek a trademark clearance report for each and every beer or brand name (and, of course, the overarching brewery name) the brewery plans to launch. We run these daily at a low flat fee.
If the results are clear, file immediately. A brewery need not be using the mark to file.
Regularly monitor to make sure no one is using the same or similar mark.
Our last Brewery Start-up Series posts (here and here) have covered aspects of brewery business planning and putting together a Brewery Operating Agreement. This time, we’re discussing brewery entity selection. In other words, what formal business structure should your brewery choose?
Choosing a Brewery Business Structure
Like most matters during the start-up process, your decision on the brewery business structure will be specific to your brewery and its owners. There is an abundance of helpful information out there directly on this topic. And, this is a good opportunity to note a couple of resources every brewery owner will want to familiarize herself or himself with. First, it’s worth bookmarking the U.S. Small Business Administration (SBA) website, which provides an abundance of information to business owners, including information on loan programs you might find helpful. Next, and even more importantly, whenever facing decisions with tax implications, it’s advisable to find a tax advisor who can help steer your brewery business through tax obstacles and into brewery-specific tax savings in the future. Indeed, no matter how much DIY work and research the brewery start-up team conducts on its own, it’s helpful to have an experienced brewery attorney and brewery-savvy CPA on your side early in the process, so you can shoot over quick questions and get trusted answers whenever issues do come up.
Speaking very generally on the topic of brewery entity selection, we’ll note that for many of the sorts of brewery start-ups we’re seeing these days, the flexibility and tax framework of the LLC fits the bill, and forming an LLC for the brewery is a lot easier than you might think. In fact, we typically direct our clients to the proper online steps to officially create the business entity to get the beverage business formally rolling. Those documents are ones you can handle yourself, quite quickly, which translates to cost savings for the brewery start-up, which we’re always mindful about. However, we’re always here to help as you bump into questions throughout the process.
Next time, the Brewery Start-up Series will be covering another aspect of business planning, drafting the actual Business Plan. You might have formed a skeleton of a plan or run some basic numbers before deciding to open a business, but many entrepreneurs lead with their hearts and haven’t necessarily cranked numbers or put pen to paper about all of the details that will not only make the business profitable but poised to grow in the direction the brewery founders want.