« on: January 04, 2012, 10:08:03 AM »
I've read with great interest all of the information in this thread, particularly from those with real life experience opening small scale breweries. I'm in the much-much-closer-to-a-pipe-dream-than-a-reality stage of considering opening a nano scale brewery, and the information in this thread has been a real eye opener for me.
While my home state appears to be very nano-friendly based on recent legislative changes, the economics of profitably operating a system in the 1 to 3.5 barrel range still appear to be grim. At first glance, it seems that one could operate on a nano scale under only a few select circumstances:
1) Operating at break-even or a loss in the hopes to establish name recognition/demand, and with the financial resources readily available to quickly expand to 7-barrels or larger
2) Life circumstance such that you can operate a break-even business and/or have some kind of advantage such as already owning a suitable property with minimal capital investment required and practically zero overhead
Unfortunately, my current personal situation doesn't place me within one of those circumstances. However, there is a small glimmer of hope in that the folks who lobbied for the new nano legislation are now lobbying to make further changes in the law which would allow for the on-premise serving and consumption of beer without the requirement to operate a full-service restaurant.
Here are the basics of the current nano laws as I understand them:
* $240 annual license fee
* $0.30/gallon state tax
* Self-distribution is allowed
* Maximum 2000 barrel annual production to qualify as nano
* Can sell growlers and cases on-premise for off-premise consumption
* Can sell/give away one 4-ounce serving per label for on-premise consumption (tasting room)
What I'm wondering is, if that last requirement is in fact changed to allow on-premise sale and consumption of beer without the 4oz limitation, how much does it change all of the assumptions within this forum (and elsewhere) regarding minimum system requirements for profitability? Is it worth the effort of further fleshing out a very detailed business plan with the hopes the law does get changed, or at a quick glance would this model still be doomed to likely failure?
My very rough model would be as follows:
* Start with something like a 2 to 3.5 barrel system primarily for on-site sale by the pint.
* Would not maintain cooperage with the exception of the fleet of kegs required to operate my own draft system.
* The only distribution would be self-distributed bombers of bottle-conditioned Belgian style ales (these sell for a premium in my area) which would occasionally be brewed on a 10-gallon system, which will otherwise be used for pilot batches for the main brewery. Would also sell growlers from the taps.
* Would need to lease and outfit a suitable building.
* Have no idea at the moment how many seats would be allowed in the serving room under the proposed regulations. I'm assuming this is a huge part of the equation.
* A have a friend who is a lawyer/cpa who would help draft the business plan, and another who is an engineer in bio who would help plan the system requirements, but would still need to hire some folks to plumb, wire, and buildout the facility.
* Finances are an issue. I could come up with maybe $60,000 cash, and believe I could get roughly the same amount in investments on an "equity only" basis from friends and family. (Meaning no dividends and their investment would grow only with the value of the business growing - at least for the first few years.)
Thanks for your time reading such a long post! Hopefully there is enough information to make a reasonably educated guess.