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Messages - Tim McManus

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16
Going Pro / Re: Brewery Financing for someone with no wealth/collateral
« on: August 17, 2011, 04:31:36 PM »
Tim, where do you live? $50k-100k (I'm assuming per year) is a lot of rent. The rest of your numbers seem really high.

I live in NJ where the cost of living is absurd.  The rent prices I threw out were actual rental costs in this area.  One brewery in our state is paying $12.50/sqft for 8,000 sqft of space, and that's very inexpensive.  Really brings home my point about how variable costs are depending on the business and the location.

I like your barn-raising idea but the devil's in the details.  You'll be generating a significant amount of waste water and will need to do something with that.  You'll probably want to condition the water and you'll be consuming a tremendous amount of electricity (heating, boiling, glycol chiller, bottling line, lights, etc.).  It all begins to add up quickly.

I once visited a commercial bakery that forgot to include utilities in their business plan.  They ran out of cash in four months and needed to be bailed out by additional investors to stay in business.

17
Going Pro / Re: Brewery Financing for someone with no wealth/collateral
« on: August 17, 2011, 04:21:32 PM »
Marketing is important and most businesses spend a significant portion of their money on it.  Yes, there are non-traditional ways to market, and it can be very effective.  However, you have to ask your self some basic questions:

Who is my customer?
Where will they find my product?
How do I tell them about my product?

Defining your customer is critically important.  For example, your customer could be men, age 35-55, college education, married, kids, home owner, median family income $100K.  Knowing this you can start to position your brand in the marketplace.  Does your labeling and brand image appeal to this group?  Is it something they can relate with and want to be seen with?  You need to position your product in the marketplace for your customer.  Where will they buy it?  Taverns?  Retail?  Knowing this you can start to create an effective marketing plan to target these people, your customers.

Marketing isn't just ads.  There should be a good amount of analysis that goes into it prior to the ads.  It's also your bling.  Everyone loves pint glasses, coasters, T-shirts, etc.  If you decided to market your beer in a tavern, you can do a co-promotion with one tavern for instance and give out coasters and pint glasses to folks who buy your beer at the bar (this varies from state to state, so take the example with a grain of salt).  A few cases of glasses will cost you a few hundred dollars.  Giving them away to folks is an excellent way of getting your brand into the marketplace and the recipient will more than likely show off his pint glass to friends, further spreading the word.

Beer festivals also cost money.  Gotta' get a keg there, pay for the space (in some cases), and give out some bling to folks.  It's great giving out body tattoos and watching all the folks walk by displaying your logo.  Again, marketing costs.

And again, no two businesses are the same so you may find better and more cost effective marketing channels to reach your customers, depending on who that is.  However, you gotta' know who your customer is first.

18
Going Pro / Re: Brewery Financing for someone with no wealth/collateral
« on: August 17, 2011, 03:28:05 PM »
What's your version of small?

I cannot ignore the numbers regardless of what they are.  Every business is different.  The capital costs for starting a 10BBL brewery can be anywhere between $200K-$500K in brewing equipment alone.  Another $50K for building modifications, and at least $150K in annual advertising (hey, they gotta' know about you to buy your stuff).  $30K-$50K for a heavy-duty van or box truck to transport the product, consumables such as water, electricity, and gas.  Rent, which around here is anywhere from $12/sqft to $25/sqft.  You'll need about 4,000 sqft for a 10BBL system.  Salaries, taxes, insurance, the list goes on.  It adds up quickly.

Additionally, you'll need a wad of cash for operating capital.  If you run out of cash your business will come to a grinding halt.

Everything has to be considered and nothing can be ignored.  If your business plan becomes expensive, then you can start scaling back until you find a number you're more comfortable with.  However, if you get too lean, you will collapse under your own weight.  Poor planning or operating under assumptions are significant reasons why businesses fail within the first year.

19
Going Pro / Re: Brewery Financing for someone with no wealth/collateral
« on: August 17, 2011, 02:35:05 PM »
first person who shows me on paper how to make a living on a 1-2 bbl system get's a free beer.  ;) Once you run the numbers it becomes pretty clear. I can understand someone starting at 1-2 bbl (though, having gone through that I wouldn't recommend it necessarily) - can't ever understand staying at that level. The one exception I have been overlooking is a pub or tasting room. I'm considering production facility only.

I've run the numbers 10,000 times about 10,000 ways and cannot find a way to do less than 3.5 bbl without slight difficulty or the possibility that unforeseen occurrence could shut down the brewery.  The numbers for 7 bbl look acceptable to me for the tasting room style with the possibility of some off-site production.  That said it’s my personal goal to support anyone who tries a small business and produces a good product.  cheers, j

Numbers are relative and vary greatly from state to state and situation to situation.  For example, where I am you'd need about $1.5M in capital to run a successful brewery, and it won't break even for 24 months.  For some that's reasonable, for other's it's astronomically absurd.  To further complicate things, you can throw in some investors who want a 22% return because of the high risk involved in starting a brewery.  It's more than the 12% you'd pay for a bank loan, but it might be more accessible.

Starting any business is a unique endeavor and no two are alike for every conceivable notion.  For this reason I try to steer clear of trying to come up with a standard for success that applies across all business ideas.

20
Going Pro / Re: Brewery Financing for someone with no wealth/collateral
« on: August 17, 2011, 02:28:40 PM »
first person who shows me on paper how to make a living on a 1-2 bbl system get's a free beer.  ;) Once you run the numbers it becomes pretty clear. I can understand someone starting at 1-2 bbl (though, having gone through that I wouldn't recommend it necessarily) - can't ever understand staying at that level. The one exception I have been overlooking is a pub or tasting room. I'm considering production facility only.

If I live in a shed in the woods I can probably make a living on a 1-2 BBL system.  It'll be the Grizzly Adams version of living, but, hey, it's living.

Where do I redeem my beer coupon?  :)

21
Going Pro / Re: Brewery Financing for someone with no wealth/collateral
« on: August 17, 2011, 08:48:54 AM »
I will start a new thread in the Going Pro section detailing many of the resources available.  Folks can add to it with alternative resources and other important information.  Give me a few hours to get organized, I am drinking from the firehose today (and it's not beer).

22
Going Pro / Re: Brewery Financing for someone with no wealth/collateral
« on: August 17, 2011, 07:53:11 AM »
Thanks to everybody who has posted hear and for all the comments and suggestions.  Looks like a solid business plan is the way to start.  Anybody got examples on the web that I can use for a template?
Thanks

Sent you some info in a PM.

23
Zymurgy / Re: 2012 Zymurgy ideas
« on: August 16, 2011, 07:12:43 PM »
One more idea:  An issue dedicated to AHA Sanctioned competitions and judging with a spotlight possibly on clubs and how they support competitions and judging.

There's been a decent amount of interest in judging and this year's national competition saw unprecedented interest.  A nice, thick issue on the aspects of beer competitions would be very informative for a lot of folks.  A look into the BJCP program would demystify it for a lot of folks.

24
Zymurgy / Re: 2012 Zymurgy ideas
« on: August 15, 2011, 05:58:29 PM »
Update all of the Special Issues from the 1990s on hops, grains, yeast and include a new one on water.  Most of those issues--while being very important--are almost 20 years old.  I'm sure there are many things in those issues that can be updated and reflect more current grains, hops, etc.

It would be great to see a water issue.  A lot more brewers are getting more and more involved with their water chemistry and there are a lot of great resources out there now that didn't exist a few years ago.

A refresh on those issues would be very, very helpful.

25
Going Pro / Re: Brewery Financing for someone with no wealth/collateral
« on: August 10, 2011, 09:08:25 AM »
You WILL need a solid business plan.

Best advice in this thread.  You need to write a business plan and that will answer your question.

Advice is good, and there's a lot of it on this thread, but every business is different and only a business plan with a complete 5-year set of financial projections will tell you if $30K is enough, and if not, how much more you need to raise to fulfill your dream.

26
General Homebrew Discussion / Re: AHA Membership
« on: August 06, 2011, 11:16:39 AM »
Welcome, welcome.. we ask that all CIA mind control programs be left at the front door! :)

These are not the droids you're looking for.

27
I have a lemon hefeweizen recipe that is a staple summer beer that I brew.  There are many things that lemon will do to your beer, and all should be considered when adding some.

I've been brewing this recipe for the better part of 12 years.  I've put whole lemons in, squeezed them, and just added lemon concentrate (plastic yellow lemon things you get at the supermarket).

The peel and the rind should be discarded and not used.  In many cases store-bought lemons have a wax covering and are dyed yellow.  Neither of these things are unhealthy but the wax and oils from the peel will kill head retention, even in a wheat.  One batch I made had no head whatsoever.  It was carbonated but the head dissipated like a soft drink.

The rind is bitter and will contribute a unique bitter taste to the beer.  Not a pleasant hop bitterness but a lemon rind bitterness.  It'll be subtle depending on the amount of lemons used, but it'll be there.

It's also important to note when the lemons are being added to the beer.  They can be added at the end of the boil to steep or at some point during fermentation.  Adding them at the last 5 minutes of the boil somewhat subdues the lemon flavor and seems to integrate it better with the beer, but adding lemons in the primary or secondary gives it a more bold and pronounced lemon flavor.

And of course there's the amount of lemons added to the beer.  Do you want a soft, subtle lemon flavor that shows up in the middle of the beer like a "C" hop and then fade with the rest of the beer taste, or do you want a bold, in-your-face lemon flavor that dominates from the aroma through to the finish that leaves you feeling like you just plopped a lemon drop into your mouth?

I took my hefeweizen based and added some slightly darker grains (Carmel 60) and usually squeeze 9 fresh lemons into the last 5-min of the boil.  The darker grains sweeten and subdue the phenols and esters from the yeast allowing the lemon to blend more equally with those flavors.  The resulting flavor is a unique iced-tea-like, and the alcohol is low.  It's my "lawnmower beer", and it's one of my wife's favorites.  It's by no means perfect, but it's a complex but nicely balanced summertime beer.

28
The Pub / Re: Aren't some of you guys drummers?
« on: August 04, 2011, 04:33:45 PM »
Best part is that even with all that flailing, he doesn't miss a beat.

29
The Pub / Re: Working on finances
« on: August 01, 2011, 03:03:22 PM »
You know, if you upgrade your income, these costs become too small to make it on a balance sheet.  :)

30
The Pub / Re: Bedding
« on: July 30, 2011, 04:38:36 PM »
http://www.bedinabox.com/

Bought a bed from these guys with the bamboo pad on top, probably the best mattress I've ever had, the price was right, and I never thought sleeping on bamboo would be comfortable.  However, they use the fibers form the plant, and they are very, very strong and very comfortable.

I recommend them.

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