Author Topic: Starting a brewery  (Read 8312 times)

Offline majorvices

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Re: Starting a brewery
« Reply #30 on: February 27, 2013, 09:15:44 AM »
debt is cheaper than equity. Interest on debt is a period expense that reduces your net income, lowering your tax liability. Equity is taxed on its full value.
I guess that would depend on how you look at it.  In my experience, debt can be expensive.  It's just less expensive lately.  I would rather have 100% equity and no debt service.  Sure, you don't get to expense any interest, but the other 85% (after corporate taxes) you keep.  You still have to spend the money to call it an expense.  That said, borrowing money is an essential part of starting a business.  And with rates like they are these days, it's not too expensive to borrow.  Just watch your ratios and be careful.

Yeah, as long as you have at least $250 grand ready to put into a brewery you are good. Otherwise, better look for investors or bank loans. IME loans are cheaper than investors.
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Offline nateo

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Re: Starting a brewery
« Reply #31 on: February 27, 2013, 09:49:15 AM »
IME loans are cheaper than investors.

You're completely right. That's like, Finance 101.

The other thing you have to know is that a dollar today is worth more than a dollar tomorrow. That's why you have to pay interest on your loans, and why investors want to make a return on their investment. I've never seen a brewery business plan that accounts for the time-value of money. (I've never seen a business plan from a brewery that went onto run successfully, so I know my sample is skewed)
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Re: Starting a brewery
« Reply #32 on: February 27, 2013, 09:50:50 AM »
I would, in some ways, like to dissuade about 90% of the people who talk about opening a brewery from actually doing it ...

I, on the other hand, would like those people to get funded, buy equipment, and *then* fail. ;)
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Offline nateo

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Re: Starting a brewery
« Reply #33 on: February 27, 2013, 09:58:45 AM »
I, on the other hand, would like those people to get funded, buy equipment, and *then* fail. ;)

Yeah, I suspect there's going to be a lot of dirt cheap 3-7bbl brewhouses for sale in about 3-4 years, when the current crop of under-capitalized breweries goes under.
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Offline In The Sand

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Re: Starting a brewery
« Reply #34 on: February 27, 2013, 10:06:07 AM »
Quote from: nateo
The other thing you have to know is that a dollar today is worth more than a dollar tomorrow.

My partners and I were discussing exactly this a couple of days ago.
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Offline majorvices

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Re: Starting a brewery
« Reply #35 on: February 27, 2013, 10:34:13 AM »
I would, in some ways, like to dissuade about 90% of the people who talk about opening a brewery from actually doing it ...

I, on the other hand, would like those people to get funded, buy equipment, and *then* fail. ;)

Bwahahahahaha!
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Offline redbeerman

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Re: Starting a brewery
« Reply #36 on: February 27, 2013, 11:10:53 AM »
I, on the other hand, would like those people to get funded, buy equipment, and *then* fail. ;)

Yeah, I suspect there's going to be a lot of dirt cheap 3-7bbl brewhouses for sale in about 3-4 years, when the current crop of under-capitalized breweries goes under.

Yep.  I think I may have visited some of these breweries last summer. ;)
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Offline kylekohlmorgen

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Re: Starting a brewery
« Reply #37 on: February 27, 2013, 11:53:07 AM »
I, on the other hand, would like those people to get funded, buy equipment, and *then* fail. ;)

Yeah, I suspect there's going to be a lot of dirt cheap 3-7bbl brewhouses for sale in about 3-4 years, when the current crop of under-capitalized breweries goes under.

On the other other hand - Imagine what the average, hands-on experience-lacking, do-it-yourselfer has managed to rig up in all the pinches he/she got into...

Most used processing/packaging equipment that I've come across has been my. worst. nightmare.

On the bright side, I learned a whole lot of "what not to do".
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Re: Starting a brewery
« Reply #38 on: February 27, 2013, 03:16:36 PM »
If I could be in front of a screen clicking icons, sure. Have seen that done.

If it is all manual, no thanks. I have done that twice on an archaic system. You realize at some point that you can do it one day, but not every day. Brewing is a young man's game. I am an old fart.

If I had a brewery, I know there is paperwork, inventory, cellar work, loading dock work, ordering, etc. Then there are the sales, marketing, website, e-mails from customers, acounting, beer fests, etc.

Brewing would be fun, but only a fraction of the job. The owners often are behind a desk, a youngster is brewing.

Preach it, Brother Jeff!  You've summed up my feelings exactly.
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Offline majorvices

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Starting a brewery
« Reply #39 on: February 27, 2013, 06:16:50 PM »
If I could be in front of a screen clicking icons, sure. Have seen that done.

If it is all manual, no thanks. I have done that twice on an archaic system. You realize at some point that you can do it one day, but not every day. Brewing is a young man's game. I am an old fart.

If I had a brewery, I know there is paperwork, inventory, cellar work, loading dock work, ordering, etc. Then there are the sales, marketing, website, e-mails from customers, acounting, beer fests, etc.

Brewing would be fun, but only a fraction of the job. The owners often are behind a desk, a youngster is brewing.

Preach it, Brother Jeff!  You've summed up my feelings exactly.

What we have here is a couple of old granny's, apparently. :p
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Offline hopfenundmalz

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Re: Starting a brewery
« Reply #40 on: February 27, 2013, 06:51:39 PM »
If I could be in front of a screen clicking icons, sure. Have seen that done.

If it is all manual, no thanks. I have done that twice on an archaic system. You realize at some point that you can do it one day, but not every day. Brewing is a young man's game. I am an old fart.

If I had a brewery, I know there is paperwork, inventory, cellar work, loading dock work, ordering, etc. Then there are the sales, marketing, website, e-mails from customers, acounting, beer fests, etc.

Brewing would be fun, but only a fraction of the job. The owners often are behind a desk, a youngster is brewing.

Preach it, Brother Jeff!  You've summed up my feelings exactly.

What we have here is a couple of old granny's, apparently. :p

Keith, a guy I worked with a long time ago said that he thought the difference in aging from 50 to 60 was about the same as the difference from 30 to 50. Check back in 17 years from now an let us know what you think! I am in pretty good shape for an old guy, but not as in good as shape as 15 years back. Just saying.

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Offline boulderbrewer

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Re: Starting a brewery
« Reply #41 on: February 27, 2013, 09:31:57 PM »
Connect to the brewers, they are the ones who know where the equipment can be found at less than a premium. Think outside the box also. As Major said your brewing experience will help you more than you know and a strong back will help. I may have some complete 10 bbl plastic fermentors available within a year. Stay tunned
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Offline majorvices

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Starting a brewery
« Reply #42 on: February 28, 2013, 05:16:26 AM »
If I could be in front of a screen clicking icons, sure. Have seen that done.

If it is all manual, no thanks. I have done that twice on an archaic system. You realize at some point that you can do it one day, but not every day. Brewing is a young man's game. I am an old fart.

If I had a brewery, I know there is paperwork, inventory, cellar work, loading dock work, ordering, etc. Then there are the sales, marketing, website, e-mails from customers, acounting, beer fests, etc.

Brewing would be fun, but only a fraction of the job. The owners often are behind a desk, a youngster is brewing.

Preach it, Brother Jeff!  You've summed up my feelings exactly.

What we have here is a couple of old granny's, apparently. :p

Keith, a guy I worked with a long time ago said that he thought the difference in aging from 50 to 60 was about the same as the difference from 30 to 50. Check back in 17 years from now an let us know what you think! I am in pretty good shape for an old guy, but not as in good as shape as 15 years back. Just saying.

I'm just messin' with you guys. Seriously hope to be both more automated and cracking the whip on the minions by then. But thanks for the reality downer anyway....
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Offline travjohn92

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Re: Starting a brewery
« Reply #43 on: March 02, 2013, 07:05:26 PM »
Someone in an earlier post mentioned kick starter.  This seems to work.  I have a friend who used kick starter to help fund their brewery and it was successful.  They were looking for $30k in 33 days.  It just finished today and they ended up with $34k.  They had different pledge levels and offered various gifts depending on the amount pledged.  The only bad part is if you don't reach the amount you set as your goal, you don't receive any of it and no ones credit card is charged who pledged.
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Offline majorvices

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Starting a brewery
« Reply #44 on: March 03, 2013, 06:13:56 AM »
Just to keep everything in perspective, once you really start rolling an operating brewery, $34 thousand becomes a mundane amount of money (not saying the above mention post is opening with that or anything, just putting everything in perspective). We pay about that much a month just in bills. I know every homebrewer who ever cooked a batch thinks at some point in time about opening a brewery but few think about the capital really needed to open one, let alone operate one in reality. It's a business first and foremost and the profit margins are very slim and the cost to get off the ground on any reasonable amount of volume output are high. If I was to start over again and not be silly like I was whenI started I wouldn't dream of starting with less that $400,000. We are officially pumping out 30 bbl batches (back to back on a 15 bbl brew house) and we are still so tiny it is almost cute.... I just moved my 7 bbl fermentors out of the wet area last week (by myself, without a pallet jack or forklift, lol) and they are so silly and cute I thought about putting them in my pocket and taking them home and letting my kids take them to school for show and tell.

We opened on a total of 80K and nearly all of that went into the facility, we didn't spend hardly anything on brewing equipment. SO I'm not saying you can't go bare bones but expect to look and feel silly when you really start any type of output. At 1-3 bbl output you are barely producing enough beer to pay the lease on your building let alone pay yourself and you will never put money away to buy more equipment. The best you can hope for is build a reputation and get investors or prove the concept that you can stay aflot long enough to get a significant loan.

So if you are going to dream, dream really big and get some damn real money and don't think of starting of with anything smaller than a 10 bbl brew house if you really want to make it for real. $34K is a good start, but it ain't nothin', really.
« Last Edit: March 03, 2013, 06:25:54 AM by majorvices »
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