Author Topic: The economics of going pro from an outsider's point of view  (Read 1235 times)

Offline BrewingRover

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The economics of going pro from an outsider's point of view
« on: October 05, 2013, 05:39:13 AM »
Interesting piece. I had no idea Lagunitas took that long to become fully profitable.

http://priceonomics.com/the-craft-beer-movement/
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Offline Pawtucket Patriot

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Re: The economics of going pro from an outsider's point of view
« Reply #1 on: October 05, 2013, 06:48:57 AM »
Interesting piece. I had no idea Lagunitas took that long to become fully profitable.

http://priceonomics.com/the-craft-beer-movement/

Maybe "revenue positive," as used in the article has a special meaning in the accounting world (which is not my bailiwick), but it's hard to understand what the author means.  If Lagunitas sold one beer it would technically have positive revenue because revenue = $$ from sales.  Also, profitability is different than having positive cash flow.  It sounds like Lagunitas may have taken losses over a long period of time due to constant expansion and purchasing a lot of new equipment.  But this doesn't mean the owners weren't making money.  No business should take almost 20 years to reach "profitability" in the sense that the owners are actually making money. 
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Online duboman

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Re: The economics of going pro from an outsider's point of view
« Reply #2 on: October 05, 2013, 07:25:56 AM »
I could be wrong as I too am not an accountant but I think what the author means is that it took them that long for their actual gross revenue to surpass their debt holdings meaning on paper they are actually showing profits not losses.

This would not be an out of the ordinary explanation for most businesses.
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