Author Topic: Doubling/Tripling your estimated start-up costs. Where?  (Read 2103 times)

Offline jessup42

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Doubling/Tripling your estimated start-up costs. Where?
« on: March 23, 2014, 05:26:19 PM »
Hey all!  For years I've been researching the nano dream.  It would be a nano with a taproom to sell everything retail and little, if any, self distribution.  After reading/researching, emailing people in the biz and just getting a handle on all facets of the business everyone says to double or triple your initial investment expectations.  My question is: where are the major hiccups where I can expect to have to double or triple my finances.  Where are people hitting the big roadblocks where more money is needed?  I'm sure the answer will vary, but are there any unanimous answers to this question??  Places that are more suspect than any others?  I am confident that I have a good handle on things, but with the majority repeating the same thing it worries the hell out of me...  Any good advice out there on the areas to expect the major source of headaches?  Thanks in advance :)

Offline jamminbrew

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Re: Doubling/Tripling your estimated start-up costs. Where?
« Reply #1 on: March 23, 2014, 05:34:35 PM »
Construction/remodeling/building. That gets expensive in a hurry.
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Re: Doubling/Tripling your estimated start-up costs. Where?
« Reply #2 on: March 23, 2014, 06:10:53 PM »
The building is a big one for $$$. Another is to have enough operating funds to make it through the start up production phase.

I am just an observer who knows guys that went pro . Some from the forum will tell their experience.
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Re: Doubling/Tripling your estimated start-up costs. Where?
« Reply #3 on: March 23, 2014, 07:37:27 PM »
I own a brewery I started as a nano in 2010, now a sate wide production brewery hoping to go regional.. I can tell you that the build out cost us about 60k or more by the time we satisfied health department and local building ordinances. But the biggest cost was working my ass off for free for almost 3 years and still working for cheap now. Hard ass work, lots of money to spend. And the thing is it never ends. You are constantly buying bits and bobs. Equipment wears out. Pump seals fail. Gaskets disappear. Kegs disappear. Tap handles disappear. solid waste disposal needs emptied. Glycol unit is down. Never ending story.

Be sure you have plenty of friggen money. It's expensive. Feel free to PM me and I can give you any nitty gritty details. Btw it's also a lot of damn fun. ;) but be sure you have some capital reserves. It's not cheap to run a brewery.
« Last Edit: March 23, 2014, 07:42:55 PM by majorvices »
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Offline Thirsty_Monk

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Re: Doubling/Tripling your estimated start-up costs. Where?
« Reply #4 on: March 23, 2014, 07:55:20 PM »
Just a walking cooler can be 10k

My joke is that every equipment cost 10k.
Wanna fermenter? 10k
Wanna bright tank? 10k
Wanna glycol chiller? 10K

Wanna more?

Not to mean to scare you but it cost money to start.
Nano is too small to my opinion.
All sales thru taproom is quite viable.
Forget about draught sales.
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Offline klickitat jim

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Re: Doubling/Tripling your estimated start-up costs. Where?
« Reply #5 on: March 23, 2014, 09:15:43 PM »
It seems like a nano brew pub could work in the perfect scenario. Like if you were in a town of over 50k people with very limited craft beer available and you could run the whole thing by yourself.

Offline coolman26

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Re: Doubling/Tripling your estimated start-up costs. Where?
« Reply #6 on: March 24, 2014, 07:34:46 AM »
I agree that nano is a very difficult model.  So many stars have to line up.  Not that it can't be done.  Many here have proven that.  I think the most difficult and unforeseen costs are the capital needed after start-up.  That goes for any business.  It takes a long time to get the ball rolling.  All that time it is eating cash.  When I opened my current business I was 75k in the hole before I made my first deal.  I never thought it would take that long.  Be prepared to have enough reserves in the tank for survival.  Wishing you nothing but the best and good luck. 

Offline reverseapachemaster

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Re: Doubling/Tripling your estimated start-up costs. Where?
« Reply #7 on: March 24, 2014, 07:48:21 AM »
Having unrealistic expectations about how cheap and how fast you can get up and running is a surefire way to end up spending way more money than you thought you would. That sounds like such an obvious thing to say but it's something that needs to be said for anybody opening any type of business. There are a lot of guys out there who think they are going to open a nano and do it on the cheap because they're going to work part time and they'll just wheel their homebrew set up into some warehouse space and build a tap wall. Then they are surprised when the local authorities say no propane burners in the building, you need to construct drains, comply with ADA regulations, local health and safety code, zoning issues, etc. and once you get past all of that then you can start worrying about your brewing permit. All of that means you're buying equipment and paying for a lease for months before you can brew and the longer it takes you to deal with issues you didn't know would come up and don't have the funds allocated to handle them the more money you are losing up front before you've poured a drop of beer.

I'm not saying you can't start a small brewery on a limited budget because obviously there are many who have done it or are doing it but for every one nano out there operating at a profit (or even breaking even) there are dozens who are still trying to get off the ground or gave up because they didn't do the planning up front. The start up process for a brewery is primarily a legal battle and a race against time to start selling beer before you run out of money.
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Offline Thirsty_Monk

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Re: Doubling/Tripling your estimated start-up costs. Where?
« Reply #8 on: March 24, 2014, 07:57:25 PM »
May be we should define what that limited budget is.

Three minivans?
Just be realistic.
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On Tap At The TapRoom:
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Bohemian Dark Lager
Smoked Bock
MaiBock
American Brown Ale
Marzen
Root beer

Offline klickitat jim

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Re: Doubling/Tripling your estimated start-up costs. Where?
« Reply #9 on: March 24, 2014, 09:09:02 PM »
I've heard it takes money to make money. If a guy wanted to 1) make money, 2) make beer, it might be way bigger than a barrel or three system. But if you want to 1) make beer, 2) make money... you might be able to do both once in a while.

In my opinion the nano is not a horrible start if you have very little into it. And any brick n mortar investment is ready for growth.

Offline tschmidlin

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Re: Doubling/Tripling your estimated start-up costs. Where?
« Reply #10 on: March 24, 2014, 09:43:00 PM »
We're just getting started, so it's hard to say where the tripping points will be.  But we're expecting to dump money into the floors, equipment, the build out, etc.  Getting enough kegs alone is a big price tag.  But mostly I think the costs are going to come from places we didn't anticipate.  Like $100 to scan the blueprints from the space.  Seriously.  And $750 to have a guy come in for an hour with a laser tape measure and do as-builts that we can give to the engineer and architect so they can do their jobs.  That kind of stuff adds up fast.
Tom Schmidlin

Offline klickitat jim

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Re: Doubling/Tripling your estimated start-up costs. Where?
« Reply #11 on: March 25, 2014, 01:08:34 AM »
Ive always thought the best place for a brew pub would be on a large military base. I imagine it would be difficult to get started, but youd have a ton of business

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Re: Doubling/Tripling your estimated start-up costs. Where?
« Reply #12 on: March 25, 2014, 05:20:59 AM »
Here are some of the things I was surprised about

Explosion proof grain room - required by city. Cost us almost 5K
Solid waste trap - required by city. Cost us over 5K
"Food grade lights" - required by city. Cost us almost 5K

There were other things as well, but that's just off the top of my head. We probably over spent for the lights. If you are just going to set up a big homebrew set up in the corner of a building it night not be that bad (but the city is still going to probably have some expensive requirements, like those I mentioned above) but you should be aware that this really isn;t a viable business plan. You probably need a 3 bbl system at the very least and you will need to be brewing constantly to stay on top of paying bills. And any business plan needs to have room for growth so you may as well build the growth into your current facility. For instance, we started with a rigged together 3 bbl system but had the wet floor build to hold much bigger and many more fermentors.
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Re: Doubling/Tripling your estimated start-up costs. Where?
« Reply #13 on: March 25, 2014, 05:28:45 AM »
Here are some of the things I was surprised about

Explosion proof grain room - required by city. Cost us almost 5K
Solid waste trap - required by city. Cost us over 5K
"Food grade lights" - required by city. Cost us almost 5K

There were other things as well, but that's just off the top of my head. We probably over spent for the lights. If you are just going to set up a big homebrew set up in the corner of a building it night not be that bad (but the city is still going to probably have some expensive requirements, like those I mentioned above) but you should be aware that this really isn;t a viable business plan. You probably need a 3 bbl system at the very least and you will need to be brewing constantly to stay on top of paying bills. And any business plan needs to have room for growth so you may as well build the growth into your current facility. For instance, we started with a rigged together 3 bbl system but had the wet floor build to hold much bigger and many more fermentors.
Leo's list was 10k for beer items.
Yours is 5k for unplanned infrastructure items.
It was just something I noticed.
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Re: Doubling/Tripling your estimated start-up costs. Where?
« Reply #14 on: March 25, 2014, 05:45:02 AM »
What's really amazing is when you are starting up you are like "OMG! That's 5K!" Then, 4 years in you are like "OMG! That's ONLY 5K!!!" ;)
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