Author Topic: Selling.....maybe?  (Read 6916 times)

Offline a10t2

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Re: Selling.....maybe?
« Reply #15 on: May 22, 2011, 06:15:47 PM »
The break-even points will be a little different for everyone, but I was looking at a very small brewery operation and determined that it just can't be profitable. At a bare minimum, you need about a 1-1.5 bbl system just to amortize the capital costs within a few years.
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Offline dano14041

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Re: Selling.....maybe?
« Reply #16 on: May 22, 2011, 06:47:10 PM »
Might be an obvious suggestion, but you should also talk with a CPA about helping with a business plan. They might now know the brewing business first had, but they do know business and can help with financial analysis and business plans.

If you don't have one, I would recommend you get references for one of your own and not use the same guy as the guy offering the money. Like most attorneys, CPA will usually offer a half hour consultation free of charge.

Good Luck!
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Offline oscarvan

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Re: Selling.....maybe?
« Reply #17 on: May 22, 2011, 07:28:10 PM »
When starting a business a lot of people will give you a lot of reasons why it won't work.

And the overwhelming statistics are there to support that. But, some succeed, and you can't be one of them if you don't try.
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Offline tonyp

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Re: Selling.....maybe?
« Reply #18 on: May 22, 2011, 07:56:30 PM »
Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win. – Sun Tzu

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Offline Thirsty_Monk

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Re: Selling.....maybe?
« Reply #19 on: May 22, 2011, 08:36:38 PM »
Weaze, you probably need at least $40-80 grand to really get off the ground. Have a vision and insist to your investor that you stick to it. Better yet, find a few guys with a little money who share your vision and take of that way. That's what I did. no investors aside from the core four owners.

Once you get started you will realize that 90 grand is really no money at all and that there is tons of bucks out there. In the words of Sly and The Family Stone - "You can make it if you try".
I would agree that $60 K is bare minimum you need to have.

I also agree when you are done with your business plan financial multiply it by 2 (just get by) to 2.5.

Good luck.
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Offline punatic

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Re: Selling.....maybe?
« Reply #20 on: May 23, 2011, 01:14:32 AM »
These people make a good,  fairly inexpensive, business plan software program.  You can download it from their website.  It starts with a series of questions.  You can plug in a W.A.G. for the parts you don't know and go back later to put in better information.  Using it helps you to see how different parts of the business affect each other.  They have a lot of example business plans to look at.

I've used it to generate several business plans that I presented to get loans and/or investers.  It makes a very professional presentation when done.

$100 may seem like a lot, but that probably won't get you a hour with a good CPA.

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Offline BrewingRover

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Re: Selling.....maybe?
« Reply #21 on: May 23, 2011, 04:36:54 AM »
Is there really an investor or are you trying to be able to charge for growler fills  ;D

Your public library probably has some good resources for general research. You should also check out SCORE:
http://www.score.org/
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Offline Tim McManus

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Re: Selling.....maybe?
« Reply #22 on: May 23, 2011, 06:18:54 AM »
I am in the process of planning a brewery.  Send me a message, and I'll share some of the info with you.

I have an MBA in finance and marketing.  During my MBA program I did all of my projects on breweries, so I have a lot of the nebulous research done.
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Offline richardt

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Re: Selling.....maybe?
« Reply #23 on: May 23, 2011, 06:24:55 AM »
Weaze,

Everyone's advice here is good--particulary the business planning and due diligence.  It's the roadmap for your dreams.  Without it, it is too easy to get lost.

In your OP it seems that you're entertaining the notion of both production AND distribution of your beer.  In some states it is difficult (or illegal) to do both without having separate corporate entities and different individuals listed as the managing partner.  Certainly worth investigating.

It might be wise to look at production and distribution separately.  Analyze them independently.  Are they both potential money makers?  Or will the losses in one (let's hypothetically say distribution, especially with today's gas prices and insurance) completely wipe out the profits in the other.

Sam C. (in "brewing up a business") mentioned how the profits from the restaurant side were used to offset the losses on the brewery side for quite some time.  It led to him and his best friend/restaurant partner splitting ways.  It is a cautionary tale.

Offline ibru

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Re: Selling.....maybe?
« Reply #24 on: May 23, 2011, 07:44:13 AM »
Weaze
I have owned a business for 20+ years. The first few years were tough with long hours and doing most of the work myself. The old 90% of businesses fail in the first year weighed heavy on us (wife and I). There have been times when I wonder just why do I put myself throgh this. But overall, it's been a very good.

I'm going to give you a couple of things to think about. First and perhaps the most important, is your wife behind you in this? Is she going to be OK with you brewing on a Saturday night? Mine has been a very supportive to me. I have times when I'm extremely busy. With some one less than understanding, it would definitely be a problem.

Next, walk into partnerships very cautiously. Talk about who is going to do what. Who is going to get the profits? Are they reinvested in the business? If you are getting backing, draw up a contract that clearly spells out how much they get and when they can expect it.

Good luck!

Offline majorvices

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Re: Selling.....maybe?
« Reply #25 on: May 23, 2011, 07:49:34 AM »
Weaze
I have owned a business for 20+ years. The first few years were tough with long hours and doing most of the work myself. The old 90% of businesses fail in the first year weighed heavy on us (wife and I). There have been times when I wonder just why do I put myself throgh this. But overall, it's been a very good.

I'm going to give you a couple of things to think about. First and perhaps the most important, is your wife behind you in this? Is she going to be OK with you brewing on a Saturday night? Mine has been a very supportive to me. I have times when I'm extremely busy. With some one less than understanding, it would definitely be a problem.

Next, walk into partnerships very cautiously. Talk about who is going to do what. Who is going to get the profits? Are they reinvested in the business? If you are getting backing, draw up a contract that clearly spells out how much they get and when they can expect it.

Good luck!

Very sage advice here. My wife has been behind this 100%. Otherwise I could not do this. And definitely choose your partners wisely. i got very lucky on my partnership. But I walked into it a little blind. I now know what to look for in the future.

Offline tomsawyer

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Re: Selling.....maybe?
« Reply #26 on: May 23, 2011, 08:40:59 AM »
You might check whether you'd need the equivalent of a commercial kitchen to comply with health laws.

I've discussed the possibility of having a "homebrew night" at a local pub, it'd be easy enough to brew 5-10gal a week.  It wouldn't be for profit so much as developing a beer culture where there is none.  But you have to deal with all the legal mumbo jumbo no matter what your production rate so it is probably best to jump in, in a bigger way.
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Offline weazletoe

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Re: Selling.....maybe?
« Reply #27 on: May 23, 2011, 09:04:05 PM »
 Good point you bring up Tom. I've thoguht about it too. Just one more thing I need to research. Lots to find out, butthe journy is half the fun, right?
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Offline phillamb168

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Re: Selling.....maybe?
« Reply #28 on: May 24, 2011, 01:18:35 AM »
You mention in the first post about doing 5-gal batches and selling those - the problem is, non-sankey systems (read: corny kegs) pretty much don't exist in most pubs/bars, so convincing someone to dedicate time, tap space and equipment costs to not only a brewer just getting off the ground but also to a different tapping system from what they have already, will be difficult.
The other thing about 5-gal vs Sankey is workload - if your beer is really popular, they're going to have to have someone going down to the cold storage and swapping kegs out more often.
If you're going to do sankey kegs, you're going to have to brew basically three times the same batch for one keg, which is three times the work you want to be doing.
My suggestion, if you wanna be serious about this, is to first get your brewhouse up to handling 15.5 gallon batches. Shouldn't cost you too much, and from what I've seen filling sankeys without all that filling machinery isn't terribly difficult.

My $0,02 anyway.
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Re: Selling.....maybe?
« Reply #29 on: May 24, 2011, 04:02:19 AM »
You mention in the first post about doing 5-gal batches and selling those - the problem is, non-sankey systems (read: corny kegs) pretty much don't exist in most pubs/bars, so convincing someone to dedicate time, tap space and equipment costs to not only a brewer just getting off the ground but also to a different tapping system from what they have already, will be difficult.
The other thing about 5-gal vs Sankey is workload - if your beer is really popular, they're going to have to have someone going down to the cold storage and swapping kegs out more often.
If you're going to do sankey kegs, you're going to have to brew basically three times the same batch for one keg, which is three times the work you want to be doing.
My suggestion, if you wanna be serious about this, is to first get your brewhouse up to handling 15.5 gallon batches. Shouldn't cost you too much, and from what I've seen filling sankeys without all that filling machinery isn't terribly difficult.

My $0,02 anyway.

They make 5 gallon "corny style" kegs with Sanke valves.