Author Topic: Brewery Financing for someone with no wealth/collateral  (Read 5224 times)

ccarlson

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Re: Brewery Financing for someone with no wealth/collateral
« Reply #30 on: August 11, 2011, 04:27:56 AM »
You have local health inspectors to deal with, right?

Offline akr71

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Re: Brewery Financing for someone with no wealth/collateral
« Reply #31 on: August 11, 2011, 05:07:29 AM »
In all seriousness, if you have the ability to move out of the US and start the brewery, I would recommend it, for no other reason than to avoid the archaic alcohol regulations that you have to deal with over there.

Just don't move north.  Our regulations are worse in Canada.
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Re: Brewery Financing for someone with no wealth/collateral
« Reply #32 on: August 11, 2011, 05:51:33 AM »
How about you? Do you know what you're talking about?
I think you are over optimistic in this time about your equipment cost.

And yes I do know what I am talking about.
I helped myself to open a brewery.

You could be right and without me or you actually going out tomorrow and researching it, neither of us will know for sure. And while I haven't opened a brewery myself, I did run a successful manufacturing business for almost 20 years. All of the things mentioned here, business plans, local laws, securing a viable location, etc. are similar in nature to a brewery. I know this because of my involvement with the start-up brewery I mentioned before, so i do know what I'm talking about, as well.

Also, if you know what you're looking for, you can get equipment at a good deal, especially in this economy.Please remember, that this is a nano brewery.

I would love to hear details of your brewery, but that is a personal question and it shouldn't be answered in this thread anyway.

The point that thirsty and I have both been trying to make is that we have both been down this road and we both know what we are talking about - we both opened our existing breweries on shoe string budgets.  I do think it is possible to open brewery for $30K (though it would be very, very difficult to make quality beer on it). I just don't think you could raise enough capital to grow without getting further investment - and you certainly could not afford enough fermenters to hire on several shifts of brewers to fill with that amount of cash. That's just the honest truth. It's not hard to calculate the facts.
« Last Edit: August 11, 2011, 06:43:28 AM by bonjour »
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Offline phillamb168

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Re: Brewery Financing for someone with no wealth/collateral
« Reply #33 on: August 11, 2011, 06:44:18 AM »
You have local health inspectors to deal with, right?

Yep, but the law says you're allowed to brew in your barn if you want (protects the heritage vinyards), so...
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Offline hopfenundmalz

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Re: Brewery Financing for someone with no wealth/collateral
« Reply #34 on: August 11, 2011, 06:51:17 AM »
Every brewery owner I have heard interviewed about starting up states that the biggest mistake they made was not having enough start up capital.  They sometimes say have 2 times what you think it will take.
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Re: Brewery Financing for someone with no wealth/collateral
« Reply #35 on: August 11, 2011, 01:26:02 PM »
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Re: Brewery Financing for someone with no wealth/collateral
« Reply #36 on: August 11, 2011, 02:01:47 PM »
Read this: http://www.soundbrew.com/small.html

Ahhhhh I wish I would have thought about posting that. It should be made a sticky at the top of this section. I will say that starting small is a good way to build demand and grow into it (as well as attract investors) but my entire point all along is that you will be working for free at anything smaller than a 7 bbl. If you are starting off small - at the very least 1bbl - be sure to understand what you are getting into. Long, hard hours often in unheated, unACed conditions, large capital upfront costs and low profit margin. You don't do this because you wanna get rich. You do it because you love it.
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Re: Brewery Financing for someone with no wealth/collateral
« Reply #37 on: August 11, 2011, 02:17:48 PM »
Soundbrew makes some good points about the cost of production vs the cost of buying craft beer at market prices.

If you can make fantastic beer, better than what others are making, and you can sell it for a substantial premium over other's prices, and you're good at marketing and open your brewery in the right market, you might be successful with a small system. But there are a lot of great breweries, and chances are slim that out-of-the-gate you'll make better beer than they do, and even if you do, you might not be able to convince people to pay more for your product.

If I were beer saavy, without a lot of money, and wanted to open a beer-business, I would open a small bar in a good location with a very good selection of rare/great beers on tap or in bottles.

There is a brewery not far from me that started off with a 10 gallon system. Yes, 10 GALLONS. They're still in business, and upgrading to a 10bbl system with a canning line. No idea about how/where they got the money for that. So if you're going to start small, start so small that you'll have no overhead. With no overhead, it shouldn't be hard to turn a profit.
« Last Edit: August 11, 2011, 02:21:50 PM by nateo »
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Re: Brewery Financing for someone with no wealth/collateral
« Reply #38 on: August 11, 2011, 02:27:30 PM »
If it weren't against the rules I would post what I sell my kegs for. It's certainly a premium. We can not keep up with the demand so I assume our marketing must be working.

If someone climbed from a 10 gallon brewery to a 10 bbl brewery they did not do so by building off their own profit base. Money came in from somewhere.

Like I said in another thread, there's nothing wrong with starting small and trying to create demand as long as you know what you are getting into. You're not making the house payment on a 10 gallon system. A couple 5 dollar footlongs might be in your future, however.  ;)
« Last Edit: August 11, 2011, 04:25:02 PM by majorvices »
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Re: Brewery Financing for someone with no wealth/collateral
« Reply #39 on: August 11, 2011, 05:19:54 PM »
A good time to again pull out the old adage about brewing for profit . .

" . . . The way to make a small fortune in brewing is to start with a big fortune . . ."

Here's an article about someone who had the same dream as the OP . .

http://www.murfreesboropost.com/roll-out-the-barrel-cms-27639

I think the key point of the article is the guy has rounded up 10 investors. An imperative part of the plan IMO.
With the craziness of the stock market, who knows, perhaps there is some investor money out there looking for a different place to land.  
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Re: Brewery Financing for someone with no wealth/collateral
« Reply #40 on: August 11, 2011, 09:15:01 PM »
Read this: http://www.soundbrew.com/small.html

Ahhhhh I wish I would have thought about posting that. It should be made a sticky at the top of this section. I will say that starting small is a good way to build demand and grow into it (as well as attract investors) but my entire point all along is that you will be working for free at anything smaller than a 7 bbl. If you are starting off small - at the very least 1bbl - be sure to understand what you are getting into. Long, hard hours often in unheated, unACed conditions, large capital upfront costs and low profit margin. You don't do this because you wanna get rich. You do it because you love it.
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Re: Brewery Financing for someone with no wealth/collateral
« Reply #42 on: August 16, 2011, 06:58:32 AM »

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Re: Brewery Financing for someone with no wealth/collateral
« Reply #43 on: August 16, 2011, 07:24:23 AM »
There are quite a few websites that can link up investors with entrepreneurs. A google search for "start up capital" will provide a number of links. For instance: http://www.gobignetwork.com/

I would assume you'd need a really good business plan if you want to go that route. It seems like there are a ton of people who are long on brewing skill and short on business skill. So I would start with an honest assessment of what you bring to the table, and what your weaknesses are, and any plans should include plans to mitigate your personal weaknesses. Like, if you don't know anything about accounting, plan to learn about accounting.
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Re: Brewery Financing for someone with no wealth/collateral
« Reply #44 on: August 16, 2011, 08:06:59 AM »
also check out the Hess brewing oddessy http://hessbrewing.blogspot.com/

also look at Healdsburg brewing company. these are two nanos that have been running for a couple of years now and Hess provides a ton of good info on the start up process. He quotes a 10K price tag for getting up and running at that scale. I think healdsburg might have even been less, but he kept his day job.
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