Author Topic: Brewery Financing for someone with no wealth/collateral  (Read 8874 times)

Offline Beer Monger

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Re: Brewery Financing for someone with no wealth/collateral
« Reply #75 on: August 18, 2011, 09:02:39 AM »
first person who shows me on paper how to make a living on a 1-2 bbl system get's a free beer.  ;) Once you run the numbers it becomes pretty clear. I can understand someone starting at 1-2 bbl (though, having gone through that I wouldn't recommend it necessarily) - can't ever understand staying at that level. The one exception I have been overlooking is a pub or tasting room. I'm considering production facility only.

Here is the website (Specificlly a photo showing his' brewery') for Epic Ales in Seattle.  His beers can be found in local bars & local bottle shops.  And apparently I exaggerated. He brews on a ONE barrel system. 

http://www.epicales.com/brewery#theBrewery
« Last Edit: August 18, 2011, 09:04:32 AM by Beer Monger »
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Offline Thirsty_Monk

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Re: Brewery Financing for someone with no wealth/collateral
« Reply #76 on: August 18, 2011, 09:20:19 AM »
I see that discussion have moved from financing to marketing.

While cleaning 40 1/2 BBL kegs I was thinking about it.
There are two kind of people who open breweries.
1) with love of the beer
2) with love of the money.

if you are in 1) category:

You decide what you want to be.
Pick the slogan what best represent you.
Pick the customer who you want to sell your product.
and finally do you have enough customers in your targeted area.
SO if you are in it for the love of beer you are setting up the expectations.

If you are in 2) category:
you buy a market research for demographics in targeted area (because your investors would not believe your analysis).
you target only people wit $$$ amount of household income.
You spend a lot of time and money in Point of sale items.
You spend a good amount of money on public image.
and you brew a beer to the intended demographics expectations (mostly contract brewing because brewing equipment is expensive).

May be I am a fool but that is how I see it.
Na Zdravie

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Bohemian Dark Lager
Smoked Bock
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American Brown Ale
Marzen
Root beer

Offline tschmidlin

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Re: Brewery Financing for someone with no wealth/collateral
« Reply #77 on: August 18, 2011, 09:28:32 AM »
first person who shows me on paper how to make a living on a 1-2 bbl system get's a free beer.  ;) Once you run the numbers it becomes pretty clear. I can understand someone starting at 1-2 bbl (though, having gone through that I wouldn't recommend it necessarily) - can't ever understand staying at that level. The one exception I have been overlooking is a pub or tasting room. I'm considering production facility only.

Here is the website (Specificlly a photo showing his' brewery') for Epic Ales in Seattle.  His beers can be found in local bars & local bottle shops.  And apparently I exaggerated. He brews on a ONE barrel system.  

http://www.epicales.com/brewery#theBrewery
It remains to be seen if he can make a living though.  I was embarrassed when an AHA bigwig was in town and was given a bottle that had clear contamination.  I've gotten some bad bottles myself, and now mostly avoid the brand.  His recipes are interesting and I hope he will be successful.  But he's got to get the issues worked out or he'll fail no matter what the size of his system.  Maybe he's already cleaned things up but I wouldn't know because, like I said, I'm avoiding the brand.  I guess some people will keep going back for phenol-bombs, but not me.
Tom Schmidlin

Offline nateo

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Re: Brewery Financing for someone with no wealth/collateral
« Reply #78 on: August 18, 2011, 09:42:59 AM »
There are two kind of people who open breweries.
1) with love of the beer
2) with love of the money.
May be I am a fool but that is how I see it.

I think that's a good way to look at it, but I also think you need both kinds of person to run a business.

I obviously don't have a brewery, but a widget is a widget, and a business is a business (more or less). In my business we have one partner who provided most of the capital, and is very cautious/fastidious with money matters, one partner who has the passion and love for the business but isn't very good at saving or keeping money, and me who mostly provides sweat equity and a different perspective and makes the whole thing run smoothly.

I guess what I'm saying is, to start a business without much capital, along with all the other things you need we've talked about already, you need some business partners you can trust and who have the skills/personality you lack.
In der Kürze liegt die Würze.

Offline majorvices

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Re: Brewery Financing for someone with no wealth/collateral
« Reply #79 on: August 18, 2011, 09:47:47 AM »
May be I am a fool but that is how I see it.

Nope, I don't think you are a fool at all. There are a few "breweries" that have been popping up that have T-Shirts, Glasses, Coasters, Stickers, even tap handles - but no beer! Seriously! Talk about putting your cart before the horse.
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Offline majorvices

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Re: Brewery Financing for someone with no wealth/collateral
« Reply #80 on: August 18, 2011, 09:54:46 AM »
first person who shows me on paper how to make a living on a 1-2 bbl system get's a free beer.  ;) Once you run the numbers it becomes pretty clear. I can understand someone starting at 1-2 bbl (though, having gone through that I wouldn't recommend it necessarily) - can't ever understand staying at that level. The one exception I have been overlooking is a pub or tasting room. I'm considering production facility only.

Here is the website (Specificlly a photo showing his' brewery') for Epic Ales in Seattle.  His beers can be found in local bars & local bottle shops.  And apparently I exaggerated. He brews on a ONE barrel system. 

http://www.epicales.com/brewery#theBrewery

No where does this show me he is making a living. I never said a 1bbl brewery couldn't exist. hell, I ran one for about 6 months. I just think it is pointless.

That said, the tasting room is a big bonus, and the fact that he bottles some of his beer for sale. I can't do either of those in my location. (Actually, legislation just went through to allow me to open a tasting room, but i don't have the resources right now).

That said, brewing and kegging ona  one bbl brewery is a full time job. I can't imagine bottling and running/and or manning a tasting room.. He either works 100+ hours a week or has a full time voluteer staff.

Now ask yourself, how long do you think this is gonna last at 1bbl?
Keith Y.

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Offline Beer Monger

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Re: Brewery Financing for someone with no wealth/collateral
« Reply #81 on: August 18, 2011, 09:55:59 AM »
first person who shows me on paper how to make a living on a 1-2 bbl system get's a free beer.  ;) Once you run the numbers it becomes pretty clear. I can understand someone starting at 1-2 bbl (though, having gone through that I wouldn't recommend it necessarily) - can't ever understand staying at that level. The one exception I have been overlooking is a pub or tasting room. I'm considering production facility only.

Here is the website (Specificlly a photo showing his' brewery') for Epic Ales in Seattle.  His beers can be found in local bars & local bottle shops.  And apparently I exaggerated. He brews on a ONE barrel system.  

http://www.epicales.com/brewery#theBrewery
It remains to be seen if he can make a living though.  I was embarrassed when an AHA bigwig was in town and was given a bottle that had clear contamination.  I've gotten some bad bottles myself, and now mostly avoid the brand.  His recipes are interesting and I hope he will be successful.  But he's got to get the issues worked out or he'll fail no matter what the size of his system.  Maybe he's already cleaned things up but I wouldn't know because, like I said, I'm avoiding the brand.  I guess some people will keep going back for phenol-bombs, but not me.

I've only ever been to the brewery once - and I don't generally buy his beers.  I was just giving an example of someone giving it a go on a serously small system.  I've only had it out of the bottle once - and I got a non-infected bottle.  The others were on tap.
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Re: Brewery Financing for someone with no wealth/collateral
« Reply #82 on: August 18, 2011, 09:57:42 AM »
first person who shows me on paper how to make a living on a 1-2 bbl system get's a free beer.  ;) Once you run the numbers it becomes pretty clear. I can understand someone starting at 1-2 bbl (though, having gone through that I wouldn't recommend it necessarily) - can't ever understand staying at that level. The one exception I have been overlooking is a pub or tasting room. I'm considering production facility only.

Here is the website (Specificlly a photo showing his' brewery') for Epic Ales in Seattle.  His beers can be found in local bars & local bottle shops.  And apparently I exaggerated. He brews on a ONE barrel system.  

http://www.epicales.com/brewery#theBrewery

No where does this show me he is making a living. I never said a 1bbl brewery couldn't exist. hell, I ran one for about 6 months. I just think it is pointless.

That said, the tasting room is a big bonus, and the fact that he bottles some of his beer for sale. I can't do either of those in my location. (Actually, legislation just went through to allow me to open a tasting room, but i don't have the resources right now).

That said, brewing and kegging ona  one bbl brewery is a full time job. I can't imagine bottling and running/and or manning a tasting room.. He either works 100+ hours a week or has a full time voluteer staff.

Now ask yourself, how long do you think this is gonna last at 1bbl?

I have no idea whether he's making any money or not.  If he is, it can't be much.  I was really just showing you an example of someone actually trying to go commercial w/ a system that small.  

I'd never try it.  I'd have no life - be brewing 24/7 to try and keep up. 
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Offline majorvices

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Re: Brewery Financing for someone with no wealth/collateral
« Reply #83 on: August 18, 2011, 10:05:15 AM »
Brew Monger - I guess you didn't see where I said I am an example of brewing on a 1bbl system. I'm still running a pro brewery on a system that is incredibly too small! I certainly know you can make it work, as long as you don't mind making it work without paying yourself anything. This is the only warning I have been trying to make through the entire thread - understand what you are getting into. You are talking about years of hard work, very little (if any) pay, and lots of over head capital and very litttle profit coming in. the only way to grow at a 1bbbl capacity is to either dig deeper into your savings, get a loan or find investors. because you will always only be making ends meet.
Keith Y.

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Offline Thirsty_Monk

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Re: Brewery Financing for someone with no wealth/collateral
« Reply #84 on: August 18, 2011, 10:07:51 AM »
first person who shows me on paper how to make a living on a 1-2 bbl system get's a free beer.  ;) Once you run the numbers it becomes pretty clear. I can understand someone starting at 1-2 bbl (though, having gone through that I wouldn't recommend it necessarily) - can't ever understand staying at that level. The one exception I have been overlooking is a pub or tasting room. I'm considering production facility only.

Here is the website (Specificlly a photo showing his' brewery') for Epic Ales in Seattle.  His beers can be found in local bars & local bottle shops.  And apparently I exaggerated. He brews on a ONE barrel system.  

http://www.epicales.com/brewery#theBrewery
It remains to be seen if he can make a living though.  I was embarrassed when an AHA bigwig was in town and was given a bottle that had clear contamination.  I've gotten some bad bottles myself, and now mostly avoid the brand.  His recipes are interesting and I hope he will be successful.  But he's got to get the issues worked out or he'll fail no matter what the size of his system.  Maybe he's already cleaned things up but I wouldn't know because, like I said, I'm avoiding the brand.  I guess some people will keep going back for phenol-bombs, but not me.
If you want to open a brewery please know how to brew and package clean beers.
Do not do it for "COOL" effect.
For that you would open a T-Shirt printing shop. (I apologize to all T-Short printing shops)
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Bohemian Pilsner
Bohemian Dark Lager
Smoked Bock
MaiBock
American Brown Ale
Marzen
Root beer

Offline Tim McManus

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Re: Brewery Financing for someone with no wealth/collateral
« Reply #85 on: August 18, 2011, 10:12:43 AM »
May be I am a fool but that is how I see it.

Nope, I don't think you are a fool at all. There are a few "breweries" that have been popping up that have T-Shirts, Glasses, Coasters, Stickers, even tap handles - but no beer! Seriously! Talk about putting your cart before the horse.

This is actually a good marketing idea.  By branding items and getting the word out well in advance, people are anticipating your product in the market place before it arrives.  This is why most companies pre-annouce products.  The inability to get a well-branded product actually increases demand.  It a strategy heavily employed by Apple Computer.  They announce something, it goes on sale, it sells out and you can't get one for weeks.  People line up outside the stores just to get one on opening days.  Regardless whether you like Apple's products or not, they get a massive amount of free publicity because of the demand they create prior to and during product launch.
Tim McManus
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Offline Thirsty_Monk

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Re: Brewery Financing for someone with no wealth/collateral
« Reply #86 on: August 18, 2011, 10:14:26 AM »
Brew Monger - I guess you didn't see where I said I am an example of brewing on a 1bbl system. I'm still running a pro brewery on a system that is incredibly too small! I certainly know you can make it work, as long as you don't mind making it work without paying yourself anything. This is the only warning I have been trying to make through the entire thread - understand what you are getting into. You are talking about years of hard work, very little (if any) pay, and lots of over head capital and very litttle profit coming in. the only way to grow at a 1bbbl capacity is to either dig deeper into your savings, get a loan or find investors. because you will always only be making ends meet.
There is another way merry a loyer or a doctor.
Avoid teacher or fast food workers.

The point that a lot of small businesses would not survive without the second study family income.
Na Zdravie

On Tap At The TapRoom:
Bohemian Pilsner
Bohemian Dark Lager
Smoked Bock
MaiBock
American Brown Ale
Marzen
Root beer

Offline majorvices

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Re: Brewery Financing for someone with no wealth/collateral
« Reply #87 on: August 18, 2011, 10:18:57 AM »
May be I am a fool but that is how I see it.

Nope, I don't think you are a fool at all. There are a few "breweries" that have been popping up that have T-Shirts, Glasses, Coasters, Stickers, even tap handles - but no beer! Seriously! Talk about putting your cart before the horse.

This is actually a good marketing idea.  By branding items and getting the word out well in advance, people are anticipating your product in the market place before it arrives.  This is why most companies pre-annouce products.  The inability to get a well-branded product actually increases demand.  It a strategy heavily employed by Apple Computer.  They announce something, it goes on sale, it sells out and you can't get one for weeks.  People line up outside the stores just to get one on opening days.  Regardless whether you like Apple's products or not, they get a massive amount of free publicity because of the demand they create prior to and during product launch.

Well, it depends on your branding mode (see link I posted before) - it can work, assuming you know what you are doing. That said, we started with a "mystery" approach that built a LOT of suspense in the amrket place and didn't come out even with T-shirts until about 9 months into the business - and sold EVERY drop we made (no returns - knock on wood).

OTOH you better have VERY good beer if you take the above approach, because if you launch and your beers suck, your dead. And I also know of some breweries who are opening up where the idea to open a brewery started first, then they decided to learn how to brew. That is a very, very bad idea.

If you are going to open a brewery you better damn well sure you know how to brew beer. That is ultimately the very most important part. Flash, pomp and swag can coast you a couple years if your lucky. But without the beer you become a joke.

**BTW: Just wanna say - great discussion, folks!****
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Offline Thirsty_Monk

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Re: Brewery Financing for someone with no wealth/collateral
« Reply #88 on: August 18, 2011, 10:21:31 AM »
There are two kind of people who open breweries.
1) with love of the beer
2) with love of the money.
May be I am a fool but that is how I see it.

I think that's a good way to look at it, but I also think you need both kinds of person to run a business.

I obviously don't have a brewery, but a widget is a widget, and a business is a business (more or less). In my business we have one partner who provided most of the capital, and is very cautious/fastidious with money matters, one partner who has the passion and love for the business but isn't very good at saving or keeping money, and me who mostly provides sweat equity and a different perspective and makes the whole thing run smoothly.

I guess what I'm saying is, to start a business without much capital, along with all the other things you need we've talked about already, you need some business partners you can trust and who have the skills/personality you lack.
I do not necessary agree with you that brewing is just another business. We all know that it takes the same amount of hours and man power to brew 10 Gal batch or 10 gallon batch.
I do agree that brewing beer is food manufacturing thou.

Well kegs are done washing time to do something else.
Na Zdravie

On Tap At The TapRoom:
Bohemian Pilsner
Bohemian Dark Lager
Smoked Bock
MaiBock
American Brown Ale
Marzen
Root beer

Offline bo

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Re: Brewery Financing for someone with no wealth/collateral
« Reply #89 on: August 18, 2011, 10:25:18 AM »
May be I am a fool but that is how I see it.

Nope, I don't think you are a fool at all. There are a few "breweries" that have been popping up that have T-Shirts, Glasses, Coasters, Stickers, even tap handles - but no beer! Seriously! Talk about putting your cart before the horse.

This is actually a good marketing idea.  By branding items and getting the word out well in advance, people are anticipating your product in the market place before it arrives.  This is why most companies pre-annouce products.  The inability to get a well-branded product actually increases demand.  It a strategy heavily employed by Apple Computer.  They announce something, it goes on sale, it sells out and you can't get one for weeks.  People line up outside the stores just to get one on opening days.  Regardless whether you like Apple's products or not, they get a massive amount of free publicity because of the demand they create prior to and during product launch.

I agree. It's done all time these days and it works.