Starting up a brewery on a budget

A friend of mine runs a farm brewery (and can therefore self-distribute) - 3 BBL system with a 1 gallon single tier "pilot" system. He has four fermenters, four brite tanks, two temperature controlled rooms. He already had the land and buildings, but his total investment is more than an order of magnitude higher than $10K. He sold a lot of things and sacrificed much to start his business. And the permitting (at least in MA) was a complete nightmare. Waste water, for instance, is one thing he never considered and that added significant cost. He's turning a modest profit, but he and his wife are "slaves to the grind", both maintaining full time jobs as well as running the brewhaus.

A former employee of mine opened a winery in Washington state. Last I talked with him, he's still $250,000 in debt and just started seeing any profit after about year ten.

Being brutally honest, I think the budget is unrealistic and you haven't thought through installation, permitting, insurance/liability, and licensing - in other words, all the stuff that makes it business.

Now, one of my wife's former students went a different route (did not open his own brewery) and even then there was some extraordinary cosmic karma involved:

https://bottlescansclaphands.wordpr...now-your-brewer-josh-letourneau-of-grey-sail/

 

First off, you're in the right college subject. And it is realistic to start a brewery. In five years. And I would suggest at least 7bbl is a good size.

Get a good as possible job out of college. Ideally where you can live at home or with family/friends for as little as possible. Between you save every cent you can. Aim to save $20-30k each. Beg or borrow as much as you can on top. As a minimum you want $50k if you have a premises (the aforementioned farm brewery), $100k if you don't, more again for a brewpub. And every dollar extra you have will exponentially increase your chances of success. And those are minimum figures doing everything yourself.

In the meantime learn everything you can about brewing. Read, homebrew, intern, get qualifications (IBD, cicerone, etc), network, and learn about business - sales, marketing, legislation, cashflow. After 3 years of saving and studying begin to write a business plan. Pick a niche.

Then the work starts, 80 hour weeks for no money. Or you could sell for a billion dollars. (Pro tip - one is more likely than the other).

 

You have to get experience and feel incredibly comfortable with every aspect of the business (not just brewing) before taking on something like this. If you are not entirely sure, you will fail. There are tons of breweries in each state. What is going to set yours apart? What is your back-up plan? If the business goes bankrupt, will you lose it all? What will happen if you lose your head brewer in the middle of the start-up process?

I am not trying to be mean or nasty, but these are questions that need to be answered. It is akin to trying to open up a restaurant right out of culinary school, with no professional experience. Even with experienced chefs, the near majority will fail. I commend you on following your passion, but don't let your tenacious drive blind you from the harsh reality of the business. Do it right or don't do it at all! Find a brewery that mimics the stuff you want to do and apply, get the experience, and then move on to fill your personal goals.

 

I have to agree that $10k sounds very low. I imagine licensing/legal fees alone could chew up much of that. I know some folks look down on this, but have you considered starting out with contract brewing? Two Roads in Stratford is brewing for a number of respected labels in the Northeast. Talking to them could give you a better handle on the details of CT's legal and distribution landscape, and it might be a good place to intern and get experience.

If you are intent on opening your own shop, I'd suggest visiting some of the smaller breweries in the area on a slow day. I visited Moustache Brewing in Riverhead, NY in the dead of winter last year and they were happy to talk shop with me. They are a young couple with no employees running a 2BBL brewhouse for less than a year at that point (1.5yrs now). They do kegs & growler fills in their brewhouse/taproom with limited bottle releases (I think 3 or 4 to date). They did most of the construction themselves and their equipment was high-end homebrew for the first year, then graduated to entry-level professional fermenters. It was a struggle, but also a labor of love and they seem to be happily producing small runs now. Finding a brewery similar to what you envision and talking to them should hopefully give you the answers you need.

Best of luck!

 

how are your beers going to differ from the masses of great New England breweries? i just moved up to the hudson valley where there are a lot of breweries but more than half of them just kinda... suck. eventually theyre gonna go under.

realistically, 10k isnt enough. leasing, lawyers, permits, accountants are gonna cost you 10k. now where's the money for the the equipment?

 

Go talk to the guys in Northampton, Ma that just opened up BLDG 8 brewery. They do only one beer, it's phenomenal, but it's really small. They do their own distribution as well.

 

I love the idea and wish you luck a couple of things that can help you
1. Boston Beer has a program called Brewing The American Dream which helps small business's grow
http://btad.samueladams.com/
2. brew your homebrew again and again until you get consistency
Good Luck

 

Don't let anyone crush your dreams, BUT you are getting very good advice here. 10k allows you to talk about a brewery not build one. Someone can set my knowledge straight, but it can cost that much just for permitting. Keep your dreams alive but try to figure out how to get more capitol and scale down your plans.

 

Where in CT are you looking to open?

We're opening early next year in Niantic, CT. I can tell you that 10K isn't nearly enough - we paid more than that in lease deposit and holding fees - our brewing system without fermenters was $15k. We're opening a 3 bbl brewery, and our budget is well into the six figures. That said, just because you only have 10K at your disposal doesn't mean you SOL. There are investors and finance and leasing companies out there, and there are cheaper ways of getting started than what we're doing. First and foremost, write your business plan. Do your financials, check out SCORE website for some free financials spreadsheets. Once you understand the costs, and the cash flow requirements, you'll have a much better understanding of where to head next and how your plan fits into reality. Shoot me a beermail and we can chat some more.

 

I admire your passion and drive, but as hard as it may be to accept, it makes a lot of sense to gain som valuable experience first.
Not only would waiting allow more time to increase your budget, but you can work at a brewery and gain real experience.
If you are going to do it right, it takes time. Enjoy

 

When you sign the lease, you can file for your brewers notice from the TTB. You'll be waiting 120 to 300+ days while they process the application. You won't be able to brew until you get your federal license, but will most likely be paying rent.

 

look at probrewer.com. Great resource for startups and knowledgeable people on those forums.

 

It's going to be an interesting route, but you can pull it off actually. Just gotta have an awful lot of stars shining some good favor on you to pull it off. Price, and location are the most important ones of all. High friends in the right places, or is it the other way around that you'll want. That, and smart use of money on brewhouse equipment. After having helped, and also working at enough breweries. How smaller/nano sized breweries come of age is a very interesting process, and how you spend your money wisely early on is fucking key.
Don't scrimp on fermentation equipment if you come across some used stainless vessels that were used for milk and think it'll work. Do however get a welder who can do stainless to convert them into a four wand electric boil kettle, and mash tun set up if you happen to find any. They work pretty well as a starter in a pinch diy brewhouse set up. Use that money you saved to start off with conical fermentation. Don't back into getting a conical. Do it first. With a biology degree on its way. You already have a huge advantage over a good many people in your situation. Get in the way of a lot of breweries in the meantime. Offer time and help if they are also on your path and want volunteers.
Your absolute best quick turn-around money maker at the scale you are talking about is in starting out with a taproom. That. Access to cheap kegs, a diy 4-6 head filler. A grip of decent quality pallets Bombers; a cheap van with low mileage and state self distribution laws.

 

I mean honestly, $10k is hardly enough to buy the kegs for a brewery. I've seen one brewery nearby that operates a place that's basically a home brewery in a shop. They are open a couple hours a week and get most of their traffic from a nearby farmers market, selling all beer on premise only, via growlers or glasses at the brewery.

I kid you not, this is their brewing equipment. $10k might, just barely might get you something like this on a premise. But realistically you'd need to borrow a lot to keep it operating. But, hey good luck I sincerely hope it works out.

 

Honestly 10K isn't anywhere in the realm for a 7bbl brewery. I think it could be done for 140-160k if you used converted dairy equipment and bought all used fermentors and had a bunch of people owe you favors or would work for beer. Im pretty sure licensing alone in most states is about 2k. I would keep crunching the numbers and maybe make yourself known at the local breweries/ brewpubs and ask around. Most people I've met in beer have been very forthcoming with information and are always ready to help someone who is serious. Starting a brewery these days pretty much means you need a tap room to be successful so figure out what the local laws are for serving pints on location. It's pretty hard to turn a profit selling kegs with a 7bbl system. Most importantly you need Very Very good beer.

 

I wish new breweries were a dime a dozen where I live. My question, how did someone who just joined BA five days ago expect to get "backlash" over this simple question.

 

Excellent post, on the money. The 140K figure is about right. I know for the project I was part of we already had two 9 barrel dairy tanks, already had an expandable 1 barrel pilot system, already had a place to brew, a tap room set up was already in existence, there was existent plumbing and electric to code, and figured out we needed another 75K to get going. Wish we could have gotten funding.

OP I think it might be worth your while to check with local pubs who don't have their own setup. Maybe they will fund you. In a pub set up you can get away with a smaller system. I know of one successful local pub that has a one barrel system, and keeps four taps going, and even sends some beer to NYC. They don't have room for more. Generally though to make money you need at least 3 barrels for a brewpub and 7 barrels minimum for any other set up.

And Connecticut allows tap rooms with local approval.

 

All of this.

 

As others have said, have your business major buddy prepare a business plan.

Also, some advice I received a long time ago said, when you start a business, expect it to take twice as long and cost twice as much as you plan it to.