Nanobrewery - The Lessons I've Learned

[Bainbridge]

I am getting a 2bbl Nano off the ground in Brooklyn that is focusing on selling through the tap room with limited distribution to local bars, and I was meeting with my accountant. He suggested that I hire a sales tax specialist (which would be about a $5,000 retainer and he has in his office)

2bbls x 31 gallons x 8 pints per gallon x $5/pint = $2480.

The question is, is it worth two batches to you to pay for this advice?

[gungadin]

Surely the sales tax forms in NY aren't that hard to figure out. There are thousands of small business owners in the city getting those done on their own.

[poltz]

OK...I waited on this thread...didn't want to jump in too quickly. So my thoughts haven't changed.

Not only would I not waste my money on the sales tax specialist.

I might ditch my accountant for: 1. thinking it was a good idea to spend that much on a sale tax guy.
2. for not knowing enough about it himself to get that done at his (already high) rates.
3. for recommending an associate....

Just me. I could be wrong....

[Thirsty_Monk]

2bbls x 31 gallons x 8 pints per gallon x $5/pint = $2480.

The question is, is it worth two batches to you to pay for this advice?

It depends what accounting software you use. Quick Books Pro keeps a track of your sales tax. You still have to file it for yourself thou. I do not know how easy NY state makes it for you.

[nateo]

Quick Books Pro keeps a track of your sales tax. You still have to file it for yourself thou. I do not know how easy NY state makes it for you.

I hate Quickbooks. I'm still trying to figure out exactly what happened, but our actual sales tax bill was about $12k higher than what QB calculated. I wouldn't put too much faith in QB being the most up-to-date, accurate resource for that.

[strongrope]

Thanks everyone for the feedback. I didnt think it was going to be too hard either, but then the accountant and his sales tax guy started rattling off numbers and using some scare tactics, so I wanted to check and see what other people were doing. "Was it necessary, or were they just trying to draw me in?" I just wanted to be sure there wasn't anything that I was missing in the conversation. I appreciate it. And fyi, I did not end up going with them and will handle it on my own.

[lhall]

You should definitely fire your accountant. He or she should be trying to help you save money.

[nateo]

Thanks! I will definitely come back and share my experiences.

I'm pretty curious to hear what happened. The last post I remember hearing from him was bad feedback about smoky off-flavors. I wonder how he's doing.

[sjcarter]

You should definitely fire your accountant. He or she should be trying to help you save money.

I hadn't thought of it this way, but yo're right - any accountant worth their pay should be working out ways for you to save money. If your accountant cannot save you more money than their fee, do it yourself or fire them.

(I used to work freelance IT consulting. I fired the first accountant because he never told me about mileage. The accountant I appointed as his replacement saved me multiple times his fees in taxes I didn't have to pay.)

[nateo]

I hadn't thought of it this way, but yo're right - any accountant worth their pay should be working out ways for you to save money. If your accountant cannot save you more money than their fee, do it yourself or fire them.

(I used to work freelance IT consulting. I fired the first accountant because he never told me about mileage. The accountant I appointed as his replacement saved me multiple times his fees in taxes I didn't have to pay.)

It's not really an accountant's job to save you money. The goal of accounting is to present a complete and faithful representation of what actually happened.

There's a lot of professional judgment involved in accounting. If you have an accountant who aggressively pushes the boundaries of what's acceptable to the IRS you open yourself up to audit risk (and the accompanying expenses). Most of the time this risk isn't worth the money you'd save unless the dollar amounts are huge.

As far as mileage goes, it's usually better to use the actual expense method if you're interested in a bigger tax deduction, and you should be keeping accurate records in the first place. If you're not keeping accurate records, then the mileage method is a lot easier.

[sjcarter]

It's not really an accountant's job to save you money. The goal of accounting is to present a complete and faithful representation of what actually happened.

There's a lot of professional judgment involved in accounting. If you have an accountant who aggressively pushes the boundaries of what's acceptable to the IRS you open yourself up to audit risk (and the accompanying expenses). Most of the time this risk isn't worth the money you'd save unless the dollar amounts are huge.

As far as mileage goes, it's usually better to use the actual expense method if you're interested in a bigger tax deduction, and you should be keeping accurate records in the first place. If you're not keeping accurate records, then the mileage method is a lot easier.

My freelance days were in the UK. The first accountant didn't even tell me about the fact that mileage could be claimed... let alone all the other permissible deductions. The second accountant never pushed it, he just told me straight what deductions were allowed by Inland Revenue and what the scale was.

I take the view that a very important part of an expert's job is "do not assume your client knows the things you consider obvious". First accountant did, second accountant didn't, second accountant saved me a lot of money.

[RichFellows]

Great thread so far. Will keep looking at this as more responses come in. Was tempted by the self-financed option of starting nano and moving onto bank financed larger hardware later once I had a buzz going but this has me a bit nervous. Need to really consider saving a bit longer or financing part of the hardware so I can go a bit bigger to start.

[NYCraftBrewer]

Great Info

Great info and thanks for sharing. Your points about time invested for product output could not be more on the money. Currently I work at a nano and its FAR more work then it should EVER be to make just 5bbls of beer. Thanks again and best of luck

[PVHops]

So close I can taste it.

So, after reading all the pages it still somehow seems like mixed thoughts, so I'll start with a little background, been brewing for roughly 5 years, mostly 10-20 gal batches over the last two years just bc. Been a commercial hop grower for 5 years now with roughly 3 acres in the ground and still work full time as an union electrician. located in md, new law(as off like 4 years ago) we would be opening a farm brewery, this allows us to brew at the farm, self distribute, and have a tasting room with far less hassle than a traditional brewery in town. So the plan is to start with a 3bbl set-up, electric of course, this is due to money and the thought is till our name gets out there and a little more known, but more the money, size limits us to this. need to build the tasting room etc still Avery. So my question is:

I get it your not going to be Wal-Mart rolling in profit, maybe not even target, their was a question a few pages back that someone asked if 3 people splitting work load could handle full time jobs, and starting a brewery. And I don't recall seeing anyone answer, so... With that thought. I could take a day off a week to do double batch brew days(7bbl going into fv) then everything else would be done after work hours. We don't have money for a tasting room so distributing to local bars/restaurants would be what we're thinking to start. The demand for local beers is great in Frederick md. Is the "work load only" doable doing it part time between 3 people? Or should be just save up as some would say and get a min of a 5-7bbl brew house etc. And just keep brewing on my 1bbl set up that I own already. And start trying to just get a keg out to a few bars?
Thanks in advanced for all advice.

[wlw33]

So, after reading all the pages it still somehow seems like mixed thoughts, so I'll start with a little background, been brewing for roughly 5 years, mostly 10-20 gal batches over the last two years just bc. Been a commercial hop grower for 5 years now with roughly 3 acres in the ground and still work full time as an union electrician. located in md, new law(as off like 4 years ago) we would be opening a farm brewery, this allows us to brew at the farm, self distribute, and have a tasting room with far less hassle than a traditional brewery in town. So the plan is to start with a 3bbl set-up, electric of course, this is due to money and the thought is till our name gets out there and a little more known, but more the money, size limits us to this. need to build the tasting room etc still Avery. So my question is:

I get it your not going to be Wal-Mart rolling in profit, maybe not even target, their was a question a few pages back that someone asked if 3 people splitting work load could handle full time jobs, and starting a brewery. And I don't recall seeing anyone answer, so... With that thought. I could take a day off a week to do double batch brew days(7bbl going into fv) then everything else would be done after work hours. We don't have money for a tasting room so distributing to local bars/restaurants would be what we're thinking to start. The demand for local beers is great in Frederick md. Is the "work load only" doable doing it part time between 3 people? Or should be just save up as some would say and get a min of a 5-7bbl brew house etc. And just keep brewing on my 1bbl set up that I own already. And start trying to just get a keg out to a few bars?
Thanks in advanced for all advice.

I think at very least you'll want to set up a place where you can fill growlers. Hard to make money on wholesale for 3-7bbl batches. Two of us run a nano with full time jobs and it's difficult but doable if you're ok with having no life for a while!