when to expand

[dmartin]

Just wondering if there is anyone who could offer advice/their experience with growth.
We started as a 3bbl brewhouse with (1) 3bbl uni and (3) 7 bbl unis. We operate primarily as a production brewery, with approx 1/4 total volume coming out as growler fills. We are in a city of ~70,000 but we service an area of easily 250,000. we have 9 restaurants/bars in town with 12 taps, and can likely get on at another 9 once we have the production for it. We just started bottling bombers. We started selling in February of this year and have experienced great reception. We actually are installing a 10 bbl uni to help keep up this week.
Our plan was to grow naturally, we paid out of pocket for our current setup and would like to have some money in the bank before we expand. We would then use our 3bbl brewhouse with a couple unis as a pilot system and upgrade to a 15-30bbl system with a new location, taphouse/venue combo.
right now we are getting a little cramped (1400 sq ft) but are wondering about the "golden time" to plan for our expansion. If we need to keep up with demand, is it worth purchasing a couple more 10bbl tanks and hiring more staff (its me and 1 part timer currently) or would it be better to be constantly low on beer until we expand? I dont think we will run out and lose taps at our current rate, but we cant get into any more bars until we make more beer. We are also operating in the black, but will not have enough equity to pay for new building/equipment for a year or two.
Any advice from others who grew their production about 10x on timing/how to go about it?
Thanks

[sjcarter]

what volume are you doing through your taproom? That should be your primary focus for now as that is the way you make the money.

[Todd Hicks]

History always repeats with nano-breweries attempting to be production breweries. It is tough to earn a profit for growth investment.

The tap room and growler sales should be your #1 focus. That is you profit center. It sounds like you have a good following that is growing. Your fans are going to take you to the next level.

I do not know if you have self distribution there. I would only nano if I had self distribution or you lose any profit. The economy of scale in Three-Tier-System distribution does not fit for small brewing equipment; really, anything under 30 bbls will be a struggle. Maybe a 15 bbl system that is set up for 2-3 brews per day could handle production for 75,000 locals and an extended market of 250,000.

Planning ahead, I would identify just where you want to get volume wise. And if that projects a 15 bbl brewhouse, then I could see investing in 1-2 15 bbl fermenters and a bright tank to fill in any available space and retain those existing outside tap clients. That would free up the 3 & 7 bbl tanks for in house volume. You will be able to take and use the 15's in the new brewhouse. If you want to put more variety into the current tap room, maybe more 3 bbl tanks. Build a platform and stack them up. There is lots of small equipment used out there.

I would be very wary of expanding outside taps until you are confident that you can ALWAYS supply them.

On another point. Merchandise and events. Guerilla marketing. Get your customers to come to you. Everyone needs a bottle opener and t-shirt. Properly done with a lot of different labels, you could sell more in merchandise than you can in beer.

Consider a small kickstarter campaign with your fan base. It won't cost that much to get those 15's used and upgrade the refrigeration for them.

Good luck. SBA is waiting to put you into a million dollars of debt!