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View Full Version : Is my idea possible? (please say yes!)



mkyle
10-22-2010, 05:23 PM
So I've been a homebrewer for a while and like everyone else I have, at one point, said "I want to sell my beer". Well I don't think I have the resources right now to open a full scale 10BBL nano, but I have some pretty serious homebrew equipment and I am converting a detached garage into a home brewery. I would, however, like to sell my beer in kegs to a FEW (maybe 2 or 3) local restaurants. Just for fun and to get my foot in the local beer scene door. Self distributing as well, I live in PA.

I know even this humble goal requires a good amount of $$, but how much and what exactly do I have to do? In other words, what are my biggest expenses going to be and of course, is this idea feasible with, lets say $10k (yes I have 90% of the equipment already).

Do I rezone for light industrial or commercial?
Do I need the same permits/licenses as every other brewery?

Thanks guys!

dmalfara
10-23-2010, 10:39 AM
Where in PA are you located?

I would talk to the guys at Breaker Brewing Company in Northeast PA. I don't know them personally but they are up and running now with a very small set-up and it seems to be working for them so I guess it can work.

Yes you'll need all the same permits and licenses that a brewery requires in PA.

PLCB brewer's license will run you about $1500 per year. Brand registration is another $75 per year per brand.

A couple of things to think about, without getting into too many details:

What are your costs for malt, water, hops, and yeast per barrel? (costs will vary but let's ballpark anywhere from $35 to $50 per barrel)
How much beer can you produce and how long does it take you to produce it? (10 to 15 gal at a time, you'll need to brew 2 to 3x per bbl...not including kegging or selling, you're in for 15 to 20 hours per bbl)
What are your costs for kegs and POS items (and taphandles)?

Think about that and then factor in that you will probably only make about $200 to $300 per barrel, gross sales. Subtract your taxes (Fed and State excise taxes, PA sales tax), cost of goods sold, plus other costs of doing business and see what you have left.

Then ask yourself, is it worth it?

If it is, then I hope to try one of your beers someday soon in a bar/restaurant in PA. If it's not, then maybe save your money and plan to do it on a slightly larger scale in 5 to 10 years. No reason to give up on a dream...just take a little longer to make it happen.

beauxman
10-23-2010, 01:28 PM
10k will evaporate overnight, it's pretty much gone already before you even start! Figure out where the next 10k is coming from...and the next....and the next.....

mybeerbuzz
10-23-2010, 09:16 PM
I'm sure some of this will depend on where exactly you are (i.e. how many other micro's and nano's you may be competing against).

mkyle
10-24-2010, 08:44 AM
thanks for the help guys. I am northeast of philly (newtown, PA) so the craft beer scene here is great. Like i said, don't care about profits but breaking even would be nice. Im still going for it!

South County
10-24-2010, 12:38 PM
So I've been a homebrewer for a while and like everyone else I have, at one point, said "I want to sell my beer". Well I don't think I have the resources right now to open a full scale 10BBL nano, but I have some pretty serious homebrew equipment and I am converting a detached garage into a home brewery. I would, however, like to sell my beer in kegs to a FEW (maybe 2 or 3) local restaurants. Just for fun and to get my foot in the local beer scene door. Self distributing as well, I live in PA.

I know even this humble goal requires a good amount of $$, but how much and what exactly do I have to do? In other words, what are my biggest expenses going to be and of course, is this idea feasible with, lets say $10k (yes I have 90% of the equipment already).

Do I rezone for light industrial or commercial?
Do I need the same permits/licenses as every other brewery?

Thanks guys!

Yes you'll need zoning clearance
Yes you'll need all the standard licensing

Philly is a very saturated market, just because alot of beer is sold there doesn't mean that everyone can sell beer there, Troegs is just barely getting dedicated taps and you know their story. Not to mention there are a gazillion startups in the Philly/suburb area. I am stunned at the people that are trying to push in the Philly market, good luck to them but common sense has to set in at some point. As the rest stated 10K disappear fast, the second 10K will go even faster. Get some industry experience first at the least, understand the nature of the business that your trying to start. One thing I've notice in the last year is that suddenly every homebrewer in the US thinks that they run and own a brewery, like its 1983-1995 all over again. Good luck to you, but there's alot more to it.

beauxman
10-24-2010, 02:15 PM
thanks for the help guys. I am northeast of philly (newtown, PA) so the craft beer scene here is great. Like i said, don't care about profits but breaking even would be nice. Im still going for it!

Why would you work (as hard as you are going to have to) for no profits? Once the romance wears off, you are just a guy paying to go to work. Think about it, you will be actually paying to work. I agree with the previous post, get into the industry and work for someone first, it goes a long way. Also, if you are really serious, plan for success. Your plan is not for success.

Just because you build model airplanes at home does not mean you are ready to start an airline. (made up a new quote, I like it!)

PS: You mentioned that you are going to do it anyway in your last post and in your first post asked for people to "say yes" to your idea. Why ask then?

Best of luck,
-Beaux

burcher
10-24-2010, 02:40 PM
Of course it's possible but you hear a lot of the resentment in these responses. I got it, too, when i started a 1 bbl nano for around 20k for the first year. We broke even (meaning we paid our bills with the income, not that we 'made money') in year one and decided to expand. I did not pay any salary (I am the only employee) during that year but only worked about 20 hrs a week and held several other jobs. It was not sustainable for me without pay. don't kid yourself that you won't want to get paid. Having people tell you they love your beer and keep it up only goes so far. We decided to expand to try and reach the sustainable/salary level and it has taken us almost a year. I can say that starting nano helped me learn the ropes and sort of made up for not having real industry experience so it is a viable way to start. The naysayers and doomsdayers are only trying to help. fwiw.

mkyle
10-24-2010, 04:30 PM
thanks for the honesty with the replies so far. keep em coming!

beauxman
10-24-2010, 05:54 PM
Of course it's possible but you hear a lot of the resentment in these responses.

No resentment here, just reality. The point is folks need to know what they are getting into and experienced voices don't always tell you what you want to hear. We (professional brewers and owners) make it look really easy sometimes if you are looking in from the outside. A dose of reality on these boards seems like the responsible thing to offer new brewers/owners. As far as your plan, of course it can be done, just know what lies ahead and have realistic expectations. Ask yourself the hard questions and be honest. What do you really want out of this?

I still think it is a very risky way to go: Starting a business (non-profit?) in a highly regulated, taxed, competitive and (semi?) mature industry with no industry experience is dangerous. It can be done and has been, but many have failed and lost more than just money, don't forget that part.

Another reality check exercise: Take the word "brewery" out of the equation and replace with "dairy farm" or "dog food factory". These industries also require large and continual capital investment and hard work. Would you still want to go through all that and make no money (actually pay to work there)? At the end of the day, it is a business that happens to produce beer.

Cheers!

Beaux Bowman
Owner/Head Brewer
Black Raven Brewing
Redmond WA

burcher
10-25-2010, 05:57 AM
I know, resentment was the wrong word. There's no doubt that it's hard, even a poor business decision, but can't we all relate to the need to brew? I don't think it's like 1994 this time. This is homebrewers wanting to go pro, to make and share beer with their neighbors. This isn't the Pete's Wicked Ale guys trying to make a million in year one. Here's the truth, mkyle. At this point in my brewery's evolution, I sometimes wish I weren't at the helm of a monster that is doomed to make little money. It's a labor of love, it's a decision that some of us have to make. I have been waiting for 9 months to get a boiler running that will cost 25k to replace. We're close, but the closer we get the more problems come up. I'm faced with not being able to make beer, being undercapitalized (aren't we all), and stuck in the same unsustainable place I was a year and a half ago. That is not so glamorous. And I'm a smart guy with community support great branding and success. The deck is just stacked against you, that's all.

ParishBrewingCo
10-25-2010, 07:07 AM
mkyle,

I am another nanobrewer, and from experience can tell you that you'll never really know what it takes until you jump in! Go for it! Yes it will be more expensive than you think. Yes, you will need all of the permits and licenses of a larger brewery. Yes, you will be tired, work all the time, and not make any money. It will be a pain in the butt sometimes! But at the end of the day, if you love beer and brewing, it can be worthwhile. It is for me. You will have to make the call for yourself.

There's a website out there that lists a bunch of nanobreweries in th US called hessbrewing.com or something like that. I'd recommend browsing through all of them and learning what they had to do. Breaker Brewing has a good working model as was mentioned before and they're in PA. Find someone close to you that may be able to give you some guidance or allow you into their brewery to see in person. Bring them some of your best beer and I bet they'll tell you a lot!

Being able to self distribute is a HUGE advantage for a worthwhile nano. I have to bring my stuff to a distributor who takes a large margin. I make very little on my brews, but the upside is I have a great distributor who can move LOTS of product when I'm ready to go big! I do 1.5bbl batches twice per week. I sell everything I make and barely break even. It took much more than 10k investment and I built my own brewhouse and keg cleaner.

My advice: Get the local permits done first (fire marshall, local alcohol) then state (health dept, state alcohol), then federal (TTB).

Andrew
Parish Brewing Co.

mkyle
10-25-2010, 08:02 PM
thanks for all the good responses. I know i have an idealistic perspective on the industry as an outsider so I appreciate the reality that you insiders can offer. I'll keep you guys posted when I eventually take the plunge. Won't be long now...:D

GlacierBrewing
10-25-2010, 08:32 PM
thanks for all the good responses. I know i have an idealistic perspective on the industry as an outsider so I appreciate the reality that you insiders can offer. I'll keep you guys posted when I eventually take the plunge. Won't be long now...:D

Hiya Mkyle,
Get at least TWICE as much money as you think you need. SERIOUSLY.

Plan on working 50+ hours a week for minimum wage, if you're lucky.
Push your brands, push your brands, push your brands.....etc.
This is a weirdly hard industry to survive in. Keep at it.

Oh yeah, make sure your wife/mate has a VERY well paying job and be creative. (Incredibly creative!)

Prost!
Dave

South County
10-29-2010, 03:15 PM
Not to beat this to death, but this topic definitely has some weight to it. So much so that Vince over at www.soundbrew.com has addressed it with a brutally honest section on his website under the mini-micro/pico link. Not starting sh*t here but just constructive food for thought to bolster the knowledge that has been shared previously.

just a small quote from his rant, which i think may can agree.



And, we think sticking your toe in the water is for weenies--starting a brewery is big risk-taking venture, and we haven't seen many become a success in the brutally competitive brewing business by starting out timidly.

CaptainEBC
10-29-2010, 03:57 PM
Mkyle,

I am in the middle of building a 3 bbl brewery and things are going pretty well because I put a lot of time into planning.

My only advise to you is to plan EVERYTHING out first. Work your way back from the legal fees, permits, and cost to make your facility compliant with local codes. From there, its easy to price equipment and figure out a rough cost to start.

If you want to start small, do it with disposable money. That way, if you fail, no problem. Just remember that the final cost you come to, will most likely be underbudgeted at the end with all of the fun supprises, so make sure you have a margin.

Don't let negative comments get you down. Only you know if its feasible to start a brewery. Worst case is that you lose a lot of money. Thats much better than looking back far from now and wishing you just took a stab at it. If people just followed the disbelief of others, this country would have nothing to be proud of.

Take everyone's advice, be it positive or negative and use it to your advantage. Create a plan and just do it.

Starting a brewery is the most glorious pain in the ass, but it's worth every moment.

Good luck.

CaptainEBC
10-29-2010, 03:57 PM
Mkyle,

I am in the middle of building a 3 bbl brewery and things are going pretty well because I put a lot of time into planning.

My only advise to you is to plan EVERYTHING out first. Work your way back from the legal fees, permits, and cost to make your facility compliant with local codes. From there, its easy to price equipment and figure out a rough cost to start.

If you want to start small, do it with disposable money. That way, if you fail, no problem. Just remember that the final cost you come to, will most likely be underbudgeted at the end with all of the fun supprises, so make sure you have a margin.

Don't let negative comments get you down. Only you know if its feasible to start a brewery. Worst case is that you lose a lot of money. Thats much better than looking back far from now and wishing you just took a stab at it. If people just followed the disbelief of others, this country would have nothing to be proud of.

Take everyone's advice, be it positive or negative and use it to your advantage. Create a plan and just do it.

Starting a brewery is the most glorious pain in the ass, but it's worth every moment.

Good luck.

gitchegumee
10-29-2010, 07:23 PM
Not to discourage anyone, to the contrary I wish you the best of luck. But why would anyone think they can make it in an industry which they have zero experience? Not even washing kegs or working on a bottle line? Never CIP a tank? You should be able to do this blindfolded. You shouldn't be asking this community of brewers if your idea is possible. You should KNOW THAT IT IS! Is there any other industry this would even be debated? Home "chef" jumping into an upscale restaurant? Know what the success rates are for that? "Paying your dues" isn't about money. I recommend strongly against throwing money at something you have no idea about until you spend at least one year (preferably much more) working in a professional setting. Hell, I couldn't even pay Siebel to take me in for their program unless I had three years' experience in the industry (back when the school could be more demanding of its prospective students.) And for good reason...the folks who paid tuition didn't want a newbie holding back the rest of the class. It was assumed that everyone had a basic working knowledge of not only brewing, but of brewery operations. I'm sure you won't regret putting this off until you actually gain some experience in the field you expect to run a business. Again, best of luck and hope to see you out and about in the brewers' community one day.

beauxman
10-29-2010, 11:23 PM
Nice addition to the Sound website, very true. Seems like some venting from all the goofy calls he gets but reality based. Very well done, not what folks want to hear but I could not disagree with any of it. Point to take from that, it can be done but do it right! To do it right takes a sh*t load of money, year after year....capital intense but worth it.

burcher
10-30-2010, 07:31 AM
Again, if there's one thing about brewing, it's that there's more than one way to skin a cat. There's no reason a person can't start something from scratch with little help and be very successful. Granted, it's much easier to be trained, go to school, learn the trade, etc. (stand on the shoulders of giants) but the world is filled with entrepreneurs that taught themselves. I mean, homebrewing, right? It takes all types. The advice that you will have a harder time starting from scratch and ignorance is sound, but somehow in some posts it can come across as dissuasive or patronizing. I mean, what, we're all altruistic people who just don't want to see our fellow man fail? It's like the scene in 'beer wars' where anat is addressing the paradox that brewery folks are all so friendly and helpful until it comes time to really cooperate and we often retreat for fear of losing what little scrap of the market we have to a 'fellow brewer' or competitor. It's just the way it is.

And, again, this nano thing is the antithesis of the early '90s industry trend of money driving the business. This is a repeal for local beer, to get back to the old days. In a way that sucks b/c now the 'little guys' have become 'bigger guys' with the addition of a new (nano) link in the chain. My brewery is to a 5,000 bbl a year brewery what sierra nevada is to boston beer company which is the same as bbc is to inbev, right? Now that there's an even littler guy in the chain and bbc has gotten even bigger the playing field has become more complex.

Sorry for my ramblings. I need to write a book already.

beermkr
10-31-2010, 12:32 PM
I applaud people that start out small. Capitalization is the key in all things. As Burcher said, testing your market and proof of concept are all valid things to do.

Think about it... Sam C. started his brewery brewing on a Sabco system.... now look at it.

If you are not confident enough to take then plunge and risk your money then no amount of us saying yes or no is going to get you where you want to be.

R/

farmbrewernw
10-31-2010, 01:37 PM
I'm going to jump on the bandwagon that you should do it if you think you can do it, whether or not you succeed or not is another issue. I just moved back down to Oregon as my wife just got a good job down here. I'm unemployed again but I do have a year of serious brewing experience under my belt now. I get pretty down when it seems like just about everyone on here says you can't succeed going small. To me starting small is more of a proof of concept venture. I know how to brew on the big systems, I know how to CIP a tank in my sleep (dream about it all the time), and I know how freeking hard being a brewer is most of the time. Sure I have more experience than you and I would say that that does put me at an advantage, but if I don't set up my business right and you do I'll fail and you'll move on to a bigger system and start making money. I think the key is that you need to learn some of the tricks of the trade. I've seen far too many people start small with no experience that got talked into far too expensive equipment that was inadequate for expansion only to fail due to capital drying up. I say if your doing anything smaller than 3bbl or less get to know a good welder and find some dairy equipment, it doesn't have to be expensive guys. I know a brewery that had no more than 25k invested in their first system was successful with that and now is on to a 20bbl system.

South County
10-31-2010, 03:44 PM
Think about it... Sam C. started his brewery brewing on a Sabco system.... now look at it.


R/


I find it interesting that so many people use Sam C. as a base for comparison to justify starting small, particularly in this discussion, which really is completely out of context for a plethora of reasons. We are talking viability of a draft only packaging start-up on a 1/2 to 3BBl system in 2010, amidst a recession. From the horses mouth, Sam C. quote, "I figured I could reduce my risk of failure if I had revenue streams from both a brewery and a restaurant." Also Keep in mind that he started in a lease position at a turnkey restaurant (Sam's words), "in a thriving commercial community" with $220K and a small horseshoe up his sleeve. So IMO much, much different scenario.

anda
11-02-2010, 06:48 AM
You will have to get a variance to be allowed to have the brewery at your garage, even in a detached garage. These can be hard to get depending on the location. You'd need city and county approval, most likely. The TTB is also reluctant to approve garage breweries, but they will. They usually look at the local approvals more in garage situations.

Yes, you will need all the same permits/licenses as every other brewery. Which, at a local level, means you will most likely also have to notify the fire, building, and health departments as well.

Like others have said, you will blow through $10K in a minute, even if you have all of your equipment. You will need at least twice as much as you think you do.

Also, talk to bars and restaurants, taps are hard to get. With a lot of breweries around, they are fought for pretty intensely.

Best of luck!

-Anda
www.legalbrewing.com

tarmadilo
11-03-2010, 12:16 PM
I can tell you from personal experience that it takes just as much time and labor to brew a small batch as a large one, but a small batch sells for a small amount of money! Your labor cost (and I don't care whether you're actually paying yourself money or not, you're certainly spending your TIME) for a very small batch of beer is all out of proportion to what you can sell it for.

I've never worked so hard in my life as I did the one year I worked at a very small batch brewery. And that brewery didn't survive.

Just sayin'...

Tim

sdgbrew
11-03-2010, 06:12 PM
I am in the process of starting a brewery in PA for as cheap as I can, just watch what the local codes are going to require. I will have no employees other than myself yet I have to put in a handicap bathroom and parking space. My driveway is gravel yet I am being forced to put in a paved space. All in all it's not too expensive but something I wasn't expecting. Oh and don't forget the architect, PA requires blue prints with a state stamp... Since the use of the building is changing I have to bring everything up to code, I would expect you would have the same issues, but I still think you should go for it if you can, just know there will be unexpected costs.

anda
11-09-2010, 10:53 AM
I am in the process of starting a brewery in PA for as cheap as I can, just watch what the local codes are going to require. I will have no employees other than myself yet I have to put in a handicap bathroom and parking space. My driveway is gravel yet I am being forced to put in a paved space. All in all it's not too expensive but something I wasn't expecting. Oh and don't forget the architect, PA requires blue prints with a state stamp... Since the use of the building is changing I have to bring everything up to code, I would expect you would have the same issues, but I still think you should go for it if you can, just know there will be unexpected costs.


The unexpected costs can sometimes get pretty high. Most of them are in local governmental entity requirements, additional sinks, hoods, dust containment systems, water rights (especially if you are in the west), and the list goes on and on depending on where you are located. It pays to do a little research locally before committing to any location. Make sure you can get a zoning variance, that there are adequate water rights and pipes connected to the building, etc. Then talk to the fire, building, and health departments and get lists of things they look for on inspection. It may take longer to find a place, but, it could be well worth the savings.

-Anda

www.legalbrewing.com

NinkasiSwain
11-10-2010, 12:25 AM
I don't think any amount of dissuading is gonna actually dissuade someone set on doing something like this. But you *do* have enough doubt to at least field the question here ... so you must be prepared to hear the weight and balance of wisdom.

To me, it's more a matter of take-your-lumps-now or take-your-lumps-later. Any hands-on larger-than-homebrew experience or additional knowledge of any of the numerous hats you must wear is certainly gonna make it that much more likely you're "successful" ... whatever that means to you personally.

Measure up your risks and protect whatever personal funds and ego you desire. Beyond that, I think there are many risks worth taking because, in the end, all you stand to really lose may be some money, time, and enthusiasm. Certainly if it doesn't kill ya, then it's all just shades of what you're willing to risk/suffer.

The potential gains are huge. And I think often it can be more about bucking the system of work offered us in this day and age, and doing something for yourself and to get your hands involved in creating something palpable and self-worth-validating.

And you'll no longer need fear living with the regret "I always used to dream of..."

Learn through wisdom or learn through experience. The second one just hurts more. But it can also make you feel more alive.

Good luck.