Sales Projections Question

[golfer]

So Im thinking about going from homebrewer to professional brewer ( I know you must get that a lot on here). I was looking and trying to write a business plan. The one thing I havent found any advice for is how to predict sales projections? How did you handle those figures? Or do you just produce enough to sell out?

[ckr]

I've had the same thought how do you project that with no history starting out.

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[Brandjes]

I came at it two ways. First I looked at what I would need to sell in order to break even (you need to have a good handle on ALL your costs and expenses). I used different mixes of wholesale and retail and different price points, wholesale direct and paying distribution. Then I expanded those figures to different profit levels. With those numbers I did a sanity check to see if it was even possible - ie If my model showed that I need to sell 6000 pints a day out of my 10 seat tasting room or I need to produce 1000bbls/year with my 2bbl system and 2 fermenters I might need to re jigger the numbers. Second I looked at my local and regional market to see what others are doing.
This is a very simplified explanation of my process, but it should get you pointed in the right direction.

[ckr]

How did you spread your equipment costs. On figuring your break even costs? I assume over a set period of time

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[golfer]

I came at it two ways. First I looked at what I would need to sell in order to break even (you need to have a good handle on ALL your costs and expenses). I used different mixes of wholesale and retail and different price points, wholesale direct and paying distribution. Then I expanded those figures to different profit levels. With those numbers I did a sanity check to see if it was even possible - ie If my model showed that I need to sell 6000 pints a day out of my 10 seat tasting room or I need to produce 1000bbls/year with my 2bbl system and 2 fermenters I might need to re jigger the numbers. Second I looked at my local and regional market to see what others are doing.
This is a very simplified explanation of my process, but it should get you pointed in the right direction.

thanks for the response but figuring out break even point is different than projecting sales.

[ChesterBrew]

thanks for the response but figuring out break even point is different than projecting sales.

Yes, but establishing the breakeven point is essential if you want to learn whether it's even worth going into business or not, and whether your go-to-market strategy makes sense in the first place.

If your sales model is predicated on sales through a distributor, realize you have no leverage unless you're known in your area as a rock-star brewer with awards to back it up. And that's different then a scenario where you do on-premises sales only and want to become a neighborhood hangout.

Brandjes' post contains more wisdom than you may recognize.

[kererubrewing]

I would add that it can take a surprising amount of time to gain traction in a congested market. It takes time, money and determination to build a brand and you must get your pricing right.