Income Structures - First Few Years

[Alchemy17]

I am new to this forum and it already seems like an excellent resource, so I look forward to contributing here!

We are in planning in Atlanta and there are some uncertainties surrounding our business plan, one being the income structure that we will have in the beginning years.

There are 3 of us starting this brewery, haven't worked out our projected sales quite yet, but my question is...Is it a matter of eating ramen noodles and water for the first few years, or is it still possible to live within your means and pay your bills without feeling completely poor? Obviously stay extremely tight on personal budgets. Just wanted to get some insights/experiences wherever we can.

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[Alchemy17]

Bump

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[jcmcdowell]

Too many variables to say.

Overhead, financing costs, buildout costs, quality, marketing, etc....

I will tell you the beer business has a high capital investment and it seems every upgrade in equipment to keep up with growth the cost is raised to another power (squared then cubed, etc)

I started tiny with frankenbrew equipment I put together. No debt. But I was brewing 4 days a week in the summer to keep up. I've built 2 brew systems now and I'm still brewing at least twice a week and double or triple batches to keep up.

I'd like to upgrade my 3bbl brew system but I'm looking at 50k plus. Right now I'd rather keep the money for labor (me) than debt.

So- it depends how much cash versus debt you're starting with. Every dollar that goes out to service debt is another dollar you could keep.

Montana issues a monthly report on how much tax is paid in production. If you're state does the same- back figure other small breweries to look at their production to figure ballpark gross sales and then see if it fits in your plan.

Best of luck.

Jc
Bandit Brewing Co.




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[FarGohnBrew]

Starting out

I kept the day job for the first year. Worked 100 hour weeks almost every week. Started with credit cards and loan from retirement.

If you are in a good location, decent marketing, and get people through the doors you will be cash positive on day one. What you do with that money is the question. I chose to double dip until I had all the debt (except my interest free loan from myself) paid off and the fact I couldnt take it anymore. I reinvested every dime to upgrade equipment and furnishings. I now draw a very modest income, approx 1/3 my previous salary (was a mid level manager in healthcare). I am currently purchasing the property and am about to remodel the whole building. It will take a couple years to put that behind me and then I look forward to increasing my pay to 2/3 of my previous salary. Someday I can (hopefully) sell/lease the business or building or both. That's my retirement plan. I would gladly do it all over again.

That said, If I had 2 other partners that are looking to draw an income than there would be no real estate investment, equipment upgrades... without taking on more debt. But Im a small place too, 5BBL, 75 seats. No plans to grow beyond that.