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Thread: Ready, set, GO!!!

  1. #1
    Join Date
    Sep 2018
    Location
    Dunedin FL
    Posts
    26

    Ready, set, GO!!!

    Iím just starting to look down my new path. I would like to open a small (2 to 7bbl) direct sales only tasting room Brewery. Iíll apologize now for any stupid questions Iím sure to ask.
    My background: Highlights, Kickass fisherman and professional beer drinker. Ran small businesses before going into Corp for the last 28 yrs. Very Mechanical, drafting n Design, Engineering back ground, Configuration Management, Project Manager, Commodity Manager, retired at 52 yrs.

    Beer background: Iíve been home brewing half bbl. all grain for 35 plus yrs., clean, propagate, and slant yeast including my house yeast. 4 to 8 beers on tap at my house. Iíve changed my friends pizza restaurant into a craft beer bar. Went from 6 taps to 28. Sales from beers are better than all 4 pizza stores together. Helped in many breweries over the years from keg cleaning to brewing.

    This small brewery will hopefully be my successful testing grounds to grow much larger in the future.
    I now live in Dunedin FL. We have 8 breweries within a mile of my house. Most are 2 and 3 bbl successful breweries. Most breweries are only open Thur thru Sun. Dunedin Brewery is the oldest in FL and the largest around here. Our town of 36K draws in lots of people per itís a great beer/food/party destination.
    Where to start? Iím sell finaning. Because this area is very supportive of breweries I believe it doesnít matter if I get in the most popular area downtown or off the beaten path. Itís the cost of leasing and sq footage that will dictate the size of the system Iíll need to support the building and make a profit. Iím thinking to start Iíll put spread sheets together to capture every cost I can down to the soap dispenser refills, look for a building, decide what size system Iím going to build.

    I plan to buy used equipment to build a 3 vessel system. Is direct fire the cheapest to install? Iím guessing running steam pipes and or electrical would be much more startup cost than installing vents.

    Leasing??? So many questions. SQ footage is 16 to 25 plus triple net in most places around here. I donít know what I can afford to pay for rent. To get an idea can I ask, how big is your system? How many sq foot is your brewery? How many seats do you have? How many kegs per month do you sell?

    Any and all help much appreciated.

    Thx n Cheers
    Jay

  2. #2
    Join Date
    Sep 2018
    Location
    Dunedin FL
    Posts
    26
    Anyone home???

  3. #3
    Join Date
    Jan 2018
    Location
    San Jose
    Posts
    21
    We are nearly done building a 4bbl brewery and had a lot of the same constraints that you describe. Here is what we have learned so far.

    We did not want to seek any additional funding beyond our own resources. The concern that we had/have is that if it takes a while for the business to become self-sustaining, we need to be able to pay the bills with our "day job" funds. We don't want to have debt hanging over us until we are in a position to take on that risk. We are also in a high rent area, so we are pretty space constrained ($2/ft is cheap for industrial space here) in order to meet the previously described financing requirements.

    At a high level, your expenses fall in to 4 categories: Rent, brewing equipment, regulatory expenses and odds & ends costs. I'll address each one, based on our experiences.

    Rent:
    In order to submit for your TTB and likely your state brewers permit, you need to have an address. This means you need to rent the space and pay for it until you receive your brewers permits. At an absolute minimum, I would plan to spend 6 months rent while you get the permits. We're at 10 months and a month away from receiving our California brewers permit. This stuff takes way longer than you think, so be prepared. Another thing to consider is the government shutdown sabre rattling that is going on. TTB was part of the 2018/2019 shutdown and we lost about 2 months because of it. Be ready for that if it happens again later this year.

    Brewing equipment:
    We cobbled together a combination of vessels, some that were intended for brewing and others that were not. Our total expense on this equipment was around $10k. At 3BBL size, you are able to use some of your legacy homebrew gear, so that's what we are doing. Be patient and think outside the box. Given our financial constraints, we were not in a position to spend crazy money on a fancy new system. Psycho Brew and Stout Tanks have good prices on smaller gear, so have a look at what they are doing. Given our space limitations and other issues with the building we're in, we cannot do a taproom at this time. If you are budget constrained, I suggest writing down all the things you think you need and putting a cost next to each line item. Then review the list and decide what is actually essential in order to open. You will find that there are a lot of things that are not essential if you make some small changes to your schedule plan. For example, we plan to brite in kegs until we have resources to buy brite tanks, which we will likely add one at a time. With regard to heating, there are likely to be things that will force your hand on which method you choose. In our case, we only have 150A of electricity available and this is not enough to heat 3BBL in a reasonable amount of time and also provide enough power for the rest of the brewery. This meant that electricity was not an option for us. Luckily, there is a 3" gas feed coming in to the building and no one is using it. We ran a direct line from the gas meter to our space and will heat with burners. Even though it isn't ideal, it was the best option for us given our electricity and financial constraints. Finally, you may need to think about packaging. Can seamers are expensive. Kegs are expensive. Labels are expensive if you print small quantities. You may need to reduce your plans for opening and add in things later.

    Regulatory expenses:
    Since we are only building a brewery, we don't have some of the costs that you will. TTB doesn't cost anything but time. California costs were around $1000 for us. Had we opened a taproom, the Conditional Use Permit (required due to the building zoning) would have cost $15k to the city, and the County would have had additional inspection costs. The area that isn't so obvious is the time it takes to get things done. Time = rent expense. We lost about 2 months due to the government shutdown, but the total time excluding the shutdown was about 2 months for approval. For California, it will be about 3.5 months total time. In the case of California, a TTB brewers permit is not required in order to submit for an ABC permit, but having it done in advance makes things go faster. I'm not sure how it will work for you. For the city and county permits, I would expect they will take 2-3 months to receive. You should expect a ton of back and forth with these entities. I probably have over 300 hours invested in research, visits and back and forth with TTB and California ABC. It's really a full time job until you get things done. Another thing to consider is your neighbors. We got a bit lucky in this regard, since we didn't really think about it enough going in. Your neighbors (we're right in the middle of a residential neighborhood) may not want a brewery in their neighborhood. At minimum, it delays the project if the neighbors put up a fight. It could ultimately derail things entirely. If I were to do it again I would have gone door to door and socialized the idea with neighbors.

    Odds & ends expenses:
    Here, who knows. We needed to install a trench drain, gas line, build things, buy fittings, hoses, test equipment, etc, etc, etc. All the larger expenses are at least a few hundred $$. Every Amazon order or trip to Home Depot is at least $50 or $100. Some of these expenses for us are because we are using equipment that wasn't meant for brewing, but hopefully you get the idea. You will be nickel and dimed to death on these little expenses.

    We have about $40k invested so far and haven't opened yet. We also have no taproom. Honestly, even being as budget conscious as we have been, I don't see how we could have built our brewery with a taproom for less than $80k. Even if we did this, I don't see how we could keep it stocked with our own beer. Some of the decisions we made have proven not to be so good. Some have proven to be good. My advice would be to plan to pay rent for 1 year with $0 income and use that as your budget guide. Maybe this means buying equipment and storing it in your garage until you can afford to pay rent for a year? That's sort of what we did. We started collecting equipment 3 or 4 months before we signed a lease. I'm guessing some of this is not what you wanted to hear, but hopefully it will give you some idea of what to expect so you can plan more effectively.

  4. #4
    Join Date
    Sep 2018
    Location
    Dunedin FL
    Posts
    26
    Thank you

    Good info

    I wish you all the best.

    Whats your projected sales a week needed to cover all cost?

  5. #5
    Join Date
    Jan 2018
    Location
    San Jose
    Posts
    21
    We have no employees and pretty minimal costs, thankfully. At this point, we need to make a little over $3000/mo profit to pay expenses.

  6. #6
    Join Date
    Oct 2017
    Location
    western , NY
    Posts
    122
    We are in a similar boat... It took us over 2 years to open due to doing the renovations ourselves while working our day jobs and unforeseen delays from inspectors and such. Also the rules changed so when we went to make an amendment we learned we had to change our license to a "brewpub" due to the fact that we serve our beer from a walkin cooler vs having the taps in a kegerator type setup behind the bar...
    anyway.
    plan on it taking twice as much $$ and time to get going. That said we built our place on a budget. We ordered our kettles from Gavin at Sungood and built our own system (electric brewing is cheaper and easier IMO because you dont need to enclose your brewing equipment in a separate room like you do with gas. (people like to see the equipment) also its more efficient with less heat going into the room. our 3bbl equipment cost us less than many similiar breweries spend because we have been frugal.. that said we are purchasing unitanks to replace our temporary plastic conicals as soon as we have the space ready to do so. Its super easy to be talked into way more expensive equipment than you need... for example we use a single 1/3 hp micromatic chiller we found at auction for $225 to control temps on all four of our conicals and we have no issues making lagers. we also use a kegco 3 roller homebrewing mill we motorized which has worked flawlessly so far vs spending thousands on a mill.

    We have only been open since march and utilized friends and family in the beginning until we were able to get payroll setup. we are still tring to get a handle on expected profits and costs as we are still working on an expansion into the space next store and purchasing the building. (think about purchasing or at least having the option to do so when you sign your lease)

    We are also only open wed-sat because we work full time and brew on sunday. that said our costs are a bit more than mentioned above.. we also serve pubfood as well as local wine and cider which helps taproom business considerably.

    Considering costs and profits selling the beer in our taproom vs distributing I dont see distributing being much more than advertising in our case.. if we just sell $5 16 oz pints from a 1/2 keg... We get $625 for that single keg of beer... if we sell that beer to a bar we get maybe $150? if we had a huge system with a surplus of beer the situation would be different. At present time we cant brew often enough to even do growler or crowler fill yet.
    Having the right location is also key to the business model. what works best for one business in one location may not be good for another.

    a good rule of thumb is expecting your costs to be about $.75 -$1 per beer which should include overhead costs.
    Last edited by augiedoggy; 06-14-2019 at 06:21 AM.

  7. #7
    Join Date
    Sep 2018
    Location
    Dunedin FL
    Posts
    26
    Quote Originally Posted by augiedoggy View Post
    We are in a similar boat... It took us over 2 years to open due to doing the renovations ourselves while working our day jobs and unforeseen delays from inspectors and such. Also the rules changed so when we went to make an amendment we learned we had to change our license to a "brewpub" due to the fact that we serve our beer from a walkin cooler vs having the taps in a kegerator type setup behind the bar...
    anyway.
    .
    Best of luck AD. Sounds awesome

    Help me out here. I plan to build a cold room and taps on the wall coming from kegs. Did something change in the rules that I would need a Brew Pub Lic? I thought that was only if you wanted to serve food.

  8. #8
    Join Date
    Oct 2017
    Location
    western , NY
    Posts
    122
    Quote Originally Posted by Jay Newbie View Post
    Best of luck AD. Sounds awesome

    Help me out here. I plan to build a cold room and taps on the wall coming from kegs. Did something change in the rules that I would need a Brew Pub Lic? I thought that was only if you wanted to serve food.
    it really depends on how closely they look at your drawing since most of the breweries ive been too do what you are describing. But yeah, we had the license and when we went to make an amendment we were told the rules changed January of 2018 and serving beer from a walkin cooler was not allowed with a microbrewery license. Maybe the person we talked to was not well informed IDK it was at that time that they told us they were also going to start fining breweries for using foodtrucks and that they were technically illegal at breweries in NY now.. They also told up we could not let any other business operate the kitchen if we opened one.. Ive seen other breweries open after we were told this that apparently didnt get this information from the LA so not sure at this point who is right and who is wrong. then again I think these were conversations we had with the SLA and not the feds but Im not sure ion that either since my business partner is the one who spoke with them on the phone.
    Last edited by augiedoggy; 07-08-2019 at 07:51 AM.

  9. #9
    Join Date
    Sep 2018
    Location
    Dunedin FL
    Posts
    26
    Quote Originally Posted by augiedoggy View Post
    it really depends on how closely they look at your drawing since most of the breweries ive been too do what you are describing. But yeah, we had the license and when we went to make an amendment we were told the rules changed January of 2018 and serving beer from a walkin cooler was not allowed with a microbrewery license. Maybe the person we talked to was not well informed IDK it was at that time that they told us they were also going to start fining breweries for using foodtrucks and that they were technically illegal at breweries in NY now.. They also told up we could not let any other business operate the kitchen if we opened one.. Ive seen other breweries open after we were told this that apparently didnt get this information from the LA so not sure at this point who is right and who is wrong. then again I think these were conversations we had with the SLA and not the feds but Im not sure ion that either since my business partner is the one who spoke with them on the phone.
    Havn't heard any of that here. Hope I don;t. I'm not going to ask questions. I'm letting everyone dictate what they want me to provide. I found asking questions makes people think too much. Then they come up with more requierments.

  10. #10
    Join Date
    Sep 2018
    Location
    Dunedin FL
    Posts
    26
    UPDATE: Town gave me their blessings. Good to go. I jumped the gun and knocked on doors all over he neighborhood. Welcomed me with open arms. Very cool. Spoke with fire marshal and other heads of town to get a feel of what they wanted before presenting my proposal. I'd say it all paid off.

    Plan changed from direct fire to Electric. I was clueless as to all the additional regulations with direct fire and ventilation.
    I've deciding to go with 2 or 3 BBL 3 vessel system. Right now FL has a 3 tier distribution but I'm hearing that may change in the near future opening up distribution. I think 2bbl brewing double batches would only be enough for the tasting room/outdoor patio. If I eventually wanted to self distribute to a few select bars I couldn't without a larger capacity. Space as well as cost is now in question. Any thoughts on this?

    Does anyone have a 2 or 3bbl system setup I can view? I'm looking hard at Stout. But 11K for a control panel is killing me. Like to see what others are using. What you like and wish you did or didn't do? Much appreciated.

    Having a couple diff contractors look over the building and give me feedback. Need a shitload of power added. I want to max out whatever I get with the most power for fastest heat time. Having zero experience brewing electric I could use all the advise I can get.

    Thank you

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