How to Start a Craft Brewery
The craft brewery scene is all the rage, and there have been quite a few enterprising folks who have turned their love of beer into lucrative small businesses. If this idea has crossed your mind, understand that you’ll need more than just a good-tasting product to be successful. Breweries are both capital-intensive and require a great deal of planning to be profitable. Here are just a few considerations you’ll want to study up on if you’re planning to start a craft brewery.
Craft Brewery Equipment
Your equipment costs will largely depend on the size of your brewery, yet even the smallest breweries require about $100,000 worth of equipment and these are second-hand prices. If buying brand-new, plan to spend upwards of $1 million for a 30-barrel system. Fortunately, there are some good equipment financing programs for small businesses that may be able to assist with your set up.
Craft Brewery Location
You will also need to find a location for your brewery. This requires balancing the monthly cost of rent, any construction costs for the building, and keeping in mind potential expansion. If you don’t have the capacity to expand when successful, you could end up stuck. Yet, having too much capacity that’s isn’t supported by sales isn’t a good situation either.
There are other costs associated with opening a craft brewery that many don’t consider. These include the legal and regulatory costs. Local permits are required, and the business will also have to request a federal brewing permit with the Alcohol and Tobacco Tax and Trade Bureau. The business should also be incorporated and will require several forms of insurance.
While craft breweries are popular, they are a lot of work and not an overnight success for businesses. With the proper capital investments and planning, however, these brewing companies can show long-term profits for their owners.
Flipside Capital offers a variety of financing solutions for your craft brewery. Contact us with any questions or to schedule a free consultation.