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Important Business Recommendations for Would-Be Microbrewery Owners

Important Business Recommendations for Would-Be Microbrewery Owners

It is no secret that the U.S. is a beer-loving nation. In fact, up to 42% of Americans admit to thoroughly enjoying beer, as opposed to 34% who classify themselves as wine drinkers. Beer is also no longer just a barbecue refreshment and can effortlessly accompany just about any meal imaginable. The nation’s love for beer has also resulted in a steady increase in the number of microbreweries and brewpubs across the country. While planning your own brewery is undoubtedly a very exhilarating process, there are also a few less-exciting business considerations to keep in mind.

Start by Creating a Business Plan

Creating a business plan for your microbrewery is the first step in turning your dream into a reality. Apart from being essential in helping you secure financing, a well-written business plan can help you keep sight of your long-term goals and also provide guidance in other areas of your business. Some of the most important sections to focus on in your business plan include an executive summary, a business description, a competitor analysis, a market analysis, a marketing plan, and an operational plan. You also need to formulate a marketing plan that will give your microbrewery a much-needed boost when it opens its doors.

Insurance Is a Vital Consideration

Before you start brewing a killer IPA or fruited sour, you have to ensure that you have all the necessary insurance policies in place that will protect you, your brewery, and your employees. Cerity Insurance notes that workers’ comp insurance can provide crucial financial protection for your microbrewery, as it will cover the high-risk injuries commonly faced by brewery workers. In addition to worker’s comp insurance, business interruption insurance can also prove to be invaluable. This is especially true if you are forced to ‘pause’ your brewing operations due to unforeseen circumstances, such as storm damage to the property. Other important insurance policies include business owner’s insurance and general liability insurance.

Keep a Close Eye on Your Finances

When starting a new microbrewery, it is easy to get carried away and splurge on equipment and the hiring of top-tier employees.  While these can all prove to be very valuable investments in your new business, it can also impact your cash flow in a negative manner especially if you had limited funding available to start with.  When your brewery is still getting off the ground it is important to ensure you have money to cover your payroll and other vital financial obligations such as insurance premiums. If you have difficulty with budgeting it may be a good idea to seek assistance from a trained professional.

Don’t Forget About Permits and Regulations

There are various country, state, and local laws you need to take heed of, depending on where in the U.S. your microbrewery is located. Irrespective of your location, however, there are several standard considerations you won’t be able to escape. Apart from federal, state, and city laws that need to be adhered to, building permits and strict health department regulations also need to be followed. The size of your brewery and its output will determine what brewery-specific permits you need to apply for.

Find Adequate Funding 

Although you cannot open your own microbrewery without start-up capital, funding is, strangely enough, not near the top of the list of priorities of would-be brewmasters. Unless you have already set aside a considerable amount of money to jump-start your business, you will have to obtain the required funding from other places. Some options worth considering include traditional bank loans, government-backed SBA 7(a) business loans, or crowdfunding initiatives. You may also want to investigate a novel concept known as Community Supported Brewing (CSB), which entails securing funds from your community in exchange for beer or merchandise at some point in the future.

Consider Your Equipment Carefully

With so many important things you need to consider, researching your equipment requirements may be the furthest thing from your mind. Due to the hefty price tags brewery equipment typically carries it is essential that you finalize your production process and floor plan prior to spending any money. Ultimately, the equipment you invest in will depend on a number of things. This includes your product range, your desired production capacity, brand preference and your budget. Also consider obtaining some pieces of equipment second-hand as you may end up saving a considerable amount of money this way.  Always do your homework though and inspect any used equipment properly as the last thing you want is to find out it is defective once production is about to commence.

Opening your own microbrewery is very exciting. Unfortunately, in order for your brewery to excel, you need to pay attention to all aspects of the business side as well.