Brewery tourism is on the rise - from beer-centric cities like Portland, Seattle, Denver or Asheville, to places where beer is just another great reason to go there, like Chicago, New York or San Diego. Remember, too, that breweries encompass all sorts of different types of brewing operations - from the traditional craft beer microbrewery to cideries, distilleries or winemakers, there’s a brewery for every style and palate.

We know it can be daunting to start a brewery business, and we’re here to help.

We’ve supported over 500,000 people to form their business and provided answers, guidance and support to transform them into entrepreneurs. We’ll guide you through what you need to know to start your brewery business.

To get you off on the right foot, here’s our simple guide to starting up a successful brewery business. From highlighting important facts to validating your ideas, and from choosing the right structure to learning your options for managing and running your business, you’ll find the answers you need.

Read on for some insight into creating your own brewery business and becoming an entrepreneur. In this guide we will cover:

Statistics on why you should start a brewery business

Choosing the right business structure for your brewery company

Deciding if a brewery business could be right for you

Proving your brewery business can work

Ideas for the type of brewery business that you could form

Where to find brewery business groups, forums and support

Setting up your brewery business, including location, equipment, employees, taxes, finances, licenses and more

Helpful software for brewery business owners

Brewery business planning

Why You Should Start a Brewery or Microbrewery

So, just how popular are breweries in the U.S.? You’d be surprised.

6,200

Number of craft breweries across the U.S.

30M

Barrels of beer breweries collectively produce every year.

$25B

Total worth of beer craft breweries sold every year.

98%
Of all U.S. breweries are independently owned craft breweries

Craft beer volumes are growing by 5 percent a year.

Millennials are the group most familiar with and most likely to consume craft beer.

Craft breweries employ over 130,000 people.

Cideries, distilleries and winemakers have also seen excellent growth and good future business prospects.

As you can see, there are plenty of opportunities to start up your own brewery business. We’ll help you be part of that success.

Is a Brewery Right for You?

Although it can be exciting to form a brewery business, there will be significant demands on you as a small business owner. Here are some of the things you can expect.

A Day in the Life of a Brewery Business Owner

Here are some of the typical tasks you’ll be performing for your brewery business on a daily basis:

Checking the status and timings of the latest brews

Ensuring you have enough beer in stock for customers

Managing employees and schedules to ensure proper staffing

Working with product manufacturers, marketers and other organizations

Making financial decisions, paying bills and reconciling accounts

Booking music, entertainment and events

Dealing with inevitable day-to-day problems as they arise

Skills Needed by a Brewery Entrepreneur

The following skills will be very useful in your role as a brewery small business owner:

You will probably manage staff, so you will need to be a good people manager

It’s possible you will interact with the public, so interpersonal skills are essential

You will need to conduct market research to learn what to brew and what to sell

You will need to be prompt and have excellent timekeeping skills

You will work with product manufacturers on merchandise, glasses, packaging and more

Marketing is essential to a successful brewery, so expect to spend plenty of time on that

Capital expenses can be high, so you’ll need to be a good administrator and financial manager

If you have adjunct businesses like a brewpub, bar or restaurant, you will need to manage those as well

What Your Brewery Customers Are Looking For

Your brewery customers are looking for a variety of unique features in your brewery, including:

A great atmosphere and sense of community

Fun music and events that they can take part in

An excellent selection of styles and flavors of beers or other alcoholic beverages

Helpful information on the tastes, brewing process and origin of beers

Friendly and knowledgeable staff to help them choose the right drink

Unique and distinctive branding and packaging of your beverages

What Type of Brewery Should You Start?

If you want to start a successful brewery business, it’s important to know what your options are. Here are some of the more popular business ideas.

1

Microbrewery Only

A microbrewery by itself doesn’t have an attached bar or brewpub. Instead, they supply beer to other bars, pubs or breweries as guest taps. Later on, they may also sell prepackaged bottles and cans through retail outlets.

2

Microbrewery and Bar or Brewpub

Making a bar or brewpub part of your brewery is a great idea. You can appeal directly to customers, sell beer to the public at better profit margins and create a reputation as a cool place to be. Naturally there is more overhead expense with having an attached bar or brewpub, but your increased revenues and profit margins will help to offset this.

3

Specialized Microbrewery

Most microbreweries will produce a variety of beers: IPAs, stouts, porters, golden ales, pilsners, lagers and more. You can choose to go a different route and produce one or two types or styles of beer and do it really well - for example you may choose to specialize in sours and saisons, or beer reminiscent of a particular region like Belgium or Eastern Europe.

4

Cidery

Hops are not the only game in town. Cider is also enjoying a renaissance with the discerning drinker, and it could be easier to make a mark in this space.

5

Distillery

You might be interested in brewing hard spirits. Whether it’s gin, bourbon, rum, or something else, small distilleries have become much more popular over the last few years.

6

Winemaker

If you like the grape, you could produce some excellent wines. Although they are most popular in California, many other parts of the U.S. are suitable for growing grapes and producing an excellent bottle.

Validating Your Brewery Business Idea

These areas are just starting points — there are many different types of brewery businesses. Once you’ve identified the areas you’d like to go into, you need to validate your brewery business idea.

Identify your brewery business’ unique selling points (USPs)

For a brewery this might be your location, the type of beer you sell, the entertainment you provide or something else. Whatever it is, it needs to be part of your marketing and a compelling reason for people to drink with you.

Look at who your competitors are in the space

Breweries are becoming increasingly popular. While an average-sized city can support several, it’s important to understand what other breweries are offering so you can find a niche in the market.

Get involved with business communities and discussion groups

One of the great things about brewery business is that there are plenty of great communities and discussion groups. Get involved with them and learn the ins and outs of your chosen market before committing.

The thing to learn here is that it’s okay to say “no” to your first, second or third brewery business ideas. Very few entrepreneurs get it right first time. In fact, getting it wrong is often a badge of honor! Still, you don’t want to waste too much time, energy or money on the wrong initiatives, so ask and answer these questions honestly to find the right way forward.

Startup Costs for a Brewery

Compared to many other small businesses, microbreweries have high startup costs. A combination of a large building to brew in, the sophisticated equipment needed and special ingredients like hops, barley and malt all means a high initial capital expenditure. If you have a bar, brewpub or cafe as well, you can expect those costs to increase significantly. Here’s a (very) rough guide to what you can expect to pay:

  • Brewing equipment could cost anything between $100,000 and $1,000,000
  • The lease or rent on your location varies widely between cities and lots, so inquire with local property owners
  • Preparing your brewery and brewpub is also expensive — you will likely need special flooring for the brewery that could run to thousands of dollars, you may need to get special electrics and water lines put in and you will need to pay for construction, decoration and fixtures for your brewpub
  • Overall, starting a brewery could cost you anywhere from $500,000 to $2.5 million or more depending on your desires, ambition and ability to negotiate
  • You will need to pay alcohol tax and licenses and permits to brew and serve alcohol

Your Brewery Business Plan

A good business plan with accurate financial projections is at the heart of any financially responsible, well-managed brewery. You will need to define how you’re going to run your brewery business, market yourself, get sales, make a profit and grow.

You will also need a business model for your brewery.

This will detail where your revenue will come from, what your profit margins are, how quickly you will pay off debts and include a thorough accounting of all your initial and ongoing brewery costs.

Brewery business plans do vary slightly, but they should all cover the following areas:

1

An executive summary with the most important points from your business plan

2

Your goals and what you hope to achieve with your brewery business

3

A description of your brewery business, background information and context

4

A market analysis and likely demand

5

An overview of how your brewery business is structured

6

Your business model

7

How you will market and sell your offerings

8

Financial projections, revenue and profitability

9

Appendices

We’ve got the perfect guide to writing your business plan.

Choose the Right Business Structure and Register Your Brewery Business

Choose the Right Business Structure and Register Your Brewery Business

There are five main business structures you can have in the U.S., and it’s important to choose the right one. We’ve shared your options below. They are:

Sole Proprietorship

This is the "default" business structure and is what your brewery business will be if you decide not to create a more formal structure. We don't recommend this type of business as it doesn't give you the legal protections you need.

Partnership Company or LLC

This is a type of business that is formed when two or more people work together without creating a more formal business entity. Like a sole proprietorship, it may not give you all the protections your brewery business may need.

Limited Liability Company or LLC

The most common type of business entity. An LLC is fast, simple and inexpensive to set up and maintain. It protects your personal finances and assets and is a great way to start your brewery business.

S Corporation

This is a more complex type of business and isn't generally recommended for smaller organizations.

C Corporation

These are the largest and most complex types of businesses and are typically far more than the average brewery entrepreneur will need.

For more information on the advantages and disadvantages of different types of businesses, please see our in-depth guide. If you’ve still got questions, we’ve answered them to help you choose the right business structure for your brewery business.

In most cases, our recommendation for your brewery business would be to create an LLC. We’ve got a complete guide to everything you need to do. LLC formation does vary from state to state, but we’ve got you covered, wherever you are.

Setting up Your Business and Brewery Operations

Once you've legally created your brewery business, you’ll need to get some other things in place.

The Complete "Start Your Business" Checklist

A Clear and Comprehensive Guide to Starting Your Business the Right Way

The Complete Start Your Business Checklist

Rules, Regulations and Taxes for Your Brewery Business

Breweries require extensive licenses and permits. In addition to standard local business licenses, you will also need permits to brew and sell alcohol, as well as meeting other federal, state and city regulations. We can help out with researching your brewery business licensing needs.

Taxes

Taxes are a fact of life if you’re in business, and there are various ways you will need to file and pay them. This can include self-employment tax, state income tax and federal income tax. Depending on where and how you’re selling products and services, you may also be liable for sales and use tax. As a brewery, you will also need to pay taxes for every pint or glass that you sell. We can also prepare and file your tax returns for you.

Insurance for Your Brewery Business

Most brewery businesses should have comprehensive business insurance. There are various types.

Workers Compensation Insurance for Your Brewery Business

Workers compensation insurance provides coverage for job-related illnesses, disabilities or injuries that affect employees. Regulations for this insurance vary from state to state. It typically covers areas like medical costs, loss of earnings, compensation and retraining.

General Liability Insurance for Your Brewery Business

This insurance protects your brewery business from claims due to being sued. This may include injury to members of the public, property damage, personal liabilities, legal defense and more. It can help protect your business from financial penalties and bankruptcy.

Home and Auto Insurance for Your Brewery Business

If you are working from home on the administration of your brewery business or driving a vehicle for work, check whether your existing home and auto policies cover you for work use of your home or car. If not, you should either expand your policy so you’re covered or get dedicated business insurance.

Maintaining Your Brewery Business

There are certain forms and legalities you need to follow to keep your brewery business in good standing.

1

File an Annual Report

Most states require all businesses to file a report once a year. This report has details of any major changes to who owns a business and other major impacts on a business’ legal status. We can file your Annual Report on your behalf.

2

Pay estimated taxes

You will be expected to pay estimated taxes on what you plan to earn in the current business year. Typically, you will need to pay estimated taxes in April, June, September and January (of the following year).

3

Renew Business Permits and Licenses

Your business will probably have several licenses, permits and other regulations. These typically need to be renewed every year.

4

Prepare Your Taxes

You will need to work with your accountant to prepare all the taxes you need to pay.

5

File your taxes

You will need to file your taxes once a year.

6

Pay payroll and sales taxes

If applicable, you will need to make payroll and sales tax payments on a regular basis.

Groups and Forums for Your Brewery Business

Here are some useful places where you can connect with other brewery entrepreneurs:

Useful Online Tools for Your Brewery Business

Here are some really great online tools for managing your brewery business. They will reduce the time you spend on administration, help you to collaborate with others and free up your time to grow and manage your new venture.

Conclusion

Although starting a brewery can be tough and requires plenty of money, the rewards can be even bigger. Profit margins on beer are typically very good, and with sound financial management, you can turn a good brewery into a thriving business.