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How to Start a Brewery Business

Breweries are one of the most exciting types of businesses to
be involved with. You get to create delicious drinks, host a
community of people, indulge in the craft of brewing and provide
all sorts of additional benefits like a bar, food, music and more.

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.

Breweries are one of the most exciting types of businesses to be involved with. You get to create delicious drinks, host a community of people, indulge in the craft of brewing and provide all sorts of additional benefits like a bar, food, music and more.

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 100,000 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
  • Deciding if a brewery business could be right for you
  • Ideas for the type of brewery business that you could form
  • Proving your brewery business can work
  • Brewery business planning
  • Choosing the right business structure for your brewery company
  • Setting up your brewery business, including location, equipment, employees, taxes, finances, licenses and more
  • Where to find brewery business groups, forums and support
  • Helpful software for brewery business owners

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.

  • 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.

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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 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.

Strong research abilities

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.

Good math skills

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.

Excellent forecasting abilities

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.

Great flexibility

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.

Excellent forecasting abilities

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.

Great flexibility

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.
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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
  • You will need to pay alcohol tax and licenses and permits to brew and serve alcohol
  • Overall, starting a brewery could cost you anywhere from $250,000 to $2.5 million or more depending on your desires, ambition and ability to negotiate

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:

Here’s what you can expect in an average day
  • 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 Appendice

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:

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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.

Limited Liability

Partnership

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.

Series LLC

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

S Corporation

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

C Corporation

C Corporation

These are the largest and most complex types of businesses and are typically far more than the average entrepreneur or brewery business owner 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.

Location of Your Brewery

Your location will be essential. The space needs to be large enough for your brewing operation and prepared to handle the unique requirements of making alcoholic beverages. If you also have a bar or brewpub, you should factor in local footfall, traffic access and parking. You will also need space to store drinks, manage the business, host musicians and more.

Brewery Equipment

Breweries are extremely reliant on specialized equipment. From brew kettles and mash tuns to barrels and endless amounts of cleaning fluid, this is where the majority of your capital expenditure will be in the early days.

Marketing Your Brewery Business

Marketing will be a huge part of your brewery business. Naturally, you will need an awesome website, but you'll also need to get branding, newsletters, digital ads, social media accounts and other channels in place. You should also focus on local marketing and branding, especially if you are selling into retail stores.

Software and Processes

Brewery entrepreneurs make extensive use of software; see our great list of the top apps at the end of this guide.

Employees

You won’t be able to do everything by yourself — it’s rare to find someone who can be everything a brewery needs (administrator, marketer, brewmaster, server and more). This means you will need to hire employees and have the right attitude, approach and support for your workers.

Finances and Taxes

You will need a separate business bank account for your brewery business. You might also want to consider a business credit card. Additionally, you will need to keep careful bookkeeping records and file business and personal taxes. Here at Incfile we can even help you file your taxes.

Our Start a Business Checklist will get your business going in the best possible way.

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.