How to Open a Brewery in 2,364 Easy Steps – Part 3

So in Part 2 I talked about how to figure out if your particular brewery dream is viable from an operations financial perspective (can you make a living brewing beer?). Next, you will have to figure out what it would take, in terms of dollars, to make it happen. That’s right – startup expenses.

What are all the things necessary to start a brewery? One thing is the actual brewery – I mean the brewhouse, fermentation vessels, and conditioning vessels. Don’t forget about a hot liquor tank and a cold liquor tank. You will need a keg washer, a mill, and the means to transport your crushed grain to the mash tun. Will your kettle and hot liquor tank (and maybe mash tun) be steam jacketed? If so, you will need a boiler to supply that steam. You will need to be able to control the temperature of your fermentation tanks, conditioning tanks, and cold liquor tank. Unless your plan is to put all of these in a gigantic cold room, they will be glycol jacketed. You will need a glycol chiller and the necessary piping and solenoid valves. Will you be a brewpub? Then you will want serving tanks as well. Don’t forget about all the pumps, fittings, clamps, hoses, etc. Think about what pieces you are willing to try to find used, as well as what pieces you can improvise or do without for a while. If you will be doing small packaging right away, you will need either a canning or bottling line. You will need a cold room of some size, depending on your brewery model.

What size vessels you need and what mix of vessels will depend on what your brewery model is. How can you figure out what you need? Once again, the information is out there. Know someone at a local brewery? If not, you should. I’ll write more later on the nature of the people in the craft brewing industry and how mostly awesome they are. If you can make a contact at a local brewery, they may be willing to offer some advice on configuring your brewery to do what you want it to do. I will say that although everyone I have met in the craft brewing industry has been beyond helpful, keep in mind that these are very busy people running what can be extremely unpredictable and urgent businesses. You may not be their first priority. Don’t take it personally if they do not get back to you right away (or at all, occasionally). Keep in mind you are not the only person asking them the same questions. Another way to get some advice on your brewery needs is to talk to brewery equipment suppliers, steam boiler suppliers, and glycol chiller suppliers. These companies have experienced, knowledgeable people who will give you free advice up to a point on equipment choices. Remember that they are also primarily salespeople. As a result of the growth and maturation of the craft brewing industry, there are also craft brewing consultants for hire out there. If you are willing to pay for the knowledge, you can find individuals and firms that have a lot of experience doing what you are thinking about doing. These may be an option for you, depending on your situation and mindset.

So, you have a general idea of what brewing equipment you need and have a few quotes from manufacturers (don’t forget to ask about the cost of shipping to where you are). Ask those manufacturers how long their lead times are for delivering what you need. You will probably hear that it is four to six months. Then, ask around about how long it takes to get your Brewer’s Notice from the TTB. You will find out that you can’t even begin the TTB application process until you have a physical address. You will also hear horror stories from people for whom it took ten months to get their Brewer’s Notice. Other people will say it took two months. Obviously, the average should be somewhere in between there. You probably also will have to make some construction changes to whatever location you choose for your brewery. That will cost money (obviously), and will take time to get done. All of these facts will lead you to a key realization about opening a brewery – there is a period of time of several months between when you find and secure a location and you can actually start brewing beer. You will have to put numbers to the things you will have to pay for while you oversee your construction buildout, apply for your Brewer’s Notice from the TTB, and wait for your shiny new brewing equipment to arrive. These will be the construction buildout itself, rent, utilities, and salaries.

Other things to think about and research the cost of: attorney fees, taproom furnishings and equipment, cold room, water filtration equipment (if you will be using municipal water), a pilot brewing system, a forklift (purchase/rent?), storage racking, office supplies and computer equipment, an air compressor, computer equipment, kegs (don’t forget those), and small package materials (if applicable). This is not a complete list. Try to think of everything. Don’t forget you will have to pay for a few months’ worth of malt, hops, yeast, and cleaning/sanitizing chemicals also.

Add it all up and now you have an estimate of what it will cost to get your brewery started. It is a lot of work to track all this down, and requires you to think a lot about what it will take to run your brewery. One question can create ten more. Chase them all down. The exercises of determining your brewery’s operating financials and startup expenses will pay mucho dividends when it comes time to write your business plan. The business plan is the articulation of your dream. It is your way to communicate to other people what you want to do, why you want to do it, how you plan to do it, and why you will be successful. The business plan is the next step. I’ll talk all about it in Part 4.

I’ll post a What’s Brewing update in the next couple of days. A lot has happened since the last one, so we need to catch up.

I still can’t say much about Half Batch Brewing other than we continue to move forward and are still on schedule to open this Summer/Fall. We are working on bringing the halfbatchbrewing.com website to life. As part of that, this blog will move over there. I’ll let you know when that happens (I’ll link the new blog on the halfbatchbrewing.com website to the Half Batch Brewing Facebook page the way this one is now).

-Nate