Starting Your Own Brewery (Book Review, Part 4, Planning and Funding Your Brewery)
The Brewers Association’s Guide to Starting Your Own Brewery
Edited by Ray Daniels (with more than 25 beer industry veterans contributing)
This is the fourth and final part of my review of The Brewers Association Guide to Starting Your Own Brewery. If you are curious why an Intellectual Property and Business Attorney would be reviewing such a book, you should check out Part 1 for some background (and because The Life of a Brewer was such a fun and inspiring part of the book). In the second section of the book, Facility Planning and Operations, the expert contributors got down to business with some highly technical aspects of getting started and running your brewery.
In the third section, we turned to Marketing and Distribution Programs, with great tips on branding, marketing, and building relationships with distributors, retailers, and customers. The final section, Planning and Funding Your Brewery is really about money. Starting a brewery is not cheap and the funds are going to have to come from somewhere. Even if you have the resources to self-fund, you still need a clear financial plan to make sure you don’t run out of cash or spend more than you could ever recover selling your beer.
As I mentioned, this is a four part book review, tracking on the four sections of the book: The Life of a Brewer, Facility Planning and Operations, Marketing and Distribution Programs, and Planning and Funding Your Brewery. So, if you haven’t read the other parts, you should check out the links below and make sure you subscribe so you don’t miss great content in the future.
The first two chapters in Planning and Funding Your Brewery, “The Hot Pursuit of Capital” and “The Ins and Outs of Brewery Finance” really introduce the basic “who” and “how” of raising money for your brewing business. They look at different sources of funding, like friends & family, banks, and small business loan programs. They are short and to the point. The intent is to get you started in thinking about sources of capital, but entire books have been written on raising funds for small businesses and every area (and personal network) is different, so don’t expect the complete answer here.
The next few chapters have the “technical” quality of Section 2, but are oriented toward finance and business planning issues. “Covering Your Assets” is an introduction to property and liability insurance (which every business needs) with special attention to different coverage for breweries. “There’s No Such Thing as a Bad Site, Just Bad Site Selection Decisions” explores the importance of site selection and “Brewpub Feasibility Planning: Market Analysis Studies” goes into a market-driven approach for brewpub site selection. “Performance Pro Formas” gets into the nuts and bolts of income statement projections, with examples that brewpub entrepreneurs should find extremely helpful.
The next two chapters almost felt like they should have been in Section 1. They fit right in with the advice found there. “The Four Corners of a Brewpub: Building for Success” looks at the key things to think about for your brewpub and “Roadmap to Success” does the same thing for packaging breweries, both based on the experience of industry veterans.
I really enjoyed the following two chapters for the insights they provide about brewpub and packaging brewery operations. They are the results of Brewers Association surveys, nicely grouped by barrel sales. “Brewpub Operational Survey Results” and “Packaging Brewery Operations Survey” are both interesting. I particularly enjoyed the results about beer styles that represent highest and lowest sales volumes for the participants in the survey. The data is from 2006, but still intriguing.
The book finishes up with a sample business plan in Chapter Thirty-Four, “Creating a Business Plan”. Needless to say brewpubs and breweries are large, complex undertakings and a good plan is an important step in building the business. It can also be critical for recruiting partners or investors, or working with banks and other professionals. The plan in the book is a modified version of an actual business plan that was used to raise capital, so it is actually an interesting read and a great starting point for your own business plan.
I found “Starting Your Own Brewery” to be a great resource and a book I would recommend to anyone starting or thinking about starting a brewery. No, it won’t teach you everything you will need to know (there is no such thing in business), but it is a great survey to start with that would combine well with other more general business startup and management books and, of course, books dedicated entirely to the art and science of brewing.
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The Brewers Association’s Guide to Starting Your Own Brewery is available on Amazon.com or from The Brewers Association website[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]
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