In 2022, the retail sales volume for craft brews reached $28.4 billion, accounting for nearly 25% of the total U.S. beer market. If you’ve always wanted to start a brewery, now might be a good time. Here are five steps to help you get started.
Come up with a business plan
A well-researched business plan is the foundation of any business, since it guides you through the early stages of setting up your brewery. It helps you think through some of the important details of your business, like your products and services and how you’ll make money.
It’s also a good opportunity to do market research and figure out how you’ll set your business apart from nearby breweries. Think about how you’ll market your brewery and build your customer base.
The idea of writing a business plan intimidates many people, but it’s not as hard as you might imagine. If you need help, you can use this free business plan template from SCORE. Once you’re done, you can work with a SCORE mentor to refine your business plan.
[Read more: 6 Steps to Market Your Business in a Competitive Market]
Choose a location
Next, you’ll need to choose a location for your brewery. Taking over an existing brewery will be the easiest route to take, but you can start with a brand-new location. You’ll need to make sure you have a large enough space to accommodate your brewing equipment and guests.
In addition to the size, you’ll want to think about the parking and how accessible that location is. You’ll also want to think about any zoning restrictions, since breweries are usually only allowed in industrially zoned districts.
One of the most expensive parts of starting a brewery is all the equipment you need to purchase.
Determine what equipment you will need
One of the most expensive parts of starting a brewery is all the equipment you need to purchase. But it’s a worthwhile investment, and you can sell any equipment your business outgrows.
Here’s some of the equipment you’ll need to purchase:
- Mash tun
- Brew kettle
- Fermentation tank
- Storage tanks
- Kegs
- Bottles
- Tap handles
[Read more: 7 Small Business Financing Trends to Watch in 2023]
Apply for the necessary permits
Any restaurant that serves and produces alcohol must apply for various state and federal permits. Some of the licenses you’ll need include the following:
- Federal brewing permit: Before you can commercially produce alcohol anywhere in the U.S., you must be approved by the Alcohol and Tobacco Tax and Trade Bureau. You can apply online by filling out an application that’s known as a Brewer’s Notice.
- State liquor license: You’ll also need to apply for a state liquor license. To get started, you’ll need to find out what the liquor laws are in your state. It’s a good idea to contact your state’s Alcohol Beverage Control agency to find out what you’ll need to do.
- Food service license: If you plan to serve food, you’ll also need to apply for a food service license. Your local state health department issues these permits.
This list is only a starting point — make sure to check on any additional state-specific permits you’ll need.
Apply for financing
Starting a brewery is expensive, and you can expect to spend anywhere between $500,000 and $1.5 million. Most people don’t have that kind of money lying around, so you’ll likely want to apply for financing.
U.S. Small Business Administration (SBA) loans are a good option, since they come with competitive rates and lower down payment requirements. And some SBA loans come with ongoing support as you continue to grow your business.
The SBA’s most popular loan program is a 7(a) loan, which is available for up to $5 million. You can use these loans for working capital, purchasing and installing equipment, and purchasing furniture.
You can also consider loans from a bank, credit union, or online lender. Or you may be able to access equipment financing for the brewery kitchen.
[Read more: Small Business Funding: A Breakdown of Business Loan Types]
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
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