How to Start a Small Craft Brewery
While sitting with a friend playing giant Jenga in your favorite spot in town, you’ve certainly dreamed about owning your own brewery. Well, there’s certainly a demand for it, with an annual growth rate of over 14.1% in the industry!
Well, you could receive a piece of that pie if you know what you’re doing. Luckily, we can help. Here’s what you need to know about starting a small craft brewery.
How to Start a Small Craft Brewery
Of course, there’s no one right way to start a brewery. You should add your own personal touch into any business endeavor of yours, and you should base everything on your own circumstances.
However, there are some general best practices to follow when starting a small craft brewery. Let’s talk about some of them!
Businesses of every size need capital, no matter how big or small. Believe it or not, a small craft brewery may need more funding than you think. For a small craft brewery, you’re looking at upfront costs of at least $250,000 but likely closer to $500,000.
Each brewing tank is bound to cost close to $10,000 and you’ll need plenty of them. Then, you will need the location, distribution (if applicable), ingredients, employee salaries, and more.
Because of this, you need a lot of funding. You may find pinching pennies or choosing the right location will save you a pretty penny, but it’s always best to have extra cash on hand.
There’s a reason why 90% of startups fail, and it’s most often due to a lack of funding. If you think you need $400,000, aim for at least $600,000 from investments, loans, or crowdfunding. Whatever you can get.
Crunch the Numbers & Plan Ahead
Next, you want to run the numbers and determine how much you need and how much you can spend. The most important parts of developing a business plan are to understand what you have, what could go wrong, and how you intend to handle it.
For example, what happens if you spend all of the money to get started, nobody shows up for 3 months, and you’re left paying your employees’ salaries that entire time.
Also, what about marketing expenses? How will anybody know about your business? Careful planning is essential down the line.
Fortunately, there is a strong market out there for new craft beers and breweries. Because of this, you should play to your strengths, especially in the early days. Since your business will be strapped for cash, your two greatest strengths should be your menu and your marketing efforts.
Brew Some Beer
Now, we’ve arrived at the fun part. Developing a strong menu is critical if you want to succeed in the industry. There is a lot of competition in the industry since the demand has grown in recent years.
Before even applying for a business loan, it’s a good idea to try out different recipes and share them with the beer lovers in your life. Write everything down as you go.
Because the demand is high, the new people thirsty for a new brew will not only return but also recommend your brewery to their friends. The stronger your menu is, the more free marketing you get. 86% of consumers trust word-of-mouth marketing, and many marketers agree it’s the most valuable form of marketing available.
The longer your menu is, the wider the audience you will attract. Consider IPAs, stouts, sours, ciders, or anything else you can brew. The more, the merrier.
Consequently, developing a niche could help your brewery stand out from the rest. While there isn’t a huge market for brews such as non-alcoholic stouts or porters, there’s virtually no supply of them. Something like that could help your brewery expand.
Don’t Forget Marketing
Fortunately, we live in the digital age. Although word-of-mouth marketing is a great start, there are so many free marketing tools that startups can use to their advantage.
Immediately, you want to get on Facebook and other social media sites. You can get on this before you even open a business and start spreading the word. Ask friends and family to share it and try to post regularly in anticipation of opening day.
Next, develop a website with a full menu to get followers excited about the grand opening. Run promotional material, offer chances to win free beer, or do whatever you want to help get people excited.
With that new website, try to optimize it for SEO value to get noticed on Google. Get your business listed on every free directory you can find (especially local ones) and reach out to some beer blogs and ask them to spread the word, especially if you’re distributing!
If affiliate marketing, SEO, and social media aren’t working (or even if they are), spending some money on advertising, especially early on, could help you generate initial revenue.
We mentioned how expensive it is to start up even a small brewery, and that’s not even mentioning the licensing and liabilities. If there’s one thing you need more than anything on this list, it’s peace of mind.
Luckily, you can use an experienced craft beverage insurance agency to keep yourself and your investment protected. Don’t forget insurance!
Brew Your Future!
Now that you know some small craft brewery tips, don’t let them go to waste. With the right funding and planning, you could be living out your dream just a few short months from now. For more business tips, keep reading our blog, and start your brewery today!