The old brewery debate

Leon103 · Mar 8, 2016

Like most home brewers the thought of starting a brewery as popped into my head a few times over the years.

On the weekend I went away with the wife and we tried a few brew pubs and different craft beers. It was the perfect date and all through the night my wife was commenting on how much nicer my brews were.

The next day we visited a brewery and after only 10 minutes my wife was saying we should set up our own. She adamant that I look into it and get some costs etc. I started looking at equipment that decided to search for breweries for sale and I have been offered a 4.5bbl brewery on lease. The previous tenant found a site closer to their home. It's on a farm in brecon and the owner said 90% of the equipment is still there with plenty of casks. He wants ÃÂ£300 a month which includes water and off and on licences. That sounds a brilliant deal. I haven't spoken further with him yet because I need to way up the pros and cons of this sort of business. I am not one for taking risks when it involves money. Anyone got any experiences of running costs for a brewery? I know I will have to sort out hmrc etc. What does this cost? Anyone with any links for costs. Ideally I want to know the rough cost to making a pint. Any resources will be greatly received.

Notlaw · Mar 8, 2016

I wouldn't know where to start on costs, apart from Google and phoning or visiting other breweries of a similar scale or slightly larger that may have started on that scale.

One thing I would do though, once you've found out all this, is offer the owner say ÃÂ£200 a month for the first year to give you chance to get up and running, then something like ÃÂ£425 a month for the second year to pay him back with interest. He can only say no.

Good luck and keep us all posted.

Halfacrem · Mar 8, 2016

It's the big dream isn't it. And I don't blame anyone for having it.

As you state you're not one for taking risks with money, maybe that in part answers your question (at the moment).

Have you run a Business before?
Can you sell?
Are you prepared to do everything for no pay? (for quite some period of time possibly)
Are you prepared to do all the Donkey work, due diligence, research, calculations to work out the costs involved (and are you prepared to put your House on the line for it?)
Are you prepared to volunteer at your local brewery to do all the s**t work for free to get some experience before you jump in?
Are you prepared to invest thousands of pounds in your brewery education while you are still working?
What about the practicalities, the lifting, the accounting, the deliveries, the marketing (finding a market first)

Please don't take the above as a wee on your camp fire, but running a business is bloody hard work, even if it's a Brewery Business and you have to be fully prepared to go through all the above and far more many times in your head and in reality before you can take the first step into any business.

If you're prepared to do all that, with many months of hard work and research and probably quite a lot of expenditure before you even get started on looking at premises and equipment, while still maintaining a smile, then go for it :thumb: I'll buy a pint off you :smile:

Leon103 · Mar 8, 2016

Notlaw said:
I wouldn't know where to start on costs, apart from Google and phoning or visiting other breweries of a similar scale or slightly larger that may have started on that scale.

One thing I would do though, once you've found out all this, is offer the owner say ÃÂ£200 a month for the first year to give you chance to get up and running, then something like ÃÂ£425 a month for the second year to pay him back with interest. He can only say no.

Good luck and keep us all posted.

That's a good idea. From our only conversation the owner said is open to negotiation and rather see it used than it not be used.

Leon103 · Mar 8, 2016

Halfacrem said:
It's the big dream isn't it. And I don't blame anyone for having it.

As you state you're not one for taking risks with money, maybe that in part answers your question (at the moment).

Have you run a Business before?
Can you sell?
Are you prepared to do everything for no pay? (for quite some period of time possibly)
Are you prepared to do all the Donkey work, due diligence, research, calculations to work out the costs involved (and are you prepared to put your House on the line for it?)
Are you prepared to volunteer at your local brewery to do all the s**t work for free to get some experience before you jump in?
Are you prepared to invest thousands of pounds in your brewery education while you are still working?
What about the practicalities, the lifting, the accounting, the deliveries, the marketing (finding a market first)

Please don't take the above as a wee on your camp fire, but running a business is bloody hard work, even if it's a Brewery Business and you have to be fully prepared to go through all the above and far more many times in your head and in reality before you can take the first step into any business.

If you're prepared to do all that, with many months of hard work and research and probably quite a lot of expenditure before you even get started on looking at premises and equipment, while still maintaining a smile, then go for it :thumb: I'll buy a pint off you :smile:

I rather have these questions now rather than when it's too late. Those are the same questions going around in my head. A lot are relevant in this situation, apart from there is no brewery for over 50 miles of where I am can't go volunteering. I did offer to help out in the closest brewery but didn't really get an answer. Costs seem OK has I don't have to buy all the brewing equipment and premises which what makes this such an ideal chance. One of main questions is would someone need to be at the brewery everyday I.e not on brew days. From speaking with other breweries they sometimes go days without anyone being in site which would be a worry to me.

terrym · Mar 8, 2016

Anyone who sets up a business, irrespective of what is is, needs a robust business plan, with your objectives spelled out, anticipated cash flows, and identification of your business risks with the potential impact good and bad, and probability of occurrence, the bottom line usually being money. There will be other things needed too in the plan. That way you have the best chance of success.
The best advice you can get is to first talk to people who run their own brewpubs or small brewery, they will have been through the learning curve and know how the business should be run. With the greatest of respect for my fellow forum members the vast majority on here are probably not going to have that experience, including me, although they will all be sincere in their views I am sure.
My personal advice is don't spend any money until you are sure you know what you want, and you are confident you know what you are doing. Brewing the odd 20 litres of home brew not the same as making a reasonable livelihood from brewing and selling beer, especially since your initial cash flow will be negative.
And remember nationally pubs are closing down not opening.
Otherwise, if you do decide to go ahead, I wish you best of luck :thumb:

Leon103 · Mar 8, 2016

Thanks.

The reason I am costs is to draw up a list of pro and cons for this and then look at a business plan and grants etc. I would normally not have thought about it any further until I saw this opportunity. It is a shame there wasn't more home brewers in that area on here to share the opportunity. I doubt there is anywhere else in the uk where you can lease a brewery for ÃÂ£300

Notlaw · Mar 8, 2016

First thing I suppose is to see what licenses you need to be able to sell it. Is it a different license to sell it direct to the consumer versus selling to a distributor (shop or pub)?

You want to try and get it into some local free house pubs and get selling at things like food festivals and farmers markets.

Oooh I'm excited for you. Any chance of a member blog with all the info on whats needed and your various findings along the way? I'm genuinely interested in following this.

geetee · Mar 8, 2016

My advice would be to register on a start up brewing course either in your area or remote. I did the full 9 week Brewlab course with mountains of information but they also run 1 week and 3 week courses. look at their website ,The course will answer ALL of your questions, help with costs,business plan,cash flow etc.and are available to help even when you leave.

Ã¯Â¿Â½ÃÂ£300 seems a remarkably small amount of money all in including casks and equipment. I was looking for premises locally with rent starting at Ã¯Â¿Â½ÃÂ£500 per month, buying equipment at Ã¯Â¿Â½ÃÂ£15,000 or more plus water and electric.. You may have landed on your feet but make sure whatever is included is in your contract/lease and that it all works.
Other things you will need include
Water company costs
Van/running costs
Business insurance
Hygiene certification
Start up ingredients costs
Advertising/website
At least 3 months to plan and scale up beers
testing of beers
Cleaning ingredients
Health and Safety plans including protecting the public from your product. (HACCP)
I am sure there is loads more but you should enrol to a course and you will find the chosen course will provide invaluable contacts and follow up support

PS
If you do go ahead try to get your beer as a "house beer" ina local pubs as this saves having to hawk your wares every week on the phone. The more guaranteed sales you have the better.

Leon103 · Mar 8, 2016

A course seems the best way forward but wanted a rough idea on costs before committing to anything.

My background is web design so that is covered cheap and I have a number of links in the beer business including a distributor (family friend).

All licences are in place. Water is free from a bore hole and all necessary paperwork is in place for that from the previous operator. I forgot to ask for water waste. I believe most of the legal stuff is in place for it to continue as a brewery (last brewery left on March 1sr)

terrym · Mar 8, 2016

You could do worse than talk to the previous tenant brewer if you can get hold of him.

Leon103 · Mar 8, 2016

Notlaw said:
First thing I suppose is to see what licenses you need to be able to sell it. Is it a different license to sell it direct to the consumer versus selling to a distributor (shop or pub)?

You want to try and get it into some local free house pubs and get selling at things like food festivals and farmers markets.

Oooh I'm excited for you. Any chance of a member blog with all the info on whats needed and your various findings along the way? I'm genuinely interested in following this.

IF I take it forward I would love to write about the journey. Early stages yet.

Leon103 · Mar 8, 2016

terrym said:
You could do worse than talk to the previous tenant brewer if you can get hold of him.

On the to do list. Thanks

geetee · Mar 8, 2016

As Terry M says above you have to put together a business plan including a spreadsheet showing all cashflow in and out. This will tell you if you are going to break even. The best way is to get on the phone and contact suppliers for ingredients and quotes for insurances. interest costs for loans. Don't forget to keep a captal sum for contingencies to tide you through until the money rolls in as some people dont pay csah.

You also need to know your local market, how much will they pay for a 9gallon cask of 4.3% ale ( ÃÂ£60 - 70 maybe). Use this as a basis and decide how many you are going to make each month. Dont forget you have to work out and pay duty on these ( approx ÃÂ£19 per cask) so after subtracting the duty, fixed costs and ingredients and wages everything else is profit

I will see if I have a simple profit and loss sheet (and maybe a business plan template) that I can PM you,this will include the headings for things where you will need to fill in costs, from multiple phone calls and calculations. You've probably got a few days work ahead of you.

Leon103 · Mar 8, 2016

Thanks geetee that would be handy. My wife run here own business for a number of years but it's been a while since I played about with balance sheets etc

I guess I know what I need to do just need to find the right sources for the information. Only started looking last night so it's very early days. Just shocked that this sort of opportunity was there for little monthly fee. I thought it was a bit of fate after the weekend I had. I guess in my head I think I would have investors/directors which would help.

geetee · Mar 8, 2016

Leon103 said:
Thanks geetee that would be handy. My wife run here own business for a number of years but it's been a while since I played about with balance sheets etc

I guess I know what I need to do just need to find the right sources for the information. Only started looking last night so it's very early days. Just shocked that this sort of opportunity was there for little monthly fee. I thought it was a bit of fate after the weekend I had. I guess in my head I think I would have investors/directors which would help.

The start up is the most hazardous and time consuming part and if this is effectively handed to you on a plate for a small sum then you are streets ahead. With a 4.5bbl you will probably have to brew 3 times a week at least to come close to making it pay AND will probably have to do most of the work yourself, not enough profit to employ cleaners sales people and drivers
That's the bit that put me off a bit, having to set up and do all that all at once

Leon103 · Mar 8, 2016

I need to find out what equipment is actually there.

Time to do the lottery.

Godfather50 · Mar 8, 2016

When considering this I read "The Microbrewers Handbook 3rd Edition", then I visited some microbreweries, then I constructed my business plan. Then I read Radical Brewing by Randy Mosher - he has an interesting take on donning the yellow wellies. My decision was to keep home brewing. I think leasing is the way to start. Good luck!

Toffee · Mar 8, 2016

Just do it! sounds like an amazing opportunity. You would need to get a lot of help with the business plan, how to use the equipment and so on. but i doubt you will ever get an opportunity to try it out like this so cheaply. if you can afford to not work for 6 months, drop everything and put 100% into this. if you don't I might!

First thing is to decide what TYPE of brewery you want to be. there are already a load of "traditional" breweries in that part of the world selling your bitters and golden ales. But then again, that is probably the biggest market right now.

best of luck.

Leon103 · Mar 8, 2016

Thanks. Shame I took 6 months off work last year after the little one was born. I am told there is a charity near by that helps with business plans and grants etc so another thing to look into

The old brewery debate

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