Go pro??

[Baz Chaz]

After a mate of mine sampled a bottle or three of mine he asked if I'd thought about starting up a micro brewery, he even offered to join me and look after the paperwork side of things and we'd give it a go as a small business. I've certainly got the room/premises, I'm retired so have the time, my mate is retiring soon and as he's in business/finance etc and between us we can manage start up costs etc, so that wasn't a problem.

.... but ... and it's a very big but, I enjoy my brewdays and enjoy the proceeds of my hobby, it's exactly that, a hobby :

Now if it was to become work, that could knock the fun out of it :? Not saying don't do it, but have a long hard think about crossing over from a hobby to a business. I started off a small business, doing something I enjoyed, because I enjoyed it and I was also good at it, it started to take over. Initially a couple of days a week, then very soon 5 days a week, then I was finding people ringing me up and wanting more and more. Looked into bigger premises and just in time thought hang on, this is becoming serious, the fun's going from it, so luckily, I managed to sell up to a lad who'd been doing some work for me and he was young enough and keen, so he (still) has a thriving business.

However, another mate who has a business, which on the surface is doing quite well, plenty of orders, quite a decent amount of money coming in, but he is working a lot of hours and actually earning less than the minimum wage, he's having a serious rethink ...

There's an old maxim that is very true Turnover is vanity ... profit is sanity :!:

If you're going to do it as a hobby that might make a few bob or just break even, fine, but if you've a mortgage/family to feed etc you really do need to look at how much profit you can make.

 

[50quidsoundboy]

there's a great book called The Microbrewer's Handbook that seems to explain everything. i read it purely out of interest recently and it's very good.

 

[puravida]

there's a great book called The Microbrewer's Handbook that seems to explain everything. i read it purely out of interest recently and it's very good.

I agree - an excellent book!

 

[graysalchemy]

I am in the same position (well not retired) I brew with a guy who is a fantastic salesman, and he is always banging on about setting up. But as Barry says it then becomes a job and not a hobby, beer has to be made to an economic formula ie low ABV session beers to avoid higher duty, and thats not for me.

Also a s business model there are easier ways to make money where the government doesn't take a large proportion of you profits in duty before then tax you again.

So for me it is a non starter. :thumb:

 

[Baz Chaz]

I am in the same position (well not retired) I brew with a guy who is a fantastic salesman, and he is always banging on about setting up. But as Barry says it then becomes a job and not a hobby, beer has to be made to an economic formula ie low ABV session beers to avoid higher duty, and thats not for me.

Also a s business model there are easier ways to make money where the government doesn't take a large proportion of you profits in duty before then tax you again.

So for me it is a non starter. :thumb:

Thanks Alistair, I didn't want to come across as an old misery and sounding as I was trying to put people off, believe me I did actually think about setting up myself for a while, but had similar reservations as you :!: I'd rather stick to brewing for fun .......

anyone who does decide to go for it, I give you my very best wishes and hope you do well :

 

[graysalchemy]

I agree with you Barry if anyone does decide to go for it good luck, but please take a good hard look at it first, take advice and do some market research. :thumb:

Running your own business may sound like the ultimate dream but the reality is very different believe me.

 

[calumscott]

Interesting conundrum this...

...but (and IANAL) I think there are two ways round it but financially neither might not stack up.

The taxman is, on the whole, reasonably decent as there is tons of precedent and case law to keep them right.

So the problem is that:

a) you want to brew some beers for money.
b) you want to brew your own beer for your own consumption without paying duty.

Route 1 - Price to break even after duty.

So you set up a sole-trader brewing company and get all the relevant registrations. You brew beer for sale to whoever and price it at duty + the duty on everything else you are going to brew for yourself. You sell some, you drink the rest and your customers pay for your beer.


Route 2 - Limited co.

So you set up a limited company to brew commercial beer. You buy new kit into the ltdco, you brew for sale using this kit and keep VERY VERY accurate records, dates, times, everything. You brew your own beer from your existing kit and keep VERY VERY accurate records. You would have to do it through a ltdco though because otherwise as a sole trader you cannot draw the distinction between commercial and personal beer. Think about it this way. If you work as a brewer for Marstons, you are still allowed to brew your own beer. Hell, even if you OWN Marstons, you can still make homebrew - the company and you are separate legal entities.

Do your sums VERY carefully though... The chances of being audited, particularly in alcohol production, are high and that can be a hell of a cost for a micro business to bear.

 

[calumscott]

Oh, and commercial brewing from home shouldn't be a problem either.

You wouldn't be allowed to run a manufacturing business from a property designated with planning consent only as a residential property, you would have to get planning consent to change of use to include the manufacture of foodstuffs/beer/whatever. Shouldn't be too hard to do so long as you can prove that you're not going to be a nuisance...

 

[graysalchemy]

I think the initial set up costs of building a brew house befitting enviromental health standards would be quite high and then to only be producing 80L at a time sounds daft to me. Coupled with the real posibility of paying commercial rates on a proportion of your property, commercial water rates, insurance premiums this could easily run into a few thousand pounds of overheads just so that you can produce a few barrels of beer which can be sold in the local pub.

Thats not owning a business but owning a white elephant.

Its all about economies of scale the more you produce then your cost of sale is reduced as your fixed overheads are spread across greater sales. My business costs me about £18,000 a year just to open the front door and trade and thats before I have made anything.

you can still make homebrew - the company and you are separate legal entities.

I think it goes on the registered premises and not on the brewer/company, so you would still be liable if you brewed at the same premises.

 

[calumscott]

you can still make homebrew - the company and you are separate legal entities.

I think it goes on the registered premises and not on the brewer/company, so you would still be liable if you brewed at the same premises.

In which case one would be, to use the technical term, buggered.

 

[graysalchemy]

:rofl: :rofl:

 

[Dronfieldbrewer]

Yes you are all right....

The economies of scale are there to see, in an ideal world I would have a decent sized industrial unit, about 10bbl brewhouse, enough casks, someone to assist with the humping of bags of malt, loading the van etc. Just in that sentence alone I have spent well over £40,000 and not covered marketing etc. But I currently work from home bored shitless with my day job, I have a garage that currently is just a junk store, loads of contacts in the trade. I am fairly confident that i can brew a consistant pint.

However from little acorns....Look at Bradfield Brewery....Abbeydale Brewery

The storys....

Bradfield Brewery

Bradfield farm, a hillside dairy farm, losing money on every pint of milk sold, the farmers son brewed beer in the kitchen for his mates and for parties.

At the village fete he was asked to fetch a couple of bottles, someone drank one and suggested that he could brew for money (still from the kitchen). Soon the father realised that he could possibly get a small grant from Europe to help set up in an old cow shed, if the market was there to sell it.

Moving on a few years, The brewery is a 60bbl set up runs 3 brews a week, has a turnover in the millions, no cows on the farm, the farm yard has a fleet of brand new Merc 4x4s. The son who started it all still brews when he wants to, drives the van when he wants to and his mates who he used to brew for are all employed in the brewery and having a nice life.

Abbeydale Brewery

A random bloke gets into homebrew, goes to a few beer festivals of the time 1996, thinks that he could brew better, goes on a brew course and gets to meet another famous brewer, gets a job brewing and eventually sets up on his own with a 4bbl plant in an old dairy in Sheffield at a time when real ale was not accepted as mainstream as it is now, now has a 40BBl Brewery, 4 full time brewers running shifts 2 brews in a brew day, currently shifting north of 500 casks of ale/ week and rising.

Both of these brewers are a success story, risen due, in the main, to the demise of the really big brewers in Sheffield (Wards, Stones)etc. But they have 1 thing in common, they started with the idea of producing beer that they liked to drink rather than what the accountant wanted them to sell. To both them its still a paying hobby but just got bigger.

 

[calumscott]

Absolutely spot on Rob.

Without the people brewing what they like to drink we wouldn't have the resurgence of craft brewing that we are seeing.

It's just a tricky thing to get going in from the position of the average man. Without the farm buildings how easy would Bradfield have found it? Where did Abbeydale get the cash to set up in the dairy?

These are people who have taken a big plunge or have had the resources to make a slower immersion. Most brewers have neither. The trouble with crossing the gulf from homebrew to commercial isn't the skill, we all know that we can produce beers better than what's on sale from the mega-brewers, it's the red-tape that makes it different to any other hobby which could support itself with a small commercial element. That option just doesn't seem to be available to hobbyist brewers like it is to photographers, handicrafters, sportspersons who could do training etc.

 

[graysalchemy]

I think both those examples had an initial production level much higher than you are suggesting. And also they started a number of years ago when economic circumstances were very different and they were relatively few micro breweries compared too today.

I am not saying it can't be a success, I wish Uncle Pumble the all the luck in the world and hope he succeeds, but we mustn't forget another member who's business failed this year (admittedly due to other circumstances).

The road to business success is littered with casualties who just didn't make it some due to bad luck but many to bad planning and overly ambitious expectations of reality.

 

[calumscott]

The road to business success is littered with casualties who just didn't make it some due to bad luck but many to bad planning and overly ambitious expectations of reality.

Profound.

Right. And profound.

 

[jamesb]

Legally you can brew in garage but cannot sell it to shops and pubs as its a residential area so you need another area to sell it from.

Rubbish. But you do need a premises license (and a personal license) which may not be so easy to get.

 

[critch]

he has been in the local CAMRA newsletter as the smallest brewery 80 litres. ( he intends to supply to festivals, private parties and weddings etc).

sorry to dissapoint but the wc brewery in chester was 60l.....http://www.wcbrewery.com/

theyve ceased trading due to work commitments, but were absolutely top notch

 

[Dronfieldbrewer]

he has been in the local CAMRA newsletter as the smallest brewery 80 litres. ( he intends to supply to festivals, private parties and weddings etc).

sorry to dissapoint but the wc brewery in chester was 60l.....http://www.wcbrewery.com/

theyve ceased trading due to work commitments, but were absolutely top notch

This is exactly what I have in mind, bit of fun really but where I live there is a beer festival at least twice a month

 

[alanywiseman.]

I like the idea of this (not for me yet but we will see how the future goes) but if there are concerns about the duty you would need to pay on the beer why not sell the green wort?

Aleman has discussed before how he was thinking about doing but am unsure why he never did. If you have a LHBS then you may be able to sell them jerry cans of wort that people just add yeast to. There would definetly be no HB twang in the final product.

if you have a 80L system that is 4 20L brews. Could probably sell them for 25-30 quid i think if you managed to skip the LHBS. If not you would need to lower your price a bit.

It could be a start before having to worry about the duty you may need to pay selling your beer.

 

[Dronfieldbrewer]

Thats a good point....Never thought of that