The leap from home to commercial brewing??
- Thread starter mickeyt69
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Anyone who is seriously considering setting up their own commercial brewery should sign up for Brewlabs' Introduction to Commercial Brewing course. I did this back in 2005 and it was money very well spent
St John and his colleagues pull no punches on the course regarding business reality - and these guys own Darwin Brewery, so they ain't talking out of their backsides. A good insight into commercial reality as well as brewing basics.
St John and his colleagues pull no punches on the course regarding business reality - and these guys own Darwin Brewery, so they ain't talking out of their backsides. A good insight into commercial reality as well as brewing basics.
Dronfieldbrewer
Landlord.
Its all well and good as a hobby, you brew when you feel like it, no deadlines to fill and brewing what you like and want to drink but seriously think this one through..
Say that you need an income of £30k/ annum and you can sell a cask of 9 with an ABV of 4.3% for £60 or so. The maths are that with ingredients, leccy, beer duty, you would be lucky to achieve 40% as a mark up.
This has to pay for, rent, fuel for the obvious van, insurances, breakages, mainainence, upgrades, purchase of kit and return of capital to backers, replacement of casks and your income etc
so say rent on a lock up unit or similar £400/month, fuel for van £200/ month, insurances for stuff £150, £200 for maintainence, £100 for upgrades, then if you have to borrow funds to set up, the costs of that on top.
You will need to shift a lot of casks, just to cover the costs, then to make a few bob will have to shift at least 20-30 casks on top each and every week
Therefore the set up that you will need has to be at least able to kick out that little lot, also how many times will you brew in a week?, once, twice if three times is your answer and then you will be falling short of deliveries, losing track of casks, getting in a muddle with the paperwork. HMRC are gits and do not like to know that you are not up to the job
I have looked at this seriously as a 2nd string to my dayjob. I would need at least a 5bbl brewery to accomododate that little lot, brewing twice a week. I think for the first 6 months or so it would be an adventure. It could be great but the capital employed to do it properly is daunting.
However I think the best idea is to buddy up with a micro, take your best beer in for their opinion, offer to help for free. Then if your really lucky and they are impressed with your beer they may offer for you to "cuckoo" with their brewery, Google "steel city brewing" for your insperation
Say that you need an income of £30k/ annum and you can sell a cask of 9 with an ABV of 4.3% for £60 or so. The maths are that with ingredients, leccy, beer duty, you would be lucky to achieve 40% as a mark up.
This has to pay for, rent, fuel for the obvious van, insurances, breakages, mainainence, upgrades, purchase of kit and return of capital to backers, replacement of casks and your income etc
so say rent on a lock up unit or similar £400/month, fuel for van £200/ month, insurances for stuff £150, £200 for maintainence, £100 for upgrades, then if you have to borrow funds to set up, the costs of that on top.
You will need to shift a lot of casks, just to cover the costs, then to make a few bob will have to shift at least 20-30 casks on top each and every week
Therefore the set up that you will need has to be at least able to kick out that little lot, also how many times will you brew in a week?, once, twice if three times is your answer and then you will be falling short of deliveries, losing track of casks, getting in a muddle with the paperwork. HMRC are gits and do not like to know that you are not up to the job
I have looked at this seriously as a 2nd string to my dayjob. I would need at least a 5bbl brewery to accomododate that little lot, brewing twice a week. I think for the first 6 months or so it would be an adventure. It could be great but the capital employed to do it properly is daunting.
However I think the best idea is to buddy up with a micro, take your best beer in for their opinion, offer to help for free. Then if your really lucky and they are impressed with your beer they may offer for you to "cuckoo" with their brewery, Google "steel city brewing" for your insperation
graysalchemy
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As I have said before brewing is large capital investment for low profits. From an investment point of view brewing is at a disadvantage over other industries because of the duty paid on beer. I make as a picture framer far greater profit margins for far lower capitol investment as I would if I was a brewer. Hardknott dave from the hardknott breeery in his blog has given a figure of £100k turnover will only return £10k. And 100k is a lot of beer.
However we do have sucess stories on this site whom I take my hat off to. :
However we do have sucess stories on this site whom I take my hat off to. :
daves a great guy but his figures are a little off
we brew 50bbl a week , we employ 5 full time staff and 3 part time, we make a profit
by next year we should be up to 75bbl a week we get 65-100 quid a firkin depending on abv you can pick up brewery quite reasonably but 100k is quite reasonable for set up costs, though ours was no where near.....
we brew 50bbl a week , we employ 5 full time staff and 3 part time, we make a profit
by next year we should be up to 75bbl a week we get 65-100 quid a firkin depending on abv you can pick up brewery quite reasonably but 100k is quite reasonable for set up costs, though ours was no where near.....
I made the leap from Domestic Brewer to Commercial Brewer back in July 2011. I love it. It is bloody hard work, but there a few feelings in the world like walking into a pub and watching fifteen pints of your beer being ordered and served across the bar in just the time you spend chatting to a landlord about how beer sales are going. Or hearing that one of my beers sold out in six hours on saturday afternoon!
The biggest issue I have found is the amount of time you need to spend in the brewery dealing with things. This single aspect has not been stressed enough on any of the brewing courses I have attended. I still have a full-time day-job, although the way the economy is going, that might well be coming to a rather sticky end in the next month, and although I can handle the brewery operations side on weekends and evenings (and the occasional skive off for a couple of hours) I had seriously under-estimated the amount of time and effort that I would need. Beer won't sell itself no matter how much we would like to think that word of mouth and a good performance at a beer festival will bring publicans to the door. You need to get out and meet them...and there are a lot of them.
I am brewing between 3 and 5bbl a week...obviously nothing like the Big Boys, yet...and, even with the selling price around here in the £60s for a nine, my break-even point to cover all of my overheads is six nines per week. When I get to ten nines per week I am going to employ someone to help me. I think if I were to do all of this again, I would definitely not do this alone. You need help to do this properly.
There does seem to be an awful lot of negativity on this thread about not taking the risk, not taking the plunge, it's a lot of money to spend, or avoiding doing something because there is simply not enough profit to be had. Yes, it's a risk. Yes, it might go wrong. No, doing it is definitely not for everyone. That is fine. But it might not fail...it might just work. Anyway, life is just too short. I am 47. In the last few years I have watched more than a few of my friends and family become ill and sadly die. That might happen to me too. Better to spend what time I have left being passionate about making great beer and perhaps even trying to make a living out of it and perhaps passing on that knowledge and passion and those brewing skills and that how-to-set-up-a-business experience to someone else.
Oh, I'm off for a beer. :drink:
Take care
Jon
Rough Draft Brewing Company Limited
Facebook:/roughdraftbrewing
Follow me on Twitter at @roughdraftuk
The biggest issue I have found is the amount of time you need to spend in the brewery dealing with things. This single aspect has not been stressed enough on any of the brewing courses I have attended. I still have a full-time day-job, although the way the economy is going, that might well be coming to a rather sticky end in the next month, and although I can handle the brewery operations side on weekends and evenings (and the occasional skive off for a couple of hours) I had seriously under-estimated the amount of time and effort that I would need. Beer won't sell itself no matter how much we would like to think that word of mouth and a good performance at a beer festival will bring publicans to the door. You need to get out and meet them...and there are a lot of them.
I am brewing between 3 and 5bbl a week...obviously nothing like the Big Boys, yet...and, even with the selling price around here in the £60s for a nine, my break-even point to cover all of my overheads is six nines per week. When I get to ten nines per week I am going to employ someone to help me. I think if I were to do all of this again, I would definitely not do this alone. You need help to do this properly.
There does seem to be an awful lot of negativity on this thread about not taking the risk, not taking the plunge, it's a lot of money to spend, or avoiding doing something because there is simply not enough profit to be had. Yes, it's a risk. Yes, it might go wrong. No, doing it is definitely not for everyone. That is fine. But it might not fail...it might just work. Anyway, life is just too short. I am 47. In the last few years I have watched more than a few of my friends and family become ill and sadly die. That might happen to me too. Better to spend what time I have left being passionate about making great beer and perhaps even trying to make a living out of it and perhaps passing on that knowledge and passion and those brewing skills and that how-to-set-up-a-business experience to someone else.
Oh, I'm off for a beer. :drink:
Take care
Jon
Rough Draft Brewing Company Limited
Facebook:/roughdraftbrewing
Follow me on Twitter at @roughdraftuk
graysalchemy
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- Messages
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Well Done Jon :clap: :clap:
My negativity towards this subject is simply that many people just think they can spend a few grand, build brewery and brew beer.
But as you and Critch will vouch that is probably a very tiny part of the story. Getting your product out there and selling it is probably the most difficult part no matter how good your product is an how passionate about it you are.
The day to day running, bureaucracy etc are not to be under estimated. The head aches of cash flow and getting paid which are accentuated as you become more successful. The more sales the more debt you incur and the more credit you have to give creating greater pressure on cash flow, this is obviously exacerbated by relatively low profit margins and tax and duty which has to be made regularly.
After running my own successful business for 8 yrs brewing would not be my choice of start up business especially if I had little or no business experience. However I can see the attraction that it has and if you have the money prepared to take the risk and have a sound business plan and business experience then it can work and obviously does work for a large number of micro breweries.
My negativity towards this subject is simply that many people just think they can spend a few grand, build brewery and brew beer.
But as you and Critch will vouch that is probably a very tiny part of the story. Getting your product out there and selling it is probably the most difficult part no matter how good your product is an how passionate about it you are.
The day to day running, bureaucracy etc are not to be under estimated. The head aches of cash flow and getting paid which are accentuated as you become more successful. The more sales the more debt you incur and the more credit you have to give creating greater pressure on cash flow, this is obviously exacerbated by relatively low profit margins and tax and duty which has to be made regularly.
After running my own successful business for 8 yrs brewing would not be my choice of start up business especially if I had little or no business experience. However I can see the attraction that it has and if you have the money prepared to take the risk and have a sound business plan and business experience then it can work and obviously does work for a large number of micro breweries.
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