10 tips of Set up Your Own Microbrewery
How to open a micro brewery? There are many issues to consider when starting a microbrewery. We have asked our expert brewing tutors to write 10 important tips for starting a micro brewery.
Small brewery startup list
Our basic small brewery startup list contains the basic things you should consider, and then incorporate them into your small brewery business plan before setting up your own small brewery:
1. Get enough funding for your micro brewery
It is not cheap to build a small brewery, but it also does not have to pay a price. Make sure you have enough funds. If you do not need to rely on the brewery as your main source of income by establishing a small brewery, then you can start small. If you decide to build a small brewery, you can start with a 3-barrel (400 liter) factory as part of the beer bar, and then the entire brewing kit is only $18,000. At this price, even if it can get the job done, you won’t get a high-quality kit.
What type of brewing kit does a small brewery need?
You need to pay for the reliability, quality, and technical support of the brewery, but it may be worth the extra money. There will also be other start-up costs, such as the cost of fitting out your premises, barrels and other accompanying brewing and commercial equipment. If you don’t have a ready route to the market through a bar or pub, then to make the brewery viable, then you will need to look at a larger brewery. We recommend a scale of at least 10 barrels to produce economically viable keg beer and considerable profits.
Micro brewing scales are important
The bigger the better, because it can provide your brewery with economies of scale, but obviously this additional brewing capacity costs. Once you have all the expensive breweries, make sure to use professional small brewery insurance to protect it from theft or damage and your valuable beer inventory. Crucial to your finances is that you understand the taxes and fees associated with beer production.
2. Provide enough expansion space for your brewery
From the first point of view, anyone who builds their own microbrewery needs to make sure they can scale. When you are working hard to get your brewery off the ground, this may be the most distant thing in your mind, but soon, the scale of most micro breweries will surpass their original factories. Make sure you have enough space on your premises to expand the brewery, unless you are ready to set it up from scratch again. Usually one larger or several permitted wineries and fewer fermentation tanks are planned for the first phase, and then only the fermentation tanks are expanded.
How much space do I need for my microbrewery?
A 3bbl factory only needs 30-50 square meters to operate. For a 10 bbl factory, you need at least 120-180 square meters. Relocation of the brewery is expensive and time-consuming, not to mention the interruption of beer production, which will not be great for your old customers.
3. Including “slippage” time
Take into account the delays in the initial brewery setup. You want to make your microbrewery start smoothly, but you need to take into account a little slippage. Maybe the plan to allow you to change your use to the B2 use category required by most breweries is delayed, or your grant application will take longer than you think to approve. Environmental agencies will not immediately agree to discharge.
4. Correct market analysis of craft beer
Know your market and understand your competitors. Craft Brewing is a very friendly business. There is a “brotherhood” relationship between microbrewers, and it is not uncommon for microbrewers to help each other. However, despite the close relationship with your winemaker, they are still your competitors. Is your local market already saturated by other micro devices? If your business plan primarily involves the production and sale of keg beer, then remember that your market is primarily the local market initially.
Beer bars and/or bars are important
This means you need to make sure that there are enough bars in your area ready to accept your beer. Start your research early and talk to local wine merchants to see if they are ready to buy your beer at a reasonable price (depending on the region, the price per 72 pint barrel may range from 65-100+ GBP) . Please consider registering and selling your beer through SIBA’s Beerflex program. Consider creating your own tap room or renting a bar at the beginning. This route to the market is critical to your long-term profitability, but in the early days, the double profit of beer will be the difference between survival and bankruptcy.
5. Long-term planning of your small brewery
Develop a long-term plan for your beer brand and small brewery. You should start with the long-term vision of the brewery business. Do you want your brewery to become primarily a local producer of keg Ayers? Do you want to become an export-led beer brand?
Small and beautiful
Are you satisfied with the lifestyle that the microbrewery brews a small amount for bottling and sells it as a craft beer in the farmers’ market? There are many business models for microbrewery, but there is a plan. That being said, you must always remain flexible and react to market changes. All successful companies show the characteristics of a long-term vision, but at the same time have the ability to adapt and seize opportunities.
6. Consider the form of packaging and the way to market
Consider all the routes your beer takes to the market and which are best for your small brewery. The main packaging forms of beer are: barreled, bottled (filtered), bottled, canned, and barreled. Each has potential appeals, disadvantages, and cost implications, so make sure to choose the right combination for your brewery and beer brand.
7. Do you have the skills to run a brewery?
Building a small brewery like any new business is the right combination of skills. Do you have all the skills to make great beer and then sell it profitably? Take a closer look, if you don’t, you may want to consider starting this business with someone with free skills. Remember, one of the old maxims is that brewing is 80% clean. The same goes for commercial brewing; you just have more!
Think about the business interruption plan-there is only one of you!
In addition, please consider that if you only have one or two employees, they can perform each other’s duties. What happens if your chief winemaker gets sick or leaves? Do you have a plan? Can anyone take over your microbrewery? Otherwise, a brewery without a brewery is a meaningless loss-making operation. Obvious…but make sure you have the appropriate strategy.
8. Know your key financial indicators
Operating a small brewery, even a small brewery, has some crucial financial concepts. Cash flow is king. You make money to make money, but if you don’t have cash to pay for daily expenses, you will soon be at the mercy of banks or creditors. You don’t want that. Therefore, please make sure that you get paid for the beer immediately. Don’t let bars or bars, especially bars or bars that you have not dealt with before, get a long line of credit, otherwise you may be severely impacted.
Turnover is vain, but “profit” is sensible
Another point to remember is that turnover is vanity, while profits are sensible. You may think that you are selling a lot of beer, but if you are not making any or enough profit from each pint of beer, it is only a matter of time before your small brewery goes bankrupt. Our professional brewing tutor will show you how to price your beer to calculate all costs, including beer tax and value-added tax.
9. Equip your brewery with a refractometer
Buy yourself a refractometer to measure the specific gravity of beer. A good refractometer can be purchased for less than £100 and is useful for both commercial and home brewers. Compared with traditional hydrometers, it is easier to use in a small brewery environment, even if you need to use a conversion table to calculate the specific gravity.
10. Gain some experience and take the course
Building a new microbrewery is a daunting task, especially if you haven’t done commercial brewing before. If you have never worked in a brewery or have direct experience, it is worthwhile to gain some experience in the industry by working with a brewery. You can also get expert advice and take courses with experts, who can take you through all the things you need to consider before taking the risk. Winemaking is a great industry worth participating in, but you must open your eyes to enter it!