Business model for brewpub - Home Brew Forums

Yesterday, 11:13 PM	? #1
Member ? Join Date: Sep 2010 Location: NJ Posts: 97	I stumbled across this site while surfing: http://sites.google.com/site/republicbrewpub/ Are these numbers typical? $1.2 million initial investment, run at a loss for 5 years, so at the end of all of it you can make $50k/year? That's a horrible ROI. I'd really love to leave the corporate world, but not if that's what it means.
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Yesterday, 11:26 PM	? #2
Senior Member ? Join Date: Jul 2009 Location: Scranton Posts: 161	I've worked in two brewpubs -- one as the brewmaster and bar manager, that lasted 4 years; the other as front manager that barely made it a year. I can't speak to the start-up numbers for either venture. However, the first one spent about $250k to start up, and that was already an operational restaurant when they converted. The brewpub business, when it is going well, is a hell of a lot of fun. It's busy, stressful, hard work, but the rewards are great. However, you need to understand that a brewpub is really TWO businesses: a brewery and a restaurant. Neither industry has a high success rate for start ups, and both are pretty labor intensive for the owners. I'll give you a key, however: advertising. Both of the brewpubs I was with ran afoul of the advertising industry by not getting bills paid, so they couldn't continue to advertise. So it became harder and harder to attract new customers. Secondly: the food and service are absolutely critical. The beer will bring people in, but the food will bring them back. If you let the food slide even a little, you will get a bad reputation in the community. Remember, if 1 customer has a bad experience, he will tell 10 people. There's 10 folks who won't come. If 1 customer has a good experience, she will tell 10 people. There's 10 folks who may or may not come in. I don't mean to be a downer -- I loved working in that industry -- but go in with your eyes wide open. __________________ Two Kids Brewery Primary: Lots of my Jenna Rose Pale Ale. Got graduations and weddings (the bride is the namesake) coming up. Secondary: Don't use one Kegged: Sadly, I finished off Mom's Best Brown Ale Planned: biere du garde, Amber red ale, Jenna Rose Pale Ale
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Yesterday, 11:47 PM	? #3
Member ? Join Date: Sep 2010 Location: NJ Posts: 97	Quote: I've worked in two brewpubs -- one as the brewmaster and bar manager, that lasted 4 years; the other as front manager that barely made it a year. I can't speak to the start-up numbers for either venture. However, the first one spent about $250k to start up, and that was already an operational restaurant when they converted. The brewpub business, when it is going well, is a hell of a lot of fun. It's busy, stressful, hard work, but the rewards are great. However, you need to understand that a brewpub is really TWO businesses: a brewery and a restaurant. Neither industry has a high success rate for start ups, and both are pretty labor intensive for the owners. I'll give you a key, however: advertising. Both of the brewpubs I was with ran afoul of the advertising industry by not getting bills paid, so they couldn't continue to advertise. So it became harder and harder to attract new customers. Secondly: the food and service are absolutely critical. The beer will bring people in, but the food will bring them back. If you let the food slide even a little, you will get a bad reputation in the community. Remember, if 1 customer has a bad experience, he will tell 10 people. There's 10 folks who won't come. If 1 customer has a good experience, she will tell 10 people. There's 10 folks who may or may not come in. I don't mean to be a downer -- I loved working in that industry -- but go in with your eyes wide open. I hear you. I'd actually love to combine my two passions - BBQ (real BBQ, ribs, brisket, pulled pork) and brewing. But if it would take over a million to start, and the terminal profit would be 50k/yr, it's a non-starter for me. Some of the assumptions in that spreadsheet seem excessive though. 23 full time employees? $500k for a 7BBL brewery? $500k in facility renovation? Seems like it should be possible to start smaller.
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Today, 12:47 AM	? #4
Brewed Nude Brewing Co. ? Join Date: Nov 2010 Location: Moreno Valley, CA Posts: 393	It looks very well thought out and pretty realistic in terms of startup costs. However, It looks to me that he's projecting income of about $50k as of year two, and the owner/managers are paying themselves $40k each a year, all during the operation. Most restaurants take about 3 years to start turning a profit and unfortunately most don't make it that long. I have a friend who runs a great little BBQ joint. He made his first profit after 2.5 years, but that is with him working 7 days a week. He's been open for about 4 years now, and still feels like he can't take a day off. __________________ Somewhere between your liver and spleen its always clear for one more beer!
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Today, 01:06 AM	? #5
Senior Member ? Join Date: Jul 2009 Location: Scranton Posts: 161	Quote: Some of the assumptions in that spreadsheet seem excessive though. 23 full time employees? $500k for a 7BBL brewery? $500k in facility renovation? Seems like it should be possible to start smaller. Absolutely you can start smaller. It depends on how big a place you want, and how many hours/days you are willing to work. You say you want to serve BBQ; how do you want to serve it? Do you want table service or have people come to a counter and collect their food, then seat themselve? How many tables do you want? If you want 20 tables, then you need 4-5 servers, plus your bartenders. What kind of liquor do you want to serve? In some places, you can get away with just wine and beer, and that license could be cheaper. Would a BBQ menu allow you a smaller kitchen staff? Many successful brewpubs (think McMenamins out in Oregon) have a menu exclusively of burgers and sandwiches. Many of those kitchens probably don't have more than 3 people in the kitchen at one time (not counting a dishwasher). Frankly, if I hit the lottery, I would open a brewery. I could focus on making beer and selling it locally, with no desire to expand beyond my region. It could easily be started as a one man operation, and peak at about 8-10 employees. __________________ Two Kids Brewery Primary: Lots of my Jenna Rose Pale Ale. Got graduations and weddings (the bride is the namesake) coming up. Secondary: Don't use one Kegged: Sadly, I finished off Mom's Best Brown Ale Planned: biere du garde, Amber red ale, Jenna Rose Pale Ale
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