Disclaimer: I am a homebrewer. I don't have an MBA, I don't have experience running a business, and I'm only a year out of college. I would never intend to try this until 5-10 years down the road. It's a long post, I know, but I'd like to get some helpful feedback. It's not written in business plan format.
I've been kicking an idea around in my head for a brewpub. After looking at pics of the smallest brewpub https://www.homebrewtalk.com/f5/smallest-brewpub-202767/, reading about how Dogfish started, and hearing about Massachusetts nanobrewery laws (farm-brewers license) I got to thinking...
Why can't you start a very small brewpub? Picking a smaller space has some pros and cons, but I think the pros help negate a lot of the risk.
Cons:
-You cannot serve as many customers, so your maximum profit is capped lower.
-Less economy of scale for ingredients, equipment, and licenses
-You cannot produce as much beer.
-You might have to brew more often.
-If you're successful, large crowds could give your brewpub a reputation as being crowded and scare customers away, even if crowds die down. Restaurant-goers are fickle.
Pros:
-Your maximum profit is lower, but so is your risk. You cannot serve as many customers, but you don't need to serve as many because your rent is lower. You might know of some restaurants which have a very small seating area, but are consistently packed. That's the idea.
-Startup costs are much lower. I'll go into that in a little bit.
-You can brew on a small scale. This allows you to have many different beers and limited releases available, and in my opinion, also allows you to make better beer. More on that, too.
-You can fill your seats more easily. A crowded place could build a good reputation/image.
My feeling is that the pros outweigh the cons; decreased risk and start-up costs, coupled with the ability to brew on a small scale, allows you to produce better and more varied beer which you can price higher. I live in the richest county in America, and there are plenty of people willing to pay a high price for beer. I'm talking all the way up to $12 per 12 oz glass for something really special. You could anchor your line with an accessible and cheap beer, and have plenty of really special limited releases: imperial IPAs, barleywines, RIS's, Belgian strong ales.
In terms of cost, if the laws in your state allow it, I don't see why you couldn't use food-safe plastic. It's not as durable as SS, but at a small scale, it's so cheap that you could afford to replace it twice a year. With care not to scratch it, plastic can last double that time. For example, you can buy a 20 gallon plastic bucket fermenter for $50 or less. If you primary for one month, 15 of those can produce 75 twelve ounce servings per night, a lot of beer for a small establishment. Too much/too little? Expanding is easy, because you only spent $750 on your initial fermenter setup.
If I'm way off somewhere, please tell me. I fully understand how difficult it is to come up with a real business plan and I'm sure there are people on this forum who know a lot more in this area.
I've been kicking an idea around in my head for a brewpub. After looking at pics of the smallest brewpub https://www.homebrewtalk.com/f5/smallest-brewpub-202767/, reading about how Dogfish started, and hearing about Massachusetts nanobrewery laws (farm-brewers license) I got to thinking...
Why can't you start a very small brewpub? Picking a smaller space has some pros and cons, but I think the pros help negate a lot of the risk.
Cons:
-You cannot serve as many customers, so your maximum profit is capped lower.
-Less economy of scale for ingredients, equipment, and licenses
-You cannot produce as much beer.
-You might have to brew more often.
-If you're successful, large crowds could give your brewpub a reputation as being crowded and scare customers away, even if crowds die down. Restaurant-goers are fickle.
Pros:
-Your maximum profit is lower, but so is your risk. You cannot serve as many customers, but you don't need to serve as many because your rent is lower. You might know of some restaurants which have a very small seating area, but are consistently packed. That's the idea.
-Startup costs are much lower. I'll go into that in a little bit.
-You can brew on a small scale. This allows you to have many different beers and limited releases available, and in my opinion, also allows you to make better beer. More on that, too.
-You can fill your seats more easily. A crowded place could build a good reputation/image.
My feeling is that the pros outweigh the cons; decreased risk and start-up costs, coupled with the ability to brew on a small scale, allows you to produce better and more varied beer which you can price higher. I live in the richest county in America, and there are plenty of people willing to pay a high price for beer. I'm talking all the way up to $12 per 12 oz glass for something really special. You could anchor your line with an accessible and cheap beer, and have plenty of really special limited releases: imperial IPAs, barleywines, RIS's, Belgian strong ales.
In terms of cost, if the laws in your state allow it, I don't see why you couldn't use food-safe plastic. It's not as durable as SS, but at a small scale, it's so cheap that you could afford to replace it twice a year. With care not to scratch it, plastic can last double that time. For example, you can buy a 20 gallon plastic bucket fermenter for $50 or less. If you primary for one month, 15 of those can produce 75 twelve ounce servings per night, a lot of beer for a small establishment. Too much/too little? Expanding is easy, because you only spent $750 on your initial fermenter setup.
If I'm way off somewhere, please tell me. I fully understand how difficult it is to come up with a real business plan and I'm sure there are people on this forum who know a lot more in this area.