Financial Factors to Consider Before Starting a Brewery
It may seem fairly simple to start a brewery. You just need to buy some equipment, make good beer and then sell it to local restaurants and distributors at a healthy profit. However, there are a number of financial factors that you have to consider before you can start your own microbrewery. What are they? Let’s take a look:
- Cost of equipment
The very first thing that you need to be concerned about is the cost of microbrewery equipment. You should be aware that it doesn’t come cheap and you have to have enough capital to get it or else your business idea cannot move forward.
- Construction costs
Considering the function and size of the brewery ahead of time will help you plan accurately in regard to construction cost. A microbrewery can simply be a place for making beer, but if you want to have a restaurant or taproom, you will need more space and this will add to the costs.
- Licenses and other costs
While a federal license will not cost you much, the local and state costs will vary. These costs can climb up considerably as there are licenses, fees, taxes, insurance and bonds that have to be considered.
- Reinvent back into the business
Even when you start earning from your microbrewery business, you will have to reinvest a substantial amount of profits to pay for expansions and upgrades.
- Bad batches and other issues
When you are running a business, it is not necessary that everything goes smoothly. Brewing the beer doesn’t mean that everything will turn out to be okay. There might be some bad batches, you may want to expand the taproom, staff turnover may increases costs or you may have to purchase a refrigerated truck for vehicles.
These are some of the costs you will have to deal with when get into the brewing business.