Paralysis by Analysis

I have lost tracks on the number of Business Plans drafts that I have created to date. Trying to factor every variable, cost and issue before you even start to run a brewery, let alone a business is challenging. There is a fine balance of going big enough for growth, and not going too small that the costs become prohibitive to make a living, at least in the Bay Area.

Couple of weeks ago, one of my favorite local breweries announced that they were shutting down. A week later, a new press release announces that a skeleton crew is trying to keep things going. They are a regional size brewery with multi-state distribution, and chances are, you will find one of their beers on tap at your local in the Bay Area. Needless to say, I began to second guess all of this. Then again, they did just spend a few million on a large expansion. We will find out their fate in the coming weeks.

Craft Beer continues to expand. The number of breweries in the US is still growing like mad. With 826 breweries opening in 2016 and only 97 closings, the numbers are still looking good. To put it into perspective, there are about 10,000 wineries  and 5300 breweries in the US, and there are many more beer drinkers out there.

With the recent growth, there is a lot more competition out there. Bars don’t typically add a new handle when a new beer come out; they remove something else. Retailers only allocate so much shelf space for beer. The craft beer model is changing. In the craft beer boom of the 90’s, craft brewers were modeled after Brewpubs and Tied Houses, and the beer was brewed for the local market, and typically only available on-premise.  The breweries that survived were expanding into larger operations including packaged beer. The recent resurgence in craft beer saw the rise of the microbrewery and the tasting room. The tasting room is becoming an important part for off-site sales. Enthusiasts want to meet the brewers, experience the brewery through the tasting room and have access to the freshest beer as possible. As mentioned before, handles and shelf space is limited and the competition will continue to rise, and will start to shift the market towards the Brewpub and Tied House models.

As of today, I feel that I have  good handle on the financials, at least have created spreadsheets that can be quickly manipulated as the numbers become more concrete. My goal is finalize the first draft of the Business Plan in the next week – well supposed to be Business Plan’s are fluid documents and require constants updates, and to start getting feedback from some mentors and potential investors for the next set of revisions.

Cheers.

Then there were numbers

Lost in excel. I have been researching business plans, pro forma, cost of goods etc etc etc… for the last couple of years. I have accumulated dozens of samples and templates, but I never could make sense of it all, until now. Starting fresh, I decided to create my own from scratch. It is important to understand where those made-up numbers came from and how to manipulate the figures into a plan that works.

As I have learned in the last two years, most of the head brewers work is behind a desk. There is a lot of planning and number crunching to do to brew beer. In order to make your dream come alive, you need to analyze the numbers, plan, make budgets… Endlessly. After the estimated numbers are on the page, then it is time to research for the actuals. Make tweaks. Rearrange. Re-analyze. Rinse and repeat.

Need a break from Excel and switching over to Word and research. So there’s the market, local market, industry and …

I need more coffee.

First 1,000 Days

From Beer School to Brewer, The First 1,000 Days

Last Day at the Brewery

Final handover, process review from grain to glass, and fresh, warm donuts. Somehow I missed the let’s all get drunk, eat and celebrate part, but I will be ‘there’ a few days a week as I am getting use of office space during the discovery and planning phases. So there will be plenty of time to have a few beers with the old team.

Taking a few days off now for a mental health break. Really, it will be a mindset shift. I work for me now. Well, my family and likely the bank, the investors… I am very much looking forward to this. I am much more prepared to do this than I was just 2 years ago when I took that first leap out of the cube farm. What I have now are a bazillion questions and a dozen answers for each.

Where will it be?
Depends.

Do you have a name for your brewery?
Depends.

How big?
Depends.

Sounds like I am back in beer school. Lot’s to do. Lot’s more to learn. Thanks to every one who has been a part of the ride so far, we are just beginning.

Twist the wick, dump the clutch, time to burn rubber.

So It Begins…

Just over two years ago, I landed my first job in craft beer. Within a few months, I was not on the deck brewing, I became the Head Brewer for a local brewery. I told myself, I wanted two years running a brewery under my belt before I attempted my own.

Here we are.

As I celebrate SF Beer Week, I will get to do the parade lap as the Head Brewer for Devil’s Canyon Brewing Company, enjoy the company of my team and start to take those first steps in opening my brewery. I look forward to bringing a unique brewery experience to you in the very near future.

​KSU. Here we go…