An exception to the builders triangle
I learned this about the time we did our third restaurant and I’ve written about it in one of the books. It’s the idea that when you are starting a business, the building triangle seems to make a lot of sense. This is where you have three sides - fast, cheap and right, but you can only have two. So if you want to build a space out fast and keep it cheap, you probably are going to mess some things up and it won’t be right. Or if you are a perfectionist with little money you know the space is going to be right and you will save a bucket of money, but it’s going to take you a lot longer to get it done.
I’ve seen this over and over. When we did that third restaurant that also turned out to be our first brewery in 1992 (started brewing at the end of ‘93 - but that’s another story) I thought I was being so clever because I found an existing restaurant, so I figured we only had to do a remodel and get open. But the restaurant we had taken over had been a restaurant from the 1940’s, and really once we dug into it, needed to be gutted and re-started from scratch. For example, their grease trap was a coffee can hanging on a wire beneath a drain, I kid you not, I have a picture of it somewhere. So the triangle in this case turned out that we built it right, but it wasn’t cheap and it wasn’t fast.
My friend Dean recently sent me a listing for 20 BBL conical fermenters for $2,000. I know that’s an exception but currently there are so many bargain basement deals on used equipment, this is the time to buy if you are planning on opening a brewery.
But wait there’s more. It had been go-go years for quite a while and in some markets breweries were over built. There are almost as many as coffee places it seems. I’ve already talked about the things you need to do to be unique, so I don’t think having too many breweries is an issue. Your’s just has to be special. What is super however is, because many of these breweries have closed down, never having recovered from Covid, there are lease deals out there for spaces where the infrastructure is already in place. Maybe not the equipment any more - heck, we talked about that, it’s cheap now - but all the floor drains, refrigeration perhaps, proper floors, restrooms, loading docks, heating and air conditioning. Even the office is already there. You only need to do a simple re-brand and re-model, which if you use your imagination, is very cheap.
It doesn’t have to be a brewery either. It could be a restaurant. Many of those didn’t survive Covid either.
I don’t think it’s because these were bad restaurants and breweries. They just built them in such a way they were super expensive and when sales fell, they couldn’t make the payments. What you can do is take them over for just a lease deal in most cases, but all the things that cost so much when building are already in place. These are things that the customer doesn’t even see. This leaves you with money for the things they do see, like lighting, furniture, a cool logo, etc.
This takes care of Cheap and Right. But here is the exception that presents itself in 2024/25: You can now have all three sides!
With taking over an existing brewery or restaurant space, you are not changing the use, so in most cases you won’t need an architect or engineer, and most of all, not trigger any of the change of use rules that a town could impose. Just remodel, brew some beer and open. Ha, there’s a little more than that!
I experienced this, the coming together of all three only once before. A group from San Francisco came to Santa Fe and spent about 1 million to do a restaurant. It didn’t fly, so they closed it with all the equipment still in place. We came in and did a very simple re-model but with a completely different concept. The place was beautiful (right), we were open in about 4 months (fast), and it cost us about $85,000 to open (cheap). That restaurant has been open for over 35 years.
I don’t know how long this current triangle situation will last, but now is not the time to shy away from opening a brewery. Try this just for fun, search breweries and restaurants for sale or lease in your area. You may be surprised.
