Opening a Brewery?

Sharpen your #2 pencil and do this exercise

I think one of the first steps in opening a brewery is figuring out how big your brewery will be. If you want a packaging brewery, then you start with a 15 BBL or larger system. A Brewpub, then about 5 BBL’s to 10 BBL’s. A Nano, then under 5 BBL’s.

However, the second step is super important. You need to figure out your labor. Let me explain why.

To make a guess on what your labor is going to cost you to run your brewery, you first have some questions to answer.

• What hours am I going to be open and how many days per week?

• Will I have full service or just order at the bar?

• What type of POS system do I need?

• How will people know what to do when they come in? Should I have a host?

• Who will open up and who will close it down at the end of the shift?

• Am I serving any food, and how will that logistically work?

Once you can answer these questions, you can now build a hypothetical schedule. I create a spread sheet to do mine. They are easy Excel sheets you can make up, or send me a note and I’ll send you one. Don’t worry about names of employees, but rather just list the positions across the top as row headings. This will be for all hourly wage earners.

For a brewpub this could include Bartender, Server 1, Server 2, Server 3, Host, Cook 1, Cook 2, Cook 3, Dish, Shift Manager. Next make the left column the days of the month. I typically just do this for 30 days.

Now start filling in how many hours for each one of these positions. For example a lunch bartender. If you were to open at 11:30 they might need an hour to prep their station. If the shift ended at 4:00, they still may need a half hour to do their check out. So I would fill in 6 hours (10:30 to 4:30).

You do this for every position. Hours will be different on a Monday than a Friday or Saturday. It all depends on how busy you think it will be on any day of the week. Once you have a full 7 days filled in, just repeat that for the rest of the days of the month. I just copy and paste. The whole process takes maybe fifteen to thirty minutes.

At the bottom of each column, fill in the pay rate. Using an Excel spreadsheet you can take the total hours of each column and multiply it by the pay rate to see what the cost per month is of a lunch bartender. Do this for each column.

Make another section of the sheet to include dinner and repeat the process. At the bottom, make a formula that will add up all the totals from the columns.

Finally, list your salaried individuals. This will be the general manager, assistant manager and the brewer, if that’s what you plan to have in your brewery. Put their monthly salaries down as well. This gets added to the total from your employees to come up with your total monthly labor.

This is really important when you want to figure out your break-even. You can’t get a good read on what your sales need to be to hit that magic break-even number if you don’t know what your monthly labor cost is going to be.

In our class this is one of the first things we do with our students. It focuses the group into thinking how this brewery will actually function. Of course they will also be cleaning kegs, tanks, transferring beer, and brewing, but it’s this kind of work that starts to make a dream become a reality.

Doing this will probably push you to make your brewery as simple as possible. As a side note I can say in all honesty that dealing with employees is the single most challenging thing about owning a business. Facing this at the beginning of your planning process is like standing next to the deep end of a pool and you want to swim but are afraid to jump in. Then you do, and you think “that’s not so bad”. The brewing business is worth it. Trust me on this.