I have always been a car guy and part of the fun of cars for people like me is taking an old car and making it run correctly. To do this, every once in a while you need to do a tune up. Because a machine, or your body, or your mind, or your garden, or anything really, will degrade over time unless you tend to it.
This is especially true for your brewery. So now that we are heading into the holiday season, it’s a great time to plan for a brewery tune up. By this I mean taking stock of your brewery where it stands currently and deciding what needs to be tweaked at this point and what you just want to keep an eye on and possibly address in the future.
The beginning of the year is a great time for renewal and to perform this basic function. I thought I would list the things I look at when someone wants me to do a tune up on their business.
P&L
The first thing I do is look at the year end profit and loss statement and compare it to the previous year(s). Was it less profitable? What stuck out and was it a one time hick-up in operations or a new trend? What line item that has grown and can I deal with it to make the brewery more profitable? Are beer sales down? Food cost gone up? What about insurance. Would it make sense with the new year to get bids on a new policy? For example if you found a policy that was $100 cheaper, that equates to $1,200 is savings, which at a 10% net profit means you would need an extra $24,000 in sales to give you that extra $1,200. There is a HUGE multiplying effect in saving on expenses.
There is probably some low hanging fruit on your P&L that for a little effort you can deal with that isn’t time consuming at all.
Expenses
The big ticket items I would want to do a deep dive on would be your cost of sales to make sure they are in line. This would be the cost of beer, liquor, wine, food, and merchandise. If any of these are creeping up, then it’s time to look to see if prices of ingredients have gone up, there is waste in the brewery or kitchen, there is theft, really, any number of causes. Hopefully you are doing at least monthly inventory cost controls. If not, now is the time to start doing this easy task.
I know some breweries that don’t do inventories or even produce a profit and loss statement. They only know if they are doing well if there is money in the account. You would be surprised how many businesses go on this way. It’s not sustainable.
Business Systems Check
The other tune up item I look at is their business system which involves how they do their books. How they hire and fire people. How they train. Do they have a system for keeping the brewery looking well taken care of? What is the overall structure of the day to day running of their business. If the owner or managers are burnt out, then I would guess the brewery is lacking in this area.
Exit Strategy
If there is not a way to unwind this beast, or at least not spend all your time in it, is there a plan in place that you can start on now? It’s like the best time to plant a tree - 20 years ago and now. If you are running your business with no end in sight, then coming up with a strategy to get out of it needs to be in place as soon as possible. Yes I know some people want to run their business until they are almost in the grave, then hope that their children will take it over. But for the other 99% of brewery owners, don’t kid yourself. One day you will wake up and dread going into the brewery and dealing with the same problems, again. I like to help people come up with an escape plan. Even if you never use it, it’s nice to know you have that get out of jail free card.
Quality
How do you feel about what you serve? You might not have the attention to detail as when you first started. Or perhaps the brewer who took over from you when you were the brewer two years ago, is not following the methods you taught them. Same goes with the food.
Send beer samples off to Siebel to have them analyzed for off-flavors. Do a brew with your brewer to see what he is doing. Have recipes changed in the brewery or the kitchen?
Competition
This is a good time to check to see what your competition is charging for a pint. What promotions are they doing and are they successful? Have you been to the competition? How was their service? What did the place look like. It can give you a fresh perspective about your own place.
There is a whole lot to unpack in those six brewery tune up steps. But don’t be overwhelmed. Even if you only did one or two you would be so far ahead of the competition that doesn’t take the time to do this. It could really open your eyes.
If you are interested in some tune up help. I do this all the time for breweries. It’s fun for me, cheap for you, and helps pay for my car habit. Shoot me an email.
