How To Open A Brewery With No Money

How To Open A Brewery With No Money

Maybe you got into brewing with your buddies in college or picked up a hobby in adulthood. At a certain point, though, you may want to evolve that hobby into a business.

Brewing beer is the easy part, though. It can cost a lot of money to open a brewery, and with it being such a risky venture, pumping your own money into it is a gamble. Especially if you’re short on money to begin with. 

If you want to chase that brewery dream, you’ll need to learn how to open a brewery while short on cash. Plan to have tons of patience, guts, determination, and a vision that’s distinct from other breweries.

In this article, we’ll help you explore creative ways to find the money to open your brewery.

What do you need to open a brewery with no money?

When you’re short on cash, you need a lot of work ethic, creativity, and boldness. There are a lot of steps to opening a brewery, but it’s not exceedingly complicated. Here’s what you need to do:

• A brewery concept: You’ve probably been working on a brewery concept since you started brewing all those years ago. This is the easy part.

• A brewery business plan: The most important step to opening any business is writing a business plan. Your brewery business plan will be your guiding light through the entire process of getting to opening day. This document not only explains your idea, but it goes into granular detail about how to operate each day, how you’ll stand out from the competition, and how you’ll maintain a sustainable profit margin.

• Bar capital: If you want to open a brewery with no money, you still have to find money somewhere. We’ll delve into this more later.

• Licenses and permits: Licensing and permitting rules vary from state to state and even from city to city. If you know where you want to open your brewery, make sure you do your research on what’s required to open a business — especially one that sells alcohol.

• Menu: You may have a good idea of what kinds of beer you want to sell at your brewery, but are you serving up food, too? This ties back to your brewery concept. If you’re a brewpub, what kind of bar menu will you offer?

• Brewery staff including FOH, BOH, and managers: There’s no need to hire right away, but you should understand what kind of staff your brewery needs to function properly so you can build that into your financial projections.

• Brewery technology: As you scale your brewing operations, you’ll need a slew of new technology to accommodate more beer. Likewise, if you’re running a restaurant in the brewery, restaurant technology can help you save money and streamline operations. Some of what you’ll need includes a point-of-sale system, inventory software, accounting and payroll software, and more. 

• A marketing or promotional plan: The brewery scene is more competitive than ever today. You need a great brewery marketing plan to make your business stand out and attract new customers to turn them into repeat ones.

• An opening date/launch plan: When you open your doors, you want to make sure there’s business for you. Building excitement up to opening day is important so that you can hit the ground running right out of the gate.

How much does it cost to open a brewery?

Breweries — even microbreweries — are extraordinarily expensive to open. You can expect to spend anywhere from $10-30 per square foot, which adds up quickly. The average microbrewery costs at least $250,000 to open, while the overall average startup costs for a brewery can be between $500,000 and $1.5 million.

How to open a brewery with no money?

You probably don’t have hundreds of thousands of dollars just lying around. So, how do you open a bar with no money? There are a number of avenues worth exploring.

Apply for restaurant loans or explore capital opportunities

Just like any other business, there are many restaurant financing options that aspiring brewery owners can use to find funding. However, restaurant financing options are often a little less straightforward than ordinary business loans so make sure to consult with a financial planner before signing any paperwork.

Financing options will depend on your specific situation, but speaking generally, you could find partnering lenders, get help from community development organizations, or access micro-lending programs like the Small Business Association (SBA) loan program. Do some digging online to see what resources are available to small business owners in your area.

There are also peer-to-peer lending services that match lenders with borrowers, and traditional bank loans to get startup funding. These are usually good low-interest rate opportunities, but it may take a while to get approved.

Lastly, alternative lenders specializing in the food and beverage industry have become more popular in recent years. These lenders understand the unique nature of food and beverage and can give you terms that are more reasonable for a brewery. Many alternative lenders also may provide business guidance and offer custom repayment plans, operating almost like an investor.

Find an investor

Speaking of investors, they’re out there. However, finding a restaurant investor be difficult, and finding an investor for a brewery might be even harder. 

The best investors for something like a brewery are people you already know. Friends or family members could act as angel investors — investors who put their money behind a project because they believe in the individuals or goals behind them. Basically, if your aunt really loves your beer, maybe she’ll give you some seed funding.

It doesn’t have to be friends or family, of course. Talk to people in your network and try to figure out if they know of anyone in the community who is looking to invest in local talent or businesses.

Get creative with crowdfunding

Crowdfunding a brewery? Yes, it’s possible. Believe it or not, crowdfunding sites like Kickstarter, Indiegogo, GoFundMe, and Wellfound have successfully funded restaurants before.

You may not get every dollar you need to open the business, but a great crowdfunding campaign can get you off the ground floor. The key is getting people excited about your beer and about having you in the community. That means an inventive grassroots marketing campaign that may include showing up at farmer’s markets or going to Octoberfests to get more people to taste your beer. You should pitch your business plan to influential local business owners and also offer great incentives to people who back your business. (Free beer for a year, anyone?)

With crowdfunding, it’s about quantity more than quality. Getting $5 from 10,000 people is just as nice as $50,000 from one person.

Start small

We alluded to it in the last section, but starting a pop-up or taking advantage of community events like farmer’s markets and food festivals is a great option to build up your brand. Branding is crucial for a new brewery and by getting your beer out into the world and into the hands of the public, you’ll build a customer base and a proof of concept that you can show to potential investors.

Additionally, pop-up bars have become a trendy way to bridge from small brewing to open a larger operations. Now well-seasoned bar concepts from the Christmas-themed Miracle to culture-themed bars in Chicago have succeeded starting from humble pop-up roots.

When you start small, your mistakes are smaller so you can iron out the details as you go and earn a little startup money at the same time.

Reach out to your local restaurant association

Finally, restaurant associations are a great asset for anybody in the food and beverage industry. Your local restaurant association could have the contacts and guidance to help you open a local brewery with no money. From leads on brewing space to intros to potential investors, there are many ways a restaurant association can help.

Some good resources to check out are:

• The National Restaurant Association, which offers events and webinars to guid restaurant and small business owners.

• Your state restaurant association, many of which offer specific programs and perks to help out aspiring brewery owners.

• Local groups like Rotary may not have financial assistance programs, but they will have members with business experience who can help you.

Toast for breweries 

Beer is a passion project, and you’ll need a lot of passion to get a brewery off the ground. Starting a brewery is extremely expensive, especially if you want to offer a restaurant aspect. It’s an arduous, time-consuming project that will require a whole lot more than the love of making beer. But with this guide in hand, you’ll have an extra asset to help you open a brewery with no money.