Monthly Archives: January 2014

The Biggest day in this Process – Lease Signing Day

It looks like the day might finally be upon us.  This is the day that seems like it should be the first step in the process, but realistically is more like the 500,000th of 1,000,000 steps in starting a brewery.  I have thought about this day for years.  It’s like I need to pinch myself to make sure this isn’t a dream.  We have signed subject removal for leasing our space.  After a 12 month courtship, and months of negotiating, feeling elated, feeling depressed, and most importantly uncertainty, we have done it.

I know what you are thinking:  Whats the big deal?  You found a place to brew your beer.  Thousands of other breweries across North America have found a suitable place to brew their beer, what makes your accomplishment any different?  When I think about it that way, it doesn’t seem like that big of a deal.  But when you consider that we live in Vancouver, where land and warehouses are at a premium, it feels like a huge accomplishment.

I would say the key learnings from this process would be as follows:

  1. Don’t even consider buying a space, unless you are rich.  And that begs the question, if you are rich, why are you starting a brewery?
  2. Dilemna:  You can only have a one of the following:  A good landlord, a good location, a good space.  Which will you choose?
  3. Get ready for a personal guarantee.  Unless you have a brewery already, and if so why the heck are you reading this blog, get ready to lay whatever personal wealth you have on the line with your landlord.
  4. Expect to spend a lot of money fixing this space up.  Our bill is going to be huge, because we have a larger space, but even for small spaces, expect to spend $300,000 minimum.
  5. Use a good commercial realtor, who works exclusively in an area.  Don’t use a friend or family member who doesn’t know a lot about what they are doing.  We used Matt Smith from Colliers, and were very happy with our choice
  6. If you are ordering new equipment, don’t order any until you get your space secured.  I’ve heard too many horror stories to go down that road.
  7. Expect the unexpected.  There will be a fundamental problem with your space that you didn’t anticipate, so budget some contingency for your build out.
  8. Engage with architects, engineers and other professionals from the get-go.  They will help you understand what is needed and what is to come.
  9. Don’t lock yourself into a size of brewery, type of brewery or anything else until you find your space.  We totally changed our strategy based on the space we found.  Committing to a space is important to do before you commit to a type of brewery you are creating.
  10. Last and most importantly, PRAY.  Thats right, because when you find a space that seems really good, I can guarantee that there will be someone else who also finds the space really good, brewery or otherwise.  There is a lack of good space, and expect landlords hold all the power to pick who they work with.

So now, the process of starting a brewery truly begins.  It is hard to believe that from the time I started to write a business plan to this point in my life has been 5 years.  So patience, if not a inherent characteristic you have, will definitely be something that you develop.  If you don’t, I would say that your journey into the world of starting a brewery might be a short one.

Today will be my last shave, and I can start officially telling people that we have a space to brew our beer.  Many thanks to all those people who helped encourage and support us in getting to this point.  Without all that you have given to this process, I am afraid I wouldn’t have been able to do it.

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Sneak Peak at our Plans!

OK, I can’t release all the plans for our space, but I sure can give you a “teaser” of what things may look like.  More will come when we actually sign a lease …. which should be the topic of my next blog.  “Lack of signing a lease stress.”  Anyhow, hopefully those who know the rules around brewery lounges in Vancouver will appreciate the connection we are going to have.  The brewhouse is literally within arms length of the tasting room!

Sneak peak brewery

Thanks for the Support

Not much to say here, but thanks for the support and words of encouragement I have received from everyone who visits my blog.  I want everyone to know that I am touched by the kind words you have passed along, and the nice things you have to say about what I am doing.  It motivates me at times like this (12:45am Wednesday morning) to write my blog and take the time to connect with others.

When I started out in this process, I found there was a lot of information online, but a lack of details on what to do and how to get it done.  There were a few other blogs, but nothing itemizing the process of inception to brewery opening.  So it was my idea to add to the information out there in small way.  To see the positive feedback and read the messages that people are sending me has truly blown me away.

So thank you to everyone that visits this blog. I hope I can continue writing posts and inspiring others, as I was inspired by others who started on the path to realizing their dreams before getting ‘off the couch’ myself.  There is a quote that I love, and it goes like this.  “A dream doesn’t come reality through magic; it takes sweat, determination and hard work.”  Colin Powell (I think).  This is more true than you can ever realize.  I would probably add to this a little luck and a lot of sleepless nights.

As always, if you have any questions, or if there is anything you would ever like me to discuss, please contact me and I will blog about it when I can find the time.

Building Permit submitted

This past week we have successfully submitted our building permit to the City of Vancouver for our the building we are hoping to lease.  It seems so absolutely absurd to submit our building permit without actually having a signed lease in place, but we are making a huge roll of the dice on this.  When you start down the road of starting a brewery, a funny thing happens.  You start doing things that previously you would have thought were crazy.  Things like submitting a building permit without a lease in place!

Let me take a step back and explain things.  When I started off doing creating this brewery, I was quite a bit more risk adverse.  I would avoid over-exposing myself on most anything in business and finances.  Take for instance a personal guarantee, it is something I would have fought tooth and nail not to do about 2 years ago.  However, as time moves on and you are constantly taking chances and risks, what at one time seemed risky, now seems somewhat ordinary.  A good analogy would be bungy jumping.  The first time is scary as hell, the second time a little less so, and so on.  By the 15th time, it is still a rush, but a lot of the fear and inhibition has left the process.

So here we are, development permit in hand, building permit submitted, yet our brewery still has no name and still has no firm lease.  It is exactly the opposite of where I thought we would be considering my personality and this process.  It is where we are however, and I wouldn’t change it for the world.  I hope that we can have our lease signed in the next week, but it seems to keep dragging out and being delayed.  I am sure this will come to a rapid close in the next week, as there is literally nothing left to be done.  Luckily, I have a great group of friends, advisors and family members that have supported me.  Even with all these people around, and experience I have gained, I have learned that nothing is for sure, so my fingers are crossed.

Moving forward, we are going to have to make some big decisions.  Things like contractor, name, equipment, branding and marketing, finishing of tasting room, types of beer, exact size of serving bottle/can, financing to be finished, first hires, legals, accounting, delivery vehicles, etc, etc.  It seems like a mountain of work, but when you work in your own garden, it doesn’t feel much like work.  We potentially take possession of our space February 1st, and while we won’t be able to do much until we get our building permits, I do anticipate some epic floor hockey games.  Anyone want to join me :o)

My next blog will hopefully share some great news  about our lease and officially help our brewery become the newest entrant to the craft beer scene in Vancouver.

Damn Exchange rate!

Well what a bad surprise we received today about purchasing our equipment.  Instead of our equipment costing us about $550,000, we just got a 10% surcharge!  I blame myself, and I would recommend to anyone else who plans on starting a brewery to take note.  Watch the exchange rates and know the forecasts!  When a business needs to order equipment, fluctuations in the exchange rate can have a massive impact on costs.

Let me give you an example, from the time that we wrote our business plan about 4 years ago to today, the Canadian dollar has gone from about $0.95 Canadian for $1 American to what it is today $1.09 Canadian for $1 American.  As you can imagine this is crushing, and seeing the Canadian dollar lose $0.03 in one week, has become too much for us to handle.  We are purchasing some US dollars.

Unfortunately, this means that the cost of every dollar in equipment we buy, will now cost us about $0.10 more.  Just so you know, here are the costs for our equipment, at least what we have budgeted in our plan:

  • Brewhouse $250,000
  • Bottler $100,000
  • Fermenters and Conditioning Tanks $150,000
  • Misc Equipment $50,000

So all the costs of this equipment just went from $550,000 to about $605,000, as the suppliers we are working with accept American money only.  That sucks so hard I can’t even begin to tell you.  I feel so stupid for not thinking ahead to this possibility and changing some money over months ago.  If we had done this even just 2 months ago we would have saved about $25,000 in  costs.

So this leads us to a point that we must now consider.  Do we raise more money to pay for this cost overrun?  Do we look to purchase our equipment locally?  Or do we reduce the size of our equipment and shave some costs off that way?  Maybe there is a combination of a couple of these to make it work.

At the end of the day, there isn’t much that we can do about this.  All we can do is manage our actions from here on out.  It is a tough lesson for us to learn, and while there isn’t a lot that I can do about this, I can at least help someone else out to save some money.