Monthly Archives: February 2014

The cat is out the bag ….

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For those of you who want to know a few more of the details about what is happening with our brewery, Jan Zeschky (The Province Newspapers most excellent food and beer writer) has released an updated guide for new breweries planning to open in 2014.  The article shows there are 19 new breweries that plan on opening their doors this year alone!  All are in various stages of development, and it means that this year will be a banner year for new breweries in this amazing province.  For a full read of this article, click here.

While this is really exciting for the beer drinks of this province, and it will likely cement British Columbia as the beer capital of Canada, it also adds a whole new dimension of stress.  If you are a regular reader of my blog, you know I wrote about all the various kinds of stress you feel in opening a brewery.  Click here for a link to this post.  Well, now we can add another type of stress to the mix:  Why would someone pick my beer over all these other great options?  Seriously!  We plan on making good beer, but don’t all of these other breweries as well.  We are nice guys, but aren’t all these other breweries as well.  We plan on having a cool tasting room, but so does everyone else right.  You can see why there is a little stress in my mind!

Another question you ask yourself, and not that the answer really matters, but is anyone else going through similar stress and anxiety ?  I see all of these pictures and posts of people smiling and having fun, and I think how come I up neck deep in stress and work, and everyone else looks so happy?  I guess some days you doubt yourself as this process really sticks it to you.  I find it important to grind through the days that are a challenge and savour the days that are a success.  The reality is that sometimes you feel like you are all alone!

At any rate, I digress.  We are really excited to be a part of the surging craft beer scene in BC, and I hope that we can add value both in terms of our beer, and in terms of the information we provide to the general public.  I hope this blog has inspired some people to dream, and for others I hope it has saved them a bucket of money on mistakes.

The Odds and Ends of this Process

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One thing that takes a lot of time, especially of late, is the final layout and design of the space.  It is quite easy to get approximate locations of the brewhouse, walls, grain room, bathrooms, etc., but it is another thing to lock in the exact location.  This goes against what I ever thought would happen, and makes you choose between saving time, saving money, but only getting one of these at once.

Are you as confused as me?  Maybe the words are not flowing from my brain to the keyboard this early in the morning, but the final location and final detail of things is taking a lot of time.  Why are these things important?  Well, without knowing how long of runs you need for mechanical engineers, electrical engineers, your general contractor and others, you can’t really get accurate quotes on work needed.  If you can’t get an accurate quote, when it comes time for an electrician to do the work, and they need to do something that is not in the original package, there is an up charge for this.  In other words, if the electrician needs to run power to 10 extra lights that were not in the plan, they charge extra.  It is also the time that they can “bend you over the table so to speak.”

So in trying to button down all the details of what to put where, it makes life really difficult for the individual(s) putting together the final plans.  For us that means our architect, our brewhouse designer, and our contractor are all working in tandem, with emails and phone calls going back in forth at the rate of about 10 per day, with weekly meetings, and with miscommunication at every step of the way.  It is very difficult to orchestrate, as often people are not focused on our project alone, meaning sometimes it is not convenient for others to work on our project.  There are also vision issues, time issues, communication issues, and issues with our issues.

One of the biggest issues you cross when it comes to the odds and ends, is saving money versus saving time.  At the end of the day, we try to save both at every step along the way, but it has proven impossible.  If you want something done quickly, you are going to pay more as you narrow the window of options you have.  On the flip side, if you want things done economically, often the time needed to save the money is huge.  For our project this means trying to balance out these 2 things, so that we can save a little time, but also a little money.  Let me give you an example.

Should you build a cooler yourself or have one prefabricated and installed by someone else?  There is something about a cooler that makes it very expensive to pay a company to design and install.  It is not like the engineering is difficult, the materials are relatively inexpensive, and the amount of time needed to put it together is nothing exorbitant.  So when you get a quote from a company that specializes in putting this into your brewery, the cost blows your mind.  The cooler can literally cost $40,000 to supply.  WTF.  So this naturally leads us to look at designing and building our own cooler.  Quickly you realize that you can build the same thing, and save yourself about $20,000 which is huge in the grand scheme of things.  The challenge with this route is the time involved.  The time needed to procure the pieces, put together design specs, meet code, coordinate trades, etc, etc.  What we are now realizing that building our own cooler will save us money, but it will suck a lot of time from spending it elsewhere.

When you have time sucked away from certain things that need it, then you are delaying the process for other things moving forward.  So in other words, there is always a delicate balance between time spent on a project, and time lost on another project.  There is also a balance between money saved and time saved.

Let this be a lesson to other future brewery owners, the balance of these things is a hard thing to do, and you will spend a lot of time heading down a path, and then after a certain amount of time, backtracking and going down the other path, only to realize that you should have stayed down the first path.  The key is to always be aware which path is the best to travel down, and to recognize when you are running into a brick wall ….. because as we have learned, there is never a brick wall to show you are on the wrong path, only a few hurdles, making recognition of this even harder.

My key learning is this:  Sometimes getting overcharged is alright, so long as you spend the time you save elsewhere to move another aspect of the brewery forward, or save money.  There are other times an owner needs to make a greater effort to save money, at the expense of time, as the cost savings outweigh the time spent.  Choose wisely!

Finish of the Tasting Room

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So I received some amazing feedback from readers on what is important in a tasting room layout, and key attributes of the space.  It has proved very helpful in helping to construct a space that meets the desires or craft beer enthusiasts and also those who will be visiting our space.  However, the progress we have made has naturally led to another huge question:  What do you want in the finishing of the space?

Does an ultra modern space like 33 Acres go over well, or would you prefer a look and feel like Brassneck.  Are there other tasting rooms outside of Vancouver and BC that stick out for you?  Tell me what you would like to see?

  • Minimalistic/Stark
  • Traditional
  • Modern
  • Ornate
  • Made to feel like a bar
  • Left to feel like a warehouse
  • Repurposed materials

More than talking about our space, I would love to know what other restaurants, bars, and spaces in Vancouver you like.  Of course our space will have a personality of its own, but we are keen to know what direction you think we should go with the finish.  As always, thanks for the thought and the feedback.

Demolition Day …

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Its a day we have long been waiting for.  Demolition.  Today we get to take out our frustrations and anger with the swing of a sledgehammer and the power of tools.  I will be sure to take video and photos of our work and post them here later on this weekend.

We hope with the demolition of our space, we will start fresh and instil some positive energy and feelings into this space.  We have already had a small ceremony to start the process of removing unwanted spirits, and creating our own guardian spirit in its place.  We understand removing what was there will help a lot in the progression of this.  After demolition is complete we have scheduled a local shaman to come in and perform a ceremony to finalize the process of removing the old and negative spirits.

Anyhow, demolition day is a big day in the life of any renewal, and for our brewery it is going to be no different.

Those costs keep on Creeping Up

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Being a salesperson for the past 15 years has ingrained in my head the need to make everyone happy.  I always seem to take the middle of the road, and that seems to always be a good win-win situation.  However the last 5 years in residential real estate has changed that somewhat.  In fact, my opinion has somewhat swung the other way.  It can probably be summed up by a real estate ‘saying’ that goes something like this:  When a buyer and seller are both unhappy about the price, its probably a good deal.

You see, selling real estate has made me realize not everyone needs to be happy all the time.  In fact, some people look for things to make them even more unhappy.  I guess you could say some people will always see the glass as half full or half empty, and normally these people like to put themselves in situations that reinforce their own personal beliefs.  Anyhow, I will get to the point.

If you are a contractor and you are called about working on our brewery, I am sorry in advance for grinding you on your price.  I feel better about saying this, as in my former life I would have rarely done this.  But the new me is a lot different as every time we can save $1, I feel like I am earning $1.  As one of my recent posts on asbestos eluded to, the costs of our brewery have been steadily going up and up.

I would pass on this advice to anyone else starting a brewery:  The cost to retrofit a 2,000 sq ft space versus a 5,000 sq ft space versus a 9,000 sq ft space is totally different, while at the same time very similar.  They are very similar in the sense that you likely have the same expenses regardless of what size space you have.  I’m talking trade water interceptor, waterline upgrade, sprinkler installation, sewer upgrade, new overhead door, power upgrade, etc.  The difference comes in the amount each of these items costs you.

Sure some of these items like a new trade waste interceptor or new overhead door are the same regardless of the size of your space.  However, upgrades like electrical, sprinkler, waterline and mechanical and their associated cost are dependent on 2 main variables.  First, how much change you need to make from the current layout of the warehouse you lease to the finished layout.  Do you even need sprinklers?  We didn’t, so we knew the only cost would be to retrofit the existing system to fit within our layout (in other words putting new heads on).  Second, and something not to underestimate, is the size of your space.  For instance. to run a pipe from end to end of a 5,000 sq ft warehouse costs a $1 per linear foot.  Well if you double the size of your warehouse, the cost per foot doesn’t change, but the length sure as heck does.

This is where we are at.  We leased a warehouse that is bigger than originally planned for (we planned for 6,000 and we ended up with 9,000 sq ft), and while we increased the costs associated with a bigger space, we are now realizing that we may not have increased the costs enough.  To bring this full circle, we are going to try and grind some savings in different ways, and one of these is through our contractors who will do various jobs for us.  More importantly, I would expect that our tasting room will have picnic tables and be pretty plain when we are finished, as we will surely run out of cash.

Tasting Room Feedback Please

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We are in the middle of planning the exact layout and functionality of our tasting room for the brewery.  There are a lot of variables that go into the fit and finish of the space, not the least of which is the experience of all our supporters/patrons.  A close second would be the amount of money we have left over at the end of this process to finish the space.  As such, and likely because you have more experience than anyone visiting tasting rooms in Vancouver and beyond, we want your feedback and help so that we build a functional, interesting and immersive space the first time around.

So given this, please pass along your feedback.  You can send it directly to me at startingacraftbrewery@gmail.com or you can post a comment below.  I want to know everything!  The good, the bad and the ugly on anything and everything.  If you need some help with what we are looking for, here are some items we are looking to get feedback around (don’t feel limited by my list, you can push any information you think is relevant our way):

  • How much separation between tasting room and brewery: Brick wall, no wall, or glass window, etc.
  • What kind of seating do you want:  Bench, smaller tables, long communal tables, bar seating, lots of standing room areas, etc
  • Do you want TV’s?
  • What do you want to see on the walls?  Artwork, Descriptions of the brewery equipment?
  • What works and doesn’t work in a growler fill area?
  • Would separate bars for Growler and Tasting Room sales be a good thing?
  • What are best practices for growler fill areas?
  • What is the average price of growler fills and pints in the tasting room out there?
  • What kind of food would you want to see on a menu given there would be a very limited kitchen?
  • Would you want pre-filled growlers so you could just switch your empty out for a new one, making your stay very quick?
  • What would your expectations be around brewery tours?
  • Do you care about the details/finishing of the space?  Concrete floors OK, if we are broke are picnic tables OK, etc?  In other words does a tasting finished like P49 matter versus one finished like 33 Acres?
  • Anything else come to mind?  I want to hear it.

So that is it.  In the future, we are likely going to hold another focus group on a bunch of stuff around our space, and what we learn from your feedback now will help set the stage for that.  Thanks for our help and feedback, it means more to me than you can imagine.

Asbestos!

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Well, one thing we didn’t think about was Asbestos in our space.  We just assumed that there would be none as it was just a small part of the building that was ‘finished’, with the rest of the warehouse concrete floor, concrete walls and a wood ceiling.  Prior to any demolition in an building, you need to get an environmental test completed ($750 minimum charge), with the results forming the basis for what you do.  Find no asbestos and you can destruct at your leisure.  But if you find asbestos, the challenge of demolition grows.

So we had our test completed by Dan from DG Environmental, and the results were sent back to us just a few days ago.  ASBESTOS!  Great, just what a new brewery needs …. an additional cost that just wasn’t anticipated or expected.  It looks like we have it in 4 different areas, and it simply becomes another line item in our budget for retrofitting our space.  Our next step is to get remediation companies into our space for approved removal of the stuff.  This work is full on!  We are talking special this, expensive that, on site showers, blowers, etc, etc.  When you hear stuff like this, I just see dollar signs.

All of this means that the contingency bucket we have with $100,000 in it, is likely going to be about $50,000 to $100,000 short.  At our current rate of spend, we are in need of an additional $100,000 of funding as more things come up that weren’t expected.  So what do we do?  Well, we raise more money, as there running out of cash just isn’t an option.  This means that each of our investors ownership in the company will be worth less than we had originally indicated.

It is frustrating for a variety of reasons, not the least of which is I feel like I am letting down those who believe in me.  I based estimates of what this project would cost to get off the ground on those who have experience in doing this.  In fact, these people encouraged me to raise our cost estimates.  At one time we thought it would take $1 million, then we raised the estimate to $1.2 million, then we raised the estimate again to $1.4 million, and most recently we raised the estimate to $1.5 million dollars.  To now think that it may cost $1.6 million dollars is a hard pill to swallow, but one that I realize is a lot more likely than not.

So when life gives you lemons, its time to make some lemonade, and that is exactly what I plan on doing.  Having additional costs and budget concerns early on will make us even more vigilant in keeping all unnecessary costs down.  I wonder if anyone will care about sitting at a picnic table at our brewery to drink our beer?  The bottom line is that we need to find savings throughout our operations, and that means really hard conversations and choices.

So back to the asbestos.  Really, this isn’t a big deal when you look at the problem in its own silo.  An extra $7,500 overall is not a huge concern, but when you get a few more overspends like this, it can become a really big deal.  All of a sudden you have an extra $50,000 in costs that you need to pay for somehow.  I am sure through this process we will find some cost savings, but I really question if we will find enough to balance out the extra items that are popping up.