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.
Bloody lemons everywhere. Hope the curve balls stop soon.