Tag Archives: brewery business plan

The Nitty Gritty of Laying out a Floor Plan

When you come along to the choice of laying out your brewery, get ready for a long and winding road.  One that will likely lead you to the wall and back, and also lead you to a place that you never really thought that you would be.  The reality is there are factors involved in your layout that you can think about and plan for, and others that you simply must deal with as they come up.

Before you can even start to work on your layout, there are a million things you will need to go through.  I would start by talking to other breweries, and find out what they like about their layout and what they don’t.  Be sure to ask lots of why questions.  You will also need to figure out how much money you have, as planning for a huge brewery will also mean huge bills.  Other factors include the size of your space and your future plans for growth, among others.

One of the most important components to think about in your layout is completely dependent on what you are doing, and what your goals are.  For instance, if you want to follow in the footsteps of Brassneck Brewing, or other breweries that are just selling their product in their own retail space, you will have a much different layout than if you want to be a production brewery, like Coal Harbour.  For us, we wanted to be somewhere in the middle, which is likely what you want to do as well.

So the elevator version of how you layout your space goes like this:

  1. Lease space
  2. Walk through and work with architect to understand ins and outs of space
  3. Build business plan around this space
  4. Determine amount of finances needed
  5. Get first plan from architect

After you get the first floor plan from the architect, you will officially begin a journey that will likely last about 6 months, and involve head scratching, high-fives and deep lows.  At the end of it, you will hopefully get a floor plan that is not too much of a compromise  and enough of what you had in mind at the beginning of things.

Think about the process for a second.  Lets say you have 3 places you can put the brew house.  Each of these areas has pros and cons.  It is truly a prisoners dilemma.  You can have things in the optimal place, you can have it done quickly, you can have it done under budget, and you can have it for the best place for your future growth, but maybe you will get 2 of these things, but likely just 1.  What do you pick and why?

Once you agonize over the location, you then need to start figuring how all the ancillary services and equipment will get to the location.  This is no small task and will involve the help and advice of your architect.  Once you then figure these basics out, you will actually need to order your equipment.  You will know what configuration you want for your brew house, and how it connect into the footprint you have created, but then this another level of questions.

Think about some of the minutiae needed:

  • Where do you want the drains
  • Where do you want water and electrical services
  • Where do you want the grain hopper
  • Where do you want the slopes and what angle

Once you figure these things out, there is another level of detail.  And I am talking exact detail …. down to the millimetre.  For instance if you are going to put your brewhouse in position A, where exactly is the drainage pipe going to go.  That means you have to work it out with the manufacturer of your equipment where this is exactly, and then map it out on your floor plan, so your mechanical contractor can give you the drain exactly where it needs to be.  Getting this kind of stuff wrong can make your life a nightmare.  And this example is just for the brewhouse. The same also goes for all the other functional areas of a brewery.

All of this means that you need to have an attention to detail.  If you leave this kind of stuff to others, you are relying on their knowledge and effort, and that may or may not work out for you.  There are literally hundreds of decisions like this to make when you are building and developing your floor plan.  Make sure you put an effort in that will give you exactly what you want.

We have found that we are making decisions over and over.  It might be annoying for others, like our sub-trades or architect …. ok it is definitely annoying for them, but I can’t see the process carrying out any other way.  How could you not change what you want over and over when it comes to something so complicated like building a brewery.

So back to the original question:  What factors are important.  I would narrow the list down to 5 things:

  1. Planning for future growth
  2. The location and interaction of your tasting room to production
  3. Inherent issues, characteristics and flow of your warehouse
  4. Budget
  5. Maximal use of space

If you can focus on these things, then your floor plan should end up in a good spot.  Not unlike building a house, there are always going to  be things that you would change, but the balance between current and future needs, along with finances will most likely determine exactly what ends up going where.  In the meantime, if you have questions or concerns, Iain is a master of this kind of thing, so give him a call.

 

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Best Practices … Writing a Business Plan

I spent the night on Sunday at Hoppapalooza, one of the best events for Vancouver Craft Beer Week, hosted by the amazing Alibi Room.  I had the chance to speak with many amazing people at party, many of whom gave me great suggestions and advice on what choices to make with our brewery.  I was asked numerous questions about our business and starting a brewery, which I found very interesting and flattering.  One of the questions I was asked several times throughout the night, was about writing a business plan.  It is also one of the questions that I get asked most often via email, by way of this blog.

So instead of going on and on about the business plan, what to put into it and what not to put into it, I figured it would be best to just give a few pointers and then a list of important points to consider when creating one.

  1. Start with the end in mind:  Yes, this is one of Stephen Coveys 7 habits of highly effective people, but I have always liked this point.  So in other words, what are you going to use the business plan for?  Your answer to this question will directly effect the scope of your plan.  A plan to just figure out your operations might be a little different than one aimed at investors.
  2. Put more into it, get more out of it:  Our business plan was a real labour of love.  We put excessive amounts of time and energy into our plan, as both Iain and I have personalities that make us overly fastidious about this kind of thing.  So we spent a lot of time making sure that we planned every detail, and projected every scenario, good and bad.
  3. No matter what, this is your roadmap:  We refer to our business plan on a regular basis, and it has become a living document for our business.  The great thing about having a plan is that it also allows any difference in opinion you may have with your partner to be vetted.  Moreover, the roadmap ensures that when you opinion changes in the future on something, you can judge it against a baseline, of what you once thought.
  4. Plan for about 6 months minimum:  I can’t see how you could write a well thought out business plan in less time than this.  Our business plan was a solid 12 months of writing, and then about 2 years of reviewing and revising every component of it.  By the end of the 2 years, our plan had completely changed several times over to become what it is now.  Moving forward, our plan will surely continue to change, and each time, we will take the time to update the details, so that our roadmap stays accurate.
  5. Its all about the financials:  Your cash flow is the most important part of the business plan.  It has to be realistic and it has to prove that you can make money quickly and consistently.  If you financials don’t add up, then you need to re-evaluate what you are doing  and the approach you are taking.  Our cash flow has become a monster, and it is something that without, we would be lost.
  6. Keep it short and sweet:  No matter what, but out all the crap.  Your plan should be no more than 25 pages written and about 25 exhibits.  For your financial projections, create a high, low and medium.  Shoot for the stars with your high projections …. say Parallel 49 or Driftwood.  Aim for realistic on the medium …. say Powell Street or Coal Harbour.  Seriously tank on the low, so you know what could happen …. say Surgenor or other under performing brewery.  The low will get you out of bed at 5am, the high will keep you dreaming of what could be, and the medium is likely where you will end up (I think).
  7. Don’t use we, use your company name:  Maybe this is just a stylistic thing or my personal preference, but you are not talking about you, or your life.  You are discussing a business that you may or may not be a part of down the line.  According to your lawyer and accountant, your business is an entity unto itself, so refer to it that way.
  8. Have sub plans for various facets:  We have a marketing plan that is about 25 pages, and a production plan, that is also about 25 pages, along with a few other plans we are working on.  Each of these detailed plans will be shortened and augmented to fit within your plan.  Just put a note in that section of the business plan, that there is more information if the reader so desires.
  9. Non-disclosure:  You may be handing out your business plan more than you think, so you will need to decide who needs to sign a NDA and who doesn’t.  From what I read, anyone that is a seasoned investor, don’t bother asking them to sign one.  It will be insulting.  But for others who are already in the business, or locals who you might think will tell the world what you have planned, it is your call.  We really never had anyone sign our NDA, other than some local brewery owners who we were going to partner with (but didn’t) several years ago.
  10. Prepare a presentation:  Maybe not if you don’t need any investors, but for those of you who need outside investment in your brewery, create a power point presentation of your plan, and summarize the key points.  Make sure you let the people know what is in it for them.  They will always want to know what they will get in return for allowing you to use their hard earned money.  Practice your presentation over and over, until you feel at ease.  Make sure you try it out on a few people before you go to any actual investors.
  11. Prepare to get rejected:  I didn’t track all my failures as much as could have, but I will tell you that I met with about 50 people over the course of 18 months, and we have only about 10 investors in our brewery.  That meant I had a 1 in 5 success rate.  You may be much better than this, but no matter what, expect some people to pass on your opportunity.  Don’t take it personally, ask a lot of questions why they didn’t go with you, and learn so that you can minimize this moving forward.
  12. Be proud, positive and confident:  I am overly realistic, so one of my biggest challenges was that I didn’t sugar coat anything for anyone.  I never promised that we would make it, never promised riches at the end of the journey, so if things did go off the rails, I would have my conscious clear.  However, you can still be proud and positive about what you are doing.  In fact, this is super important.  No one else will believe in you, if you don’t believe in yourself.
  13. Use a business plan guide:  I have my business plan guide in storage, so I can’t tell you which one I used, but be sure to have a guide that will help walk you through each of the key facets of your business plan.  A guide explains all the details that you need to know, and will help you determine how to best write your plan.  I have written a total of 4 business plans in my lifetime, and I still wouldn’t consider writing a business plan without some sort of guide to help write the plan.

So that is my best practices on writing a business plan.  I will gladly send you a copy of my business plan, should you want to see what we created.  Just send me a message.  Best of luck, and writing a business plan can be a lot of fun, so make sure you prepare yourself for an amazing journey.

 

Hitting the Wall

Today I lost my shit at about 4pm.  After a week of burning the candle at both ends, getting only about 5 hours sleep a night, and having one of the busiest weeks of the year, I literally melted at about 4pm.  I couldn’t talk, hold a conversation, engage with my wife or kids, or even crack a smile.  The burden of this brewery, and all the associated mental and physical work involved got the better of me.

So instead of writing about this, or anything else, I am going to take the rest of the night off and get some rest.  I had planned to write about best practices for concrete, mechanical and trade waste interceptor, but it will have to wait for another day.

I feel I have been ignoring this blog, so I do feel bad about not writing too much of late, but I hope that next week will be a chance to write more.  Thanks to everyone for your continued support and I hope to have some good articles this week.

General Contractors and Sub-contractors

One of the most important decisions you can make is around construction of your brewery.  Do you want to have a general contractor guide the process, or do you feel like you have enough time and energy to take the lead on piecing together the build-out?  Depending on your skills, the amount of time you have, your preference for this kind of thing and most importantly your budget, your decision may already be made for you.

We decided to work with a general contractor, Graham Disher of Disher Contracting.  The process for looking to team with a contractor was relatively painless, as at the end of the day, we decided to work with someone that was willing to work with our constraints.  In other words, we are able to offer some ownership shares in lieu of having to raise the money and then pay it as a fee.  In fact, because craft beer is growing so much right now, you could take this approach with many of the different trades that come through your space, and you would be able to do well for yourself in foregoing fees.

At any rate, Graham was also a good choice for more than just his willingness to work with us.  He had the time to dedicate towards our project, he has good experience that will serve us well in various aspects of the buildout, he was trustworthy (and he has continued to show us that), and what he doesn’t know, he goes about learning in a quick and positive manner.  When you add all these things up, we felt good about teaming with Graham Disher, and we would not hesitate to recommend him for your brewery (once he is finished ours of course).  Get in touch with me if you want to be connected, as he is one of those contractors who is too busy to worry about a website and all that.  In other words, he is hard to find online.

Back to the process of looking for a general contractor.  We met with 4 different GC’s after tossing around the names of about 12 or 15 that were passed our way or in our “rolodex”.  The 4 we met with all had experience, but were all at different stages of their business life cycle.  One company had been around for about 30 years, another just a couple years.  When you meet with these companies you take a list of questions, usually around the process of working with them, budgeting, who is on job, costs, estimates for work, their ideas for your job, experience in this field, etc.  When you start asking questions you will clearly see that there is a big difference in how each of these guys run their business.  Everything from their presentation, to how they budget, when they invoice, what jobs they sub-out, and so on.

What we came to was a list of pro’s and con’s for each contractor, which you then weigh against all the other factors.  Big ones for us include:  What is their mark-up, when could they start, who is going to be site supervisor, how much time are they going to dedicate, how many other jobs do they have, what is their crew like, what is their vision for the project,  what is their timeframe, what are the biggest challenges and how will they overcome, how are they with change … you get the drift.

As for subcontractors, this is really a 2 step process.  The first is to meet with various sub trades that are going to be important to your job.  Likely you will meet with electrical and mechanical  trades people.  You will also do this with the help of your general contractor.   The first objective of meeting with them is to understand what changes you can make to your plans to save money, while at the same time meeting with them to understand who is going to be the best fit for your project.  We met with 4 or 5 electrical and 4 or 5 mechanical contractors.  That allowed us to get some feedback and gauge who was going to work within our constraints the best.  Usually you are basing discussions off a set of drawings that aren’t yet complete.

Hopefully soon after this you will get some IFC drawings for the build-out, and then you can distribute to the 2 or 3 sub-trades that you think would be the best fit.  Once you get the estimates back, you can play them however you like, to try and get a better deal and position the job in the best position for your interests.  For us, number one was not money believe it or not … it was time.  Who could get started and complete the job (in other words, who could dedicate the most manpower to this job) in a fair period of time.  Second was money for us.  Of course all the companies we met with had the proper experience and were keen to be a part of this … that was just standard.

We picked our Electrical Contractor – Clear Energy Solutions.  They have solution in their name for a reason.  They offered us great advice on what to change and what could be streamlined to save money and time.  I would highly recommend these guys to  be at least a part of the bidding process.

We picked our Mechanical Contractor – Nathan from Meridian.  They are a great outfit that has experience in residential and commercial work, they were willing to work with our timeline and they were excellent on price.  I would also recommend these guys to anyone else for all their mechanical needs.

If you want more information on any of this stuff, let me know and I would be happy to add to the information I have put out there.  Bottom line, there are lots of great companies and lots of bad companies and general contractors to work with, just make sure you take your time to make the right choice.  Saving a little money won’t seem worth it if you have to spend extra time on a project.