When you feel like you have checked a lot of big items off your list, it will be time to start looking for a space to lease. You have likely been already casually looking, but this is about the time that you need to seriously look for a space. This step can take a long time. If you were to speak with any of the owners of the recent breweries that have opened, they would tell you it takes luck, the willingness to jump at the right opportunity and a great commercial realtor to find a space. It took us 18 months of looking for a space to finally stumble upon the space we ended up leasing.
- Lets assume about now you find a space you like: You have to decide if you think you can get the investors you need on board to make this work. We took the leap after many long conversations with potential investors and their level of interest. There are a lot of layers to this onion, but essentially friends and family are good for some money, but others will walk when you counted on them (and that is totally ok).
- Take the amount of money you think you need and multiply by 1.25: It always seems to happen, that when you start looking at spaces you optimistically view the expenses associated with it. We heard others do it, so we tried to always guesstimate higher costs than what we thought, and we were still too low. At the end of the day, you need to guess, but at least try to get as much information as you can before making the guess.
- Negotiate a lease but know that you are a ‘nobody’ to a landlord: So don’t expect much in terms of tenant inducements. We were able to negotiate a few things, but only because our landlord is an individual and not a corporation, and more likely we just got lucky. Expect a personal guarantee coming down the road, so start preparing your partner for putting a lot of your personal wealth on the line.
- Big worries when looking at spaces: Seismic upgrades to the space needed, sprinklers, flooring, electrical power, mechanical requirements. There are huge swings in cost on all these things. For instance, if you were to lease the space that Powell Street Brewing is going to vacate when they grow, your costs would be much less than finding a space that was used as a storage facility and needs upgrades to everything.
- Keep working on your business plan and meeting with investors: At this point in our press we didn’t have all our money. Likely, you have some of the money you need, but not all of it yet. Plus, when you actually start asking for the money, people may have a change in circumstances that preclude them from investing as much or at all.
- Work on your marketing: This is do as I say, and not as I have done, as we really delayed this part of our process. We really struggled with picking our name, so don’t fall into the same trap we did. Set a drop-dead date and stick to it. Pick your name, start the process of trademarking, figure out a logo and start researching other brewery websites. Also a good time to meet with firms that can help you with this. It will give you an idea of what others envision for your brand.