How to Start a Brewery Business in 7 Steps

Microbrewery Only

Want to make your own beer but don't want to worry about running a bar or tasting room? You might want to open a microbrewery only.

This type of brewery doesn’t have an attached bar or brewpub. Instead, they supply beer to other bars, pubs or breweries as guest taps. Later on, they may also sell prepackaged bottles and cans through retail outlets.

Microbrewery and Bar or Brewpub

Integrating a bar or brewpub into your brewery will allow you to sell your products on site instead of just shipping them out. You can appeal directly to customers, sell beer to the public at better profit margins and create a reputation as a cool place to hang out.

There's more overhead expense associated with running an attached bar or brewpub, but your increased revenues and profit margins can help to offset it.

Specialized Microbrewery

Most microbreweries will produce a variety of beers, including IPAs, stouts, porters, golden ales, pilsners, lagers and more.

If you want to go a different route, you can produce just one or two types or styles of beer and do it really well. For example, you may choose to specialize in sours and saisons or beer reminiscent of a particular part of the world, such as Belgium, Australia, Ireland or Eastern Europe.

Cidery

Hops are not the only game in town. Hard cider is also enjoying a renaissance with discerning drinkers, and with fewer competitors than the beer business, you might find it easier to make a mark in this space.

Cider isn't limited to apples, either — from pears to raspberries to oranges and more, you can make delicious cider with flavors from just about any fruit.

Distillery

More interested in brewing hard spirits than beer? You may want to consider opening a distillery.

Whether they're brewing gin, bourbon, rum, whiskey, vodka or something else entirely, small distilleries have only grown in popularity in recent years.

Winery

If you're more of a sommelier than a brewmaster, why not open a winery and start producing fantastic wine of your own?

Although wineries are most commonly found in California, Oregon and Washington, many other parts of the U.S. are suitable for growing grapes and creating excellent bottles of wine. All 50 states produce wine, and there are vineyards in over 30.

An executive summary

Once you've finished writing your plan, summarize all of its most important elements here

Your core goals

For instance, perhaps you want to produce 500 barrels of beer by the end of the year or become one of the top local breweries within five years.

A description of your microbrewery startup

Include its location, as well as its unique selling points (USPs). In other words, what makes your microbrewery special?

A market and demand analysis

Evaluate the competition in your area and work to determine demand.

An overview of your business structure

For example, will it be a Limited Liability Company (LLC) with a single owner (you)? Or will you be opening your brewery with the help of a partner?

Your intended business model

Will you sell your beer to local pubs, breweries and retailers? Will you sell your beer directly to customers via your own bar or brewpub? Or will you aim to do a combination of both?

Your marketing and sales plan

Describe how you'll market your business, such as through online advertising, social media marketing or local publications. Also detail your plan for making sales — for instance, how will you approach retailers to get your beer on store shelves?

Financial information

Include your projected expenses (more on that below), as well as your expected revenue and profit within a specific timeframe.

Appendices

If you have any additional notes or need to cite any sources, this is a perfect place to put them.

Location

Under most zoning laws, breweries aren't allowed to open just anywhere. So, you'll need to find a properly outfitted facility that's in an approved location. If you're leasing space, that means you'll need to pay monthly rent to use it.

Equipment

All breweries need brewing equipment like fermenters, boiling equipment, beer kettles, kegs, tanks, valves, filters and, of course, the ingredients required to make beer. Some may also require bar taps, beer glasses, seating and other equipment needed to serve customers on site. Since even a single fermenter costs thousands of dollars, your equipment will be a significant investment.

Liquor license

Depending on the state and city you're located in and the type of license you're getting, a liquor license can cost anywhere from under $100 to over $10,000.

Employees

Brewing craft beer is a team effort, so you'll likely need some employees to help make your microbrewery startup a reality. Your staff can include people tasked with brewing, cleaning, packaging, performing quality assurance tests and more.

Utilities

It takes a lot of electricity and water to brew high-quality beer, so don't forget to factor in the cost of utilities in your area.

Marketing and branding

Even if you're only planning on utilizing a bare-bones marketing strategy, it will require some money to get started. And if you'll be hiring someone to design your logo, packaging and other branding elements, consider the cost of that, too.

Sole proprietorship

This is the "default" business structure and is what your brewery business will be if you don't create a formal legal structure. We don't recommend using a sole proprietorship since it doesn't give you any liability protection in the event that your microbrewery is sued, goes bankrupt or otherwise runs into trouble.

Partnership company

This is a type of business that is formed when two or more people work together without creating a more formal business entity. Like a sole proprietorship, it may not give you all the protections you need.

LLC

The most common type of business entity. An LLC is fast, simple and inexpensive to set up and maintain. It protects your personal finances and assets and offers a great way to start your brewery business.

S Corporation

While corporations with fewer than 100 shareholders can save money on taxes by forming an S Corp, they're not recommended for new startups.

C Corporation

These are the largest and most complex types of businesses. As such, C Corps are typically far more than the average brewery entrepreneur will need.

Traditional loans

Available from just about every major bank, these small business loans typically have low interest rates, but they also tend to have strict requirements and stiff competition.

Small Business Association (SBA) loans

With SBA's Lender Match tool, it's easy to find lenders who may be able to fund your brewery.

Friends and family

If your friends and family members are willing to help, you can try borrowing money from them to get the ball rolling.

Venture capital

If investors see potential in your business, you may be able to secure money from venture capitalists.

Crowdfunding

With the help of sites like Kickstarter, you can create a campaign to get funding from a wide variety of backers.

Liquor license

All 50 states require businesses that sell alcohol to obtain a liquor license, and some municipalities even have their own individual rules and regulations. Find out how to get a liquor license in your state, and be sure to research your city's laws, too.

Brewer's Notice

All U.S. breweries must submit a Brewer's Notice application to the the Alcohol and Tobacco Tax and Trade Bureau (TTB) in order to legally sell beer.

State and local licenses

Depending on your location, there can be additional licenses and permits you need to get. Use our Business License Search Tool to quickly find out which ones your microbrewery startup may need.

Insurance

Nearly every state requires employers to have workers' compensation insurance, so be sure to get that squared away before putting your employees to work. You'd also be smart to look into getting business liability insurance to protect your brewery from a variety of risks and situations.

File Annual Reports

Most states require both LLCs and corporations to file annual reports on a (you guessed it) annual basis. This report should contain details of any major changes, such as a change of ownership, as well as current information about your brewery's management, identification numbers, location and more.

Renew Business Permits and Licenses

Unfortunately for business owners everywhere, licenses and permits aren't a one-and-done deal, and that includes liquor licenses and other brewery-specific permits. These may need to be renewed every one, two or even 10 years, depending on your state and local government's rules.

Pay Estimated Taxes

As the owner of your own brewery (and thus, your own boss), you'll need to pay estimated taxes on a quarterly basis. These will be calculated based on the amount of money you expect to earn in the coming year rather than the amount of money you've already earned.

Prepare and Pay Yearly Taxes

In addition to your quarterly estimated taxes, you'll also need to work with your accountant to prepare and file your annual taxes. (Don't have an accountant yet? Bizee can file your federal and state returns for you.)

Pay Sales and Payroll Taxes

Nope, we're not done with taxes just yet — if you have employees working at your microbrewery, you'll be subject to payroll tax (use our payroll tax calculator to find out how much you'll need to pay). And since you'll be selling beer, you'll also likely need to pay sales tax (our sales tax calculator can help you estimate that, too).