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The market for craft beer has positively exploded in recent years, with a record number of breweries popping up all over the United States. From IPAs to pilsners to hard ciders, there’s something for everyone.
Thinking about opening a microbrewery yourself? Our complete guide will show you how to write a business plan, choose a brewery type, secure funding and more. Cheers!
Not all microbreweries are the same — in fact, their unique qualities and one-of-a-kind products are what helped make craft beer so popular to begin with. Just how popular are we talking? There are now more craft breweries in the U.S. than at any other point in history. As of 2021, that includes approximately 230 regional breweries, 1,800 microbreweries, 3,300 brewpubs and 3,700 taprooms:
If you want your brewery business to be a part of that nationwide beer boom, start by learning about the different types of microbreweries to determine which one is best for you.
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.
Once you know which type of microbrewery you want to open, you can start brainstorming name ideas and writing your business plan.
To come up with a memorable name for your brewery, you might find it useful to start by looking at the names of established breweries. Don’t be afraid to get creative — some of the most successful microbreweries in the U.S. have names like CANarchy, Flying Dog Brewery, Surly Brewing Company and Fiddlehead Brewing.
And if you get stuck, check out our 22 resources and tips for coming up with a business name. Your creative juices are sure to start flowing in no time.
While you’re working to create the perfect name for your microbrewery startup, you can also start crafting your business plan. It doesn’t have to follow a strict formula, but you’d be wise to include:
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.
Hint
Once you’ve finally settled on your brewery’s name, it’s a good idea to buy and register a domain name as soon as possible. Don’t forget to open social media accounts under your chosen name on all your preferred platforms, too.
Before making anything official, it’s important to know what kind of costs you can expect to face.
The amount of money you’ll need to open a microbrewery startup can vary based on a number of factors, but the absolute minimum is approximately $250,000. Here’s where that money will likely go:
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.
No one can deny that opening a microbrewery startup is an expensive endeavor, but with the right funding (more on that ahead) it is entirely possible.
There are five main business structures in the U.S., and you should get familiar with each of them before deciding which one is right for you. They include:
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.
While the choice is up to you, most small businesses find that forming an LLC is their best option. If the same is true for you, you can file your LLC now.
As you now know, breweries aren’t exactly the cheapest small business to open. To help you cover the cost of equipment, brewing space, employees, utilities and more, you can raise capital from a variety of sources. These can include:
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.
Since microbreweries sell alcohol by definition, there are some legal considerations you’ll need to address before opening your doors.
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.
Once your microbrewery is up and running, it’s time to celebrate! But not for too long, because you still have to maintain your business in order to keep it compliant with all applicable laws and running like a well-oiled machine.
Here’s what you’ll need to do to maintain your brewery for the long haul.
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).
Starting your own brewery business can seem daunting, but remember that many others have done it before and are willing to share their insights. To connect with other brewery owners, check out:
The Brewers Association
With a members-only forum, tons of up-to-date data, educational materials and more, the Brewer’s Association is a one-stop shop.
ProBrewer Message Board
Browse past discussions to find a wealth of information or create your own thread to get personalized answers to your questions.
BeerAdvocate Forums
If you want to talk about beer with people who love it, these forums will be right up your alley.
The Craft Beer Community
This Facebook group has tens of thousands of members and is the perfect place to meet other brewers and beer enthusiasts.
Ready to take the plunge and open your own microbrewery startup? We’ll drink to that — and if you form your business with Bizee, we’ll also take care of the pesky paperwork so you can focus on running your brewery and creating some truly killer beer.
Starting a Brewery FAQ
Most breweries cost at least $250,000 to get up and running. That might sound like a lot of money (and it is), but keep in mind that you can greatly reduce your personal financial burden by raising capital, as described in step five.
A microbrewery’s profitability depends on many different factors, including how well it was planned beforehand, the efficiency of its staff and the cost of its space. One thing most industry experts can agree on, though, is that selling beer to customers by the glass is the best way to reap the highest profits possible.
There’s no way around it — starting a brewery is difficult in terms of both finances and logistics. After all, even if you already have the necessary capital, you’ll still need to navigate a variety of legal requirements.
But don’t let that reality stop you from starting the microbrewery of your dreams: With creativity, careful planning and a passion for great beer, starting a brewery of your own is well within the realm of possibility.
