Brewpub Business Plan

The Brew Enthusiast



The Brew Enthusiast

Business Plan


Mission Statement

“Creating a nation of breweries. Highlighting the people, passion, and growth in craft beer”


  1. Executive Summary

  2. Company Description

  3. Industry Background

  4. Products and Services

  5. Leadership/Management

  6. Marketing  

  7. Operations

  8. Expenses and Capitalization

  9. Finances

Executive Summary

Write this section last.

We suggest that you make it two pages or fewer.

Include everything that you would cover in a five-minute interview.

Explain the fundamentals of the proposed business:  What will your product be? Who will your customers be? Who are the owners? What do you think the future holds for your business and your industry?

Make it enthusiastic, professional, complete, and concise.

If applying for a loan, state clearly how much you want, precisely how you are going to use it, and how the money will make your business more profitable, thereby ensuring repayment.


Personal Background and Company Description

Linkedin Profile

Chris McClellan has a broad professional background in digital marketing, technology, and great beer. A native Vermonter, he worked in sales and marketing for Magic Hat Brewing Company for a few years coming out of business school at the University of Vermont. From there, Chris moved to Washington, DC where he found himeself in the startup world at LivingSocial, helping to build a customer service department from the ground up. He worked there for over two years, and then moved unto a number of challenging independent business and contracting positions, including business partnerships at NPR, along with project management roles at AOL and Edelman. Chris then moved to New York City, working with a wide variety of beer (and non-beer) focused clients as a digital marketing consultant, writer, and storyteller, helping them craft a coherent online voice and vision.

For the past year, Chris took on a brand new position as the hiring manager and strategic marketing lead for the new U.S Guinness Brewery Ambassador Program. He hired a full national team of 9 Guinness Brewery Ambassadors, developed our positioning and voice in the market with a continued focus on program growth, operational excellence, and amazing beer.

The Guinness Brewery Ambassador program is an educational initiative focused on putting beer experts on the ground across the country who can represent the best of Guinness. Each Ambassador is a professionally certified subject matter expert on all things great beer and Guinness,  including our iconic portfolio, Guinness heritage and history, and the amazing modern craft beer world we live in today. Our team attends conferences, brewery dinners, and any other consumer and trade focused event where we get to tell the Guinness story and network across the great beer world we live in.

Starting The Brew Enthusiast…

I started The Brew Enthusiast in November of 2013 with a hunch that I was onto something big. If you should know anything about me, it’s that I trust my hunches. I back them up with data and heavy analysis, but I believe in myself.  Most of the online beer community was rating and ranking their beer, which isn’t the right way to approach great beer. There wasn’t a coherent place online the told the brewery’s stories, from the brewery’s perspective. There were (and are) hundreds of blogs out there that review beer, and there are a few sites where great writing and authentic journalism exist, but they’re few and far between. I knew I could build a place known for great content that actually explored the most important parts of the brewing industry and built real brand value for these small businesses.

The Future of The Brew Enthusiast…

The Brew Enthusiast will, first and foremost, be in the business of great beer. I will build upon on our current content platform (which is focused on brewery stories and education) and eventually create an entire online network of breweries, suppliers, distributors, retailers, and consumers. Initially, this platform will build brand value for the breweries, giving them a well designed place to tell their story and engage their online community. There is no independent digital platform that exists right now, outside of those that let you check into/rate beer, that helps a brewery accomplish these marketing objectives and reach a dedicated community of engaged craft beer consumers. Sites like Beer Advocate, Craftbeer.com, Brewbound, and Untappd serve a specific purpose, but they don’t actually let the brewery tell it’s own story. 

Since its inception, I have built and iterated on the site’s design, messaging, and structure. I have managed all of our social media, started an email newsletter, and done a little bit of advertising to see how paid media does for the site. I’ve also done 97% of the actual content creation, interviewing breweries and building the features you see see on the site. I have done all the outreach up to this point. It’s been quite a lot of work.

The Brew Enthusiast, which will be formed as an LLC here in New York, will be marketed to breweries at first and completely open to consumers from the start, with the eventual plan (1-2 years down the road) to include all members of the supply chain (distributor, retailer, and consumer). We’ll need a critical mass of breweries to participate in, and pay for, our service on a monthly basis to get cash flow going, and then we can start to build on the value offering so that everyone feels encouraged to participate.

With my background, I bring great writing, organization, management, digital expertise and intimate knowledge of the beer industry to this business venture. I truly understand what great beer means to this country, and to the folks of my generation, all of whom are looking to connect with their brands. The Brew Enthusiast will be that connection. 


Industry Background

Craft beer has been growing by double digit percentages every years for over 10 years. We now have over 4700 craft breweries in this country, with almost 2200 breweries coming down the pipe in various stages of planning right now. Craft beer contributed $28 billion to the U.S economy in 2015, and still only accounts for around 12% of total U.S beer production. Large domestic producers account for a huge percentage of total beer produced, and their market share is declining due to the rise of craft beer, and changing consumers tastes . There is tremendous growth to be had in the United States yet. In fact, this is one of the fastest growing sectors in the U.S economy right now.

The Brew Enthusiast can harness this changing consumer landscape perfectly. Modern (millennial) consumers need to connect with their brands, and they want to do it digitally. They want to understand who these breweries are and why they do what they do. They want their breweries and local businesses to be transparent and accessible. I have received a lot of email from folks who love the content they read on The Brew Enthusiast, and I can’t sustainably write every story out there, so we should give breweries the chance to do it themselves on a site purpose-built for them, among a community of users who care about that story. 

The Brew Enthusiast will also be a dedicated digital platform for breweries that currently don’t have the capacity or ability to maintain an elegant digital identity. A lot of their websites are just plain terrible, badly designed, and not optimized for a great user experience. Building a new website is very expensive and time-consuming. These brewery owners are already putting in 14 hours days without actually addressing any of their marketing needs. They can use The Brew Enthusiast as their online home to reach a dedicated audience interested in great beer and great stories.

In short, I want to build the digital platform that lets consumers connect with the broader beer industry. I want to build the digital platform that let’s a brewery tell its story in a well-designed, coherent way.

Once we’ve done this, Phase 2 of our plan means that we can harness the data that comes from this activity and use it to realize value where we haven’t yet. There is enormous potential in curating this information flow.


Products and Services

I’m going to build a product and platform (on top of this site) focused on breweries and what actually matters to them. I’m assuming they’ll pay for a robust platform that allows them to represent their brand to their consumer base (current and future) in a clean, modern, and engaging way. This assumption will need to be tested thoroughly. Think of it as a much better version of all the current websites that feature basic profile information about their business. Initially, we’ll build brewery profiles with these features:

  • An intro video
  • Brewery name and logo 
  • Brewery background info – Founding date, Brewery size, Contact information, Website, Social Media info
  • Brewery Events
  • Brewery Staff
  • Product Portfolio (the beers they make)
  • Distribution
  • Photos/Updates
  • A Blog

All this would be curated and updated by the brewery itself, which is the real benefit of the platform. We’d have a validation procedure in place to make sure it actually was the brewery altering the profile, but then they would have full access to change the information within our design constraints and rules.

The Data

As a secondary benefit, brewery profiles and data pulled from these profiles will allow TBE to track live trends about the craft industry. Interactive models on current consumption, brewery openings/closings, employment data, beer styles, events, and all the other data you could ever want about the beer industry, all visible on the front end of the site on a live basis. The skies the limit for this platform after we prove the viability of this first step. This would all require a robust backend that could support these features, but it’s distinctly possible once we’ve ridden the learning curve.

Competitive Advantage

Moving on an opportunity like this now presents us with a number of key competitive advantages:

  • First-mover – No one has done this yet effectively.
  • Our platform would be grounded in outstanding design and ease-of-use. Consumers will want to discover breweries on our platform, and breweries will want to use it. User Experience is critical to the growth of TBE. Look at a site like Medium as an example. It’s clean, beautifully designed, and extremely easy to use. It’s a storytelling platform purpose built for great content and it’s growing rapidly. We can do the same thing for the brewing industry.
  • There are plenty of mobile apps offering the option to check into specific beers, rate them, rank them, or tell people what you’re drinking. This doesn’t inherently build awareness in the brewery or its story. Our platform will be better. Great stories around beer curated from the breweries themselves, as well as excellent resources for breweries and consumers. We could eventually build a database that could easily feed into a mobile app that updates folks on brewery events, beers, and all the other information they would want to participate with the brand.

Management and Organization

Since I’ve built the entire thing up to this point, I will continue to act as point-person and lead for the website and Phase 1 of this project. I’m not in a position to hire writers, marketers, salespeople, developers, or designers on a part-time or full-time basis, nor would it be a strategically sound move to invest in human resources until we’ve proven the model. I’ve got a basic proof-of-concept and MVP (minimum viable product) in the current iteration of the site, and we can build on that by creating the first prototype of the brewery profiles to see how breweries and consumers react to it. Realistically, this seems like a good idea, but it might not be, and that’s something we’ll have to prove as we go along.

Professional and Advisory Support

Attorney

Accountant

Consultant or consultants

Mentors and key advisor


Marketing Plan

SWOT

Channel Strategy (Email, Paid, Social, Events, PR, etc)

Positioning (What do we do? Why do we do it? Who are we targeting?)

Customer ID/Persona (what does our ideal customer look like?)

Messaging/Communication (What’s our call-to-action? Why are providing a service that makes sense for our target customers?)


Operations

The website build-out and product launch will be handled by me, and will be as lean as possible. Because this first step is designed to prove the viability and profitability of this concept, we’re not going to invest more than absolutely necessary in the operating cost of the site. This doesn’t mean that we’re going to skimp on product development, but rather means that we’re not going to need a large team to gain initial traction in the market. The only real costs (which are outlined in detail in the financial section) will involve my time, along with the investment in design/development resources to build it out. I will project manage the build myself, which avoids extra costs from full-service agencies. There are no operating costs associated with labor or rent. Legal services should be minimal. There will be no necessary physical overhead or inventory, insurance, equipment, or real estate at this time.

Product build-out (tentative timeline, based on funding):

  1. Identify initial feature set for the website. This has been outlined briefly in the “products and services” section above, but will be detailed upon project commencement in a project plan.
  2. Identify associated design and engineering resources needed. Independent/freelance designers and engineers will be considered for this first step, along with full-service agencies that specialize in Squarespace development and design. 
  3. Once we’ve determined these factors, we’ll be able to commence building the platform. 

Expenses and Capitalization

You will have many expenses before you even begin operating your business. It’s important to estimate these expenses accurately and then to plan where you will get sufficient capital. This is a research project, and the more thorough your research efforts, the less chance that you will leave out important expenses or underestimate them.

Even with the best of research, however, opening a new business has a way of costing more than you anticipate. There are two ways to make allowances for surprise expenses. The first is to add a little “padding” to each item in the budget. The problem with that approach, however, is that it destroys the accuracy of your carefully wrought plan. The second approach is to add a separate line item, called contingencies, to account for the unforeseeable. This is the approach we recommend.

Talk to others who have started similar businesses to get a good idea of how much to allow for contingencies. If you cannot get good information, we recommend a rule of thumb that contingencies should equal at least 20 percent of the total of all other start-up expenses.

Explain your research and how you arrived at your forecasts of expenses. Give sources, amounts, and terms of proposed loans. Also explain in detail how much will be contributed by each investor and what percent ownership each will have.


Financial Projections

The financial plan consists of a 12-month profit and loss projection, a four-year profit and loss projection (optional), a cash-flow projection, a projected balance sheet, and a break-even calculation. Together they constitute a reasonable estimate of your company’s financial future. More important, the process of thinking through the financial plan will improve your insight into the inner financial workings of your company.

12-Month Profit and Loss Projection

Many business owners think of the 12-month profit and loss projection as the centerpiece of their plan. This is where you put it all together in numbers and get an idea of what it will take to make a profit and be successful.

Your sales projections will come from a sales forecast in which you forecast sales, cost of goods sold, expenses, and profit month-by-month for one year.

Profit projections should be accompanied by a narrative explaining the major assumptions used to estimate company income and expenses.

Research Notes: Keep careful notes on your research and assumptions, so that you can explain them later if necessary, and also so that you can go back to your sources when it’s time to revise your plan.

Break-Even Analysis

A break-even analysis predicts the sales volume, at a given price, required to recover total costs. In other words, it’s the sales level that is the dividing line between operating at a loss and operating at a profit.

Expressed as a formula, break-even is:

Breakeven Sales          =

Fixed Costs

1- Variable Costs

(Where fixed costs are expressed in dollars, but variable costs are expressed as a percent of total sales.)

Include all assumptions upon which your break-even calculation is based.

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The Business Plan: Part I – Overview


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Gary Gulley

Now where did I put cash flow statement?
As I move on to the next and more difficult phase of this endeavor, financing, I thought I would share some goodies I learned from the business plan phase. Here is a link to the template of my business plan . This is simply the business plan with all section and subsections and all content removed, save for an introductory sentence or two in each.

I will not claim to be an expert on writing business plans, but I think I know a lot more now than I did six months ago. The pdf I’ve included in this post will show how I organized mine. I based it almost completely off of the “Business Plan for a Start Up” template located at the SCORE website . One notable change is that I pulled the “Competitive Analysis” section out of the “Marketing Plan” and made it its own section. I felt this was a better way to organize it and to really emphasize to would be loaners or investors that I’ve done my research and I’m not expecting to just jump into easy street. There is a lot of competition and it’s important that anyone willing to give me money understand that and understand that I understand that. Understand? I really put a lot of work into the competitive analysis.

The business plan was written with the assumption that any commercial banking representatives I meet will not have the faintest idea about the craft beer industry, specifically the growth rate. A big part of my plan is to educate the would be loaner about the industry. Obviously any business plan would need to do that but it would be easy to assume that because of the ubiquitousness of craft beer everyone already knows this, right? (I don’t actually know what “ubiquitousness” means, but I see that word everywhere.) I mean, jeez, it’s craft beer! Are bankers living under a damn rock? Well, I’m sure there are plenty of Bud Light drinkin’ bank folks who will require education and convincing. To help me make these points, I have included numerous facts, tables, and supporting news articles on the industry. Much of the information comes from the Brewers Association . I have an individual membership to the BA which allows access to all of this material, and I highly recommend you do the same. I want to make it really, really apparent that this is not a particularly risky enterprise. At least relative to, say, a new social media website startup or an online pet store. To underscore this, I’m going to work hard to communicate to bankers that I’m not making widgets here, I’m not competing against InBev, and there is a real dearth of craft breweries in Chicago, one of the world’s great cities which also happens to have a rich brewing history.

With all of that in mind, I think it’s important to note that regardless of what kind of business you’re trying to open, the first thing a banker is going to do is open your business plan and turn to the financial sections. Your friendly banker wants to know how much money you’re asking for before anything else. After that, they’re going to look at your profit and loss and cash flow statements. They need to know that they’re going to get their money back and they need to know they’re going to make a profit. So although educating a banker about the craft beer industry is important, they’re first concern is the numbers. I’ve learned this because I have a friend who used to be commercial loan banker for a locally owned bank. When I showed him my business plan, he went right to the numbers and ignored “the fluff”, his words, not mine. That’s something that will be at the forefront of my mind as I navigate these waters.

In the next few posts I’ll delve into the financial sections and I’ll talk about some of the other important sections.

Note: I’ve had quite a few people ask me for my business plan. Complete strangers who’ve read this blog and have emailed me requesting it. Now, if you read the FAQ you’ll see that I’m not freely sharing the entire business plan. I would expect most people to understand why that is but there are a few folks who seem to think that it’s a legitimate request. For those few let me ask you this: would you want to give away something that required months and months of work? Or something that contains confidential information about you and your family? Exactly. The only people with whom I’ve shared the business plan are advisors, trusted acquaintances, and a few close friends. All sharing was done quid pro quo. Each person has provided me helpful insight in some form or other. Another valid reason for not sharing is that my business plan is exactly that, mine. It reflects my viewpoints, my research, and my environment. Opening a brewery in Chicago is probably quite a bit different than opening one in a rural area. Opening a 15 bbl brewery is quite a bit different than opening a nanobrewery. So I say to you here today, go forth and write your own business plan. You will learn so much about the business when you do. And you’ll tailor your business plan to your situation which is completely different from mine. Then there’s the possibility that my business plan isn’t very good. Right? I’ve never written one before. There are assumptions in there that might be completely wrong. Who knows? I’ve done everything I know how to mitigate mistakes but I am human and I don’t have a crystal ball. Finally, remember I’ve just shared the template . C’mon man, that’s pretty generous, ain’t it? 😉