I have revised my guide to preparing for getting funding and finding a building for a craft brewery. These steps need to be done before looking for a building, or you stand a good chance of not being able to secure the space that meets your needs, and wastes a lot of time and effort.
Steps Required Before
Conducting a Craft Brewery Real Estate Search
Step
1
Make it all legal
You
need to create a legal entity for your business. S Corp, C Corp, or LLC. It
should be done first. This shows that you, and your partners, are serious and
committed.
Step
2
Impress Potential Investors and Landlords of
your Craft Brewery
So you
want to open a craft brewery. Which means you need money, and a location for
said brewery. Which means you will be interfacing with investors, who have
money, and landlords, who have buildings.
If you
want this budding relationship with investors and landlords to lead to a
successful conclusion, then you need to create positive impression right at the
start. This where your “Business Plan” comes in. The parts of a Business Plan
are as follows:
Executive Summary
It should all be there, “Summarized”. What you
want to do, how you are paying for it, how much money you need to open with a
capital reserve, what you plan to do with the building, where you are going to
sell your beer, and how you are going to market your brewery and beer.
Management Biographies
Introduce yourselves. Include a SHORT bio,
which shows your passion for craft beer and what expertise each partner is
bringing to the table.
Financials
Show where the funds are coming from, how much
you will spend to get open, how much you will have left over for contingencies
and marketing, and 3 year sales projections. Be concise.
Marketing Strategy
You need to show that you
can sell beer in the marketplace, or at least in your taproom. Hours of
operation for you taproom, local community involvement, tap takeovers, and
industry relationships. Again, a brief plan that oozes confidence without
sounding like BS.
Step
3
Raise Money
Use your family, acquaintances, and business contacts to build your
capital. Leave no stone unturned. While Kickstarter and other crowdfunding
sites have been used with limited success, most of your money will come from
the aforementioned sources. Your funding
in the bank should be expressed as a percentage of your goal. For example,
20% from family/friends, 40% equipment financing, 10% SBA loan, 10% investors, so
80% of goal total.
Step
4
Find a Building
Begin looking for a suitable space for a craft
brewery. Use a broker who knows the unique needs of a craft brewery, like me. Clean
industrial buildings with high ceilings come and go quickly. Any landlord will
expect to see Steps 1 and 2 completed, and Step 3 coming to a conclusion,
before they are willing to commit to negotiating a lease.
Contact
me if you want to open a craft brewery in Los Angeles or Orange County
Mike
Lanzarotta, NAI Capital Commercial Real Estate
Cell 626
826 5586 Direct 626 204 1509 mlanzarotta@naicapital.com
