Brewery Business Plan, With a 12-Month Projection

A brewery business plan sets out the beer you'll brew and where it'll be sold, what a pint, a can and a keg cost and sell for, the equipment, the licenses and the excise tax, and the first year month by month. Beer itself is cheap, under 40 cents of ingredients in a pint; what costs money is the brewhouse, the taproom, the staff and the rent, all of which start before the first pint is poured. So a small brewery plan is mostly a plan for the first six months, when the taproom is still finding its regulars, and the working cash to get through them. In the example below, a 7-barrel brewery with a taproom in Greenville sells pints, cans and crowlers to go and kegs to bars, loses money for six months, needs $37,300 of cash to get through them, and ends the year about $8,700 ahead on $204,200 of sales. Below is a description example, each part of the plan, the licenses and tax, the projection, the startup budget, and a free template.

The short version

• Describe the business in a paragraph: the beer, the taproom, the accounts, the goals.
• Cost a pint, a four-pack and a keg from the barrel: ingredients, excise tax, packaging.
• Taproom pints leave the most; kegs to bars leave the least a gallon but build the name.
• Count the taproom staff and rent as fixed: they cost the same on a quiet Tuesday.
• File the Brewer's Notice with TTB and get it approved before you brew to sell; state licenses too.
• Budget working cash for six slow months; it's the line small brewery plans leave short.
• TaroStack keeps ingredients by lot and costs every batch. It doesn't produce TTB reports. More below.

Part 1: the business description

Reedy River Brewing, a made-up craft brewery in Greenville, South Carolina, I use in these examples, writes:

Reedy River Brewing brews ales and lagers on a 7-barrel system with a taproom on site, selling pints, four-packs and crowlers to go, and kegs to ten local bars and restaurants. In our first year we plan to brew about 350 barrels.

Part 2: what a pint costs

A barrel is 31 gallons, 248 pints, so $90 of malt, hops and yeast is 36 cents a pint. The taproom staff and the brewer's own time aren't in these costs; they're fixed below. How a brewery keeps its ingredients, tanks and kegs counted is in brewery inventory management software.

Part 3: customers and prices

A half-barrel keg holds about 124 pints and leaves $118.25 sold to a bar; poured in the taproom, the same beer leaves nearly $790. That's why the taproom is the business and kegs are the advertising: a tap handle in ten bars brings people to the brewery. At full speed the plan pours about 3,000 pints a month, some 100 a day.

Part 4: the licenses and the tax

No one may start business as a brewer until TTB approves the brewery and the Brewer's Notice, Form 5130.10 (27 CFR 25.61), and the state licenses the brewery and decides what it may sell on site and to whom. Federal excise tax on beer for a brewer producing no more than 2 million barrels a year is $3.50 a barrel on the first 60,000 barrels removed for sale (26 U.S.C. 5051), about a penny and a half a pint, and the brewery files reports of its operations with TTB. The approval takes time, so the plan's first months of rent are paid while waiting for it. This is general information, not legal or tax advice.

Part 5: the first year, month by month

Fixed costs are $14,050 a month: rent for the brewhouse and taproom ($5,000), taproom staff ($6,500), utilities ($1,200), insurance ($400), licenses and bond ($100), CO2, cleaning chemicals and lab supplies ($300), marketing and events ($400), and point of sale and software ($150). Sales start at 15% of full speed and reach it by month 11:

The year's sales are $204,180 and the profit $8,736, after paying the taproom staff; the brewer-owner's own pay comes out of that, so year one is a building year. Cash falls to −$37,271 by month 6, which is why the startup budget carries $40,000 of working cash. Loan payments on the equipment aren't in the fixed costs; add them if you borrow. How many pints a month cover the fixed costs is in break-even point for a food business.

Part 6: the startup budget

Get the template

Download the brewery business plan workbook. Four sheets: your pints, packages and kegs with price, variable cost and monthly volume at full speed; the year, month by month, with sales, profit and cash; your fixed costs; and your startup budget with working cash. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers. Each batch's ingredient lots are worth recording from the first brew; how is in lot tracking spreadsheet.

Where this stops working

Eight beers on tap, malt and hops from three suppliers in lots with their own specs, batches moving from fermenters to kegs and cans, sixty kegs in bars and the cold room, and ten accounts ordering every week. A sheet can't take the malt off stock when a batch is brewed, say which bars got beer from a hop lot that's been recalled, or show what a barrel of IPA really cost.

How TaroStack does it

TaroStack keeps ingredients by lot and costs every batch. Plainly: it doesn't produce the TTB Brewer's Report of Operations or the excise tax return, and it isn't built around tank transfers.

Ingredients by lot. Malt, hops, cans and CO2 are received by supplier lot, at what you paid, and units convert: malt bought by the bag, used by the pound.

Batches at what they used. Each beer is a recipe with versions. Recording a batch takes each ingredient from its lot at its cost and divides by what was packaged, so the cost of a pint, a can and a keg comes from the batch. One report walks a hop lot to every batch and every account that got the beer.

And the accounts. Bar and restaurant orders are sales orders that show whether the kegs are in the cold room while you're still typing, and margins are reported by product and by customer.

Recipes, batches, lots, recalls and margins by product and customer are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.

Questions people also ask

How much does it cost to start a small brewery?

In the example, $202,200 for a 7-barrel brewery with a taproom: used brewhouse and tanks, a chiller, kegs, a taproom build-out, a can seamer, licenses, first ingredients, and $40,000 of working cash for the slow months.

Is a small brewery profitable?

It can be, once the taproom has regulars. In the example, a brewery loses money for six months and ends the first year about $8,700 ahead on $204,200 of sales, after paying its taproom staff.

How much does a pint of beer cost to make?

In the example, about 36 cents of malt, hops and yeast, a penny and a half of federal excise tax, and a little for glass washing, before staff and rent.

What licenses does a brewery need?

A Brewer's Notice approved by TTB before brewing to sell, and state and local licenses that decide what the taproom may sell. Federal excise tax and reports to TTB follow.