Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.
David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.
Published on December 7, 2021 Updated on November 9, 2023
$162,950 - $1,141,800
$475,000 - $2.4 million p.a.
Time to build
$118,000 - $590,000 p.a.
Beer is more than a beverage – it’s a craft. If you love to drink it, why not make it yourself?
Local breweries have popped up across the country in recent years aiming to ride the craft beer boom. Globally, craft beer has been exploding and the market is expected to double again by 2028. You could join the ranks of brewers, grab your share of the booming market and build a beer empire.
Of course, starting a brewery will have its challenges, but with diligence and passion, you can be successful. The key to launching your brewery is having the right information, and this step-by-step guide provides all you need to start brewing some business.
Looking to register your business? A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple.
The startup costs for a brewery range from around $160,000 to over $1 million. Brewing equipment and other equipment are the largest expenses. The high-end includes having a kitchen in the brewery so that you can have a taproom with a food menu. If you’re willing to start out small with a microbrewery, you might be able to launch for $80,000, but that’s with bargain-basement prices for all your key equipment.
You’ll need a handful of items to successfully launch your brewery business. Here’s a list to help you get started:
Kettles and kegs
Boilers and cooling equipment
Storage tanks and refrigeration equipment
Setting up a business name and corporation
$150 - $200
Licenses and permits
$1,500 - $3,000
$100 - $300
Business cards and brochures
$200 - $300
$1,000 - $3,000
Location security deposit
$5,000 - $10,000
$20,000 - $50,000
$100,000 - $1,000,000
Other equipment such as canning equipment and kitchen equipment
$25,000 - $50,000
$10,000 - $25,000
$162,950 - $1,141,800
How much can you earn from a brewery?
Breweries generally use the half barrel, which represents 100 cans of beer as the primary sales metric. The profit margin for a brewery is often around 25%.
If you’re able to sell 1,000 half barrels per year at the average price of $4.75 per can, you’d have $475,000 in revenue and more than $118,000 in profit. As your brand gains recognition, you might do 5,000 half barrels in a year, resulting in annual revenue of $2.4 million and a nifty $590,000 in profit.
What barriers to entry are there?
There are several barriers to entry for starting a brewery. Your biggest challenges will be:
Startup costs – Brewing large batches requires major equipment
Space – Once sales tick up, you’ll need a warehouse or open space
Competition – Craft beer is a crowded marketplace
Related Business Ideas
If you’re still not sure whether this business idea is the right choice for you, here are some related business opportunities to help you on your path to entrepreneurial success.
Now that you know what’s involved in starting a brewery, it’s a good idea to hone your idea in preparation to enter a competitive market.
Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.
Why? Identify an opportunity
Research other breweries in your area and see what kinds of beers they produce, their prices, and which products do best. Based on this info, consider how your brewery might stand out. You need a unique concept that will fill a gap in the market.
What? Determine your products or services
First, determine which beers you plan to produce. This should be based on what’s trending, what you’re good at, which flavor profiles you prefer, and what you come up with through experimentation. Will you have a taproom? Will you serve food as well? If so, research dishes and meals that pair well with your brews.
How much should you charge for beer?
The average price of a craft beer in a bar or taproom is $6-$8, while the average price of a packaged beer is $1-$2. Including all costs, you should aim for a profit margin of about 30%, but this will be dependent largely on the rental cost of your location. Good locations with a lot of space are going to be expensive, so your margin will be lower.
Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.
Who? Identify your target market
Your target market will depend on the concept you choose, but the market for locally brewed and craft beers generally tends to be younger, around college age. You can reach a younger audience on a site like Instagram or TikTok.
You could also target older professionals looking for a high-end beer, use local and organic ingredients to create a more adult flavor profile, and reach out to potential customers on Facebook and LinkedIn.
Where? Choose your brewery location
If you plan to have a taproom, a good location will have high foot and road traffic and be close to restaurants, clubs, and cinemas. Trendy areas that attract young craft beer drinkers would be ideal, though expensive.
If you’re not planning to have a taproom, it might be wise to find a warehouse outside the city, where rents are much cheaper and spaces larger. The more square footage you have, the more revenue you can bring in. And you can always add a taproom down the line.
You can find commercial space to rent in your area on Craigslist, Crexi, and Commercial Cafe. When choosing a commercial space, you may want to follow these rules of thumb:
Central location accessible via public transport
Ventilated and spacious, with good natural light
Flexible lease that can be extended as your business grows
Ready-to-use space with no major renovations or repairs needed
Step 3: Brainstorm a Brewery Name
Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.
Here are some ideas for brainstorming your business name:
Short, unique, and catchy names tend to stand out
Names that are easy to say and spell tend to do better
The name should be relevant to your product or service offerings
Ask around — family, friends, colleagues, social media — for suggestions
Including keywords, such as “beer” or “brewery”, boosts SEO
Choose a name that allows for expansion: “Apex Brewing Company” over “Belgian Ale Brewery”
Avoid location-based names that might hinder future expansion
Discover over 330 unique brewery name ideas here. If you want your business name to include specific keywords, you can also use our brewery name generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.
Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.
Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that set your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.
Step 4: Create a Brewery Business Plan
Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:
Executive Summary: A brief overview of the brewery business plan, summarizing key points such as the business concept, goals, and financial projections.
Business Overview: Detailed information about the brewery, including its mission, vision, location, legal structure, and founding date.
Product and Services: Description of the brewery’s beer offerings, potential expansion into merchandise or events, and any unique selling points.
Market Analysis: Examination of the craft beer market, target demographics, and trends, highlighting potential opportunities and challenges.
Competitive Analysis: Evaluation of other breweries in the area, their strengths and weaknesses, and how the new brewery plans to differentiate itself.
Sales and Marketing: Strategies for promoting and selling the brewery’s products, including pricing, distribution channels, and marketing campaigns.
Management Team: Profiles of key team members, emphasizing their skills, experience, and roles within the brewery.
Operations Plan: Details on the day-to-day operations, production processes, equipment, and facilities required to run the brewery efficiently.
Financial Plan: Projections of the brewery’s financial performance, including startup costs, revenue forecasts, and profit margins.
Appendix: Additional documents or information supporting the brewery business plan, such as resumes, permits, and any relevant research data.
If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.
Step 5: Register Your Business
Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!
If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.
Choose your business structure
Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your brewery will shape your taxes, personal liability, and business registration requirements, so choose wisely.
Here are the main options:
Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
Limited Liability Company (LLC)– Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just needs to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.
We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.
The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.
Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.
It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.
Step 7: Fund your Business
Securing financing is your next step and there are plenty of ways to raise capital:
Bank loans: This is the most common method, but getting approved requires a rock-solid business plan and strong credit history.
SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
Venture capital: Offer potential investors an ownership stake in exchange for funds, keeping in mind that you would be sacrificing some control over your business.
Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
Personal: Self-fund your business via your savings or the sale of property or other assets.
Bank and SBA loans are probably the best options, other than friends and family, for funding a brewery. You might also try crowdfunding if you have an innovative concept.
Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.
You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.
Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your brewery as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.
Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.
Step 10: Get Business Insurance
Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.
Here are some types of insurance to consider:
General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
Business Property: Provides coverage for your equipment and supplies.
Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
Worker’s compensation: Provides compensation to employees injured on the job.
Property: Covers your physical space, whether it is a cart, storefront, or office.
Commercial auto: Protection for your company-owned vehicle.
Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of any of the above insurance types.
As opening day nears, prepare for launch by reviewing and improving some key elements of your business.
Essential software and tools
Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.
It’s a good idea to use industry-specific software, such as Ekos, BrewNinja, or Orchestra, to manage inventory, staffing, accounting, and production.
If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.
Develop your website
Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.
You can create your own website using website builders. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.
They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.
When creating a marketing strategy for your beer-making business, concentrate on highlighting the distinct taste of your products, your involvement with local activities, and the artisanal methods you employ. It’s vital to cultivate an image that appeals to both enthusiasts and occasional drinkers. The goal is to design a promotional plan that will attract new customers and retain existing ones, ensuring they return for more of your offerings.
Digital Presence and Online Marketing
Crafty Social Media Campaigns: Engage with followers on platforms like Instagram and Twitter by showcasing your brewing process, highlighting unique flavors, and sharing behind-the-scenes glimpses.
SEO for Craft Beer Lovers:Optimize your website with keywords that craft beer enthusiasts are likely to search for, helping them find your brewery online.
Online Store and Merchandise: Set up an e-commerce platform for fans to purchase your beer, branded merchandise, and even book brewery tours.
Distinctive Branding: Ensure your brewery and products have strong, memorable branding that stands out in retail spaces and online.
Seasonal and Limited Releases: Create buzz with seasonal brews or limited release batches to encourage customers to visit and try new products.
Email Newsletters: Keep your community informed about new releases, events, and brewery news with a regular newsletter.
Content Marketing and Engagement
Beer Blogging: Share stories about the inspiration for different brews, pairing suggestions, and posts about the craft beer industry trends.
Customer Reviews and Spotlights: Feature customer testimonials and spotlight regular visitors or members of your loyalty program to build a community feel.
Experiential and In-Person Engagements
Brewery Tours and Tastings: Offer tours and tasting events to educate visitors about your brewing process and beer selection.
Community Events: Host beer festivals, food pairings, and live music nights to draw in crowds and create memorable experiences.
Collaborations and Community
Local Business Collaborations: Partner with local restaurants and stores to feature your beer, creating cross-promotional opportunities.
Support for Local Causes: Engage in community service and support local causes to build a positive brand image and give back to the community.
Customer Relationship and Loyalty Programs
Loyalty Rewards Program: Implement a program that offers discounts, early releases, or exclusive events to repeat customers.
Referral Incentives: Encourage visitors to bring friends by offering incentives for each new customer they introduce to your brewery.
Promotions and Advertising
Strategic Local Advertising: Utilize local media and craft beer publications to advertise your beers and upcoming events.
Influencer Partnerships: Work with local influencers and beer bloggers to reach a wider audience and add credibility to your brand.
Focus on USPs
Unique selling propositions, or USPs, are the characteristics of a product or service that set it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your brewery meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.
Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your brewery could be:
Barrel-aged for premium taste
Eco-friendly brews made with local & organic ingredients
The coziest and most welcoming taproom
You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a taproom, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in breweries for years and can offer invaluable insight and industry connections.
The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in beer. You’ll probably generate new customers or find companies with which you could establish a partnership. Online businesses might also consider affiliate marketing as a way to build relationships with potential partners and boost business.
Step 12: Build Your Team
If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a brewery would include:
Bartenders and Waitstaff (if you have a taproom)
At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.
Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn or Facebook. You can also use free classified sites like Jobs and AngelList. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.
Beer is always in demand, and the craft beer craze shows no sign of slowing. Almost every bar carries local craft brews for good reason — people like to try them. Starting your own brewery can make for an exciting and fun lifestyle, and you might share a beer with all kinds of people in your own little pub! There’s no reason you can’t tap into this booming market.
Now that you have the knowledge to start a brewery, you’re ready to take the first step in your entrepreneurial journey. The right knowledge will be crucial to your success, so you might want to bookmark this page. Happy brewing!
Brewery Business FAQs
Can I start a brewery from home?
It’s illegal to make beer for sale from your home in the United States. You need a brewery that has all the proper licensing at federal, state, and local levels.
How can I learn to brew my own beer to sell?
There are many online guides to brewing your own beer, but your best bet would be to contact a local brewer for advice. You’ll just need to convince them to help you even though you may become a competitor!
Who is world's largest brewer?
Anheuser-Busch InBev is the world’s largest brewery. They have over 600 beer brands and sell in over 150 countries.
How much space do you need for a brewery?
As a general rule, you need a little over two square feet per barrel that you produce annually. It really depends on how much you want to produce.
How long does beer take to ferment in a brewery?
It takes one to two weeks for the beer to ferment. The whole process of producing beer takes three to four weeks.
What are the skills and experience required that will help me to to open a brewery?
You don’t have to have much experience to open a brewery. You can easily research brewing techniques. You also should do plenty of research to learn the business side of things.
How to Start a Brewery
Decide if the Business Is Right for You
Hone Your Idea
Brainstorm a Brewery Name
Create a Brewery Business Plan
Register Your Business
Register for Taxes
Fund your Business
Apply for Brewery Business Licenses and Permits
Open a Business Bank Account
Get Business Insurance
Prepare to Launch
Build Your Team
Run a Brewery - Start Making Money!
Brewery Business FAQs
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