A microbrewery is a bit of a unique business, because it requires both strong sales skills and the ability to craft different beers. If yours is a brewpub, where you sell directly to customers, you will also need bartending expertise and perhaps restaurant skills as well. Many microbreweries try to grow too fast, and end up failing as a result.
A written business plan will control your expansion and give your microbrewery the best chance for success. In addition, if you seek outside funding, investors and lenders depend on the business plan to determine financial risk.
What Is a Business Plan?
Your business plan explains your microbrewery at this moment in time, and defines its growth plan for the next three to five years. It lays out your business goals, potential hurdles, and strategies for meeting your goals. As a living document, it will grow and evolve along with your microbrewery.
The executive summary introduces your business plan, but is usually written last. Financiers will read the first page and then decide whether to read more, so put your most important information up front. Provide a clear and concise description of your microbrewery, summarize your market analysis proving that a clear need exists, and note how your microbrewery will fulfill that need.
The company analysis describes your microbrewery as it is today. Talk about the company’s founding, legal structure, and current business stage. Mention past milestones that you have achieved, such as securing a historic tasting room or partnering with a local distributor. Then provide more details about your microbrewery’s unique qualifications, such as proven recipes or a locally famous brew master.
The beer industry is huge, but you only need to focus on your relative market, or the specific segment of the industry into which your microbrewery falls. Do you use a distributor? Sell directly to customers? Do you have a brewpub? When you find your niche, research the current trends and projections for your part of the market, and develop a solid strategy for overcoming any challenges you find.
Who will buy your beer? Are those people upper income, middle income, or working class? What are their flavor preferences? Are they looking for a place to congregate, or do they prefer drinking at home? Do they value quality over price? How do they decide which beers to purchase? Define your customer demographics as precisely as you can, and then determine their unique needs. Develop a strong plan for meeting those needs.
You are not in direct competition with every beer producer in the country. Your direct competitors are those that target the same need within the same demographic. Your indirect competitors target a different need for your demographic, or the same need for a different demographic. Name your direct competitors individually, and discuss how your microbrewery differs from theirs. Group your indirect competitors into a single category and discuss them as a whole.
Your marketing plan must cover the four P’s: Product, Price, Place, and Promotion. Your Product section will be long, because you must individually name each beer and other item you sell. In the Price section, list the charges for each product and your rationale for selecting those price points. Place refers to your physical location and website, as well as any distribution channels you use. Promotion includes the ways you convince people to try your beers. Customer retention is another important category that refers to your methods for building customer loyalty.
The operations plan describes the ways you will meet the goals you set earlier in your business plan. Everyday short-term processes are all the day to day tasks that your microbrewery performs, from brewing the beer to distributing it, maintaining cleanliness standards, and collecting payment. Long-term processes are your strategies for meeting your business goals, such as adding new beers or restaurant service.
Your management team needs to prove to financiers that your microbrewery has what it takes to make it as a business. Highlight the business management backgrounds of your key team members. A strong advisory board can overcome weaknesses, if you can show how board members will directly affect the company’s growth.
The financial plan is the most heavily scrutinized part of your business plan, but it can be a nightmare for microbreweries, which face the challenges of shrinkage (loss due to theft or breakage), complex legal regulations, and changing customer whims. In this section, you must outline your individual revenue streams by relative importance and timeline for implementation, and disclose projected sources of outside funding. You must also provide summaries of both your past and future Cash Flow Statements, Income Statements, and Balance Sheets, based on key assumptions that are reasonable and verifiable. Lenders and investors also require a strong exit strategy that proves your understanding of the market and desire to capitalize on profitability.
Place your full financial projections in the appendix, alongside any supporting documentation you might have, such as patents for new brewing methods or letters from key partners.
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