Nano breweries have been getting the attention of entrepreneurs lately, but is one a good investment. Here are some thoughts on starting a nano brewery.
Nano breweries started in the U.K and are typically brewing under 20 barrels annually. The allure of nano brewing is the lower investment to get started as one could start in a garage or low cost commercial building and smaller equipment is inexpensive compared to the large scale stuff. Typically with a nano the focus on selling directly to consumer via the glass, which are the best profits. If you plan on selling kegs to restaurants your price point goes down so you may have to produce more to be profitable.
Nanos are good for taking the passion for making beer and using it to learn lessons about brewing that can’t be learned through reading, watching or being told. Nanos are also good for providing a relatively low-risk entrepreneurial exercise, learning business and developing a customer base, all while keeping a full-time job. If you can build a successful nano brewery with lots of demand and your odds of getting money from banks or investors is probably going to be better than if they just see a business idea on paper.
Ultimately, I see the best and most reasonable justification for opening a nano is to provide an opportunity to learn in a business environment where consequences are real without risking all of your life savings, plus it can be a fun business to have.
There are some downsides to nano breweries though.
There isn’t really much room for growth. With the equipment for a nano brewery, you will be maxed out pretty quick and the ability to generate additional revenue will be expensive with the purchase of additional equipment and possible larger space. Smaller scale equipment tends to hold it’s value quite well so the option to sell and purchase larger equipment isn’t a huge risk, unless you are cramped for room at the nano level.
Going the nano route also means working hard but not making a whole lot of beer or money. Remember that it takes just as much time to brew a 10 gallon batch of beer as it does to brew a 10 barrel batch.
Most people who start a nano brewery aren’t thinking it is the total vision for the business. Many are planning on either expanding and going full-time or developing into a brew pub. Be sure you are doing the planning now and know what your vision is and keep working towards that vision.
The best advice for starting a nano brewery is to not take on too much debt. With the small production volume, your cash flows will be irregular and every dollar is significant. Having the burden of a fixed loan payment will make this a bigger issue.
Costs to Start a Nano Brewery
Expect to spend $25k – $50k for permitting, construction, rent (it takes at least 90-105+ days for TTB and local licensure), and operating capital.
I recommend a 7 barrel system instead of a 3 barrel system. A 7 barrel isn’t twice the cost of a 3 barrel but gives more expansion capacity and still be a part-time operation (provided you aren’t doing on-site sales). It is going to take you 8 hours to brew 50 gallons or 210 so you may as well make it worth your time.
Starting a nano brewery is a great option for someone wanting to get into the brewing business without risking a lot of money or their full-time job. While you won’t get rich owning a nano brewery, this is a great option to try your skills.