The biggest mistakes brewing entrepreneurs make when planning to start a brewery
There Are No Shortcuts For Breweries When Dealing With Government Regulations and Licensing
Knowing all of the steps involved in the licensing process prior to filling out your first form is the key to successfully starting a brewery, cidery, winery, or distillery. In an industry as highly regulated as the craft brewing industry you should get used to the idea of things like red tape, loads of paperworks, numerous fees and licenses, inspections, and other nefarious tasks. There's no reason to get discouraged as it's just part of the process. Besides, every other brewery you've ever visited has been through the exact same process.
Brewery Licensing Pitfalls To Avoid
One of the biggest mistakes entrepreneurs make is they don't take the time to properly educate themselves on the requirements of the various government agencies. There's a specific timeline and procedure for getting licensed, and you'll want to educate yourself on each requirement prior to diving head first into the baby pool that is the craft beer industry. For instance, perhaps a prospective brewery owner from Georgia knows full well that prior to applying for his state brewer's license in Georgia, he would approval from the TTB on his Brewer's Notice. Nothing too out of the ordinary there, so why go through the trouble of making sure you have the licensing information at the federal, state, county, and city level prior to beginning?
- Certain licenses have special caveats. You may think the TTB is going easy on you since they don't make you pay any type of application fee for your Brewer's Notice. What you may not realize is that your Brewer's Notice requires a signed lease. How eager do you think landlords are to have tenant move into their property that can't even think about producing a drop of beer (and therefore revenue) for the first six months?
- Unexpected costs. Going back to our prospective Georgia brewery owner who has now received his TTB approval and GA approval, now all he needs is a business license and to upfit his new building to house his brewery. Unfortunately, our prospective owner didn't realize he'd be hit with various exorbitant county licensing fees in the thousands of dollars - alcohol production license, retail alcohol sales license, growler filling license (which is a real thing by the way). To make matters worse, his minor renovations will require an architect's stamp (~$5,000) and engineers (~$2,000). Before he's even opened his doors, our fearless brewing entrepreneurs has already stepped into nearly $10,000 of debt. That could spell trouble for brewer's getting started on a shoestring budget.
I wouldn't worry too much about these types of things. With proper planning, almost any hurdle can be overcome - no matter how large. When it comes to licensing, be prepared to spend some time educating yourself and plan your application/licensing timeline by meshing the requirements of the federal, state, county, and city government into one cohesive plan. From there, it's just a matter of tackling each milestone as it comes up.
For additional information on where to begin the brewery licensing process, check out our post on Federal Brewing Licensing and Laws: The United States TTB