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Setting up a Craft Beer Business

All you need to know about starting and running your business

Business guides » Setting up a Craft Beer Business

What is a Craft Beer Business?

The size of the craft beer market in the UK exceeded £1.1 billion in 2023. The popularity of craft beer is at an all-time high, with a market growth of 2.6% since 2022, making now a great time to set up a craft beer business.

Craft beer is a type of beer that is made in a traditional or non-mechanised way by a small brewery. It is made by the brewing and fermenting of malted barley and oats or other grains and is usually flavoured with hops. Usually, the beer is brewed in an independently owned brewery and not by a large corporation brewery. The ‘craft’ in craft beer refers to the idea that the Brewmasters of craft beer usually view beer production as a type of art form.

To be deemed as a craft beer brewery, the brewery should produce six million barrels of beer or less per year and should be classed as an independent brewery (with less than 25% of the brewery owned by a larger corporation).

Craft beer is also usually made using high-quality ingredients to create a more flavourful and complex beer. To be classified as a craft beer, the beer must contain a minimum of 50% traditional malt. As well as containing higher quality ingredients, craft beer businesses tend to produce beer in smaller batches. This results in craft beer usually being more expensive, compared to industrially produced beer.

A craft beer business can sell its products in multiple ways:

  • The three-tier system: Brewer – Wholesaler – Retailer – Consumer
  • The two-tier system: Brewer (acting as a wholesaler) – Retailer – Consumer
  • Direct to customers: The brewer sells directly to customers, e.g. through carry-out sales, an on-site tape room, via a tasting room or restaurant sales or online.

 

If you are thinking of starting up a craft beer business, you first need to decide what type of craft beer business you want to set up.

There are two main types of craft beer businesses:

A craft beer brewery

This type of business makes the beer to sell to wholesalers, retailers or consumers. They will be involved in all eight stages of brewing:

  • Malting: The barley grain is added to water and soaked for 40 hours. It is then germinated for five days before being dried in a kiln ready for brewing.
  • Milling: The grain is cracked to make it easier to absorb water when mixed.
  • Mashing: The milled grain is combined with water and heat for between 1 and 2 hours.
  • Lautering: The grains are separated from the wort.
  • Boiling: The wort is boiled until sterilised. The hops are also added to bring bitterness, flavour and aroma to the craft beer. The wort is then cooled for fermentation.
  • Fermenting: After the wort has been cooled and aerated using sterile air, yeast is then added, and the beer begins to ferment.
  • Conditioning: The beer is cooled to freezing point, which allows the yeast to settle and the protein to coagulate.
  • Filtering: This stabilises the flavour of the beer and gives it a polished clear appearance whilst also removing dead yeast and other unsavoury elements.

 

Once the brewing process is complete, you will then bottle, can or keg your craft beer. Craft beer breweries can sell their products in multiple ways. You could open your brewery to the general public and create a tasting room or brewery tour or operate a shop on-site. You could also sell your beer online. Many breweries do not sell their products directly to customers and instead sell them to wholesalers or retailers, who usually buy the beer in bulk for a lower price.

A craft beer sales company

This type of business doesn’t make craft beer themselves and instead purchases the beer for a wholesale cost (usually directly from the brewer). They will then sell the beer to consumers or other businesses (e.g. bars and pubs) for a marked-up price. Usually, this type of business sells craft beer from multiple breweries and craft beer companies. A wholesaler beer business generally sells more beer, compared to self-distribution from the brewery.

The type of craft beer business you choose to set up can have a significant impact on your premises and equipment requirements, the training requirements for you and your staff, your set-up costs and running costs and your price points.

Starting up a craft beer business can be extremely lucrative as beer has a high markup (typically between 200% and 300%). The markup for craft beer can be even higher, as craft beer is typically more expensive to purchase (although the ingredients used to make craft beer are also more expensive).

There are many different responsibilities associated with running a craft beer business. Although the responsibilities can vary, depending on the type of business you set up, some of the typical tasks you can expect to be responsible for include:

  • Creating new and appealing craft beer recipes.
  • Choosing and ordering high-quality ingredients.
  • Tasting and improving beer recipes.
  • Packaging your products.
  • Purchasing, cleaning and maintaining equipment and machinery.
  • Creating professional and beneficial relationships with suppliers, vendors and wholesalers.
  • Pricing your products.
  • Managing inventory and maintaining accurate records.
  • Managing staff.
  • Implementing health and safety and hygiene policies.
  • Complying with all legal guidelines.
  • Selling your products (using your primary selling strategy, e.g. online or direct to wholesalers).
  • Handling deliveries.
  • Marketing and advertising.
  • Completing business and administrative tasks.
  • Keeping up to date with new trends and flavours.
  • Handling orders, payments and invoices.

 

To open a craft beer business, you must ensure you are of legal drinking age. Previous experience working in the craft beer industry and in-depth knowledge of the brewing process are also recommended. To make your business stand out, being passionate about craft beer and having an understanding of different ingredients and flavours and having the creativity to create new beer recipes is also recommended. Attention to detail, good organisational skills and a solid business plan can also help your craft beer business to succeed.

Types of Customers

Your typical customer base will depend on multiple factors, such as:

The type of craft beer business you set up

A craft beer brewery business will target different customers compared to a business that purchases craft beer to sell on. When determining your typical customer base, consider the type of business you are setting up and the customers this business is likely to attract.

Your primary selling strategy

Your primary selling strategy will be one of the most important factors in determining the types of customers your business attracts.

There are multiple ways you can opt to sell your products, including:

  • Direct to consumers (e.g. via your own shop or website).
  • To retailers (e.g. bars, pubs, restaurants and shops).
  • To a wholesaler (who will then sell your craft beer on for an inflated price).

 

Your craft beer recipes and flavours

This is an important factor that will directly impact your typical customer base. There are a huge number of craft beer recipes you can use and the majority of craft beer businesses opt to create their own unique recipes. You can also utilise different ingredients and flavours. When creating your recipes, consider the types of customers they are likely to attract.

Your branding

Consumers generally want a craft beer business that is unique and that has invested in its branding. Craft beer companies typically have unusual names (e.g. BrewDog, Cloudwater Brew and Magic Rock), more intricately designed labels and a recognisable logo. Consider this when creating your branding.

Your pricing

Although craft beers are generally more expensive than other types of beers, potential customers will likely still consider your pricing before purchasing your products.

Customers can typically be separated into three pricing categories:

  • Budget: Price will be the most important factor for this type of customer. They are likely looking for the lowest-priced beer and may be less concerned with your beer recipes and branding.
  • Mid-range: Mid-range customers are looking for a combination of quality and affordability. Although they don’t want to pay premium prices, they don’t look for the cheapest option.
  • High-end: Price is not an important factor for high-end customers. They generally want the highest quality, best-tasting and most unique craft beers and are willing to pay a higher price. They are more likely to look at your ingredients and flavours and your branding, rather than your prices.
Craft Beer Cartoon
Beer Barrel Cartoon
Beer Cartoon

Equipment You Will Need

The type of equipment you need will depend on the type of craft beer business you set up. Some of the equipment you may require includes:

Brewing Equipment

A grain miller

Milling your own grains ensures the freshness and high quality of your beer. A grain miller grinds and processes your grains to a fine consistency to improve the mashing efficiency. The grains will be crushed to open the malt husks and expose the grists within the husks. This ensures a more efficient mashing process and is crucial to the beer brewing process.

A heat source

Your heat source is how you will heat your brewing vessels. Most breweries choose from:

  • Steam-heated vessels: These require a steam generator which transforms water into steam which is then piped into steam jackets fitted to your vessels. Steam usually offers greater control than other heating methods as the steam can be finely adjusted.
  • Electricity-heated vessels: These typically have two or three elements that can be switched on and off, allowing you to control the heating. They are available in multiple sizes and strengths.

 

A water treatment machine

Because water is the main ingredient in beer, the quality of your water can impact the taste and consistency of your beer. A water treatment machine can improve the quality of the water by filtration and the removal of organic pollutants, chlorine and chlorine compounds and unpleasant odours and tastes. It can also adjust the pH of the water according to the beer style and help you to brew a variety of beer flavours.

A hot liquor tank (HLT)

This is the container where the brewing water is heated to the mash temperature. The HLT is the source of hot water that eventually becomes beer. It maintains the specific temperatures needed as the barley grain is mashed (soaked in hot water). An HLT allows you to precisely control the ratio of water to grain to create your chosen flavours and to precisely control the temperature. Brewing beer requires a large amount of hot water so you will need a HLT with a high capacity.

A flowmeter

Flowmeters are used to accurately measure the flow rate of liquids (such as water or beer) to monitor the production process, optimise the use of your resources and ensure quality control. A flowmeter can help you to ensure consistent batches of beer every time.

A mash tun

This is an insulated chamber where the grains and temperature-controlled water combine and are heated to create a wort. It helps to ensure a consistent temperature is maintained throughout the mashing process. Your mash tun should feature an in-built temperature probe and a pump to transport the mash to the lauter tun.

A lauter tun

This is a large vessel used to separate the mash from the residual grain in the most efficient way. It works like a sieve, with a slotted, perforated bottom which holds the grain while the wort filters through into the area below. The lauter tun should be connected to the HLT via your flowmeter so that the hot wort can be recirculated over the grain before transferring to the brew kettle.

A brew kettle

Also known as a boil kettle, this equipment boils the wort with the hops and any other ingredients. They are boiled and reduced for approximately 60-90 minutes. This is where your beer gets its flavour, colour and aroma and is where most of the chemical and technical reactions take place. Your brew kettle should also include a condensing stack to help you cool the steam.

A whirlpool

Once the process in the brew kettle is complete, the wort is left to settle in the whirlpool. Any additional hop ingredients can also be added at this stage. The whirlpool clarifies the beer and separates any solid particles. A whirlpool can increase the number of turns your brewery can do per day.

A plate heat exchanger (PHE)

This is the most common type of heat exchanger and consists of a number of plates connected to a large frame. It drops the temperature of the boiling wort before it is transferred to the fermenting vessel. The beer flows through one side of the vessel while ice water (or cold water and glycol) flow through the other side. A hot exchange takes place across the plates which helps to cool and pasteurise the wort and prepare it for fermentation.

Instead of a PHE, you could opt for:

  • A shell and tube heat exchanger.
  • A shell and coil heat exchanger.

 

However, a PHE is more energy efficient and more space efficient. They are also easier to maintain.

Fermenting vessels

There are multiple types of fermenting vessels (usually tanks or barrels) you can choose from. The fermenting vessels are where the fermentation process is carried out (where the wort is fermented into beer). You will likely require multiple fermenting vessels, with the number required depending on the daily output of your brewery (keep in mind that craft beer usually takes 3-4 weeks to mature). If you are making multiple beer products, you could also opt for vessels of different sizes, as some products may be more popular and require more output than others.

A clean-in-place (CIP) station

This is a common feature of breweries and consists of several vessels attached to a cleaning pump. It allows an automated cleaning procedure that is used to spray cleaning solutions at a high pressure to coat the interior of your brewing equipment and clean equipment such as pipes, tanks, filling machines and heating exchangers. The CIP station ensures that all your equipment and surfaces are cleaned and sanitised and reduces the risk of bacterial contamination.

CO2 tanks and regulators

These can be used to purge the oxygen from your pipes and tanks and to maintain the pressure in the tank. They are also beneficial when your move the beer to another vessel, such as during the packaging process.

A filling machine

Depending on your packaging preference, you will need either a bottle or a can filling machine. There are many different types of bottling or canning machines, depending on whether you will package carbonated beer or use bottle conditioning for carbonation. Your filling machine will likely have multiple filling lines, with the number of filling lines depending on how many filling heads you need.

A labelling machine

You could choose to apply your labels individually by hand. However, a labelling machine can help you to label more products much faster. You can choose a manual, semi-automatic or automatic labelling machine. Before purchasing your machine, consider how you would like your labels to be applied (e.g. single labels or wrap-around labels).

A bottle washer

If you package your beer in bottles, you will need a bottle washer to ensure all the bottles are properly washed before use. This can increase the hygiene level of your business and increase the shelf-life of your beer.

Kegging equipment

If you package or store your beer in kegs, you will require specific kegging equipment, including:

  • Kegs.
  • Lid relief valves.
  • Beer faucets.
  • Shanks.
  • Taps.
  • Tubing.
  • Regulators.
  • Distributors.
  • A keg washing machine.

 

Hoses and pipelines

You will need food-grade, heat-resistant pipes and hoses that can withstand a high amount of pressure. You will need pipes and hoses of various lengths. Some pieces of equipment will come with their own hoses and pipes so check your equipment before ordering these items separately. Even if your equipment comes with hoses and pipelines, it may be recommended to buy some additionally in case any become damaged.

Gaskets, clamps and valves

These items usually come included with your equipment. However, similarly to the pipes and hoses, your gaskets, clamps and valves can break or wear down and begin to leak, shutting down production in your brewery. Purchasing spare gaskets, clamps and valves is recommended.

Stainless steel worktops or worktables

You will use the worktops for all your preparation tasks. Your worktables should be stainless steel as this material is non-porous, meaning it is resistant to most bacteria and germs. It is also easier to clean and will help you to maintain high standards of hygiene.

Ventilation

A good ventilation system is essential in a brewery. A brewery requires more complex ventilation as the area can be filled with steam, odours, high heat and potentially harmful gases.

Some ventilation you could install includes:

  • Ventilation hoods.
  • Exhaust fans.
  • Makeup air systems.
  • Fire suppression systems.

 

Stock and ingredients

This is an important ongoing purchase that can take up a noticeable percentage of your business’s running costs. Before ordering stock and ingredients, you will first need to plan your craft beer recipes. Create an ongoing ingredient inventory to ensure you always have the correct amount of stock and ingredients.

Date labels

These are necessary to label when ingredients were opened. It ensures that all stock and ingredients are completely safe to use and that your brewery is operating in line with safety and hygiene guidelines.

Handwashing sinks

You will need separate handwashing facilities and cannot use the same sink for handwashing as you do for stock preparation or washing equipment. A handwashing sink helps to encourage good hygiene practices in your business and should be exclusively used for handwashing.

Rubbish bins and a waste disposal system

You will need rubbish bins in all beer preparation areas. You will also need different bins for different items to ensure you are disposing of rubbish correctly and following recycling guidelines. Colour-coded bins are the easiest way to ensure your waste disposal system is operating correctly.

Safety equipment

Some of the safety equipment your business may require includes:

  • Fire extinguishers.
  • Rubber floor mats.
  • Wet floor signs.
  • First aid kits.

 

Other Equipment Requirements

A delivery vehicle

Whether you brew the craft beer yourself or sell craft beer brewed by other businesses, you will likely need a delivery van or vehicle to fulfil your orders. To maximise your profits, you will likely sell the craft beer directly to retailers and other businesses (e.g. bars, pubs and shops). A delivery van will help you to fulfil all of your orders in a timely manner. Depending on the scale of your business, you may require multiple delivery vans.

Packaging

As well as the cans, bottles and kegs that you package your beer into, you may also need other types of packaging that are suitable for online orders and deliveries to wholesalers and retailers. This could include branded packaging boxes and pallets. Your outer packaging should either be reusable or recyclable. Use your packaging as a way of promoting your business by including your business name and logo.

Shipping labels

These labels will need to include:

  • Customer name.
  • Customer address.
  • Your business name and address.
  • The shipping method.
  • The packaged weight.
  • A scannable bar code (if relevant).

 

A website

A website is useful for advertising your business. It should contain photos and descriptions of your beer products (including the ingredients), your business contact information, the areas and locations you offer delivery to and your customer reviews. Your website will likely feature an option to order online and may have other information about your business. Design your website to include your business logo and to reflect your branding.

A computer or laptop

If you run your business online or communicate with suppliers, customers, wholesalers or retailers online, you will need a computer or laptop to effectively run your business. You can also use your computer to market and advertise your business and to order stock and inventory.

Storage

You will need storage equipment for your stock and dedicated storage areas. Your storage areas will need to be temperature controlled and free from potential contaminants. Your storage area will likely include shelving and secure storage containers.

A payment system

The type of payment system you require will depend on your primary selling strategy. For example, if you accept in-person sales, you will likely require a Point of Sale (POS) system with a cash till. If you sell your products online or via a standing order with a wholesaler, you may require an online payment system.

Cleaning supplies

Keeping all areas of your business premises clean is imperative. You will likely need different cleaning materials for different areas of your premises. You may need to invest in cloths, sponges, antibacterial surface cleaners, bleach, sanitiser and a sweeping brush and mop.

Personal Protective Equipment (PPE)

PPE is a necessary purchase for all types of craft beer businesses, as it helps to protect the beer from contamination and protect you and your staff from harm. Some PPE you may require includes hairnets, gloves, anti-slip footwear, aprons and face masks.

A CCTV system

A CCTV system is necessary for protecting your business from theft and burglaries. It can also help to protect you in the event of a negative incident or an allegation against your business. A CCTV system can cost between £300 and £5,000 depending on the specification of the equipment, how many cameras you require, and the installation costs.

Craft Beer Business

Typical Costs

When you are setting up your craft beer business, an important consideration you will need to make is the approximate costs associated with starting up and running this type of business. Calculating your typical costs allows you to estimate your initial investment requirements, any monthly and annual costs, your pricing strategy, your profit goals and your acceptable profit margins.

There are multiple costs associated with setting up and running this type of business. Some of these costs will be one-off initial costs that you will need to pay when you are setting up your business. Other costs will be ongoing costs you will need to pay regularly – usually weekly, monthly, quarterly or annually.

Although the typical costs can vary depending on the type of craft beer business you choose to set up and the size of your business, some of the costs you can expect when setting up and running your business include:

Your brewery

If you choose to set up a craft beer brewery business, your brewery will likely be your biggest expenditure. A brewery requires a specific type of building (usually a manufacturing or industrial plant or premises). To reduce your costs, you may be able to purchase or rent a building that is currently operating or previously operated as a brewery. The costs associated with your premises can vary significantly, depending on the size of the premises and your location. Rental costs are usually calculated per square metre and purchase costs are usually calculated based on the value of the property. Your costs are likely to be higher if you are renting an already-established brewery.

Refurbishment and installation costs

Even if your premises previously operated as a brewery, you will likely still need to renovate your premises to fit your business and make it fit for purpose (as per your business plan). You will also need to install your equipment and machinery. This can include installing or moving electricity, water and gas lines. Renovation and installation costs can vary, ranging from £5,000 to £75,000 depending on the level and scale of work that is required. When planning your renovation, consider how you can ensure your business operates in line with health, safety and hygiene regulations.

A delivery vehicle

A van will likely be the most convenient type of vehicle for your business. The price of a van can vary significantly, depending on the make and model and whether it is new or second-hand. Keep in mind that if your order volume is high or you deliver to different areas of the country, you may require multiple vehicles. The cost of a van can begin at £5,000 (for a second-hand vehicle). For a new van, expect to pay at least £30,000. As your business grows, you may choose to invest in larger vehicles, such as lorries.

Vehicle running costs

Your vehicle running costs include your vehicle insurance, petrol, MOT, services and the costs of any repairs. These costs can vary significantly, depending on the age and condition of your vehicle, the level of insurance you choose and the amount of travel you need to do. Typically, you can expect to pay between £50 and £200 per month.

Equipment

Equipment and machinery will be one of your biggest expenditures when setting up your business. Your equipment costs can vary, depending on the type of craft beer business you set up (specifically whether you brew the beer or not) and the size of your business. You can expect to spend between £2,000 and £60,000 on equipment and machinery.

Maintaining, repairing and replacing equipment

Repairs, maintenance and replacements are ongoing costs you will need to factor into your budget. Although some of your equipment and machinery will come with warranties or guarantees, repairs and replacements are inevitable because much of your equipment will experience heavy usage and be exposed to chemicals and gases. Correctly cleaning and maintaining equipment and ensuring it is used correctly can extend its life, but potential repairs and replacements should still be factored into your budget.

Stock and ingredients

This is an ongoing cost you will need to factor into your budget and will be a major monthly expenditure. You will need to purchase ingredients such as barley and other grains, hops and yeast. If you add additional flavours to your beer, you may require specific ingredients for this. You can reduce the cost of your stock and ingredients by buying wholesale, buying in bulk and shopping around. Keep your stock costs low to maximise your profits.

Beer products

If you are selling craft beer that is made by a brewery independent of your business, you will need to factor the costs of purchasing the beer into your budget. Your target profit margin when purchasing beer to sell on should be approximately 17.8% (the industry average). For example, if you plan to sell 11 gallons of craft beer for £140, your purchase costs should not exceed £118. Purchasing directly from the supplier or brewery and purchasing in bulk can help to reduce the cost of the beer.

Licensing fees

There are a number of different licences you will need to apply for when setting up and running your business. This can include a Premises Licence and a Personal Licence to sell alcohol. Licence costs can vary depending on your local council, but you can expect to pay between £100 and £1,000 in licensing fees.

Running costs

These are the day-to-day costs associated with running your business. Your running costs can vary significantly depending on the type of craft beer business you set up. Some running costs are paid monthly, and others are paid quarterly or annually. Your running costs can include electricity, gas, water, council tax and insurance. To maximise your profits, try to keep your running costs as low as possible.

Staff

You may need to hire staff, such as:

  • A Brewmaster.
  • A senior brewer or cellar manager.
  • Production brewers.
  • Delivery drivers.
  • Packaging technicians.
  • A sales and marketing manager.

 

You will need to pay your staff at least the national minimum wage (although higher-ranked or more experienced employees will expect a higher wage). You also need to account for other expenses, such as holiday pay, sick pay, maternity/paternity pay, National Insurance and any company pension contributions.

Branding

When creating your brand identity, consider how you want your business to be perceived by potential customers. When creating your brand, consider the type of craft beer business you are setting up, the beer you are selling and your typical customer base. Branding can include creating your business’s visual identity (e.g. your logo and labels), your design and aesthetic, your business name and your website. You could hire a professional to help you with branding or do some or all of the work yourself. Branding can cost between £500 and £10,000, depending on the level of work required.

Advertising and marketing

To ensure your business attracts customers and creates maximum profits, you will need to spend money on advertising and marketing. It is recommended that you spend between 1%-3% of your annual turnover on marketing. For example, if your annual turnover (or your desired annual turnover) is £150,000, you should spend between £1,500 and £4,500 on advertising and marketing. You may need to invest more money when you initially set up your business or when you are trying to grow your business. To reduce your costs, capitalise on free marketing strategies, such as on social media.

Your business website

A business website is an essential advertising tool (particularly if you sell online) as it allows potential customers to find your beer online and view pictures, descriptions and additional information. You should ensure your website is attractive to customers and use search engine optimisation (SEO) so that your website ranks highly on search engines, such as Google. Your website will need regular monitoring, updating and upgrading. You also need to make sure your website is secure, particularly if you will be collecting any customer information or banking details. You may choose to set up and run your website yourself or hire someone to do this for you. You can expect to pay between £20 and £100 per hour for someone to set up your website.

Business insurance

There are multiple coverage options available for a craft beer business.

For example:

  • Public Liability Insurance.
  • Product Liability Insurance.
  • Employers’ Liability Insurance.
  • Building and Contents Cover.
  • Equipment Insurance.
  • Stock Insurance.
  • Goods in Transit Cover.
  • Business Interruption Cover.

 

The cost of insurance can vary, depending on your insurance provider and the level of coverage you require. Prices typically start at £15 per month.

Typical Pricing Customers

Once you have calculated the costs associated with setting up and running a craft beer business, you can then create your pricing strategy. If you brew or sell a variety of beer products, keep in mind that different products will have different pricing.

There are multiple factors that can influence your pricing, including:

  • The beer products you create (and their popularity).
  • The ingredients you use (including any additional flavours).
  • Your branding (including your business name, logo and the design of your labelling).
  • The popularity of your products and how well-known your business is.
  • Your stock and purchase costs.
  • Your competitors’ pricing.
  • Your primary selling strategy (specifically whether you are selling directly to customers, wholesale or to other businesses).
  • Your delivery costs.

Safely Running a Craft Beer Business

Safe practices in your craft beer business can help to protect the health, safety and well-being of you, your staff and your customers.

Some ways you can safely run your craft beer business include:

Safely store stock

All beer stock must be stored safely to prevent contamination and to ensure it is of good quality and safe to consume.

Some safe storage practices you should follow include:

  • Keep storage areas clean and tidy.
  • Follow the First In First Out (FIFO) stock rotation system.
  • Pay attention to use-by and best-before dates.
  • Store any chemicals away from food.
  • Ensure alcohol stock cannot be accessed by visitors to your business or the general public.

 

Ensure the personal hygiene of all staff

Good personal hygiene is essential when working in the food and drink industry.

Good personal hygiene can include:

  • Following handwashing procedures.
  • Tying back hair or covering hair.
  • Not wearing false nails, nail varnish or jewellery on your fingernails.
  • Not wearing strong perfume or other chemical products that could cause contamination.
  • Wearing Personal Protective Equipment (PPE).
  • Following good habits, such as not coughing or sneezing near the beer and refraining from touching your hair or face.

 

Use a chemical safety data sheet (SDS)

If you store any chemicals, you should create safety data sheets to list the properties of each chemical, any potential physical, health and environmental hazards and any safety precautions for handling, storing and transporting the chemicals. An SDS can help to prevent exposure and reduce hazards and prepare emergency responses and procedures in the event that someone is exposed to a chemical.

Implement pest prevention and control methods

Pests can be a major issue for food and drink businesses and can result in contaminated beer, your products being recalled or your business being shut down.

Some ways you can prevent pests are:

  • Fill any gaps or holes in your building.
  • Keep your external areas free from food, rubbish or vegetation.
  • Keep your premises clean and tidy.
  • Use fly screens on open windows or doors.
  • Check your deliveries for signs of pest damage.
Craft Beer
Crafting Beer

Conduct risk assessments

Although not a legal requirement for businesses with fewer than five employees, risk assessments can help to eliminate risks and ensure safe practices in your craft beer business.

As part of your risk assessments, you should:

  • Identify hazards.
  • Determine who could be at risk.
  • Evaluate any potential risks.
  • Implement relevant safety measures.
  • Record the results of the risk assessment.
  • Review the risk assessment regularly.

 

You should keep physical records of your risk assessments as evidence of your commitment to safe practices.

Implement security measures

Security measures can be implemented to protect your business, your equipment and your stock. Some ways you can protect your business include installing a CCTV system, using secure and reliable locks and installing an alarm system.

Obtain health and safety training

Obtaining health and safety training can ensure that you are your employees follow safe practices at all times.

Some training courses you could opt for include:

  • Assessing Risk.
  • Manual Handling.
  • Health and Safety for Employees.
  • Fire Safety Awareness.
  • COSHH Awareness.
  • HACCP.

 

Properly maintain and set up equipment

Any equipment you use, including brewing equipment, must be properly maintained, correctly set up and safe to use. You must protect yourself, your employees and your customers from accidents or injuries caused by equipment and protect your products from contamination. You should also perform regular equipment inspections to ensure your equipment’s safety and help extend the lifespan of your equipment. Maintenance includes cleaning equipment regularly and checking it is functioning correctly.

Keep detailed and accurate records

Depending on the type of craft beer business you set up, you may receive an inspection to check your business is operating safely and in line with health and safety policies. During the inspection, the officer may request to see up-to-date records of your business’s cleaning schedules, risk assessments, health and safety policies, allergen information, and temperature checks (throughout the brewing process). Keeping such records not only helps to protect your business and improve the likelihood of you receiving a higher score in your inspection, but it also ensures procedures are followed at all times.

Legal Requirements

Complying with legal requirements is essential when setting up and running your craft beer business. Legal guidelines are designed to protect you, your employees, your company and your business.

The legal guidelines your business will have to adhere to will depend on the type of craft beer business you set up.

Some of the legal requirements you should be aware of include:

Apply for a Personal Licence to Sell Alcohol

If you intend to sell alcohol on your premises, you (or a member of your staff) will need to apply for a Personal Licence. This means that every sale or the supply of alcohol is authorised by your Personal Licence holder.

To qualify for a Personal Licence, you (or your employee) will need to obtain a qualification such as:

  • The APLH Level 2 Award for Personal Licence Holders.
  • BIIAB Level 2 Award for Personal Licence Holders.
  • BTEC Level 2 Award for Personal Licence Holders.

 

This licence teaches you about your responsibilities regarding alcohol sales, specific prohibitions, the strength of alcoholic drinks and protecting children from harm.

Register for the Alcohol Wholesaler Registration Scheme (AWRS)

If you sell alcohol to another business, you will need to apply for approval from HMRC for the Alcohol Wholesaler Registration Scheme. You must apply for approval at least 45 days before you intend to begin trading. You must also ensure you have an adequate business plan in place, as HMRC will assess your business plan to ensure it meets their fit and proper criteria.

Apply for a Premises Licence

If you intend to sell alcohol or provide ‘licensable activities’ you will need to apply for a Premises Licence from your local council. There are separate applications, depending on where in the UK your business is based.

Apply for a Premises Licence

If you intend to sell alcohol or provide ‘licensable activities’ you will need to apply for a Premises Licence from your local council. There are separate applications, depending on where in the UK your business is based.

Appoint a Designated Premises Supervisor (DPS)

Any business that sells or supplies alcohol must have a designated premises supervisor. Your DPS is the person who is responsible for the day-to-day running of your craft beer business and must be named specifically in your operating schedule. You must ensure your DPS understands the issues and potential problems associated with selling alcohol. They should also be contactable at all times and should have a Personal Licence to sell alcohol.

Comply with the Licensing Act 2003 (Mandatory Licensing Conditions) (Amendment) Order 2014

Under this Act, the sale of alcohol below the cost of duty plus VAT is banned. To comply with these conditions, you should be aware of:

  • The ban on irresponsible promotions.
  • The mandatory provision of free drinking water.
  • The mandatory provision of smaller measures of alcohol.
  • The adoption of an age verification process.

 

Register as a brewer or packager with HMRC

If you brew, package or hold craft beer, you must register as a brewer or packager with HMRC. Once you have registered you must ensure you keep detailed and specific records and accounts.

Register to pay Beer Duty

Any brewer or packager of craft beer is liable for Beer Duty. Beer Duty is chargeable on any beer that has a strength of more than 1.2% alcohol by volume (ABV). As soon as the beer is produced it is liable for Beer Duty.

To pay Beer Duty you must:

  • Keep accurate records and accounts.
  • Calculate any Beer Duty that is due and make returns.
  • Submit your Beer Duty return by the 15th day of the month after your accounting period.
  • Pay your Beer Duty by the 25th day of the following month.

 

Comply with the Beer Regulations (1993)

The Beer Regulations specify certain regulations that producers of beer in the UK must follow, including:

  • Register as a producer of beer.
  • You must register the time the beer was packaged, when it was removed from the brewery and when it reaches the state of maturity at which it is fit for consumption.
  • Comply with guidelines on moving beer in duty suspension.
  • Comply with guidelines on the strength of the beer and the amount of beer in each container.

 

Comply with corroborative testing

Your products must undergo an independent analysis at least once per year to test the alcohol by volume (ABV) of each of your products. This is to confirm consistency with your calculated results. The results of the independent analysis must be held in your business records.

Follow protocol if a product needs to be withdrawn

If any incident occurs that could compromise the safety of your beer, you are required to withdraw your product from the market. You should immediately contact an incident team and create a log detailing the situation. You should also notify your local authority and/or the Food Standards Agency.

Obtain a Basic DBS Check Certificate

Without this certificate, you will not be able to apply for a Personal Licence to sell alcohol.

The type of check you require depends on the country you live in:

  • England: Disclosure and Barring Service (DBS).
  • Wales: Disclosure and Barring Service (DBS).
  • Scotland: Protecting Vulnerable Groups (PVG) Scheme.
  • Northern Ireland: AccessNI.

 

Challenge underage drinking

It is against the law to sell or supply alcohol to those under 18 years old in the UK. It is therefore imperative that you, and any employees, request to see ID for any individuals you believe are underage. It could be beneficial to adopt the Challenge 25 policy, whereby ID is required for all individuals who look younger than 25. This helps to prevent your business from mistakenly selling alcohol to an underage person. For more information about retail guidance for serving alcohol in the different countries of the UK, consult the Retail of Alcohol Standards Group (RASG).

Comply with labelling legislation

There are strict requirements for labelling. You must ensure any craft beer you supply or sell that has a label (e.g. a bottle, can or box label) includes information such as:

  • The ingredients list.
  • Allergen information (particularly pertaining to the 14 allergens).
  • The best before date.
  • The recommended storage conditions.
  • The conditions of use.
  • Your business name and address.
  • The country of origin.

 

Implement a waste management system

Your business should have appropriate provisions for the separation, storage and removal of waste.

Some guidelines you should abide by include:

  • Have appropriate bins which are sufficient in number and specified for different types of waste.
  • Do not allow waste to accumulate.
  • Use bins that have fitted lids and foot pedals.
  • Have a specific waste disposal area.
  • Apply for a waste carrier registration if you transport any waste.

 

It is also recommended that you clean and disinfect bins regularly.

Comply with the Manual Handling Operations Regulations 1992

Manual handling regulations can help to protect you and your employees from sustaining an injury or illness as a result of manual handling tasks. The regulations apply to the lifting or moving of any objects, bending down and reaching high and repetitive movements. You will likely be performing manual handling activities when brewing or packaging beer.

Comply with the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations (RIDDOR) 2013

RIDDOR states that you must report all injuries, diseases and dangerous events that occur in your business. Reports must be made to the Health and Safety Executive (HSE) using an appropriate recording document. These regulations apply to any incidents that involve employees or customers.

Comply with the Control of Substances Hazardous to Health (COSHH) Regulations 2002

The COSHH regulations state that you must control any potentially hazardous substances. You should also assess, control, and reduce any risks or potential hazards and protect people from harm.

Some hazardous substances you should be aware of are:

  • The mixed gases or CO2 used in drink dispensing lines.
  • The gases used in cellar cooling systems.
  • Cleaning chemicals.

 

Comply with the Provision and Use of Work Equipment Regulations (PUWER) 1998

PUWER regulations apply to you and any employees you hire. You must ensure any equipment used in your business is fit for purpose and is maintained and inspected regularly. You must also ensure that health and safety risks are minimised to an acceptable level, that you have the correct knowledge and training to use the equipment, and that protective measures are put into place. Equipment should also be used under appropriate conditions.

Comply with fire regulations

As the business owner, you are responsible for fire safety measures. There are multiple fire regulations you must ensure you comply with, including:

  • Conducting a fire risk assessment.
  • Comply with the Regulatory Reform (Fire Safety) Order 2005.
  • Implementing any necessary fire safety measures.
  • Implementing emergency procedures and ensuring these are clearly displayed.

 

Comply with the Electricity at Work Regulations 1989

The Electricity at Work Regulations state that any workplaces that use electricals must construct electrical systems in a way that prevents danger. You must also maintain electrical systems to ensure they are safe, ensure electrical equipment is checked by a competent person annually and conduct Portable Appliance Tests (PAT).

Comply with gas safety regulations

You will need to have your boiler and any equipment that uses gas inspected by a gas safe engineer. If your equipment is deemed safe to use and complies with government requirements, you will be issued a Gas Safety Certificate. You will need to display your gas certificate clearly on your business premises.

Prepare a health and safety policy

The law states that every business in the UK must have a specific policy for managing health and safety. Your policy should state exactly how you will manage health and safety in your business, who is responsible for specific tasks and how and when these tasks are completed.

Appoint a competent person

A competent person should be appointed to help your business meet your health and safety legal duties. You can act in this role yourself or appoint another person to fulfil this role. The competent person should have the skills, knowledge and experience to identify any hazards in your business and put controls in place to protect people from harm.

Comply with the Consumer Contract (Information, Cancellation and Additional Charges) Regulations 2013

If you sell your craft beer online, you must comply with the Consumer Contracts Regulations. They outline your customers’ basic rights when purchasing online. This includes the right to a 14-day cancellation period.

You must also provide information, such as:

  • A description of the goods.
  • The total price of the goods.
  • How the goods will be paid for and how they will be delivered.
  • Any additional delivery charges and other costs.
  • Details of the right to cancel, including who is liable for the cost of returning items.
  • Information about the seller, including contact details and geographical address.

 

Comply with retail legislation

There are several pieces of legislation you need to follow when selling goods to consumers. You must ensure your products are described correctly and that pricing is displayed visibly. You must also ensure your products are of good quality and are fit for the intended purpose.

Comply with the General Data Protection Regulations (GDPR) and the Data Protection Act (DPA)

You must comply with both pieces of legislation when storing or sharing personal information, such as your customers’ personal information, contact details and banking information. You must also apply for a Notification to Process Personal Data Licence. You will also need to apply for a licence with the Information Commissioner’s Office and renew your registration every year.

Comply with employment legislation

You must ensure you follow employment legislation, including the Employment Rights Act (1996) and the National Minimum Wage Act (1998). You must also comply with legislation relating to recruitment, working hours, sickness, discrimination, dismissals, and maternity or paternity pay.

Ensure your website complies with the guidelines

If you set up a business website, there are several guidelines you need to comply with, including:

  • Privacy policies.
  • Cookie legislation.
  • Service descriptions.

 

Under the Equality Act (2010) you must also make reasonable adjustments to your website to ensure it is accessible to people with disabilities.

Register your business

You must register your business with HMRC before you begin operating. You can register as a sole trader or as a limited company. You will need to register your business name and any other relevant information.

Register for self-assessment tax

This allows you to calculate and pay your own taxes each year. You will need to track your finances every month and submit any expenses as part of your tax assessment.

As part of your tax responsibilities, you must:

  • Record all forms of income and expenses.
  • Complete an annual self-assessment tax return.
  • Register for VAT if you earn above the threshold (currently £85,000).
  • Pay National Insurance contributions.
  • Keep a record of your business accounts for the previous five years.
Beer

Positives of Owning a Craft Beer Business

Running a craft beer business can be rewarding in multiple ways. Some of the main pros associated with this type of business include:

A growing industry

The craft beer industry is consistently growing, with more and more people wanting to diversify the types of beer they drink and the taste profiles. This means there is a strong demand for craft beer businesses, making now a great time to establish yourself in the industry. A growing market also makes it easier to grow your business and maximise your profits.

A scalable business

A craft beer business can have a simple business model, making it easy to set up this type of business. If you want to grow your business, this type of business is highly scalable, as you will already have established strong business relationships with suppliers, wholesalers and vendors and will already have created a consumer base. There is always demand for new recipes and different flavours, making a craft beer business highly scalable.

Choose the type of business you want to set up

As the business owner, you can decide whether you want to brew the beer yourself or not. You can set up a business that fits your interests and your skills and experience. You can also choose the types of beer you create and sell, your branding, the customers you want to target and your pricing. Having the freedom and opportunity to create your dream business can be very rewarding.

Choose your selling strategy

There are multiple selling strategies available for craft beer, including in-person sales, online customer sales and selling directly to wholesalers or businesses. Having the ability to sell on multiple avenues can increase your customer reach and increase your revenue streams. You can even change your selling strategy as your business grows and evolves.

You can be creative

You will have the opportunity to be creative with your recipes, ingredients and beer flavours and aromas. You can also be creative with your branding and labelling. Having the creative freedom to create your own unique products can be extremely rewarding.

Work in an industry you are passionate about

If you love beer and are passionate about the industry, starting up a craft beer business can be extremely rewarding. You can work in an industry you love and have the opportunity to influence this industry, by creating new and exciting flavours and creating new craft beer trends.

Low entry barriers

Setting up a craft beer business doesn’t require any specific qualifications or training. Instead, all you will need is the relevant knowledge and experience. This makes it easier (and quicker) for you to set up your business, particularly compared to other industries that require months or years of specific training and formal qualifications.

High profit margins

Depending on the type of craft beer business you set up, your products could have high profit margins – typically 17.8% if you are buying and selling beer and up to 200-300% for a brewery. High profit margins can help you to maximise your profits and make your business more successful.

Global opportunities

If you build a successful brand, sell quality products and build a strong reputation, you will have the opportunity to sell your products globally. Beer is an international product, with beers from different countries being sold all over the world. If your original business plan succeeds and you want to grow your business further, you have the opportunity to sell your beer internationally.

Capitalise on seasonal opportunities

Although beer is drunk year-round, there are some seasonal opportunities you can capitalise on. For example, beer is closely associated with sunny days, BBQs, the Summer and big sporting events. Offering special discounts and promotions at these times, for example, in the lead-up to Summer or during big sporting events such as the football or rugby World Cups, can help to attract new customers to your business and help you to increase your sales and maximise your profits.

Unlimited income potential

There is no fixed income or limit on how much money your craft beer business can make. There are multiple ways you can increase your profits, expand your customer base and increase your sales. A craft beer business has a high-income potential and with a solid business plan can be extremely lucrative.

Customer loyalty

Beer drinkers often have a favourite beer and generally stick to this beer, buying it for their homes and ordering it in pubs, bars and restaurants. If your customers like your products, they are more likely to be loyal to your brand and purchase your beer time and time again. They may even recommend your products to other people, helping you to grow your customer base.

Start small and grow your business

If you don’t have an external investor or a large capital with which to start your business, you can start smaller and grow your business in time. You can start by producing only one type of beer at a lower volume. As your customer base grows and your profits increase, you can then expand your business.

Wide customer reach

Because you can sell your products online or build relationships and create contracts with buyers in different locations, your customer base will not be limited to people who live or work locally to you. Instead, you can sell to customers all over the country, allowing you to grow your business and maximise your profits.

Choose your own schedule and workload

As a business owner, you can choose the hours you work and how many orders you want to accept each week and month. You can run your business around your family life, for example, by working when it is convenient for you and your family. You can close your orders if you want to take time off and if your workload becomes too much, you can hire additional staff to handle the day-to-day running of your business and reduce your responsibilities and working hours.

Free advertising on social media

You can easily gain exposure on social media by posting photos or videos of your products online. Your customers may also post pictures of them drinking your beer to their own social media accounts which will be seen by their followers. This can help you to gain exposure and be noticed online. Social media is a form of free advertising which can help you to grow your customer base and increase your income.

Be your own boss

You can make all key decisions yourself and steer your business in whichever direction you choose. You can choose how involved you want to be, the type of craft beer business you set up, the beers you sell and how you want to run your business. You can make the best decisions for you and your business.

Craft Beer Business Sign

Negatives of Owning a Craft Beer Business

Although setting up a craft beer business can be beneficial in many ways, there are some potential cons to this type of business that you should be aware of:

Difficult to stand out

With so many existing successful craft beer businesses in operation, it can be difficult to make your business stand out. Differentiating yourself from other existing businesses can be difficult, particularly as they will already have created popular recipes and built up a customer base. This can result in lower profits and can even result in your business failing.

Perfecting recipes can be time-consuming

It can take a lot of time and effort to create your recipes and perfect them ready for selling. It may also take a lot of wasted stock and ingredients as you will likely have to create each recipe multiple times until it is perfected. This can be difficult when you are setting up your business, as you will not initially be earning an income.

Competitive industry

As well as existing craft beer businesses, you will also be competing with other well-known beer and ale companies. Having high competition can make it difficult for you to grow your business and establish a customer base and you may experience low sales and a lack of profitability, particularly when you first set up your business.

It can be difficult to perfect your craft

Not only can it be time-consuming to learn how to correctly and efficiently use brewing equipment and machinery, but it can also be difficult to create the perfect products that appeal to your customers. Gaining the necessary skills and knowledge you need to make your business a success can also be time-consuming.

It can be repetitive

Brewing and selling beer can be repetitive processes, particularly once your business is established and there is less need to create new products and recipes. This can make your work feel monotonous and less interesting.

High start-up costs

Your equipment, premises and stock costs can be expensive. High start-up costs can mean you have to source outside investment or invest a lot of capital yourself, which can make your business high risk (as you could potentially lose a lot of money if your business fails). High start-up costs can also mean it takes longer until you begin turning a profit.

Potential for lost income

There are multiple ways you could lose income, including:

  • Contaminated stock.
  • Customer cancellations or returns.
  • Your products being broken or damaged.
  • Products not selling before the best-before date.

 

Lost income can significantly affect your profits.

Staffing challenges

There are many staffing challenges you could face, such as a lack of staff motivation, customer complaints about staff and staff not fulfilling their expected duties. It can be difficult to create and maintain a positive work environment when working in such a busy, environment. You will also have lots of responsibilities related to your staff, such as the hiring process, staff training, day-to-day management, staff rotas and staff payroll. While your business and your profits are growing, you may have to undertake many of these responsibilities yourself.

Complying with legislation

The beer industry is highly regulated, with a large number of laws and regulations you must be aware of. You need to ensure you follow all policies and procedures, particularly those relating to health and safety. Not only can it be time-consuming to ensure compliance, but failure to comply, even unintentionally, could have serious consequences. A craft beer business can have high liability which can be a lot of stress and pressure for the business owner.

High responsibility

As the business owner, you will have a lot of responsibility, including ensuring the financial well-being, positive public opinion and the health, safety and hygiene of your business. Although other employees can handle the day-to-day running of your business, you may wish to take on these responsibilities yourself to ensure the success of your business. A lot of responsibility can be time-consuming and stressful.

It can be high stress

As the business owner, you will have a large number of responsibilities and a high level of stress. You will be responsible for every aspect of the business, including marketing, ordering ingredients, creating, perfecting or approving recipes and running the business. This can be highly stressful, especially when your business first opens.

Issues out of your control

This can be one of the most frustrating aspects of running a business, as things that are outside of your control can have a negative impact on your business and your profits. For example, your supplier raising its prices, your stock delivery being cancelled or your equipment breaking can prevent you from properly running your business, which could not only affect your profits but also result in negative reviews from customers or the cancellation of contracts and orders.

It can be physically demanding

If you run a brewery and are involved in the day-to-day operations of your business, you may be involved in tasks that are physically demanding, including handling large and heavy equipment. A physically demanding job can result in pain, strain or injury.

No benefits

As you are self-employed, you won’t receive benefits such as pension contributions. You will also be responsible for doing your own taxes and organising your National Insurance contributions. You will also have a lack of job security.

Planning Your Craft Beer Business

If you are considering starting up a craft beer business, an effective and well-designed business plan is essential. A business plan can help you to focus on the specific steps that will help your business succeed, plan your short-term and long-term goals, determine your financial needs and help your business to grow.

Your business plan should contain information such as:

  • Your company information.
  • Your company description.
  • The services you will provide.
  • Your branding, marketing and advertising plan.
  • The structure of your business.
  • The operational plan for your business.
  • The financial plan for your business.

 

When creating your business plan, some factors you will need to take into consideration include:

The type of craft beer business you set up

This is the first consideration you will need to make when creating your business plan. Will you set up a business that brews craft beer or will your purchase the beer directly from the brewer or vendor to sell on to your customers? Consider your own skills and expertise, your available capital and the expected costs and profits when deciding what type of craft beer business you are going to set up.

Your products

Whether you are brewing or selling the beer, you will still be responsible for the types of beer available to your customers. There are different craft beer recipes and different ingredients, flavours and aromas. You may choose to sell multiple craft beer products with different ingredients and flavours to offer your customers variety and to appeal to a diversified market.

Your primary selling strategy

This is a key consideration and can have a significant impact on the types of customers you attract and the success of your business. Will you sell your products directly to customers, to wholesalers or to other businesses? Will you offer online sales? Will you offer delivery options? Whichever options you choose require forward thinking before you begin setting up your business. You could choose to utilise a combination of different selling approaches in order to increase your sales. Your primary selling strategy could also change as your business grows.

Your employees

Your employees are another important consideration you will need to make. What are your staffing requirements and which employees are necessary for the running of your business? Because your employee requirements can change as your business grows, you could hire fewer employees initially and then hire more as demand grows and you have the ability to increase your running costs.

Your target market

Determining your target market is a key step in helping your business succeed. Different types of beer products and different craft beer businesses will attract different clients.

Your competition

Being aware of your competition is an important step to ensuring the success of your business. Analysing your competition allows you to look at what they do well and what you think can be improved upon. Look at the types of craft beer sold, the ingredients used, your competitors’ pricing, and the typical customers they target. Analysing your competition also helps you to identify whether there is space in the market for your business and can help you to identify any niches in the craft beer industry that you could exploit.

Your brand and your unique selling point (USP)

Creating your brand is a key way to ensure you stand out from your competition. Branding can help you to focus your target audience, attract customers and concentrate your marketing and advertising strategies. Some ways you can create your brand are by focusing on your business’s visual identity (e.g. your labelling, business name, logo and your website) and creating a brand story. Your USP can also be part of your brand and can help your business stand out from your competitors. Consider what makes your business special and how this fits into what defines your business.

Your advertising and marketing strategies

There are many ways you can choose to advertise your business. This can include partnering with other businesses in your area, advertising on the TV and radio, advertising on social media and using paid online ads. Your marketing and advertising plan should detail what your brand is and how you plan to promote your business. As part of your marketing strategy, consider the most effective ways to reach your target audience and attract potential customers. Create an advertising plan that is specific to the type of craft beer business you are going to run.

Your equipment and stock requirements

Consult the list above to determine your equipment requirements. The equipment you require will depend on the type of craft beer business you set up and the size of your business. Once you have determined your equipment requirements, you can then calculate the initial costs of purchasing the equipment. Ensure you include the costs of replenishing ingredients and stock into your budget.

Your start-up costs and running costs

Consult the list above to calculate your approximate start-up costs and running costs. Determining your approximate costs allows you to calculate your initial investment and what your monthly or yearly running costs will be. You can then calculate whether you can finance your business yourself. Being aware of your expected costs also allows you to create a budget, which is a key part of your business plan. Once you have calculated your approximate costs, you can then calculate your pricing strategy and determine your profit forecast.

Financing your business

Consult the list of start-up costs and running costs above to determine what capital you will require. Can you finance the business yourself or will you need to source outside investment? You will also need to calculate when you are likely to begin turning a profit. If you require outside investment, you could consider a bank or other financial institution, a business loan or an investment partner.

Your pricing strategy

How will you price your products? What profit margin is acceptable to you? When pricing your products, you should also consider the pricing of your competitors. As part of your pricing strategy, you can consider any special discounts or deals you are willing to offer, for example, when purchasing your products in bulk or setting up a purchasing contract.

Your sales forecast

How many products do you hope to sell each day, week and month? Are there certain times of the year that are likely to be busier than others? What are your weekly, monthly and annual sales forecasts? You can also analyse the sales forecasts of similar businesses and look at how sales vary throughout the year to estimate demand. As your business grows, your sales forecast is likely to change.

Your strategy for growth

Your strategy for growth is the actions you will take to realise your goals for expansion and any potential challenges your business could face and how you will avoid or overcome them. Being aware of any potential challenges can help you to prepare for them and hopefully avoid them. This can help to make your business more successful.

Potential challenges could include:

  • Issues with your suppliers.
  • Difficulties growing your customer base.
  • Difficulties retaining staff.

 

Some potential strategies for growth include:

  • Create long-term supply and sales contracts.
  • Diversify your products.
  • Sell your beer internationally.

 

Your business summary

Your business plan should include a detailed overview of your business, including the type of craft beer business you are setting up, the products you will sell, your primary selling strategy, your typical customer base, your staffing and equipment requirements and your business goals.

Your business goals

Your business goals or objectives are an essential part of creating your business plan. Your business objectives highlight the targets and goals of your craft beer business and help you to create a one-year, three-year and five-year business plan.

Your business objectives should be SMART:

  • S = Specific
  • M = Measurable
  • A = Achievable
  • R = Realistic
  • T = Time-bound

Check you have complied with all legal requirements

Consult the list of legal requirements above to check you have complied with all requirements and regulations and that all your paperwork is accurate. Failure to comply with legal requirements could have a detrimental effect on your business or could result in a fine, the forced closure of your business or, in serious cases, prosecution.

Download our business plan

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