How to write a brewery and taproom business plan for its four readers

What to take away

Who reads it, and what each reader wants

Write for four readers and label the sections so each can find their part.

The fourth reader is the one people forget. Your plan describes premises, equipment and activities, and those descriptions should not contradict what you told the licensing bodies. Keep the operational description consistent with the material set out in what your license actually requires of you.

The sections, and what belongs in each

1. What this business is. One page. The operation type, the address or the area, the license class you intend to hold, and the single sentence that says why someone will come. If you cannot write that sentence, the rest of the document will not save it.

2. The market read. Observations rather than statistics. Who is out near your address at your hours, what they currently do instead, and what would make them come. Record how you observed it and when. State the seasonal shape you expect and say how confident you are.

3. Production capacity. Brewhouse size, tank count, expected cycle length, and the resulting volume per period. Then the constraint: which of tanks, cellar, packaging or cold storage runs out first. Name it explicitly.

4. Service capacity. Occupancy load, hours you intend to open, and the staffing needed to hold each of those hours. This is the section most plans omit, and it is where a plan becomes realistic, since the wider startup and market picture usually turns on staffed hours rather than tanks.

5. Products and channels. What you will sell and through which channels, with the approvals each channel requires. Note which channels your license permits, and cite the answer you were given rather than an assumption.

6. People. The roles you need on day one, in month three and in year one. Who does what when the owner is ill. Training time, costed. The plan for the first non owner manager, since that hire decides whether the business can run without you.

7. Money. Startup costs by category, the funding sources, the runway in months, and a monthly cash view for at least the first year. Show the slow winter rather than smoothing it.

8. Compliance and risk. The authorities involved, the state of each application, and the three things most likely to go wrong with dates by which you will know.

9. Assumptions and tests. Every assumption in one place, each with the test that would confirm or refute it. This is the section that makes the plan honest.

How to handle numbers you do not have

Most of the numbers a plan wants are not knowable in advance, and the standard mistake is to produce a confident figure anyway.

Do this instead. Write the assumption as a sentence, state the range you think it falls in, say what it is based on, and say what you will do if it turns out worse.

A lender reading "we assume X, based on Y, and if it is half that we reduce to four opening days" sees a business that has thought about failure. A lender reading a single confident projection sees a guess.

Never invent an industry benchmark, and be careful with any you find, because most published figures for this trade come from operations with different rents, wages and channel mixes. Where a figure genuinely matters, name the body you would get it from and go and get it.

Anything you state publicly about the business also has to be supportable. That is true of a plan shown to investors as much as of a menu board.

Where the source material comes from

The U.S. Small Business Administration: SBA Business Guide covers the general planning sequence: market research, startup costs, funding, permits, insurance, hiring and growth. It is the right frame for sections seven and eight, and it makes no attempt to address anything specific to alcohol.

For structure, registration and the tax obligations that follow, the Internal Revenue Service: Starting a business material sets out the choices a new business makes and what each implies. Settle the entity question with an accountant before the plan is finished, because it changes sections six and seven.

The production side begins at the Alcohol and Tobacco Tax and Trade Bureau: Starting a TTB-Regulated Business: Brewery page, which sets out the application, the premises information required and the reporting a brewer owes. Section five of your plan should be consistent with what you file there, and section eight should reflect its real timeline.

Writing sections three and four so they connect

The most common weakness in a plan for this trade is a production number and a sales number that were calculated separately and never reconciled.

Take production volume per period from section three. Convert it to servings at your standard pour. Compare that to section four: occupancy times the hours you can staff times realistic servings per guest.

If production is larger, you need a second channel and its approvals. If service capacity is larger, you have a beer constraint. Tanks are your first investment.

Write which one it is in the plan, in one sentence. That single sentence is the most useful line in the whole document, because it tells every reader what this business is actually short of.

The operational plan behind the written one

A plan that stops at the document is decoration. Attach the working sequence: what happens in which week, who owns it, and what depends on what. The practical version of that sequence is set out in the week by week opening sequence, and the staffing half of it belongs with hiring and training the crew.

Then treat the plan as a live document. Update section nine every time an assumption is tested, with the date and the result. After a year the assumptions log will be more valuable than the plan, because it is a record of how wrong you were and in which direction, which is exactly what you need for the second year.

If growth is on the horizon, the plan should say which of the routes to more volume is the intended one and what would trigger it, rather than promising growth in general terms.

Common questions

How long should a plan be?

Long enough to answer the four readers and short enough that they finish it. Length is not evidence of thoroughness, and an appendix is where detail belongs.

Do I need a plan if I am not raising money?

Yes, for sections three, four and nine especially. The reconciliation between production and service capacity is worth the whole exercise even if nobody else ever reads it.

Should I include a projected profit and loss?

Include one, clearly labeled as built on the stated assumptions, and put the assumptions next to it. A projection presented without its assumptions invites a reader to test it against their own, which they will.

How often should it be rewritten?

Update the assumptions log continuously and rewrite the document when the shape of the business changes, not on a calendar. A plan rewritten annually out of habit tends to be edited rather than rethought.

What is the most common thing missing?

Service capacity. Plans in this trade describe what will be brewed in detail and treat the room as though it can absorb whatever arrives.