What’s Taking So Long – Part I
“Nothing ever happens as quickly as you would like it to…” – Me, just now
I know there are probably a handful of folks who are wondering why updates here are so few and far between. Well, I can tell you that it is because this whole process is a long and complicated one. I think we knew that going into this, but I am not sure we knew to what extent.
This is going to be the first in a series of posts that is going to give a bit more of a detailed outline of what EXACTLY we have been up to for the past year and a half and what exactly it has taken to get to this point. Grab a beer and get comfy.
I have covered some of the idea stage in previous posts, but just to recap… Pearce and I wanted to open a brewery that was a good bit closer to the population. Our vision was a place where people could walk, ride their bikes and push their strollers and not have to go too far out of their way. We started batting the idea around during the summer of 2015. In December of that same year, different life circumstances gave us the fortitude to buckle down and push forward. We decided that we would invest time and energy into creating a plan and finding a location. We said that once we got to the point where we needed to spend any significant amount of money, we would step back, evaluate the situation and decide whether or not to move forward.
Pearce and I had very different ideas around what could be considered a “business plan.” I was coming out of a stint in the tech-world, where there was no such thing as a “traditional” business plan. I figured that we could create a 10-page slide deck that would tell people who we are, what we are doing, how much money it would take, and how much money we needed to accomplish our goals. Pearce comes from a much more traditional business background. He pushed the idea that our business plan needed to be 200 pages and cover everything under the sun. Long story short is, we reached a compromise. Pearce found someone online, in a market very similar to ours, who had written out a 100-page business plan as well as a pro-forma workbook and was willing to share it (for a price) with us. We combed over the plan and the financials and then decided to use it as a base for writing our own plan. We got connected with an online software called Live Plan, which is a tool for helping write and organize a business plan, initial budget, and pro-forma. I took cues from the purchased plan we had and wrote out a very lean plan that ended up being more like an executive summary. Pearce took my plan and then delved in and added the detail. It took several weeks just to get the first draft together and we had to make a lot of assumptions about the market. It took a couple of months to get it to where we felt good enough to present it to a bank, potential investors, and/or anyone else who might want a peek. All in, it turned out to be about 95 pages and covered every imaginable topic there is.
This was probably the hardest part of the initial planning stage. It is pretty easy to talk about what you want your brewery to be and how you want it to look and what type of beer you will serve. It is something entirely different trying to figure out whether or not all of those ideas equate to making money. Pearce and I spent hours and days and weeks and months going over all aspects of our revenue model, including how much beer we could make, how much beer we could sell out of the tap room, and how much beer we would then send into local and eventually regional distribution. These numbers changed and shifted and adjusted several times before we had something that we thought made sense. And then we changed and shifted and adjusted it again. We even hired an accounting major intern from Wofford to help us prepare our workbook and crunch our numbers. Then we ended up meeting with our CPA who promptly looked at our 10 tab excel workbook and told us that while this was all great info, it was not the best way to go about it. He took all the hours and hours of work that we had amassed and ended up spending several hours himself adjusting and shifting and changing it. And still…it is all just a big guess. But I will tell you that it is a very calculated guess. We established a very tight budget with very conservative sales and revenue numbers. We did not fudge them to make them look better. The good news is that even with very conservative numbers, we can see a path to profitability.
I have written several times about the different opportunities that we have encountered as far as locations go. All the while that we were working on our pro-forma and business plan, we were also scouting locations for the brewery. Every time that we thought we had the perfect fit, we had to adjust the plan and numbers to take into account each situation. We took a look at any nook and cranny that seemed like it might fit our needs. Some were buildings that we would have to retro-fit and some were vacant or wooded lots that would mean ground up construction. All in all, it ended up being close to 10 locations that we looked at in various degrees of seriousness. Each one had several pros, but most of them had cons that were enough to disqualify them. Finally we stumbled upon the location that we are working on. It fit the vision of being close to a population so that people can walk and ride their bikes and it also is in the heart of a growing area with lots of upside potential.
So we finally found the right location for our brewery. The property is a vacant piece of land and the owner is willing to sell it to us AND work with us on the construction. We wrote a contract for the purchase of the property that was contingent upon changing the zoning of the property, appraisal of the property and also some of the conditions that would allow us to build on the property. The rezoning process was mostly covered in the Zoning In post. We also requested a variance on the building lot lines, because we really wanted to preserve the urban lines in the neighborhood, but the new zoning had some different requirements. The board of zoning appeals agreed with our vision and approved the variance request as well. This meant that everything was green-lit by the City. Now we needed to work with an architect to make sure we could fit a building on the property that not only met our needs but that we could also afford. Not an easy task as you will find out in subsequent posts.
In the next post, we will start delving into the architectural process, the search for funding and the out of pocket costs that we have had to endure up unto this point. I told you things would start to get interesting.