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Microbrewery Facts to Beer in Mind

June 10, 1997|KAREN E. KLEIN

Q: I would like to start my own microbrewery. Where do I begin, as far as my finances are concerned?

--Dan Lewis, La Habra Heights

A: You will need to determine the total cost of establishing the microbrewery. Start putting together estimates that include the physical location, equipment and assembly. Do not forget personnel costs and distribution--will you sell your beer wholesale or locate inside a restaurant and sell to retail customers?

Once you've figured out how much money you will need, get a good estimate of how much time it will take you, realistically, to get the operation up and running. That will give you an idea of how much working capital you will need.

After you have good numbers, you should look for sources of funding. Typically, start-ups begin with their own assets and those of their friends and family. Equipment suppliers may issue you credit as you set up your microbrewery, or you may find wealthy persons who have an interest in such an idea and would be willing to make an investment. Another idea is to approach established restaurateurs who may be interested in having a microbrewery at their locations or in helping you start a brewery under their name.

If you want to explore loans from the Small Business Administration or from financial institutions, you will need sufficient collateral and must be willing to shoulder significant costs as your business gets off the ground.

--Dan Love,

director of entrepreneurial services,

Ernst & Young


Q: I have been operating a very successful business for several years. In the past, if I wanted to find an interested investor, operator or owner in another city, I would just place an ad in that city's main newspaper. This has worked in the past, but lately it is starting to get expensive, with no results. Any suggestions?

--Ralph, HLTC, Long Beach


A: Instead of using a classified ad, you might put a small display ad in the financial section. Or you could consider sending direct mail to principals in the same business category as yours and in affinity categories. For instance, if you have an automotive business, you would use direct mail and personal selling to connect with various categories of automotive businesses in the city you are targeting, as well as with affinity businesses such as upholstery, painting, body shops and parts shops. Use your imagination.

Your best basic research tool for finding these people is the Yellow Pages for the city you are interested in. It is a wonderful tool that is often overlooked as a resource for all kinds of projects. Also, all major cities have direct-mail houses that sell direct-mail lists. If you carefully define your business category and your affinity categories, you could buy a very effective direct-mail list.

Another suggestion would be for you to contact a trade publication for your industry and ask its marketing department if it would share subscriber names with you. If the publication sees you as a potential advertiser, it may be interested in cooperating with you. Usually, such publications won't let you get your hands on their mailing lists, but they will "rent" their use and sell you their mailing services as long as you supply the mailer.

--John Klein, managing partner of marketing services,

Klein Mickaelian Partners,

Century City


Q: I am considering starting a consulting and training business. My background is in law enforcement and security management. How can I find the target group--individual security guards and security companies--that would take advantage of my services? Should I hire a consulting firm to assist me?

--S. Machuga, Garden Grove


A: No, I don't think you need a consultant to find your target group--that should be a breeze. You can find listings for all of the associations that represent private law enforcement and security companies, as well as associations that public law enforcement officers belong to, in the National Trade and Professional Assn. Directory. It can be obtained for $85 by writing to Columbia Books, 1212 New York Ave., Suite 330, Washington, DC 20005. It will give you contact names for these associations and information about when they have their regional trade shows and national conventions.

If you really want to break into this industry fast, I would recommend that you develop an interesting short training session and solicit your services as a presenter for these shows and conventions. Here is where you might want to use a consultant, if you have not done presentations before, to help you put together a sharp, entertaining session that leaves prospective clients wanting to hear more and a good-looking brochure outlining your service. It should not cost you a fortune to get someone to help you put some polish on your presentation.

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