Do you want to start microbrewery business?

Are you planning how to start a microbrewery business? There is no doubt, this is a great business venture with a lot of potential. Nowadays, a lot of people appreciate great tasting beer and for this reason, there is an increase in the number of people who need to enjoy a wide variety of quality beers. As a result, many entrepreneurs have decided to venture into the brewing industry. The eye for tasty beer has opened up new opportunities for private brewers to develop their own brands. Starting a microbrewery is the foundation to launch your own brewery business. With a great business plan and strategy, it’s definitely a rewarding venture that promises good profits.

Executive Summary

2.1 The Business

The microbrewery will be registered under the name Starvic Brewery and will be located in Oakland, California. The microbrewery will be owned by Thomas Anderson who is a Brewing Specialist with vast experience on microbrewery start up cost and what will be involved.

2.2 Management Team

Thomas Anderson is who is the owner of Starvic Brewery is a professional brewing specialist with sufficient experience spanning over two decades in the brewing industry. Before own a brewery, Anderson worked for various high profile brewery brands across the United States. After completing business-setup, Thomas has plans to employ professionals to assist in managing the microbrewery.

2.3 Customer Focus

Starvic Brewery has plans to set up the brewery in a strategic location to ensure the business effectively reaches out to the target market. The brewery intends to serve different kinds of customers.

2.4 Business Target

Starvic Brewery will offer various types of products in line with maintaining high brewing standards. The brewery intends to target various customer segments in Oakland.
Microbrewery Business Plan - 3 Years Profit Forecast

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Company Summary

3.1 Company Owner

Thomas Anderson is an experienced brewing specialist who has had a successful career journey. He has achieved numerous career accomplishments and played a key role in helping to startup various brewery plants in various cities across the United States.

3.2 Aim of Starting the Microbrewery Business

Everyone loves tasty beer and nowadays, there are numerous brands of beer which have been introduced in the market. In the recent days, customers prefer having a wide variety of beers to choose from. Aside from the traditional brands, there was a need to be creative and introduce other exciting brands and flavors in the market.

3.3 How the Microbrewery Business will be Started

With over twenty years of experience, Mr. Thomas enjoys extensive experience in the brewing industry. Therefore, he understands how to start microbrewery business using the latest technologies and business practices. Additionally, he has sought the services of financial experts to help him come up with a detailed financial analysis.
Microbrewery Business Plan - Startup Cost


Start-up Expenses  
Legal $4,000
Consultants $2,500
Insurance $18,000
Rent $12,000
Research and Development $10,000
Expensed Equipment $13,000
Signs $3,000
Start-up Assets $0
Cash Required $110,000
Start-up Inventory $35,000
Other Current Assets $25,000
Long-term Assets $7,000
Total Requirements $24,000
Start-up Expenses to Fund $37,000
Start-up Assets to Fund $20,000
Assets $18,000
Non-cash Assets from Start-up $12,000
Cash Requirements from Start-up $0
Additional Cash Raised $45,000
Cash Balance on Starting Date $20,000
Liabilities and Capital $0
Liabilities $0
Current Borrowing $0
Long-term Liabilities $0
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Capital $0
Planned Investment $0
Investor 1 $15,000
Investor 2 $18,000
Other $0
Additional Investment Requirement $0
Loss at Start-up (Start-up Expenses) $50,000
Total Funding $110,000

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Services for Customers

Starvic Brewery intends to provide its customers with diversified products in order to attract more customers and boost revenue for the microbrewery. When planning how to start your own microbrewery, there should be a defined approach that emphasizes upholding the highest standards of beer quality. In this regard, Starvic Brewery intends to offer the following products.

  • Starvic Super is a special beer brand made using traditional ingredients with a fine taste
  • Starvic Pilsner is a combination of the finest imported and domestic malts
  • Starvic Lager is an incredible traditional brewed malt which contains European yeast and roasted specialty malts
  • Starvic Light is a crisp and crystal clear beer known for its white foamy head.

Marketing Analysis of Microbrewery Business

In the recent times, many people are beginning to appreciate the value of locally brewed beers. In this craft brewery business plan, Starvic Brewery intends to capitalize on the increasing consumption of local brewed beers to attain higher revenue streams.


There is no doubt, microbrewery business is flourishing thanks to steady growth in locally brewed beers. In this regard, a comprehensive market analysis was done to better understand the market and how to advertise to potential customers.

5.1 Market Segmentation

In order to ensure Starvic Brewery meets its market obligations, the business will sell four unique beer varieties that have never been sold on the market before. Even though microbreweries cannot exceed a specified amount of barrels produced, they are well placed to meet the demands of the market. With great opportunities to expand revenue such as forming partnerships with beer distribution, the future of microbreweries looks great. This microbrewery start up business plan has identified the following customer segments. Locally brewed beers are consumed by a wide range of customers.
Microbrewery Business Plan - Market Segmentation

5.1.1 Corporate Executives

Landlord business plan

Oakland is a large city with a huge working class population. Statistics have shown that a majority of beer consumers are career professionals who earn a regular income. A good number of patrons who go to entertainment spots where locally brewed brands are sold happen to be employees drawn from different careers. For this reason, Starvic Brewery has come up with a beer product line that will meet the needs of corporate executives. In this case, strategic pricing and quality assurance is critical to tap revenue from working class customers.

5.1.2 Entrepreneurs

Entrepreneurs are a key customer target for Starvic Brewery because some of them are expected to purchase locally brewed beers in large quantities. In this case entrepreneurs such as those who own bars and business plans restaurants well as beer retailers are expected to get their supplies from Starvic Brewery. This microbrewery business plan sample has outlined the techniques to be used to market the microbrewery to entrepreneurs around Oakland.

5.1.3 Sports Professionals

Starvic Brewery has a wide range of beers crafted with special ingredients to provide energy. Together with other beer varieties, the business intends to target sportsmen and women who according to statistics, are an excellent market segment for any microbrewery. Oakland is a hub for various sports activities thus providing ready market for locally brewed beers from Starvic Brewery.

5.1.4 Visitors and Tourists

As any other large city, Oakland receives numerous visitors who travel to the city both for business and leisure activities. Because of the numerous entertainment facilities built around the city, having special locally brewed beer with a unique taste will help to market Starvic Brewery across the city and its environs. In addition, many tourists come to Oakland to see the numerous points of interest.

5.1.5 College Students

Starvic Brewery products are not sold to underage consumers but college students who are above 18 years love unique blends of locally manufactured beers. Given the high number of colleges in Oakland the surrounding areas, there is a great market for local beer brands. This business plan microbrewery outlines how the microbrewery will reach out to various customers.

Market Analysis
Potential Customers Growth YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Corporate Executive 25% 23,000 26,000 29,000 32,000 35,000
Entreprenuers 23% 20,000 23,000 26,000 29,000 31,000
Sports Professionals 20% 17,000 20,000 23,000 26,000 29,000
Visitors and Tourists 17% 13,000 16,000 19,000 22,000 25,000
College Students 15% 10,000 13,000 16,000 19,000 22,000
Total 100% 83,000 98000              113000 128,000 142,000
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5.2 Business Target

Starvic Brewery has acquired the required machinery and facilities that will support the infrastructure of running the microbrewery. Oakland is a large city and this microbrewery business model intends to target the residents, entrepreneurs and special groups. The microbrewery plans to adopt modern brewing infrastructure and technologies to help to seamlessly coordinate business activities. With a good microbrewery business plan template in place, the microbrewery hopes to increase its annual sales margins by 15% – 20%.

5.3 Product Pricing

Starvic Brewery plans to come up with well-researched product pricing guidelines after carefully surveying the market. In order to survive industry competition, good microbrewery business plans place a lot of emphasis on accurately determining product prices.



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In order Stanvic Brewery to meet its objectives, Thomas Anderson has worked closely with experts devise a marketing strategy that will help the microbrewery to effectively serve its customers. When planning to start a microbrewery business, a good sales strategy should be put in place for the enterprise meet its objectives.

6.1 Competitive Analysis

Starvic Brewery intends to come up with a well-structured business model that will ensure provision of quality products. Even though there are other microbreweries in the region, the microbrewery has identified its strengths and the available opportunities to leverage on.

6.2 Sales Strategy

For the microbrewery to realize its sales targets, the following business strategy services have been identified to help market the business. While you plan how much to start a microbrewery, the following marketing action points will be of great help. Starvic Brewery intends to adopt the following plan.

  • Introduce the microbrewery in a grand style by organizing a party and giving attendants free gifts such as offering them free cups of locally brewed brands for customers to have a feel of the tastes and flavors.
  • Ensure the microbrewery always has various types of products at all times to offer customers the variety they need
  • Place signage at strategic places within the neighboring areas to market the microbrewery
  • Come up with a loyalty plan that allows rewarding of potential customers with goodies from the microbrewery
  • Advertise the business on local media channels such as television, radio and newspapers
  • Advertise the business on local directories such as yellow pages
  • Use word of mouth marketing and referrals to reach out to potential customers
  • Hire a professional marketing company to help the microbrewery effectively penetrate the market
  • Organize roadshows and events in the target customer areas with a view to market the microbrewery.

6.3 Sales Forecast

In order to meet business goals, Starvic Brewery has come up with a sales forecast that will show how the microbrewery is expected to perform when it begins operations.
Microbrewery Business Plan - Unit Sales

Sales Forecast      
Unit Sales Year 1 Year 2 Year 3
Starvic Super 400,000 430,000 460,000
Starvic Pilsner 300,000 330,000 360,000
Starvic Lager 200,000 230,000 260,000
Starvic Light 100,000 130,000 160,000
TOTAL UNIT SALES 1,000,000 1,120,000 1,240,000
Unit Prices Year 1 Year 2 Year 3
Starvic Super $300.00 $320.00 $340.00
Starvic Pilsner $250.00 $270.00 $290.00
Starvic Lager $200.00 $220.00 $240.00
Starvic Light $150.00 $170.00 $190.00
Starvic Super $250,000 $270,000 $290,000
Starvic Pilsner $200,000 $220,000 $240,000
Starvic Lager $150,000 $170,000 $190,000
starvic Light $100,000 $120,000 $140,000
Direct Unit Costs Year 1 Year 2 Year 3
Starvic Super $4.00 $3.00 $2.00
Starvic Pilsner $3.00 $2.00 $1.50
Starvic Lager $2.00 $1.50 $1.00
Starvic Light $1.00 $0.75 $0.40
Direct Cost of Sales
Starvic Super $150,000 $170,000 $190,000
Starvic Pilsner $130,000 $150,000 $170,000
Starvic Lager $100,000 $120,000 $140,000
Starvic Light $80,000 $100,000 $120,000
Subtotal Direct Cost of Sales $460,000 $540,000 $620,000

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Personnel Plan

Starvic Brewery hopes to recruit well trained and experienced staff to run its operations on a day-to-day basis. This microbrewery start up business plan explains the kind of staff the business will need to hire in order to meet its objectives.

7.1 Personnel Plan

Starvic Brewery is owned by Thomas Anderson who is also the owner and manager of the microbrewery. As plans are put in place to start the business, the following staff will be employed in the business.

  • Owner/Manager
  • Bottling and Shipping Manager
  • Brewing Managers
  • 2 Marketing Executives
  • 1 Accountant
  • 4 Bottling Staff
  • 3 Shipping staff
  • 2 Security Guards

Successful applicants will be thoroughly trained in various areas of microbrewery operations in order to ensure a seamless flow of operations.

7.2 Average Salaries

Stanvic Brewery intends to pay its members of staff the following salaries within the first three years of operation.

 Personnel Plan      
Year 1 Year 2 Year 3
Manager $65,000 $68,000 $71,000
Bottling and Shipping Manager $36,000 $39,000 $41,000
Brewing Manager $30,000 $33,000 $36,000
2 Sales and Marketing Executive $60,000 $62,000 $64,000
1 Accountant $25,000 $30,000 $35,000
4 Bottling Staff $100,000 $105,000 $110,000
3 Shiping Staff $60,000 $63,000 $65,000
2 Security Guards $50,000 $52,000 $54,000
Total Salaries $426,000 $452,000 $476,000

Financial Plan

Starvic Brewery has come up with a comprehensive financial plan that will guide the operations of the microbrewery. In order to streamline business operations and forecast microbrewery profit margin, initial capital must be determined alongside other business expenses. In this case, Thomas Anderson will finance the microbrewery using his personal savings and will be helped by two investors. In addition, a bank loan shall be secured to provide additional capital.

Below is the key financial data for Starvic Brewery.

8.1 Important Assumptions

Financial forecast for Starvic Brewery shall be based on the assumptions below.

 General Assumptions      
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 15.00% 18.00% 21.00%
Long-term Interest Rate 6.00% 6.00% 6.00%
Tax Rate 14.00% 16.00% 18.00%
Other 0 0 0

8.2 Brake-even Analysis

The Brake-even Analysis for Starvic Brewery is illustrated in the graph below.
Microbrewery Business Plan - Brake-even Analysis

 Brake-Even Analysis  
Monthly Units Break-even 8000
Monthly Revenue Break-even $320,000
Average Per-Unit Revenue $200.00
Average Per-Unit Variable Cost $1.60
Estimated Monthly Fixed Cost $420,000

8.3 Projected Profit and Loss

Profit and Loss information for the microbrewery is calculated on an annual and monthly basis as shown below.

 Pro Forma Profit And Loss      
Year 1 Year 2 Year 3
Sales $400,000 $430,000 $460,000
Direct Cost of Sales $50,000 $70,000 $90,000
Other $0 $0 $0
TOTAL COST OF SALES $50,000 $70,000 $90,000
Gross Margin $420,000 $460,000 $500,000
Gross Margin % 72.00% 80.00% 88.00%
Payroll $300,000 $330,000 $360,000
Sales and Marketing and Other Expenses $5,000 $7,000 $9,000
Depreciation $3,000 $5,000 $7,000
Leased Equipment $0 $0 $0
Utilities $5,000 $7,000 $9,000
Insurance $2,000 $4,000 $6,000
Rent $10,000 $14,000 $18,000
Payroll Taxes $25,000 $30,000 $35,000
Other $0 $0 $0
Total Operating Expenses $320,000 $350,000 $380,000
Profit Before Interest and Taxes $30,000 $50,000 $70,000
EBITDA $25,000 $30,000 $35,000
Interest Expense $0 $0 $0
Taxes Incurred $25,000 $30,000 $35,000
Net Profit $120,000 $130,000 $140,000
Net Profit/Sales 35.00% 40.00% 45.00%

8.3.1 Monthly Profit

Microbrewery Business Plan - Profit Monthly

8.3.2 Yearly Profit

Microbrewery Business Plan - Profit Yearly

8.3.3 Monthly Gross Margin

Microbrewery Business Plan - Gross Margin Monthly

8.3.4 Yearly Gross Margin

Microbrewery Business Plan - Gross Margin Yearly

8.4 Projected Cash Flow

Below is a summary of pro forma cash flow, subtotal cash spent, subtotal cash spent on operations, subtotal cash received and subtotal cash from operations.
Microbrewery Business Plan - Projected Cash Flow

 Pro Forma Cash Flow      
Cash Received Year 1 Year 2 Year 3
Cash from Operations
Cash Sales $100,000 $120,000 $140,000
Cash from Receivables $10,000 $12,000 $14,000
SUBTOTAL CASH FROM OPERATIONS $110,000 $132,000 $154,000
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
SUBTOTAL CASH RECEIVED $158,000 $165,000 $172,000
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $23,000 $26,000 $29,000
Bill Payments $24,000 $28,000 $32,000
SUBTOTAL SPENT ON OPERATIONS $47,000 $54,000 $61,000
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
SUBTOTAL CASH SPENT $40,000 $45,000 $50,000
Net Cash Flow $15,000 $25,000 $35,000
Cash Balance $25,000 $30,000 $35,000

8.5 Projected Balance Sheet

Below is a Projected Balance Sheet for Starvic Brewery that shows capital, assets, liabilities, current liabilities and long term assets.

 Pro Forma Balance Sheet      
Assets Year 1 Year 2 Year 3
Current Assets
Cash $280,000 $320,000 $360,000
Accounts Receivable $15,000 $18,000 $21,000
Inventory $4,000 $5,000 $6,000
Other Current Assets $4,000 $4,000 $4,000
TOTAL CURRENT ASSETS $303,000 $347,000 $391,000
Long-term Assets
Long-term Assets $12,000 $14,000 $16,000
Accumulated Depreciation $14,000 $17,000 $21,000
TOTAL LONG-TERM ASSETS $4,000 $3,000 $2,000
TOTAL ASSETS $330,000 $368,000 $420,000
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $12,000 $15,000 $18,000
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
SUBTOTAL CURRENT LIABILITIES $12,000 $15,000 $18,000
Long-term Liabilities $0 $0 $0
TOTAL LIABILITIES $12,000 $15,000 $18,000
Paid-in Capital $26,000 $26,000 $26,000
Retained Earnings $35,000 $45,000 $55,000
Earnings $80,000 $100,000 $120,000
TOTAL CAPITAL $300,000 $330,000 $360,000
TOTAL LIABILITIES AND CAPITAL $280,000 $310,000 $340,000
Net Worth $320,000 $350,000 $380,000

8.6 Business Ratios

The following is the Ratio Analysis, Business Net Worth and Business Ratios for the microbrewery.

 Ratio Analysis        
Year 1 Year 2 Year 3 INDUSTRY PROFILE
Sales Growth 10.00% 35.00% 45.00% 6.00%
Percent of Total Assets
Accounts Receivable 7.00% 6.00% 5.00% 12.00%
Inventory 5.00% 3.00% 2.10% 14.00%
Other Current Assets 4.00% 2.20% 3.00% 35.00%
Total Current Assets 120.00% 150.00% 155.00% 60.00%
Long-term Assets -10.00% -20.00% -30.00% 50.50%
TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%
Current Liabilities 6.00% 4.20% 3.00% 25.50%
Long-term Liabilities 0.00% 0.00% 0.00% 25.00%
Total Liabilities 8.00% 2.00% 1.50% 52.10%
NET WORTH 100.20% 90.00% 95.00% 30.00%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 80.00% 82.00% 84.00% 0.00%
Selling, General & Administrative Expenses 70.00% 77.00% 65.00% 67.00%
Advertising Expenses 4.00% 3.00% 1.50% 4.20%
Profit Before Interest and Taxes 25.00% 30.00% 35.40% 2.50%
Main Ratios
Current 12 15 19 1.5
Quick 26 30 34 2.5
Total Debt to Total Assets 4.00% 3.00% 2.00% 60.00%
Pre-tax Return on Net Worth 85.00% 95.00% 100.00% 4.00%
Pre-tax Return on Assets 66.00% 60.00% 70.00% 9.00%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 20.00% 23.00% 26.00% N.A.
Return on Equity 52.00% 56.00% 60.00% N.A.
Activity Ratios
Accounts Receivable Turnover 7 9 11 N.A.
Collection Days 95 99 113 N.A.
Inventory Turnover 16 19 22 N.A.
Accounts Payable Turnover 12 16 20 N.A.
Payment Days 25 25 25 N.A.
Total Asset Turnover 2.8 2.6 2.4 N.A.
Debt Ratios
Debt to Net Worth 0 -0.06 -0.03 N.A.
Current Liab. to Liab. 0 0 0 N.A.
Liquidity Ratios
Net Working Capital $250,000 $270,000 $290,000 N.A.
Interest Coverage 0 0 0 N.A.
Additional Ratios
Assets to Sales 0.55 0.5 0.4 N.A.
Current Debt/Total Assets 8% 4% 3% N.A.
Acid Test 30 34 38 N.A.
Sales/Net Worth 2.8 2.2 2 N.A.
Dividend Payout 0 0 0 N.A.

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