Starting a microbrewery in the crowded market of Colorado can be a great business opportunity, but a challenging one as well. This is especially true if you are in an area where beer retailers are growing. Places like restaurants, bars, grocery stores, and even gas stations can all become customers of yours.
The guide below will give you a step-by-step process of opening your microbrewery.
1. Business Plan
You will want to lay out your plan for your microbrewery before jumping in. This will give you a specific direction to go in and could help you think through potential pitfalls. Here are a few key points to put in your business plan.
Startup Cost
- Rent
- Equipment
- Renovation
- Legal costs
Ongoing Expenses
- Brewing materials
- Utilities
- Cleaning services
- Repairs
- Employee salaries
Target market
- Gas stations
- Local bars
- Restaurants
- Local distributors
- Grocery stores
- Liquor stores
Pricing
- What do competitors charge?
- Will you sell single, quadruple, or six-packs?
- What are your area’s average distributor margins?
- What are your area’s average retailer margins?
2. Form a Legal Entity
You will need to form a legal business entity, most likely an LLC, so that you can separate your business activity from your personal activity. LLCs in particular keep you from being personally liable if your business is sued.
The best way to go about this is to contact your local lawyer and ask him to draw up the necessary paperwork in order for you to form your business entity.
3. Register for Taxes
In order to pay for the appropriate taxes, federal and Colorado, you will have to register for an EIN. This will notify the IRS that you are a legal business that is able to pay taxes. You can do this by going to the IRS website and filling out the necessary forms.
4. Open a Business Bank Account
In order to separate your personal funds from your business funds, you need to open a banking account in the name of your microbrewery. You will need to do this in order to keep your personal taxes separate from your business taxes. This will also ensure that your personal assets are not subject to seizure in a lawsuit against your business.
5. Open Up a Business Credit Card
Obtaining a business credit card will help your company build credit which may help you raise money for expansion and growth. You can also use credit for temporary business expenses.
6. Find a Good Accountant
You will need to start tracking your business expenses and income as early as possible. Make sure to keep receipts and invoices to give to your accountant monthly, quarterly, or even yearly.
If you ever get audited by the IRS, then these records will be invaluable in making sure they do not take any adverse action against your business.
7. Acquire Necessary Permits
Usually, the state or county you are in requires you have a permit to run your business. You may need a state-sanctioned permit and a county or even city business permit. You should be able to find this information at your local city hall.
Conclusion
Opening a microbrewery is a challenging ordeal, but with the right steps in place, it can be a great business opportunity. Defining fixed and variable costs and getting your legal proceedings in place for the business can make your business ownership journey much easier.
If you decide opening a microbrewery in Colorado or in Denver might be a little bit too much of an undertaking, but you love to enjoy local brews you might visit our friend Steve at Denver Microbrew Tour. They have multiple tours in Denver to check out all of the local brew flavors they are ranked the number one walking tour in Denver.
