When you are ready to start a brewery, you need to how to secure financing for the business. You need to pay for all the equipment that is needed to make your beer, and you must pay to advance the business. Use the tips below to secure funding for the business, grow your company, and make beer that will be known around the country. You can use each of these steps at the same time, or you might try each funding option depending on the situation and your needs.
Create A Business Plan
If you want to find a role model, you could copy the business plan of a company like Melvin Brewing. You need a business plan that explains how you will sell beer, how much it costs to run the company, and how when you plan to break even. You can show this business plan to all the banks or lenders that you work with, and the business plan will explain when these lenders will get their money back. You may also share your business plan with a venture capitalist who will invest in you for a small stake in the company.
You Need Funding For Expansion
You need funding for expansion when you would like to sell more beers, expand your facility, or even open a restaurant. You need money to pay for the expansion plans you have created, and you can use your funding for payroll expansion. You must hire the best people to work for your company, but you cannot do that if you do not pay them well.
You Should Reach Out To The SBA
You might want to get an SBA loan that will help your business grow. The US Small Business Administration will offer you a loan with good terms and low rates. You can get one of these loans if you are just starting, or you might want to try an SBA loan when you are expanding.
You Can Work With A Venture Capitalist
A venture capitalist will give you money in exchange for a stake in your company. You are giving that person a small share of the company, and they are investing in you because they think they can make money. You will get very good advice from a capitalist that works with you, or you might be connected to a capitalist by an advisor.
If you work with an advisor, you should ask the advisor to choose a capitalist who is very interested in the beer business. The capitalist may have invested in a company like Melvin Brewing in the past. You will benefit from the advice that you get from the capitalist, and you will make money at the same time.
Can You Go To Your Bank?
If you have money to spend, you might go to the bank to ask for a loan showing that you have collateral in place. The bank might double or triple any capital you have, and you can get all the money you need quickly. This is how you leverage capital to your advantage.
You should consider how much money you can generate in a short time if a capitalist gives you money, you use that money to get a loan at the bank, and you go to the SBA for a loan that will help you pay for a particular project. Your brewery can grow quickly, and you do not need to exhaust any lines of credit you have.
Reinvest When You Are Selling Your Beer
Your profits should be partly reinvested in your business. The money that you make should go back into the company to pay for more projects, to add payroll, or to pay off debt. You cannot take all the profits for yourself because the company will not survive without a healthy dose of reinvestment. You might also invest in charitable causes that you can write off at the end of the year. By doing this, you can save money when you file your year-end tax return.
Conclusion
Getting funding for your brewery is an important part of managing and growing your business. You can get funding for your brewery from any source that you like, but it is wise to get funding from multiple sources so that you have more funding available to you. You can leverage the cash you have to get more money, and you can reinvest in your company when you are making money. Start searching for funding right now whether your business is new or it has been operating for many years