Brewery Builders: Preliminary Budget and Schedule Elements
While grabbing a beer with a few friends at the Rough Draft Brewery in San Diego the construction manager within me took over and I started to mentally plan, design, and construct the space I was sitting in. My first thought:
All breweries, no matter how simple or extravagant, are unique in their own regard.
The following article aims to provide entrepreneurs with a preliminary schedule starting from the transactional phase through the occupancy phase. Don’t worry; this article is free of the technical and scientific details.
Location, Location, Location
Aside from your master brewers and financial advisors, you should get a knowledgeable commercial real estate broker on board early. Find a broker who:
1. Has worked with brewers before and knows what type of space will accommodate your basic needs,
2. Understands your goals and your target market, and;
3. Most importantly, is as excited about your passion as you are.
The broker will narrow down your search based on your criteria. Take a look at the schedule below, the “Transactional Phase,” a crucial phase of the project, could take as long as eight weeks to complete and sometimes longer depending on the space requirements:
Your construction manager will be the owner representative throughout the design and construction phase.
Why do you need a construction manager with you? As an entrepreneur and soon-to-be business owner, you want to minimize risk and avoid foreseeable mistakes. A space that may seem perfect in your mind may require more time and money than you were hoping to invest. A construction manager will help you establish a preliminary budget and schedule to your vision.
The design and construction phase of projects are driven by two pieces:
- Preliminary Budget: The budget is self-explanatory, it says how much you might need in order to build out, or build up, your first brewery.
- Preliminary Schedule: The schedule will help guide and itemize your schedule milestones, but most importantly the schedule will tell you how to get from today to being open for business, and when you will need to start spending money.
Schedule Component: Licenses and Permits
The schedule below plans for a worst case scenario, meaning the project design would not begin until the alcohol license has been granted, it would be the business owner’s decision on whether to begin the brewery design during the alcohol licensing duration, or to wait until the license has been granted. This preliminary schedule plans on starting the design phase once the alcohol license has been granted. Keep these durations in mind:
- Alcohol License: ABC licensing period can take as long as six months; and,
- Change Use Permit (CUP) Process: CUP process can take as long as six months (The schedule shown does not include a CUP process)
The main concern here is that once you commence with the design, you would be spending money on architectural and engineering design services. You would run the risk of expending money prior to the alcohol licensing approval. As a business owner, it would be difficult to rationalize opening a brewery that is unable to sell alcoholic beverages because the alcohol license was rejected.
With the right broker and construction manager on board early, these types of concerns will come up sooner than later allowing you the time to successfully plan for, and assess the crucial business decisions.
The schedule below is based on the following criteria:
- The chosen property not requiring a CUP process,
- Design beginning after the alcohol license has been granted; and,
- A 16-week construction duration for a 5,000 square foot space facility excluding a kitchen.
Given the criteria above, you would be able to occupy your new space and open for business approximately 15 months after the transactional phase.
Nik Bandak is a vice president of Hughes Marino, an award-winning commercial real estate company specializing in project management, tenant representation and building purchases, with offices across the nation. Contact Nik at 1-844-662-6635 or email@example.com to learn more.