Something's Brewing in Mid-City

It’s back to the business plan…  Hi Y’all, we’re still making progress on the brewery.  We’re actually pretty close.  We applied for our permit with the TTB and they responded quickly.  They need several more questions answered and then we should be good to go.  We’re hopeful that we’ll get our permit soon.

We’re also close to taking possession of our building.  Once we take possession, we’ll begin the brewery build out and I’ll start posting some photographs as we make progress.  As I’ve mentioned in the past, our building is roughly 12,000 square feet and it has access from two streets with  North Bernadotte being the main entrance, this is also where the power, water and sewer tie into the building so we’re planning putting the brewery on that end.  Our engineering firm has given us a great idea on how to manage water without having to cut trench drains in the slab; it will be interesting to see how this works…  we’ll share more information soon.

I say it’s back to the business plan because we’re at the point in our startup where we’re going to be spending a lot of money.  It will be interesting to see how accurate we were when we put our rough estimation together.  For me, this will be one of the most important phases of the startup.  All of our numbers are based on a several important financial consdierations which are:

1. Salaries and wages


2. Insurance costs


3. Legal and accounting fees


4. Lease and utility deposits


5. Supplies (office and such)


6. Licenses


7. Advertising and promotions


8. Equipment freight and installation costs


9. Equipment costs


10. Raw materials


11. Utilities


12. Lease expense


13. Contingency

The closer we’re able to get to the numbers we put together in our pro forma, the more likely we’ll be financially successful and sustainable.  It’s pretty easy to get distracted on the fun stuff, like brewing beer, drinking beer, marketing beer and dreaming big but ultimately, it’s the business plan that will guide us.  This is what our investors have bought into as well as our banking partner and the SBA.

Some of our plans have changed since we originally put together the business plan and we need to update it accordingly.  In addition, Mark has been diligent about getting multiple bids for equipment and for the most part, that has worked really well.  There are a lot of suppliers out there and there are even more sales people and depending upon who you talk to an how specific you are with your specifications and requirements, the pricing can vary by as much as 100%.

And, finally, if you’re wondering about our website, we hope to have it up and running soon.  While we may be beer aficionados, we are not website builders.  This has taken more time than we expected.  That said, we’re going to keep our website to the K-I-S-S model.

Cheers for now y’all and thanks for following us.  I hope you’ll be drinking one of our tasty beers in the near future…  If I haven’t mentioned this in the past, we plan to kick off our production with two styles of beer:  a pale ale and an IPA.

Hi Y'all

I’ve been thinking about this blog and when we started we were focused on the business plan and financing and brewing great tasting beer. We’re at a totally different stage today which has caused me to reflect on the process as a whole for starting a craft brewery. No doubt, in a year, my thoughts will be extremely different again…

For those of you out there thinking about starting a craft brewery, now that we’re almost two years in planning, you need to think of the big picture and move beyond the business plan and financing but never go beyond brewing great tasting beer! The business plan was a huge tool for us and we’ll keep using it… and as far as financing goes, if you have a dream and you do your homework, the financing will fall into place. It did for us.. I hope this doesn’t sound shallow because we really worked our asses off to get where we are so perhaps it wasn’t all that easy. What really happened was people realized a few things, we’re hugely dedicated, we’re taking a big risk and Mark is a great brewer with a vision of perfection.

Here are some additional hurdles for you to consider when planning your brewery…

Finding the right location… local zoning ordinances can be a challenge. We were fortunate that Mark did an extensive amount of homework before we found our pristine location. In New Orleans there are certain areas of the City that actually exclude breweries from existing and in other areas, depending on the zoning, a conditional use permit may be required. If you need a conditional use permit, you have to have a public hearing with the City Council. The current zoning ordinances for the City of New Orleans can be found here: http://www.nola.gov/city-planning/current-comprehensive-zoning-ordinance/.

So, you’ve done your homework on zoning ordinances and now you’re on the hunt for the perfect building. Are you going to rent or buy? For us, we opted to rent based on not wanting to tie up cash in the purchase of a property. Bank financed commercial property requires a 20% down payment. We did find a 5,000 square foot warehouse that we considered but making a substantial down payment with negative cash flow was not for us.

Gross lease of triple net lease – you should do your homework and determine what you can afford. With the triple net lease, you are on the hook for all of the maintenance, insurance and property taxes for the building. A commercial realtor will also have a hefty fees associated with your service and then of course, you’ll need your legal team to review any lease agreement before you sign on the dotted line.

Ok, so like us, you’ve found the perfect spot… what’s next. Well, what’s next is bringing the building up to snuff for opening a craft brewery. That is no simple task… will the concrete support the weight of the tanks, does the building a have a sprinkler system (required), does your space have enough parking spots? Are you planning on a tap room? I certainly hope so and if that is the case, is the property ADA compliant? Where are you going to place your boiler and CO2 tank?? Do you need an RO water filter and what about storage for all of your cooperage? How are trucks going to make deliveries and pick up your product? The list goes on and on… for us, we’ve decided to use an engineering firm to help us with these requirements. In addition, the folks who we bought our brewhouse from have also made some recommendations based on the footprint of our building. All the while, all of these folks answering your questions providing you with an invaluable service are expensive. You need to ensure you have enough cash and have budgeted enough to help you get your building up to code requirements. Oh, and in the meantime, don’t forget you have to continue to work on your beer recipes!

That said, we’re hoping to get our ducks in a row in the next month or two with production prior to December 31st! Feel free to contact us if you have any questions.

Cheers to that y’all,

Karen

PS - Steve Edwards, come for a visit!

Summer fun!

Bienvenue Hopfools,

It’s been a busy and fun three weeks since we last posted. The big news is that we’re just a hair’s breadth from finalizing all of our financials and ultimately the purchase of our new brewhouse, fermenters, bright tanks, pilot system, walk-in, etc.

The basic elements of our taproom and brewery are starting to come to life on paper and we’re beginning to vet contractors in anticipation of starting construction.

Along the way I also managed to visit Ontario and spend some time with our friends Peter and Andrea Chiodo of the award winning Flying Monkeys Craft Brewery in Barrie, just outside of Toronto.

It was a great first visit to Barrie and I really enjoyed hanging out in the brewhouse with his brewer, Paul Buttery and the rest of the “monkeys”. This also gave me an invaluable opportunity to bounce around ideas about brewery layout, process workflow, standard operating procedures and equipment selection.

It wasn’t all just work and technical talk mind you. I also managed to take in a Blue Jays game (sorry Boston but your kung fu was just not strong enough) and the Toronto’s Festival of Beers as a VIP guest of The Flying Monkeys. The three-day festival was located close to Lake Ontario and this year over 60 breweries were represented. There was also a number of musical guests and I was lucky enough to be a backstage guest of the Flying Monkeys for k-os, a Canadian born rapper/singer.

There were some really great beer offerings and lots of intriguing taste profiles (I actually took notes). It’s really fantastic to see and experience such a vibrant local craft beer community and for me underscored the enormous potential for craft beer in NOLA, Louisiana and the South.

I also ran into Ginger Johnson of Women Enjoying Beer, at the festival. It was good to finally meet her in person and I was able to collect on the beer she “owed” me for helping with some questions she had last year regarding the health benefits of beer.

Overall it was a great week of beer geek fellowship, beer tasting and incredible hospitality, many thanks to Peter, Andrea and the rest of the flying monkeys!

Lastly, Karen and I recently went to dinner at MoPho only to run into the crew from Yalobusha Brewing Company. It was really great talking with Andy O’Bryan, Tony Balzola and Amos Harvey, comparing notes, talking beer and finding out that the light at the end of the tunnel isn't a train.  Yalobusha's offerings that evening included their Miss-iss-IPA and River Ale. The latter is billed as a pale pilsner owing to the predominant role of pilsner malt in the grain bill and it really worked great with my pho.

Well that’s all for now. Expect more news soon as we move along with making equipment purchases, renovating our space (located at 433 N. Bernodotte) and refining recipes.

Till next time thank you for all of your support, inquiries and patience as we continue our progress.  And of course, please continue to drink craft, drink local and drink responsibly.

Cheers,

Mark

We're Making a List and Checking it Twice!

Hi Y’all,



We’ve got our final list together on the tasks that need to be completed to get the brewery up and operating. We’re hoping to have all of the boxes checked within the next three to five weeks. It feels like traction…



We’ve done a huge amount of work with the Louisiana Small Business Development Center (https://www.lsbdc.org) in Metairie and they have really helped us streamline our business plan. In addition, they love craft beer; we think is a win-win for our business and for other up and coming craft breweries in the State. We plan to give our advisor from the LSBDC a tour of our brewery this week.



We’re just about ready to submit our TTB paperwork, our website is coming along and we’re trademarking our beer names.   We’re working on some of our label art and language so we can get COLA approval and order our labels, cans, etc.



On the beer brewing front, we are working on some additional prototypes and plan to share some of these brews with our friends, family and fools network. Mark is heading to Flying Monkeys (http://www.theflyingmonkeys.ca) in Barrie, Ontario for a week to work on a production brewing system and the rest of the team is working on the task list. We’ve been pretty fortunate and have added several additional key investors; this has been a godsend.
Well y’all, cheers for now. As we get closer we’ll try and keep the blog a little more up to date.



Karen

Time Flies When You’re Planning a Craft Brewery

Hi Y’all,

 

Almost a month has past since my last entry.   You may wonder what we’ve been up to… First, we’ve been visiting as many craft breweries as possible and are of course return customers to our favorites. In the past two weeks, we’ve been to King Street, Midnight Sun and Seward Brewing Company. We’ve had some great tips from the owners and have had the pleasure of sharing some really good beer. While not drinking good beer, we’ve been working fulltime day jobs and working the brewery plans at night.

 

Here’s where we are… our business plan is being modified again for submission to the SBA. Our banker put us in touch with a great service through the LSBDC Greater New Orleans and Bayou Region. This non-profit helps small businesses and banks alike get their ducks in a row for paperwork submission to the SBA free of charge. There are some pay for service programs out there that do the same; I recommend starting with your local organization. Of interest, we only found out about this service through our bank, the SBA people failed to mention this to us when we spoke with them.

 

Outside of the business plan and financing, Mark has put together a rather extensive list of permits that we need to obtain and we’re working our way through them one at a time. Our first win was with the Louisiana Department of Revenue approval so now we’re waiting on the TTB and working with the City of New Orleans to get our occupancy approval.

 

Our architect is working on the engineering design for the taproom and brewhouse layout and associated mechanical work. We has originally thought we were going to have to tunnel through the building’s existing slab but we’ve talked with several brewery owners and have decided to build our brewing platform / sump area on top of the existing slab. We believe that this will save us some big dollars without impacting our operations.

 

There are some hurdles ahead but we think we’ve got a pretty good plan in place to work through them or work around them. All in all, we’re making progress but it’s slower than we expected. It will be great when we’ve finally resolved all of our design and engineer work and begin construction.
That’s all for now y’all and cheers to that,
Karen

 

The Friendly Skies Need Craft Beer!

Hi Y’all,

I’m writing a quick update at 30,000 feet and am wondering why do the airlines (with the exception of Alaska Airlines) not sell craft beer?  The US airlines needs to embrace craft beer!  Enough on my flying rant…  Here’s an update on Second Line Brewing…  we’re working with an engineering firm to ensure that the building is up to snuff – what does this include?  First, is the fire suppression system in good working order?  Is the slab of the building strong enough to support our tanks?  Is the electrical system adequate or do we need to upgrade it?  Where are we going to put our backup generator?  Are we in compliance with all of the various building codes?  Where is the most cost effective place to put our tap room, etc.

We’re hoping to have those questions answered soon.  We’re also working with our very smart and beer savvy lawyer on updating our operating agreement.  We’ve had several people approach us who want to invest in Second Line.  While we are excited by the interest,  we need to ensure we’re following the SEC rules and have our operating agreement up to snuff from a legal standpoint.  A startup is risky business but in the words of friends down at King Street Brewing, "if you brew it, they will drink it"!

We had a great time at Jazz Fest and did a bit of gorilla marketing by handing out Second Line t-shirts.  That was a lot of fun and the weather was the best – both weekends were beautiful.  I can’t remember a Jazz Fest when it didn’t rain at least one weekend.

We’re still working on our business plan and have been updating it as needed.  We think our pro forma is fairly reasonable and accurate based on benchmarking data from the Brewer’s Association and other industry sources.

Since so many people were in town for Jazz Fest, we also held several tastings and we were able to share a few Second Line brews with Jeremy Labadie (aka "the Beer Buddha") and Nora Mcgunnigle.  Great people and huge craft beer enthusiasts – you’ve got to love that…

We’re still targeting a soft opening in November so I hope my next blog posts states that brewhouse is being built.

Cheers for now y’all.

Karen

"Cheers to that" Senator Lisa Murkowski

Hi Hop Lovers,



Here is some food for thought that I borrowed from Alaska's Senator Lisa Murkowski on the craft beer industry in Alaska:



"Happy National Beer Day! Here are some fun beer facts:
Alaska’s 24 breweries produce 323 different beers.
Alaska ranks 4th among the states in terms of breweries per capita and 17th nationally in terms of beer production.
Our beer industry employs over 1,000 Alaskans and generates $150 million.
From Healy to Homer, from Fox to Skagway, Alaska’s brewing companies are a key component of our economies, communities and culture. They’re also a point of local pride. Cheers to that!"



Now, who do I call first?  David Vitter or Mary Landrieu?



Cheers y'all and happy Tuesday.
Karen

It Feels Like We're Getting Close!

Hi Y’all, it’s been a while.  We are rapidly pulling the business plan together to present to our banker when we arrive in New Orleans at the end of December.  We’ve also hired a lawyer to help us finalize our Operating Agreement and develop our term sheet for potential investors.  We’re following the Private Placement Offering (PPO) sometimes referred to as the Private Placement Memorandum (PPM).   Unfortunately, we’ll need to file with the Securities and Exchange Commission and we need to ensure we’re in compliance with state Blue Sky Laws.  The legalese is complicated but certainly manageable.



We have found the perfect property and it’s located in Mid City.  We’re working with the property owner to negotiate a deal that will give us some relief on the terms of the lease agreement should we not be able to get our Alcohol and Tobacco, Trade and Tax Bureau (TTB) permit and our non-conforming use permit from the City of New Orleans.   Manufacturing alcohol is capital intensive on the front end.  Basically, you can’t apply for any of your permits until you have a signed lease agreement or you own the property where your brewery will be located.  There is no way around this.



Our current plan is to present our business plan to our banker and lawyer at the end of January.  Have our lawyer finalize our Operating Agreement and develop our investor Term Sheet and then start raising capital.  In conjunction with this, we are hoping to sign the lease agreement on the great piece of property we’ve found.  Once the lease is signed, we’ll file the TTB papers and start the NOLA permitting process.  If the stars align, Mark will head to New Orleans in June to receive our brewery and we’ll have our brewery and tap room up and operating by January 1, 2015.  Happy New Year’s Y’all.



We’re planning on selling a lot of draft and “bombers”.  We’re also looking at a canning line.



Well, I’d better get back to finalizing the business plan.

Cheers Y’all!



Karen

Financing the Brewery

Hi Y’all,

Happy Thanksgiving to you!  We’re in Seattle doing some recon on good craft beer.  We’ve been to several choice restaurants and the numbers of local brews that are available is really impressive.  Perhaps one day, Louisiana and NOLA will have as many offerings.

 

We’re chugging along on the business plan.  We head to New Orleans on December 29^th and we want to meet with our banker at First Bank and Trust to discuss financing.  We found some great help at score.org.   It’s a website dedicated to free small business advice.   One of our larger challenges is figuring out the profitability and company worth.  We have a few gaps – we need quotes for insurance – business interruption, worker’s compensation, inventory, etc.  We hope to get those by the end of next week.  The other challenge is developing the pro forma without a piece of real estate.  And, speaking of real estate – the $500k question is do we lease or buy?  Again, we’re huge fans of buying but that will lock up some cash.

 

As soon as the pro forma is complete, we’ll meet with our legal team in New Orleans; they’re going to help us put together a term sheet so we can go out and raise money through a Private Placement Offering (PPO) or a Private Placement Memorandum (PPM).  They’re the same.  We need to figure out where we want to price the offering.  We’re hoping the legal team can help with this.

 

Our logo is almost finished, our designer Jennifer Carbuto has been doing a great job.  When the logo is complete we’ll get Secondlinebrewing.com up and running.

 

Cheers for now y’all,

 

Karen