Does Your Brewery Have Strategy?
For a lot of brewers, opening and operating a brewery has been the culmination of years of planning, late nights building out the taproom, soliciting investors, and working 60+ hours a week to see their dream come to reality. This hard work continues once the doors open, beer is being produced and served, employees are hired, and taxes are being paid.
As the brewery is fully operational, it can be easy to fall in a pattern of working in the business and not working on the business. Or, even worse, not treating the brewery like a business at all. All entrepreneurs struggle with this; it’s extremely difficult to not just fight the day to day fires and instead focus on where the business is going and what is needed to grow and scale the business. However, working on the business is one of most important things a brewery owner can do; part of that is crafting a long term business strategy.
When crafting strategy for your business, there are three things to consider. First is the long term plan of the brewery. Is it the intention of the owners to keep the brewery for the long haul or try to sell in the intermediate future? What are the one year, three year and ten year goals and the metrics necessary to ensure those goals are met? What needs to change now in order to meet your goals? Asking and understanding these long term questions allows you opportunity to define the course you want to take with your brewery.
The second consideration is understanding the micro and macro economic conditions affecting the brewing industry. Whether there are changes in the larger economy, like a recession or expansion, or changes with the craft beer industry, like hop shortages or declining demand, understanding and keeping a pulse on the economic trends is crucial in developing your strategy. A good way to do this is to utilize “what if” scenarios in your forecast planning, that take into consideration some different potential economic trends.
The third consideration in crafting your strategy is to build the right internal structure that can support your strategic objectives. If your three year goal is to double in size, but you don’t have the right structure in place, you won’t be able to meet your objectives. Having the right structure in place means having the right people in the right places within your brewery. It means having a vision that gets communicated and bought into by the entire organization. It also means understanding the measurables that need to be tracked and the people who are accountable for meeting those metrics, as well as defining roles so that there is clear accountability throughout the brewery. Having the right internal structure allows you to meet the strategic goals you have for the brewery.
Crafting and implementing a strategy for a brewery is work that needs to be done by the brewery owner operators. They need to spend the time working on their business in order for it to succeed in all environments. Understanding the three considerations is vitally important for the brewery to go where you want it to go in the future.
If you are interested in further discussions on strategy, check out the recording of our recent webinar on Strategic Financial Trends for Breweries and attend our Brewery Benchmarking Event on January 23, 2018 to understand how your brewery compares among your peers and what you need to do to grow the brewery to where you want it to be. You can register for this event here.
by Joshua Lance, CPA, CGMA, Managing Director- Lance CPA Group