Microbreweries are one of their kinds and the business involving microbreweries is getting a lot of attention these days. One might want to estimate the costs incurred before setting microbrewery. My previous post on viability of Microbrewery startup gave you the insight on the trend. In continuation to this let’s see what would be the cost of setting microbrewery.
Nature of costs incurred in microbrewery
We all know that a business comes with different kinds of costs incurred. The types of costs that need to be maintained in setting microbrewery business are
• Equipment costs
• Location and construction costs
• Raw material cost
• Permission and license costs and other costs as well.
Location, construction, and maintenance cost
Location plays a great role in setting up the business. One might want to rent the location or buy according to the preferences. If one decides to rent a space then he/she might need to pay rent plus some security deposit in advance to the landlord. One can have a setup in 500-1000 sq. ft. The cost of the land depends on the location and size of the premises.
Also, the proper setup needs a good construction. So, construction costs need for setting microbrewery needs to be analyzed. There are some other maintenance costs like costs of good flooring that can withstand the shocks in the brewing process. All this is estimated to charge approximately $10 per sq. ft.
Cost of equipment
Proper equipment is necessary for setting microbrewery. The smallest capacity equipment is considered to be of 1 barrel (31 gallons of beer). If rented it approximately costs up to $1,00,000. Otherwise, a brand new 30 barrel system will cost up to $1 million.
License is the foremost necessity in setting microbrewery. Getting a license for a business like this is not easy, especially in India. This may range from several $100-$1000 and more. The state excise government issues the license. Earlier the costs of getting the license were approx 10 lacs/year. These days it is as low to Rs. 25000/year in India but for the exact amount you need to contact your state’s excise office.
Importing equipment and other needs may involve some extra excise and the total cost turns out to be Rs. 6 crores/year on an average as estimated. Extra taxes are also applicable. Thus while planning one must estimate around 50% extra for miscellaneous expenses.
Hope this post update is helpful for those who are considering this business seriously. If there is anything else that I can help with please comment below.