Download Report

2013
Business Plan
March 2013
Twin Pints Cooperative
325 E. Grand River Ste. #345
East Lansing, Mich. 48823
Table of Contents
Table of Contents
Table of Contents ....................................................................................................................... ii
Executive Summary ................................................................................................................... 1
Recognitions .............................................................................................................................. 2
Background ............................................................................................................................... 2
Community-supported Brewing .............................................................................................. 3
The Cooperative Model .......................................................................................................... 5
Mission ................................................................................................................................... 6
Objectives & Milestones ......................................................................................................... 6
Management Team ................................................................................................................... 7
President ................................................................................................................................ 7
Legal & Regulatory Officer ..................................................................................................... 7
Financial Management Officer................................................................................................ 7
Production Operations Officers .............................................................................................. 7
Marketing & Brand Management Officers .............................................................................. 8
Advisors & References ........................................................................................................... 8
Industry & Market Analysis ........................................................................................................ 8
Craft Beer Trends in the United States................................................................................... 9
Products, Services & Pricing Plan ........................................................................................... 10
Artisan Participatory Brewing & Artisan Tap Room Sales .................................................... 10
CSB Growler Club ................................................................................................................ 11
Commemorative Growler Containers ................................................................................... 11
Homebrew Tool Library ........................................................................................................ 12
Production ............................................................................................................................... 12
Productive Capacity ............................................................................................................. 12
Location Requirements ........................................................................................................ 12
Staff ...................................................................................................................................... 13
Financial Plan ......................................................................................................................... 13
Risks Assessment ................................................................................................................... 14
Insufficient Start-up Capital .................................................................................................. 14
Slow Customer Uptake......................................................................................................... 15
Licensing .............................................................................................................................. 15
Operational Risk ................................................................................................................... 15
Transient Management (Turn-over)...................................................................................... 16
Strategic Timeline .................................................................................................................... 16
Twin Pints Cooperative | Table of Contents ii
Business Plan
Executive Summary
Twin Pints Cooperative will develop and operate a brewpub in Old Town, Lansing,
which will engage craft beer drinkers, homebrewers, and artisan brewers through a variety of
services and experiences. Our tap room will cater to young professionals from Cooley Law,
LCC, and MSU; our homebrewing tool library will offer our members the opportunity to pick up
the hobby of homebrewing; and, finally, our collective ownership structure will allow at least 25
artisan brewers in the area experiment with making a craft beer of their own to sell in the tap
room.
Craft beer is a growing market in the United States, enjoying over 10% growth in both
2011 and 2010 even as the overall beer industry fell by 1% both years. However, the Lansing
area is currently under-served by breweries and brewpubs compared to the adjacent
Kalamazoo–Grand Rapids or Ann Arbor–Detroit corridors. We seek to create a vibrant
brewpub destination in Old Town that will anchor more bright young professionals in the tricounty area.
Our cooperative will also operate as a “beer incubator” to develop new brewers and
brews. For the novice homebrewer, there is an approximate $200 investment to purchase a
homebrewing kit and get started with the hobby; the members of our cooperative will be able to
utilize collectively-owned equipment for as little as $30 a year in membership dues. Aspiring
artisan brewers often need to hatch their own business plan with financing of ~$50,000 before
they can even brew their first batch; we will provide at least 25 artisan brewers in the local area
the opportunity to use our facilities for a much more modest $500 investment in co-ownership.
Brewing will become much more accessible to individuals in the greater Lansing area, and all
of this participation in the cooperative will drive additional tap room sales as they, along with
their friends and colleagues, visit to test their latest beer recipe.
This is also an entirely new innovation, and it is cooperative ownership that makes it
possible for brewing equipment to be so accessible and affordable for the individual. Investors
in a more conventional venture would typically only hire one brewmaster to run their facility
rather than make it available for participatory brewing as in a cooperative where hobbyists
could get a piece of the action and the profits. This is our dream.
Twin Pints Cooperative | Executive Summary 1
Recognitions
Twin Pints Cooperative was a finalist in the 2012 MSU FCU startUP Challenge
(November 2012) and was also awarded the 2nd place ($2,500) and People’s Choice ($500)
awards in the MSU Broad College Pitch Contest (December 2012).
Background
Twin Pints Cooperative was conceived over the past summer by a group of friends that
wanted to collaborate over something that brings everyone together: craft beer. We are each
hobbyist homebrewers and the original ambition to create a brewing cooperative arose from a
shared need for better brewing equipment. Homebrewing is a laborious task that, for many,
begins with kitchen stove tops for cooking and ice baths or snow banks for cooling. It takes a
lot of work, and vast quality (and labor-saving) improvements can be realized with more
sophisticated brewing equipment like gas kettles or immersion cooling systems. However, this
equipment has a cost that would be prohibitively expensive for any one student-brewer to
invest in. A number of members of our group are current or former officers of the MSU Student
Housing Cooperative, so we already knew the solution to this cost dilemma was collective
ownership.
Cooperatives, including credit unions, are expert “self-help” organizations where
individuals can contribute their individual resources to a common pool for everyone to utilize.
The credit union aggregates deposits from the community to provide affordable lending back to
the community, and the insurance mutual does its best to charge its policyholders affordable
premiums and any surpluses are refunded back to the member-owners. We understood that a
homebrewer should only need a gas kettle or a cooling system for one day out of each month
to brew, and then that this equipment would later sit idle in a storage room. That is twenty-nine
days that others could be utilizing the tools through collective ownership, as in a cooperative.
And so, we first set out to organize a homebrewing tool library where users could check out
and use this sort of equipment.
However, when we started polling our friends and colleagues for support and interest
we received an overwhelmingly positive response that exceeded the narrow scope of a tool
library. Many were excited about participating in the tool library and still others shared their
dreams of starting a cooperatively-owned nanobrewery where artisan brewers could
Twin Pints Cooperative | Recognitions 2
collaborate with minimal investment to test out new and exotic beer styles. Still more, who
were not brewers themselves, were enthusiastic about being able to taste all the great locally
brewed beers we would be producing.
Out of our first meeting in August, we discovered that a cooperative was uniquely suited
to deliver an entirely new model of brewing and consumption: the beer incubator. A tap room
could introduce newbies to the craft beer market, which is a tiny, hidden 6% market share as
opposed to the Anheuser-Busch InBev and Coors empires that most beer drinkers are
inundated with. Newbie craft beer patrons would eventually develop their beer palate and
could grow interested in homebrewing for themselves. For those of us that got into the hobby
alone years ago, that meant an initial investment of at least $200 in equipment and ingredients
only to spoil our first batch of beer because we had been un-skilled. But for our target market,
they will be able to use free equipment from the homebrew tool library and attend staff-led
educational workshops to learn the trade. Their only cost will be their $30 in membership dues.
Before our proposed Twin Pints Cooperative, the hobby of homebrewing doesn’t
advance much farther than $200 homebrewing kits. Homebrewers are pretty limited in
equipment choices and it is arduous, time-consuming work without larger, industrial
equipment. Further, it is not lawful to distribute homebrewed beer, meaning you cannot
financially support your burgeoning hobby. Our business plan will provide a leg-up to aspiring
artisan brewers by offering affordable limited-equity shares to buy into the nanobrewery at
$500. They will be able to hone their craft by brewing 2-keg batches of beer once each quarter
and will be able to support their hobby with tap room revenues from selling their own beers.
At its heart, however, our cooperative will be a worker-owned nanobrewery providing
affordable, tasty beer. We anticipate that many of the artisan brewers from the preceding
paragraph will be contented with their existing careers or academic studies, and for them,
theirs will be the part of the silent business partner. However, for those other brewers with the
drive and the dream of life as a brewer, they will be able to prove themselves to our patrons in
the tap room and be hired as full-time brewers with wages.
Community-supported Brewing
A recent innovation in microbrewing is Community-supported Brewing. The term is
borrowed from farming where it stands for Community-supported Agriculture (CSA) which
Twin Pints Cooperative | Background 3
describes a local network of consumers that have pledged to support one or more local
farmers.
The CSA model tackles the challenge of promoting a locally-based supply of produce
which provides environmental benefits for the community when produce does not have to be
imported from thousands of miles away. Corporate supply chains stretching from Walmart to
offshore countries have long since displaced much of the original agricultural production in
Michigan and the United States, and many lament that this may be causing environmental
degradation from the pollution associated with shipping transportation. For those that hold this
viewpoint, CSAs offer an opportunity for them to consume locally and to avoid the ill-gotten
superstore produce, while also supporting local jobs in farming. We make no assertion one
way or the other as to the validity of the environmental concerns with supermarket shopping,
but CSAs do exist and demonstrate the emerging appeal of this model of consumption.
Under a common CSA scheme, subscribers purchase a share of the anticipated harvest
at the beginning of the season. Then, through the course of the growing season they receive
periodic shares of the vegetables and fruits harvested. A significant innovation in the CSA
model is shared risk: the loss of a crop from drought or flooding or locusts will be felt financially
by both the farmers and the subscribers. Should the farmer have a great enough CSA
subscriber base, it will not be wholly devastating enough to bankrupt his operation. And
consumers benefit when they can realize slightly cheaper prices when the farmer does not
need to purchase crop insurance or otherwise structure his prices lower knowing he does not
need to put away savings in each of nine years to plan for the tenth year when his crops could
fail.
While a microbrewery is not likely to suffer a locust swarm or one of the other crippling
hazards facing farms, the CSA model does provide other advantages for a microbrewery. A
large base of subscribers who pay dues ahead of the launch can provide a large amount of
start-up capital and the regularity of income will enable our business to approach creditors for
expansion in the future with the assurance that we have a committed community behind us.
Further, Community-supported Brewing will enable our artisans and brewers to take more risks
with exotic and edgy ingredients in their beers. If a batch designated for the CSB subscribers
turns out poorly because the Macaroni Stout tastes too much like macaroni, or the Pop-tart
Porter is not quite the winner it was expected to be, the risk is borne wholly by the CSB
Twin Pints Cooperative | Background 4
subscribers; we will have already booked our revenue for that batch from their subscription
fees. We, the founders, do not feel a failed batch in this manner to be an unfortunate event,
rather, this adventurous brewing that is made possible by the CSB model will inevitably
produce a few amazing beers that will carry our brand and grow our market share vis-à-vis
other microbrewers that stick with yesterday’s styles. We will not be shackled to the same risk
aversion which is necessary at other microbreweries because we will have a community
backing our risks up financially. The CSB model greatly resonates with our aspirations for
being a beer incubator.
The Cooperative Model
The cooperative model and Community-supported Brewing are mutually reinforcing.
Whereas conventional corporations are governed by a remote group of people that are farremoved from either the worker or the consumer, our Board of Directors will only be comprised
of the brewers and the consumers. The profit interests of external stakeholders and investors
often result in efforts to minimize product costs, resulting in diminished product quality that is
disadvantageous for consumers. These same profit interests also typically drive down the
wages of employees whom are not usually equity owners of the company.
A cooperative, once successfully developed by its founders with the contributions of
time and money by its backers, is not burdened with the same motivation for cheapening
products and under-paying workers. Our success will be a virtuous cycle of better beers,
resulting in increased demand for our better beers, and increased production capacity and new
salaries to meet the increased demand. The net profits of our enterprise will accrue to the
worker-owners of the cooperative, all of whom will live in Michigan and buy in Michigan. The
dollars earned by our workers will be paid back into the Lansing economy whenever our
workers go shopping. (This is not the case when you choose to purchase an inferior beer from
Anheuser-Busch InBev in St. Louis, Missouri.)
Further, cooperative ownership will give consumers a direct voice to express feedback
as a minority block of directors on our Board. They will be able to provide input and guidance
in selecting beer recipes for the CSB production scheme. Marketing consultants for
conventional corporations extol the value of “brand buy-in” and how the belief that you can
impact a product via social media (whether true or not) can make you more likely to routinely
buy a product; as a cooperative, we offer genuine ownership of the brand and we anticipate
Twin Pints Cooperative | Background 5
this characteristic of cooperative ownership will be a great selling point in our own marketing
strategy to attract CSB subscribers.
With at least a few of us hailing from a background including real estate development,
we also see the value of our cooperative in potentially re-developing blighted areas of East
Lansing or Lansing. Cooperatives by their very nature remain in one geographic area,
anchored by the workers and consumers that use them; they are not apt to re-locate to another
city once founded. A long-term goal for our nanobrewery is to continually reinvest and grow
each year to eventually build-out a larger package brewery in East Lansing. (We rather like the
prospect of renovating the ugly Citizens Bank Building into a brewpub at street-level with cooperative housing apartments or other ventures above.)
Indeed, cooperatives have been widely acknowledged as a potential solution to the
economic woes facing our society in the wake of the Great Recession, with the United Nations
declaring this year, 2012, as the International Year of Cooperatives. We intend to do our small
part to develop an economy built to last, starting with our very modest nanobrewery.
Mission
Our primary mission, then, is to develop a full suite of engagement with craft beer for
everyone in the Greater Lansing area. Our tap room and CSB will cater to novice drinkers as
well as those drinkers with more sophisticated palates; our homebrewing tool library will
introduce individuals to the hobby inexpensively; and our cooperative structure will provide the
opportunity for motivated individuals to take their hobby one step further as artisan brewers
and co-owners at a fraction of the investment costs otherwise required.
A secondary mission of the cooperative is to incubate new and appealing beer styles.
A tertiary interest is to effect economic redevelopment in the Greater Lansing area by
reinvesting our net income toward a new package brewery and to other future co-operative
businesses.
Objectives & Milestones
1. Spring 2013: Operate a homebrewing tool library to begin networking and generating
interest in our cooperative brewery.
2. Spring 2013: Raise start-up capital of ~$25,000 for the “soft launch”. This includes
recruiting 100 earnest members in the pre-development period.
Twin Pints Cooperative | Background 6
3. Summer 2013: Build-out our brewhouse in a small location to initiate licensure/registration
and thereafter to begin earning revenue on take-out growler sales.
4. Autumn 2013: Conduct an offering to raise ~$50K+ to acquire and renovate a location in an
entertainment district.
5. Winter 2013-14: Open the new location with finished tap room and robust street traffic.
Management Team
President
Patrick Paul is our President and is responsible for project management, meeting
facilitation, networking, and strategic planning. Patrick is a Michigan State University graduate
with a degree in International Relations (Class of 2011). He has two years of experience in
financial management and has demonstrable success managing projects. Patrick currently
works as a research programmer in the MSU Department of Forestry developing applications
for monitoring and modeling forest carbon emissions and reductions.
Legal & Regulatory Officer
Isaiah Wunsch is our Legal & Regulatory Officer and is responsible for our incorporating
documents and for our microbrewery licensure in the pre-development period. Isaiah holds a
B.A. Public Policy from the University of Michigan (Class of 2009) and a M.S. Agriculture,
Food, and Resource Economics from Michigan State University (Class of 2012). He has
already proven himself very knowledgeable of federal and Michigan brewing regulations in the
strategic planning to-date. Isaiah currently works as an agribusiness specialist at Michigan
Economic Development Corporation.
Financial Management Officer
Aaron Hoffer is our Financial Management Officer and is responsible for financial
planning, capital financing, and bookkeeping. Aaron holds a B.S. Finance from Caltech, an
M.S. Astronomy from Michigan State University, and is a current PhD candidate in Astronomy
at MSU. Apart from his PhD research, Aaron currently serves as corporate treasurer at MSU
Student Housing Cooperative, which has an on-going banking relationship with MSUFCU.
Production Operations Officers
Ted Linabury and Jonathan Huck are our Production Operations Officers and are
responsible for brewhouse purchasing and build-out in the pre-development period and brew
Twin Pints Cooperative | Management Team 7
operations thereafter. Ted is a junior at MSU majoring in Mechanical Engineering and has
work experience as a Product Development Co-op at BorgWarner Turbo Systems in Asheville,
NC. Jonathan is a junior studying neuroscience at Lyman Briggs College, MSU.
Marketing & Brand Management Officers
Michael Spreng, Megan Spaans, and Brendan LaCroix are our Marketing & Brand
Management Officers. Michael Spreng is a senior studying Applied Engineering Sciences at
MSU who also has internship experience as a market analyst at Ducker Worldwide in Troy,
Michigan. Mike will primarily be responsible for our marketing efforts and the recruitment of
CSB subscribers. He also participates in on-going market analysis associated with the
founding’s feasibility studies. Megan Spaans is a graduate of MSU with a degree in Media Arts
& Technology and Brendan LaCroix is a graduate of MSU with a degree in Professional
Writing. Megan and Brendan will be responsible for communications, web development,
videography, and brand management.
Advisors & References
Finally, we have already begun bringing together a “brain trust” that will guide our efforts
to a successful launch. These individuals have contributed their vast knowledge and
experience to our business planning efforts and we are very grateful for their assistance.
1. Kris Berglund, PhD
MSU University Distinguished Professor
Director, Artisan Distilling Program
2. Richard Spreng, PhD
MSU Associate Professor of Marketing;
Director, Masters in Marketing Research Program
Industry & Market Analysis
The Brewers Association ranks Michigan as #14
in terms of Capita per Brewery in 2011 with 102
Microbrewing “Donut Hole”
breweries and a Capita/Brewery of 96,898. This is a
comparatively great standing for Michigan beer lovers,
however, there is one glaring need that has not yet been
filled. The Greater Lansing area is unquestionably
lacking in the availability of locally-brewed beer. Just by
Twin Pints Cooperative | Industry & Market Analysis 8
looking at a map of the locations of Michigan breweries and brewpubs one can see that the
area has only one pin on the map, that location being Harper’s Restaurant and Brewpub. While
it is great that we have a brewpub in the heart of downtown East Lansing, Harper’s clearly
caters to a college student demographic—one that doesn’t necessarily frequent Harper’s
specifically for its craft brews. There is a definite demand for a true local craft beer
establishment. There is a virtual donut around the greater Lansing area. We seek to remedy
this with a constant and utterly unique supply of participant brewed beer that the entire
community can enjoy and get their fix for some true local beer.
Craft Beer Trends in the United States
The entire success of Twin Pints Cooperative is centralized on the idea that consumers
want to drink more craft beer. Market analysis has consistently supported the fact that
consumers are increasingly moving away from buying mass produced beer and starting to
purchase more and more beer from craft beer makers and micro breweries. An interesting
point to note is that in 2011 and 2010 while the overall US beer market was down 1.3% and
1.2% respectively, the craft brewing industry enjoyed 13% and 12% growth by volume
respectively, and 15% growth by retail dollars both years (Brewers Association).
According to the IBISWorld Industry Report from October 2011, “the craft brewing
segment of this industry has grown consistently since the 1990s.” This report attributes the
4.5% annualized increase in industry establishments (individual breweries) over the past five
years to the craft brewing industry. It goes on to explain that “younger beer drinkers (aged 2124) will increasingly experiment with and seek out unusual flavors as part of their drinking
experience, which will provide opportunities for craft and microbreweries to expand their
market reach.”
Mintel Group’s report Beer: The Consumer from November 2011 agrees, saying that
“despite recession, job losses, and other negatives, craft beers have enjoyed eight years of
positive - and sometimes dramatic - growth.” This rapid growth and market opportunity can be
evidenced by the national companies’ moves towards the craft beer market, for example,
Anheuser-Busch InBev purchased Goose Island in 2011 and the launch of the Blue Moon
brand by Coors in 1995. By looking at some of the most successful craft beers we can see
obvious consumer trends: Blue Moon grew by 30.4% in 2010 and 68% of craft beer drinkers
ages 21-24 drink Blue Moon. Yuengling, a Pennsylvania regional brand, sold 29.7 million
Twin Pints Cooperative | Industry & Market Analysis 9
cases in 2010. Sierra Nevada Brewing Company shipped a total of 779,065 barrels, and its
Torpedo Extra Dry IPA is growing at 40% annually. Many bars and restaurants have cashed in
on the growing craft beer movement as well with many competing for the best selections to
attract customers.
As of July 1, 2012, there are 2,075 craft breweries in the US and 2,126 US breweries
total. In 2011 there were 1,938 craft breweries and 1,749 in 2010.
Products, Services & Pricing Plan
We have developed a product mix that offers something for everybody: tap room pint
sales, growler club subscriptions, homebrew tool rentals, and artisan participatory brewing.
Our first year operating budget calls for competitive prices that will attract high sales volume.
Artisan Participatory Brewing & Artisan Tap Room Sales
As co-owners, 25 artisan brewers will share in the labor of manufacturing our beer.
Artisan co-owners will invest $500 in limited equity shares. For this, they will be able to
manufacture one batch of beer each quarter to sell in our tap room. One batch of beer
produces 2 kegs of beer or 248 pints, and artisan brewers will earn a royalty on their beer
recipes.
Pint prices will vary from $4 to $7 depending on the variety and quality of the craft beer.
We will assign higher prices to our beers with the greatest demand. New beer recipes will
initially be licensed at the “Yellow Ribbon” tier of a $1 per-pint royalty. Beers that sell-out
quickly will be promoted to the higher “Red Ribbon” tier ($2 per pint) and finally the “Blue
Twin Pints Cooperative | Products, Services & Pricing Plan 10
Ribbon” tier ($3 per pint) on subsequent batches, based on quality. This competitive process
will yield excellent craft beers. (The pricing and royalties are subject to market demand in order
to remain profitable.)
In this way, our artisan brewers are also entrepreneurs who can take risks on new beer
recipes in hopes of striking it rich with a new beer style that commands a higher sales price in
the tap room. Artisan brewers will typically support their livelihood with their own jobs and
careers, but for those that want to do it for a living and whose beers are also popular in the tap
room, the cooperative can hire them as workers to brew every week for a living. The
cooperative is able to offer this amazing opportunity to hobby brewers because it’s our
mission. Something for everybody.
CSB Growler Club
Our operations are also supported by a 12-month subscription known as the Growler
Club. To keep our equipment running around the clock, we will hire workers to brew batches
for those holes in the calendar week that are not allocated to artisan brewers. The symbolic
contribution from workers’ batches is to provide the base-line break-even revenue necessary
to keep the organization afloat financially. We intend for these batches to be exclusively
marketed to Growler Club subscribers whom will receive one growler pour each month at no
additional charge beyond the original subscription fee of $100 per year (excluding $30 in CSB
membership dues).
The fee of $100 is competitive pricing. The volume of a growler (64 oz.) for one year
equates to approximately 10 ⅔ six-packs of craft beer, which are typically sold in retail for $10
(e.g. Meijer). Therefore, the equivalent market price for our subscription is $106.67. We are
charging prices slightly below market and we also provide exclusive beers that will only be
available to Growler Club subscribers; they will not be available in the tap room. This
exclusivity makes our product superior to an alternative that would always be available in the
grocery aisle.
Commemorative Growler Containers
Each year we will produce a limited edition growler emblazoned with a different design
that is unique for the year. These commemorative growlers will be issued at no additional
charge to Growler Club members whom have paid their $30 dues and any supplies that remain
Twin Pints Cooperative | Products, Services & Pricing Plan 11
after September 1 of each year will be sold separately for $10 each. This exclusive growler is
another draw of the Growler Club membership.
Homebrew Tool Library
The last service we offer is the homebrew tool library. We will endow our library with an
initial investment in homebrew equipment, and CSB members will be able to utilize this
equipment at no additional charge. This freebie should be understood as a “loss leader” which
promotes the hobby of homebrewing in the community and ultimately leads to greater demand
for our tap room and artisan-owner shares.
Production
Productive Capacity
Twin Pints will produce beer in one barrel batches (a 1 BBL capacity), the smallest size
typically used in commercial brewing (sometimes also used to make “pilot” batches at larger
breweries). Each barrel is equivalent to two kegs or 248 pints. There are numerous
advantages to this size. Namely, the equipment is readily available, is compact enough to be
set up in almost any commercial space and easily handled by employees, and many different
types of beer may be brewed at once.
Most importantly, the system is very scalable; adding additional fermenters (along with
additional refrigeration capacity as required) could increase the production by two-fold or more.
This is because the mashing and wort boiling equipment is only used in four hour blocks,
allowing two batches to be brewed per day (more with an additional shift).
Location Requirements
The location requirements for Twin Pints are similar to those of any restaurant, bar, or
brewpub. A visible storefront with sidewalk access is not only convenient, but draws interest,
providing free advertisement. Therefore, a building with a previous history as a bar or
restaurant and a basement or additional storage space beyond the seating area/bar (to house
the brewing equipment) would be highly desirable. The additional advantage of a location of
this nature would be the high likelihood of being able to or having once contained a walk-in
refrigerator.
Twin Pints Cooperative | Production 12
We have found a suitable location in Old Town and hope to identify two additional spots
to compare and contrast in order to inform our negotiating of the lease. This location is a
former bar and would require minimal improvements to host our business there.
We will pursue any and all relevant economic development grants available.
Staff
Our staff positions include a general manager, a brewer, and a bartender. The general
manager will be responsible for purchasing, marketing, bookkeeping, and information
technology. One or more brewers will manufacture our CSB-allocated beer. And a bartender
and/or other available staff will keep the tap room open from 4pm to 12am each day of the
week. The Board of Directors will evaluate staff periodically and will also ensure that adequate
cash controls are in place to mitigate the risk of fraud.
Financial Plan
The Twin Pints strategic timeline envisions the lease of an affordable location to begin
July 2013, a soft launch around September 2013, with an autumn ramp-up period before truly
opening our microbrewery and taproom in January 2014 in a vibrant entertainment district.
Generally speaking, the pre-launch period will consist of installing our brewhouse
equipment in July at an affordable location to allow two months’ time for microbrewery license
registration. As we will not be earning any revenue until our license is granted, it is prudent to
operate as cheaply as possible in this period; we have allocated July and August to this waiting
period.
After successfully registering with the state and federal regulatory bodies, around
September, we will begin earning revenue with take-out growler sales on a couple batches
each week while simultaneously renovating our eventual vibrant, brewpub location to open in
January 2014. This is the soft launch period.
During the summer and autumn ramp-up period, we will begin recruiting further artisan
brewers to join our ranks (with thirty more $500 investment shares to match our initial twenty)
and generally promote the January launch of our brewpub within the community (garnering
one-hundred “early bird” Growler Club memberships at $100 each). We have amortized these
cash flows equally over the four autumn months in our cash flow budget.
Twin Pints Cooperative | Financial Plan 13
The pre-launch and soft launch periods are identified in cash flow budget for 2013
(Appendix C). During this entire period, we maintain a healthy checking account balance of at
least $20,000. The full capital budget for our Old Town/REO Town brewpub projects a capital
cost of approximately ~$60,000 before opening on January 1, 2014 (Appendix A, “January
2014 Capital Budget”). The capital required to begin microbrewery registration activities in July
before ramping up is smaller at ~$20,000 (Appendix F, “July 2013 Capital Budget”); all the
capital included in the July budget is a piece of the full capital budget for January 1. With
$41,000 in financing in-hand by July, we will need to raise a further $19,000 from additional
artisan brewers and Growler Club subscriptions in the autumn ramp-up period.
Moving on to our January launch at the entertainment district brewpub, we have
projected a first year operating budget (Appendix C) and two 5-year proforma income
statements (Appendix D & E). Our FY2014 operating budget projects ~$179,000 in revenue on
~$162,000 in expenses, yielding an EBITDA of ~$17,000. Accounting for the ~$13,000 in
FY2013 cap-ex attributable to FY2014 “early bird” growler club sales in the soft launch period,
actual positive cash flow for the first year is ~$4,000. This is based on a production capacity of
20 kegs a week.
Our 5-year proforma with zero growth (Appendix D) shows net income sliding from
$13,000 in year one to $7,500 in year five. Our 5-year proforma with 20% growth shows
income increase from $13,000 in year one to $143,000 in year five. With 20% growth we would
produce 518 barrels in year five, safely beneath our theoretical maximum capacity of 700
barrels.
Risks Assessment
Insufficient Start-up Capital
Substantial capital barriers exist for developing brewpubs, which must be covered
before any income can be generated. We anticipate we will be able to raise sufficient capital
from equity and grant sources and are not pursuing debt financing at this time. In the event we
are unable to raise enough start-up capital through equity and grant sources, including “early
bird” revenues in the pre-development period, we can consider a line of credit to get us started.
Twin Pints Cooperative | Risks Assessment 14
Slow Customer Uptake
Twin Pints Cooperative will pursue two models in its brewing operations: CSB brewing
and Artisan brewing. The number or ratio of CSB members or Artisan brewers may initially be
lower than estimated. In future years the distribution of CSB brewed beer and Artisan brewed
beer may change drastically from the initial distribution. In our feasibility analysis, we projected
a balance of 60% CSB batches and 40% Artisan batches. In our first year, the figure of 60%
CSB batches roughly correlates to the amount of business we need to support our fixed
overhead costs. As a significant part of our mission is to “incubate” beer and to provide a
ladder for individuals to grow as brewers, we will incentivize individuals to take up Artisan
shares of ownership. Under this scenario, the share of brewing production would trend toward
more Artisan batches and away from CSB batches.
We acknowledge that consumer demand for beer remains a risk, but we do feel it is a
strength that we can market to two different pieces of the community – to CSB participants and
to Artisan brewers – and we feel this balancing act will allow flexibility in our production goals.
Licensing
We do not have any licensing as a microbrewery or brewpub. We still need to receive
that licensing from the state of Michigan and from the federal government. Several members of
our team have experience with compliance, government affairs, and public policy and we
anticipate that we will able to obtain licensing.
Liquor Liability
There is a risk that an intoxicated patron of Twin Pints Cooperative could cause an
accident or perpetrate some other damages while drunk, and Twin Pints Cooperative could be
sued and found liable. We will carry liquor liability insurance (as is also required by law) to
mitigate this risk. We will also provide alcohol consumption awareness training to our
bartenders and servers to reduce the likelihood of these events.
Operational Risk
Because Twin Pints Cooperative seeks to help prospective brewers move from home
brewing to their own commercial microbrewery operations, our management team will need to
carefully screen prospective brewers to ensure that their technical skills are sufficient, and to
ensure that we are providing the level of administrative support needed to keep their activities
organized. We feel that we have put into place sufficient internal policies to manage this risk.
Twin Pints Cooperative | Risks Assessment 15
From time to time, batches of beer will not turn out well. This is a risk inherent in the
vagaries of fermentation. In order to manage this risk, we will provide training to our brewers in
proper sanitation and food chemistry. Additionally, we will plan on occasional failures in our
budgeting process.
Transient Management (Turn-over)
Our existing management team is comprised primarily of students and we have heard
the concern expressed by our advisors that the venture could underperform if our management
and customers were primarily college-aged students that are prone to move away for career
opportunities. We will address this risk of transience by deliberating recruiting tenured
professors (of which there are a fair number of homebrewers) to serve on our Board of
Directors as at-large, appointed directors that will contribute to the governance of the
organization and to our institutional memory. We will also market our CSB broadly to both
young and old demographics to encourage multigenerational participation in our business that
will better shape our business to persist as a community asset for longevity.
Strategic Timeline
While the brewpub articulated in this business plan is and remains the ultimate goal of
the founding team, there are a few immediate and intermediate activities that we are
undertaking to drive us forward.
Phase 1 of the start-up is to begin operating the homebrewing tool library. This can be
achieved at minimal cost through de-centralized peer-to-peer lending and through centralized
branch lending located at some of the founders’ properties. We anticipate that many entry-level
homebrewing tools can be sourced from the founding team and charter members and that we
will be able to make our first investments in higher-tier brewing equipment which will entice
existing homebrewers to participate in the tool library. This activity will garner interest in the
cooperative from outside of the founding team, and would demonstrate the demand for the
further homebrewing and probrewing opportunities that we want to market. This phase is an
opportunity to prove our market in order to attract further private investment.
Phase 2 of the start-up is to open a licensed microbrewery in a very cheap (and likely
very remote or blighted) location. This will enable us to begin manufacturing beer and earning
enough sales to self-sustain via the patronage of founders/charter members and their friends.
Twin Pints Cooperative | Strategic Timeline 16
We will also continue to network and recruit further brewers to join our co-op from the greater
Lansing area, in order to (again) prove our market and attract further private investment. We
will pursue generous month-to-month leases at long-vacant properties in exchange for paying
property taxes as well as approaching existing restaurants which have been unable to obtain a
Class C liquor license for a partnership where we could manufacture beer to serve on-site.
This phase could be limited to exclusively take-out growler sales with no on-site consumption.
Phase 3 of the start-up is the launch of our commercial/downtown brewpub, as
articulated in this business plan.
Phase 4 comprises the post-launch activities we hope we will be able to pursue and
monetize. These activities include recipe licensing and brewer acceleration. Recipe licensing is
a revenue stream whereby we license the most successful brews from our tap room to existing
package breweries for a cut of any profits. Brewer acceleration is where we help graduate our
best brewers whom have proven out in our tap room into the real world to start microbreweries
of their own; as with recipe licensing, we would retain a financial interest in the new business.
Phase 4 activities provide compelling value for our capital investors.
Twin Pints Cooperative | Strategic Timeline 17
Twin Pints Cooperative
CSB Nanobrewery JANUARY 2014 Capital Budget (Sources / Uses Statement)
Appendix A
Brewhouse Capacity
1.00 bbl / batch
CSB # Batches / week
1
allocation varies based on artisan demand, up to 14 batches per week
Artisan # Batches / week
4
BBL / month
21.8
Oz. / month 86,304 calculated as: # batches/mth * 1 BBL per batch * 3968 oz per BBL
USE OF FUNDS
General Pre-development Costs
Incorporation Registration Fees
Microbrewery License
First & Last Month's Rent
Corporate & liquor attorney, hourly rate
Sub-total
Qty
Unit Cost
Cost
$
$
$
$
$
155
520
6,000
2,000
8,675
Brewhouse Equipment
Grain Mill, Hopper, Base + $30 Corded Drill (Motor)
40G Hot Liquor Tank, 40G Mash Tun, 45G Brew Kettle
March Pump 7GPM, x3
5500W Heating Elements, weldless kits, and elec. controls
DIY Immersion Wort Chiller and 300G Tank
40G Conical Fermenter, Food-grade Plastic
15 $
400
37G Brite Beer Tanks
3 $ 1,389
20.5 cu. ft. Upright Freezer
18 $
649
Kegs, 15.5G half-barrel
45 $
129
Water Filter (Reverse Osmosis system)
Sub-total
$
$
$
$
$
$
$
$
$
$
$
212
2,157
480
1,570
300
6,000
3,473
11,358
5,805
200
31,554
Tap Room & Homebrew Library
Tap Room Renovation & Supplies
Homebrew Supplies Shopping Spree
Printed Glass Growlers
Sub-total
$
$
$
$
5,000
2,000
3,000
10,000
$
$
$
5,023
3,000
8,023
$
58,252
Other
Contingency & Shipping/Handling
Operating Reserve
Sub-total
2 $
10 $
1,000 $
10%
3,000
200
3
of costs
$ 3,000
Total Project Uses
SOURCE OF FUNDS
Debt Sources
Bank Loan
Amount
$
10,000
$
$
10,000
Total Debt Sources
Internal Sources (Equity & Revenue)
Artisan Brewer Shares
Early Bird CSB Membership Dues
Early Bird Growler Club Sales (1-year)
Total Equity
50
$
500
25% of sales
25% of sales
External Sources (Grant & Equity)
Offering
MSU Broad Contest 2nd Place + People's Choice
Total Grant Sources
$
$
$
$
25,000
2,023
6,743
33,765
Amount
$
25,000
$
$
3,000
$
28,000
Total Sources
$
71,765
Balance
$
13,513.35
Brewing Weeks in Year
Fermentation Period, weeks
Batches per Ferm. Vessel, year
Brite Period, weeks
Batches per Brite Vessel, year
50
3
17
0.50
100
This table is used to determine the quantity of
fermenting vessels that we need.
Twin Pints Cooperative
First Year Operating Budget
Appendix B
Anticipated Production PER MONTH and portions allocated to Growler Club or Tap Room
Total Oz. / month % Portion Growlers % Tap Room Sales # Growlers
# Tap Room Pints
Beer Production CSB
17,261
100.00%
0.00%
269.70
0.00
Beer Production Artisan
69,043
0.00%
100.00%
0.00
4,315.20
Total
86,304
269.70
4,315.20
Income
Old Town Brewpub Income
CSB Membership / "Mug Club" Dues
CSB Growler Club subscriptions (12-months)
Price
Qty
30.00
125.00
Pint Sales ($3 per pint before royalties)
3.00
Glass Growler Sales
10.00
CSB Membership / "Mug Club" Perks (reductions to income)
Growler Club growler container
20% Discount on Tap Room Sales (varies)
20% Discount on Growler Club Sub. ($25 off)
Free Homebrew Tool Library use
Expenses
General & Administrative
Advertising
External Audit
Bank Interest
Property Insurance
Liquor Liability Insurance
Brewpub Overhead
Rent (~$12 per sq. ft.)
Replacement Pint Glasses
Pub Water (gal)
Pub Electrical (kWh)
Pub Gas, mcf
Trash
Internet
Workers
(10.00)
-20.00%
(25.00)
0.00
Price
269.70
4,315.20
269.70
269.70
Qty
Monthly
Annual
674.25
8,091.00
2,809.38
33,712.50
0.00
0.00
0.00
0.00
12,945.60 155,347.20
0.00
0.00
833.33
10,000.00
17,262.56 207,150.70
annually
monthly
annually
annually
(224.75)
(863.04)
(561.88)
0.00
(1,649.67)
(2,697.00)
(10,356.48)
(6,742.50)
0.00
(19,795.98)
Total Income
15,612.89
187,354.72
1,000.00
500.00
50.00
1,000.00
500.00
1.00
1.00
1.00
1.00
1.00
Rate
annually
annually
annually
annually
annually
3,000.00
1.00
0.0029
0.10
8.00
100.00
100.00
1.00
100.00
1,348.50
9,500.00
0.00
1.00
1.00
monthly
monthly
monthly
annually
annually
monthly
monthly
3,000.00
100.00
3.91
79.17
0.00
100.00
100.00
3,383.08
36,000.00
1,200.00
46.93
950.00
0.00
1,200.00
1,200.00
40,596.93
10.00
10.00
10.00
10.00
20.00
56.00
10.00
10.00
weekly
weekly
weekly
weekly
weekly
25.00% of above wages
16.35% of compensation
866.67
2,426.67
433.33
433.33
0.00
1,040.00
850.20
6,050.20
10,400.00
29,120.00
5,200.00
5,200.00
0.00
12,480.00
10,202.40
72,602.40
250.00 annually
annually
annually
weekly
weekly
weekly
weekly
3,802.84
0.00
0.00
0.00
0.00
0.00
0.00
3,802.84
45,634.02
0.00
0.00
0.00
0.00
0.00
0.00
45,634.02
13,490.28
161,883.35
2,122.61
25,471.37
Less "Early Bird" CapEx from Capital Budget
(8,765.25)
Anticipated Cash Flow for First Year
16,706.12
(As hours per labor pool)
Brewing (# Batches * 4 hrs per batch)
Bartending (7 days @ 8 hours: 4p-12p)
Bookkeeper / Purchaser (10 hrs/wk)
Other Administrative (10 hrs/wk)
Employee Benefits (Healthcare, etc.)
Payroll Taxes (SS, Medicare, FUTA, SUTA)
Variable Costs / Cost of Goods Sold
Batches of beer (utilities + ingredients)
Rate
269.70 annually
269.70 annually
annually
monthly
4,315.20 monthly
annually
1,000.00 annually
182.54
Variable Costs per 1BBL Batch (for use in COGS calculation)
Total Expenses
Input
Qty
Unit Cost
$ in Batch
Electricity*, kWh
157
$0.10
Water, gal
90
$0.0029
Gas, mcf **
2.8
$8.00
Hops, oz
25
$1.00
Grain, lbs
75
$1.35
Yeast, grams
70
$0.02
S/H & Misc.
10% of above costs
EBITDA
$15.70
$0.26
$22.40
$25.00
$101.25
$1.33
$16.59
$182.54
* 110 kWh required; assuming 70% efficiency we will draw 157kWh from the wall.
** At this time, we are looking at electrical heating elements but gas is an alternative.
Monthly
Annual
83.33
1,000.00
41.67
500.00
4.17
50.00
83.33
1,000.00
41.67
500.00
254.17
3,050.00
Twin Pints Cooperative
Cash Flow Budget - Project Development Period and Soft Launch
Appendix C
Project Development Period
Soft Launch Period
Equity & Grant & Loan & Income
Budgeted
May
June
July
Aug
Sep
Oct
Nov
Offering
$ 50,000
$ 12,500 $ 12,500 $ 12,500
Artisan Brewer Shares
$ 25,000 $ 10,000
$ 2,500 $ 2,500 $ 2,500 $ 2,500 $ 2,500
Early Bird CSB Membership Dues
$
2,023
$
506 $
759 $
759
Early Bird Growler Club Sales (1-year) $
6,743
$ 1,686 $ 2,528 $ 2,528
MSU Broad Contest
$
3,000 $ 3,000
Bank Loan
$ 10,000 $ 10,000
Operating Revenue, 2 bbl / week *
$ 21,576
$ 5,394 $ 5,394 $ 5,394
Total
$ 118,341 $ 23,000 $
$ 2,500 $ 2,500 $ 22,585 $ 23,681 $ 23,681
* Operating revenue calculated as follows: 2 bbl * 3968 oz/bbl * 4.35 weeks/month / 64 oz/growler * $10 per growler = $ 5,394
Expense
Legal & Incorporation Fees
Microbrewery License
Attorney fees
July Brewhouse Order (2 bbl /wk)
Dec. Brewhouse Order (5 bbl /wk)
Homebrew Supplies Order
Tap Room Location, 1st Months Rent
Tap Room Renovation & Supplies
Bank Loan (Principal, Interest, Payoff)
Growler Purchase Order
Labor, 10 hrs/wk @ $10 + $2.50 fringe
Rent, monthly
Utilities, monthly
Soft launch COGS, monthly
Total
Checking Account Balance
$
$
$
$
Dec
12,500
2,500
759
2,528
$ 5,394
$ 23,681
Expense
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
155
520
2,000
12,993
18,561
2,000
3,000
5,000
10,851
3,000
4,350
6,000
2,298
1,460
72,189
$
155
$
520
$ 2,000
$ 12,993
Delivered
$ 18,561
$
193
$
193
$
193
$
544
$
544
$
$
$
$ 16,405
$
737
$
$
5,859
6,595
193
$
193
3,020
$
$
$
$
$
544
1,000
383
365
2,485
$
544
$ 1,000
$
383
$
365
$ 21,046
$
$
$
$
$
544
1,000
383
365
2,485
Delivered
$ 2,000
$ 3,000
$ 20,000
$ 9,500
$ 2,100
$
544
$ 1,000
$
383
$
365
$ 38,892
5,719
$ 25,819
$ 28,454
$ 49,650
$ 34,439
544
1,000
383
$
$
$
$
$
193
900
544
1,000
383
$
2,120
$
$
6,239
$
$
193
$
Twin Pints Cooperative
5-Year Proforma Income Statement
Production Expansion
Worker Batches per Year
Artisan Batches per Year
Total Batches per Year
Income
Worker contribution to Income
Artisan contribution to Income
Annual Income
Expenses
General & Administrative
Brewpub Overhead
Brewers (per batch, base+fringe)
Batch variable costs (per batch)
Non-brewer workers
Appendix D
0
1
2
3
4
Year-over-year change based on Expansion Trend %
Actual %
Year 1
Year 2
Year 3
Year 4
Year 5
20%
50
50
50
50
50
80%
200
200
200
200
200
100%
250
250
250
250
250
# Additional Required Fermenting Vessels
0
0
0
0
# Additional Required Brite Beer Tanks
0
0
0
0
# Additional Required Freezers
0
0
0
0
# Additional Required Kegs
0
0
0
0
Cost of New Capital, 2012 prices
$0.00
$0.00
$0.00
$0.00
Cost of New Capital, 201X prices
$0.00
$0.00
$0.00
$0.00
Budgeted % $ per Batch
17%
$640
83%
$777
100%
2014 Variable Costs
n/a
n/a
61
183
Operating Expenses
Capital Improvement Reserve
2%
Net Operating Income
Debt Service
n/a
Total Debt Service
Total Expenses + Reserves + Debt
NET INCOME
YoY change based on Production Qty & Income Trend %
Year 1
Year 2
Year 3
Year 4
Year 5
32,008
32,968
33,957
34,975
36,025
155,347
160,008
164,808
169,752
174,845
187,355
192,975
198,765
204,728
210,869
YoY change based on Production Qty & Expense Trend %
3,050
3,172
3,299
3,431
3,568
40,597
42,221
43,910
45,666
47,493
15,126
15,731
16,360
17,014
17,695
45,634
47,459
49,358
51,332
53,385
57,477
59,776
62,167
64,654
67,240
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
161,883
168,359
175,093
182,097
189,381
3,747
3,860
3,975
4,095
4,217
21,724
20,757
19,696
18,536
17,271
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
165,630
172,218
179,068
186,191
193,598
21,724
20,757
19,696
18,536
17,271
$21,724
$0
$21,724
$20,757
$0
$20,757
$19,696
$0
$19,696
Recipient
Portion %
Year 1
Year 2
Twin Pints Reinvestment Reserve
20%
$4,345
$4,151
Financing Partner / Co-op Development Reserve
20%
$4,345
$4,151
CSB Members' Dividend
10%
$2,172
$2,076
Artisan Brewers' Dividend
20%
$4,345
$4,151
Workers' Dividend
30%
$6,517
$6,227
100%
$21,724
$20,757
Year 3
$3,939
$3,939
$1,970
$3,939
$5,909
$19,696
Trends
Income
Expense
3%
4%
Expansion
0%
$17,271
$0
$17,271
Cumulative
Five Years
$97,985
$0
$97,985
Year 4 Year 5
$3,707
$3,454
$3,707
$3,454
$1,854
$1,727
$3,707
$3,454
$5,561
$5,181
$18,536
$17,271
Cumulative
Five Years
$19,597
$19,597
$9,799
$19,597
$29,396
$97,985
Planned Capital Investment
Net Income
Planned CapEx for Expansion for Following Year
Remainder after CapEx
Brewhouse Limit
140
560
700
$18,536
$0
$18,536
Allocation of Net Income to Cooperative and to Stakeholders
# CSB Members
# Artisans
Annual Dividend per 1x CSB Member
Annual Dividend per 1x Artisan
Annual Dividend per 1x Worker (40-hourly)
270
50
$8
$22
$2,716
270
50
$8
$21
$2,595
270
50
$7
$20
$2,462
270
50
$7
$19
$2,317
270
50
$6
$17
$2,159
The above individualized figures assume a constant #
members/artisans/workers per 1x batch using Year 1 as the base-line.
n/a
n/a
$36
$98
$12,248
Twin Pints Cooperative
5-Year Proforma Income Statement
Production Expansion
Worker Batches per Year
Artisan Batches per Year
Total Batches per Year
Income
Worker contribution to Income
Artisan contribution to Income
Annual Income
Expenses
General & Administrative
Brewpub Overhead
Brewers (per batch, base+fringe)
Batch variable costs (per batch)
Non-brewer workers
Appendix E
0
1
2
3
4
Year-over-year change based on Expansion Trend %
Actual %
Year 1
Year 2
Year 3
Year 4
Year 5
20%
50
60
72
86
104
80%
200
240
288
346
415
100%
250
300
360
432
518
# Additional Required Fermenting Vessels
3
4
4
5
# Additional Required Brite Beer Tanks
1
1
1
1
# Additional Required Freezers
4
4
5
6
# Additional Required Kegs
9
11
13
16
Cost of New Capital, 2012 prices
$5,327.00 $6,392.40 $7,670.88 $9,205.06
Cost of New Capital, 201X prices
$5,540.08 $6,914.02 $8,628.70 $10,768.61
Budgeted % $ per Batch
17%
$640
83%
$777
100%
2014 Variable Costs
n/a
n/a
61
183
Operating Expenses
Capital Improvement Reserve
2%
Net Operating Income
Debt Service
n/a
Total Debt Service
Total Expenses + Reserves + Debt
NET INCOME
YoY change based on Production Qty & Income Trend %
Year 1
Year 2
Year 3
Year 4
Year 5
32,008
39,561
48,898
60,438
74,701
155,347
192,009
237,323
293,332
362,558
187,355
231,570
286,221
353,769
437,259
YoY change based on Production Qty & Expense Trend %
3,050
3,172
3,299
3,431
3,568
40,597
42,221
43,910
45,666
47,493
15,126
18,877
23,558
29,400
36,692
45,634
56,951
71,075
88,702
110,700
57,477
59,776
62,167
64,654
67,240
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
161,883
180,997
204,009
231,853
265,692
3,747
4,631
5,724
7,075
8,745
21,724
45,942
76,488
114,841
162,821
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
165,630
185,628
209,733
238,928
274,437
21,724
45,942
76,488
114,841
162,821
$21,724
-$5,540
$16,184
$45,942
-$6,914
$39,028
$76,488
-$8,629
$67,859
Recipient
Portion %
Year 1
Year 2
Twin Pints Reinvestment Reserve
20%
$4,345
$9,188
Financing Partner / Co-op Development Reserve
20%
$4,345
$9,188
CSB Members' Dividend
10%
$2,172
$4,594
Artisan Brewers' Dividend
20%
$4,345
$9,188
Workers' Dividend
30%
$6,517
$13,783
100%
$21,724
$45,942
Year 3
$15,298
$15,298
$7,649
$15,298
$22,946
$76,488
Trends
Income
Expense
Expansion
$162,821
$0
$162,821
Cumulative
Five Years
$421,817
-$31,851
$389,966
Year 4 Year 5
$22,968
$32,564
$22,968
$32,564
$11,484
$16,282
$22,968
$32,564
$34,452
$48,846
$114,841 $162,821
Cumulative
Five Years
$84,363
$84,363
$42,182
$84,363
$126,545
$421,817
Planned Capital Investment
Net Income
Planned CapEx for Expansion for Following Year
Remainder after CapEx
Brewhouse Limit
140
560
700
$114,841
-$10,769
$104,072
Allocation of Net Income to Cooperative and to Stakeholders
# CSB Members
# Artisans
Annual Dividend per 1x CSB Member
Annual Dividend per 1x Artisan
Annual Dividend per 1x Worker (40-hourly)
270
50
$8
$22
$2,716
324
60
$14
$38
$4,786
388
72
$20
$53
$6,640
466
86
$25
$66
$8,307
559
104
$29
$79
$9,815
The above individualized figures assume a constant #
members/artisans/workers per 1x batch using Year 1 as the base-line.
n/a
n/a
$96
$258
$32,263
3%
4%
20%
Twin Pints Cooperative - CSB Nanobrewery JULY 2013 Capital Budget (Sources / Uses Statement)
Appendix F
Brewhouse Capacity
1.00 bbl / batch
CSB # Batches / week
0
allocation varies based on artisan demand, up to 14 batches per week
Artisan # Batches / week
2
BBL / month
8.7
Oz. / month 34,522 calculated as: # batches/mth * 1 BBL per batch * 3968 oz per BBL
USE OF FUNDS
General Pre-development Costs
Qty Unit Cost
Incorporation Registration Fees
Microbrewery License
First & Last Month's Rent
2 $ 1,000
Corporate & liquor attorney, hourly rate
10 $
200
Sub-total
Brewhouse Equipment
Grain Mill, Hopper, Base + $30 Corded Drill (Motor)
40G Hot Liquor Tank w HERMS coil
40G Mash Tun + 90 degree recirc inlet adapter
45G Brew Kettle
3x March Pump, 7GPM, $160 ea.
3x 5500W heating element for Kettle/HLT, $70 ea.
Weldless heating element kit x3
HLT/Mash Tun Temp/Elec. Element Controller (automagic)
Brew Kettle Electronic Controller x2 (manual)
DIY Immersion Wort Chiller and 300G Tub
1 BBL Brite Tank, x2
2x Fridge for housing Brite Tank
Water filter, reverse osmosis system
5 lb CO2 tank + Dual gauge pressure regulator w safety valve
Batch ingredients for roll-out
Plastic fermenters, 30-40G x 8 @ ~$400
Kegs, 1/2 bbl x 12 @ $129 ea.
Sub-total
Tap Room & Homebrew Library
Tap Room Renovation & Supplies
Printed Glass Growlers
300 $
3
Sub-total
Other
Contingency & Shipping/Handling
10% of costs
Operating Reserve
Sub-total
Total Project Uses
Cost
$
$
$
$
$
155
520
2,000
2,000
4,675
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
212
759
739
659
480
210
60
800
500
300
2,778
1,298
200
50
800
1,600
1,548
12,993
$
$
$
1,000
900
1,900
$
$
$
1,689
1,500
3,189
$
20,082
SOURCE OF FUNDS
Debt Sources
Bank Loan
Total Debt Sources
Internal Sources (Equity & "Early Bird" Revenue)
Artisan Brewer Shares
20
$
500
Early Bird CSB Membership Dues
0% of sales
Early Bird Growler Club Sales (1-year)
0% of sales
Total Equity
External Sources
MSU Broad Contest 2nd Place + People's Choice
Total Grant Sources
Total Sources
Balance
Amount
$
10,000
$
10,000
$
$
$
$
10,000
10,000
Amount
$
$
$
3,000
$
3,000
$
$
23,000
2,917.70
Brewing Weeks in Year
Fermentation Period, weeks
Batches per Ferm. Vessel, year
Brite Period, weeks
Batches per Brite Vessel, year
50
3
17
0.50
100
This table is used to determine the quantity of
fermenting vessels that we need.