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All posts in Brewery Accounting
Taproom POS
Recently, taproom POS (point of sale) questions keep appearing up on my radar. More specifically, people want to know which tablet application is best for their taproom. Within the last 5 years many POS startups have moved in and commanded respect in the space. The introduction of the tablet in business, coupled with these subscription POS systems has granted increased access to reputable/respectable products. One major benefit of using a iPad or Android device as a POS is the up-front investment. Compared to a traditional POS, the “price to play” is about 1/3rd. Most tablet based POS systems’ have a monthly subscription pricing structure, often with the only upfront cost being the hardware. (*Note many are now using the hardware as a giveaway to win the business) A traditional POS system can cost between $10-15K when you factor in all the hardware and printer paper? Printer paper? WGAS about printer paper you ask; trust me it all adds up.
Here are some questions I have seen lately:
So why scrap the old skewl cash register?
Couple of reasons: 1) Depending on how you set up your items, super useful reports can be generated on what is selling and what is not. 2) Cash controls are far better with a POS. 3) A frekin iPad looks cool in the taproom.
Which one should I get?
I have played with many subscription based POS systems and while the prices are sweet, the functionality may not jive with your processes. For example, Vend, Shopkeep, SalesVu, Square, are all considered retail POS systems. This would be perfect if you were just a packing store,; but if your people are drinking onsite (host onsite consumption space), creating tabs may give you a issue. **Breadcrumb is one true restaurant POS that falls in the subscription space. These systems usually have a free trial. My suggestion would be to sign up, test, and see if it works for your space.
What about the big boys, they all seem to have tablet options now?
Micros, Aloha, Calypso have all rolled out some tablet version of their software. Problem is they are all still expensive. Look, if you are pulling down $150-200k and have multiple terminals in your taproom, then the big boys is the way to go.
Conclusion:
Subscriptions based POS systems are here to stay and tablets are making them a viable option for the taproom. With all the options out there, you may need to test a few or get with a expert who is going to help you pick on that will fit in your processes.
The “Commitment”
The next phase in brewery development is what I call “the commitment.” Capital is committed, a location is committed, equipment is committed and en-route, construction starts and anxiety sets in. You are actually doing this! Along with your commitment to brewing awesome beer, you also have a commitment to your financial fitness. Bookkeeping, payroll, brewers reports, tank labels, and brewing & packing schedules are a FEW of the items you must keep in order to ensure your fitness. **I caution new breweries not to skimp on the back office expense for the sake of saving a few dollars in the beginning.** The old adage “you get what you pay for” also applies to the accounting and consulting world. After reading the remote accountant reviews, and coming to a conclusion, here are a few steps to take that ensures that your back office is in order:
- Interview outsourced controllership firms – Take the temperature of the team. Do they speak your language? Do they dress like you? Are they excited about your entry into the market? Do they intimidate you? Would you hire these people to work at your brewery?
- Research who is the expert in the space – While you may not be able to hire the expert during year 1, they may have some helpful advice to share. Set a goal to eventually get to the level where you can work with the expert.
- Talk to other breweries – Breweries love to help other breweries, so ask them what their back office looks like. Do they do it in-house or outsourced? Are they happy with the results? Is it clean, or are they managing it on Excel? Do they know what their cost per BBL is?
Your commitment to financial fitness is as important as the beer you produce!
Potential interview questions:
- What is your experience with TTB reporting?
- Can you help my brewery grow? How?
- What retail/restaurant experience do you have?
- What manufacturing experience do you have?
- Are you familiar with industry specific software that can help my processes?
- Our goal is to grow distribution statewide and then expand across multiple states, can you grow with us?
Considering your move
To keep up the momentum of the last post I have come up with a list of five “thought points” a potential brewery should consider while planning their arrival; enjoy:
- Capital – Do you have the money it takes to open a brewery? I see undercapitalized businesses across many industries, and it doesn’t work. Under capitalization is the equivalent of roofers affixing shingles with bubble gum, it simply won’t last if you didn’t hire the experts from Best Indianapolis roofing company for this job. Seek council to understand the capital requirements to open a brewery; oh yea….use nails.
- Plan – Do you have a plan? I am not talking about a traditional business plan. I am talking about a PLAN. Traditional business plans are for winemakers, you’re brewing beer guy. I am talking about: brewery layout, 1, 3, 5 year goals, parking, expansion, marketing, staff, benchmarks. Can you feel the energy you are about to bring? We can’t predict the future, but we can plan.
- Distribution – What does distribution look like in your state? Here in Florida, all wholesale must pass through a distributor. Some states have self-distribution and that is a GOOD thing. Depending on your state, a refrigerated truck purchase may be on the horizon.
- Back office – I am confident you know how to operate all those valves and tanks, but can you balance your check book? The accounting and compliance piece may be a little more than the wife can handle. Hire someone knows the industry, they will get it! This is important for two reasons: 1) because proper record keeping will keep the TTB out of your hair and 2) you want to know if your operation is profitable.
- Culture – Who will you serve? I understand anyone who bellies up to the bar and has money; but what does that person look like? Culture benefits more than just the patrons, it’s the unspoken writing on the wall every business owner strives for. Define your culture, and the people will come.
Craft Brewing
West Coaster’s bear with me; Midwesterners please be patient. I know what I am about to say is SO a decade-old for yall, but here I go. I am excited about craft brewing!!! This industry is less than 5 years old to my wonderful city, and the momentum is not slowing. While I love beer, my excitement stems from the contribution these businesses are having on the US economy.
Two years ago I was given the awesome opportunity to help open a local brewery. While I spend most my time in the back office, I can feel the energy. The smells, employees, fork-lifts, tanks, patrons, all exude positive energy. What makes craft breweries so exciting? I came up with a few thoughts:
- “Love not War” – While their ingredients may be special, expensive, and exotic, I can promise you blood is not being shed over them. It is a peaceful product which if you hang around long enough…. will make you smile. Take that diamonds!
- BRIC, be gone – During the last 5 years, the U.S. has taken a slight beating from Brazil, Russia, India, and China. I meant to say the U.S. (minus) the craft brewing industry. Communism and slave labor can’t intrude.
- Ingredients – This one is my opinion; well actually; all of these are my opinion, but especially this one. The luscious, succulent ingredients craft breweries are using don’t interest the big boys. Why should InBev purchase breweries using expensive German hops when they can continue to sell us the watered down, rice filled, cheap crap? Economics 101 folks: the big boys understand their space.
- Communities – Who doesn’t crave a little community in their life? Every time a craft brewery opens, a new community is born. Whether you lean on the brewery for an afternoon pint or host a fundraiser in the taproom, it brings people together to help a local cause.
Craft Breweries are here to stay. The economic development they bring to cities is awesome and communities love them. This excitement is why I love to serve the industry.
