That's a Wrap!

Guess what? That blog post title is a pun! Yup, when I'm not planning my brewery, I spend all my free time ignoring my family and just working on really, really clever puns. Here's where the pun is explained: So the big news right now is that I've hired Wrap Architecture (pun revealed!!!) to do all my design and drawings required for permits/construction.

Here's Wrap Architecture's first pass at creating a schematic drawing of the space. These folks are leaving no stone unturned!

Wrap are a husband and wife team of Cheryl Noel and Ravi Ricker. In the brewing world, they are probably best known as the architects behind both Revolution Brewing's brew pub and production brewery.

They came highly recommended from numerous people in the business and after meeting with them, I could immediately see why. Very knowledgeable and just damn nice people.

So now, we wait while Wrap and their consultants do their thing. We're talking general layout, mechanical, plumbing, and electrical plans and building code research (always fun in Chicago). This is going to take a few weeks.

After all the plans are completed, we'll be submitting drawings to contractors for bids and submitting for building permits. The building permit process in Chicago is a complete nightmare, but we'll get through it.

Since my last post I've also taken care of my general liability insurance for the business, got my surety bond for my TTB application (which is 99% ready to submit), and have firmed up what hops I can get from a variety of suppliers. I'll FINALLY have my hop contracts in place before the year is over. Slim pickings, but we'll deal with it. I've also done more detailed research on steam boilers and glycol chillers.

As usual, many wheels in motion. Lots of cogs in this machine, but we're getting there!

Where You At?

Chicago Craft Beer Week is over and what a week it was! My favorite part of the whole week was meeting new Panic Alarmist fans and admirers. I've lost count how many people came up and thanked me (I was wearing my Panic T-shirts all week) for sharing so much and offering wonderful words of encouragement at the four events I attended. My wife, Bridget, who isn't usually a big beer festival fan, accepted that beer events would be a part of our lives from now on and joined me for all of them. She really got to see first hand how much all this work I've done has started to pay off and she's more excited than ever to get this brewery up and running. And as usual, people liked my wife more than they liked me. I'm used to it. This is what I hope to be the home to Panic Brewing. There's lots of space, but the other tenants are either a bit insular, pregnant, or dead.

Let me start with the biggest news thus far: I've found a space I'd like to lease. I like it a lot. It's almost perfect. I say it's "almost" perfect as there are some potential zoning issues I'm trying to hash out with the alderman's office for the location. I want to be able to open a retail store first, and then a tap room down the road. There could be some problems with the current zoning, but like everything else, it will all work out. As much as I'd love to reveal the address, I can't let the cat out of the bag just yet. There's a lot that has to happen before I can sign the lease and it will definitely be several weeks or more before the deal is done, but I REALLY want this space. I'll gladly share the ins and outs of leasing once I have it signed.

Another big deal for me was opening a business checking and credit card account, which I did last week. Yes, it's easy to do (you need to be a registered business entity with your state and get your EIN from the IRS, which is easily done online here), but I had put it off as I thought it might be an additional expense I wasn't ready to take on yet. Turns out, it's pretty cheap and actually free if you maintain a certain balance. An easy task, but it's checked off the list, and that's a good thing.

Now, the big question is, where is Panic Alarmist now in the process? It seems like I'm always saying, "almost ready to fund raise", or "finishing up the legal investment documents". Well, I'm almost ready to fund raise. I'll officially begin once we finally finish up the legal documents. I spent 2 hours on the phone with my attorney last week to go over the damn near final versions of the operating agreement and PPM. We've agreed to have these 100% completed by mid June. Monday, June 17 to be exact. I'm sure I'll have to go through at least a couple more reviews before then, but that is my focus right now. I want this shit done NOW!

I have some final tweaking to the business plan that I will be finishing up over the next two evenings and then that's it. No more business plan changes. Over the past couple of months I've received some new equipment quotes and learned some new info that has allowed me to make some pretty significant changes to my financial analyses ranging from start up costs to ongoing monthly costs. Some changes are required due to how some banks underwrite loans. I'll go into painful detail on bank loans, especially SBA backed ones once I have my loan in place.

Let me go into my business plan process real quick. I finished the plan months ago. Since then I've made numerous revisions both big and small. This is how I operate. When I am learning something new, I iterate over and over until at some point I feel comfortable with the result. I'm not looking for perfection with the business plan, but I'm definitely looking to not commit any egregious errors. Perfect example: there are so many things that could go wrong during the construction process that my costs could be way beyond what I've budgeted. I've tried very hard to mitigate that. But at some point, you have to let it go, roll the dice, and do your best. Most people would've started the dice rolling much sooner than me. That's ok. Everyone is different and I'm very comfortable with how I learn and execute. It's now time to execute.

So here's kinda how the rest of this story unfolds, as I see it:

  1. I get the completed investor documents from my attorney (which is my current primary focus)
  2. I contact all the folks who've expressed interest in investing (there are quite a few), email them the operating agreement, PPM, and some other stuff.
  3. We meet or talk on the phone, I answer any questions investors may have. (more on this when the time comes, which is SOON)
  4. Investors invest, money goes into an escrow account and stays there until a certain funding level is reached
  5. Once a certain funding level is reached, I continue my conversations with the banks I've been dealing with. They see I have investor money and personal investment, they analyze the business plan, they approve, the SBA agrees to guarantee it, loan gets funded. This takes several weeks.
  6. As soon as the loan is funded, I order equipment. Brew house and fermenters require about 6 months to arrive.
  7. Also, as soon as loan is funded, lease is signed. This will take a few weeks of negotiation.
  8. Once lease is signed, contractors allowed to bid, contractors hired, work is completed. How much and what type of work will depend on the space I lease.
  9. On the day the lease is signed, I will submit my paperwork to the TTB (Federal agency in charge of breweries amongst other things). I will have begun completion of this paperwork way before this. TTB approval takes about 2 months. Could be more, could be less.
  10. Once TTB approval is received, I can then start the Illinois state approval process which can take up to 2 months. It would be nice to start this process in parallel with the TTB, but that would make Illinois business friendly.
  11. Construction finishes, equipment is installed, licenses all received, brewing begins.
  12. Beer is brewed, packaged, and sent to a distributor in the Chicago area. I will not be self distributing.
  13. Once operations are smoothed out and cash flow is good, I'll begin the process of opening up a retail store or tap room, depending on zoning and Chicago liquor license bull shit.

So, that's the plan. There are lots of mini tasks in there as well, but this is a good overview of what's involved yet. From the day I get the loan, we're looking at at LEAST 6 months to opening day, most likely 7 or 8. Who knows?

But this I can promise you, it's moving along better now than ever before. It feels very real and there's no stopping.

Last note: My latest batch of Panic Pale Ale is finally in the ballpark of what I'm looking for. There's a lot of tweaking yet to do, I'll be experimenting with some hop schedules, but it's close. Very close.

Cheers,

G

Milestone: Numbers

Screw Research! As of about 10 minutes ago, I now have every single number I need to complete the business plan.  Ok, I need the glycol chiller installation estimate, but I was just provided with the contact info for that person 10 minutes ago as well, so things are damn near done on the numbers front.  I now know EXACTLY how much my start up costs will be and EXACTY how much my monthly costs will be.  This is going to be an incredibly accurate business plan with both start up and cash flow costs nailed down as much as humanly possible without a crystal ball.  There will be very, very little guesswork and you can bet your ass I'll be driving that point home with any commercial lending institutions I talk to.

I want to give a HUGE thank you to the great, great guys at Helios Design + Build for taking their valuable time in helping me with this endeavor and I'll tell you right now, any construction that I need done will be done by them.  I could do the old get three bids route, which I've done many times before when getting large construction projects completed on my house, but I won't.  My gut tells me it would be pointless.  There's no way anyone would be able to beat the knowledge and service and Helios, at any price.  As I mentioned in an earlier post, I wouldn't have even known of Helios were it not for my friend Jeff Sommers.  Jeff is an extraordinary architect who specializes in environmentally sound projects.  His firm is Square Root Architecture + Design.  Remember that.

Also, I want to thank Doug and Tracy at Metropolitan Brewing for opening their respective kimonos and giving me the full frontal...for the brewery of course.  This project would never happen without their uncompromising generosity and you can bet that their generosity will NEVER be forgotten.

I'm am absolutely thrilled right now.  My endorphins are on overtime.  Seriously.

(Now, a quick note to any budding brewery owners:  please don't contact/harass/harangue Helios or Metropolitan for the information I just mentioned.  All of this info was provided to me on good faith, and I only mention them by name as a thank you and also to promote their businesses in the small way that I can right now.  Remember that I interned at Metropolitan for five weeks, sans pay.  Well, I was paid, but my payment was knowledge and generosity, which quite frankly is worth more than any dollar amount.  The information and help from Metro was earned through hard work and by being authentic.  Helios was more serendipity than anything else, but again, I made the effort to meet with them and talk authentically about who I am and what I'm doing.  I think they could sense my level of focus and seriousness.  If you want access to this kind of information, you can get it from your local breweries and businesses, but you have to provide something in return.  That means making some sacrifices and working your ass off.  And if you're not willing to do that, you might want to find a different industry to get into, 'cause that's what craft brewing is all about.  I'm not preaching I'm just conveying what I've learned personally. )