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

Quickie: Brain Dump From Craft Beer Conference 2012

If you checked out my Panic Brewing Facebook page over the weekend now the Alarmist Brewing Facebook page, you probably saw some updates from the Craft Beer Conference. I was at the trade show portion on Friday only. I had a great time and learned a lot. Here are a few quick tidbits: I already knew Premier Stainless made excellent equipment, but it was great to get an up close look. Amazing stuff made incredibly well, despite the fact that most of the manufacturing occurs in China (which I'm never a fan of).  Once the equipment arrives from China, Premiere brings it into their Escondido facility and ensures that all fabrication is absolute world class. They also fit the finished equipment with very high quality tri-clamp valves, pumps, and motors. And the heat exchanger is made in Washington state. Nice. We visited the Pizza Port brew pub in Ocean Beach later that night and sure enough, there was a gorgeous Premier brew house and fermenters front and center.

Only takes 3 hours to wash one keg!

Premier makes a dual semi-automatic keg washer, meaning you have to lift the kegs, but the cleaning cycle is automatic. It's beautiful and will be in my brewery at launch.

Rob Soltys of Premier Stainless recommended 16 ft minimum height ceilings.  When I asked him how high you need for 30 bbl fermenters (and you always need extra height for the rigging equipment, remember that!), he said if you go with 16 ft minimum, you'll be able to fit 60 bbl fermenters in the future easily.  Good tip.  They can customize fermenters just about any way you need them, so smaller clearances would require short and squat fermenters which affect fermentation flavors (brewing school). Not a big deal, but you'd probably have to adjust your fermentation temperatures to deal with less hydrostatic pressure due to shallower depths.

Wild Goose Engineering's canning line is awesome AND they're not tied to Ball Canning like Cask is. That's a good thing. Their two head filler can package cans faster than Cask's five head filler. The secret? The seamer, which is the device that seals the lid onto the can. Both canning lines have only one seamer, but Wild Goose's is so damn fast, their line cans faster with less than half the fill heads! The people are awesome as well. When the need arises, you can easily add two fill heads to the machine for a total of four. Awesomesauce.

I spoke to the U.S. Tax and Trade Bureau (TTB), very nice people. Here's the gospel from the horse's mouth: If you fill out your TTB paperwork correctly AND submit it online, it currently requires about 51 days to get your Federal Brewer's Notice approved. If you submit your application via paper, it takes 90 days, but who would be that dumb anyway? I inquired what the biggest mistake people make that causes their application to be rejected. Answer: improper handling of the Brewer's Bond process. They have a phone number you can call to get all your questions answered and encouraged me to use that resource. I'll add that number to this post when I find it. I'll go into all the nitty gritty of dealing with the TTB and the State of Illinois once I begin that part of the process.

Great stuff, well worth the effort and money.