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Comment by chrisgd | Hacker News Reader

Now I really don't know what to say to my brother in law who is opening a brewery / restaurant...

I have an acquaintance who made good money on Wall Street for about ten years and then invested it all in a brewpub out in the country (near a ski area.) I don't think he's making much money and I hear he works all the time. But I think after Wall Street he realized he wasn't motivated by the money, and he was used to working all the time.

Now he gets to work with his hands, make something real people enjoy, and be accountable only to himself. I think he's pretty happy.

Yeah, I like brewpubs as a customer, but I don't see what the business model is, over just running a brewery or a bar. You get the beer at cost, but the price of a keg of beer is not really a problem most bars feel the need to improve upon.

My understanding is that the business model of the brewpub is to sell beer at retail prices as opposed to selling at wholesale to a distributor.

I would guess that the bigger margins would allow you to start at a smaller scale.

Brewpubs can skirt around the regulatory insanity that some states impose on breweries. I'm not sure how close South Carolina is to the norm but you cannot sell more than 48oz of beer to the public per day and only after a tour (and only 16oz can be over 8% abv). You have to sell to an independent distributor who sells to independent (of both distributor and brewery) stores. If you operate a brewpub you can sell "freely" but only up to 2,000 (IIRC) barrels a year.

I know several states have tough regulatory environment but I don't know if they go as far.

I wonder what defines a brew pub. Could you have a couple under the same roof owned by the same person? "This tap belongs to pub A, this to pub B..."

That could be a loophole, here's the relevant legislation:

SECTION 61-4-1700. Definitions.

For purposes of this article:

(1) "Brewpub" means a tavern, public house, restaurant, or hotel which produces on the permitted premises a maximum of two thousand barrels a year of beer for sale on the premises.

(2) "Permitted premises" means those areas normally used by the permittee or licensee to conduct his business and includes, but is not limited to, the selling areas, brewing areas, storage areas, food preparation areas, and parking areas.

(3) "Person" means an individual, partnership, corporation, or other form of business organization.

HISTORY: 1996 Act No. 415, Section 1.

http://www.scstatehouse.gov/code/t61c004.php

The cost of beer made on-premises is roughly half what vs. buying from a distributor. If you can create real demand for your product at your own pub, you can make an extra $100 per barrel (a.k.a. $50 per keg). At ~2000 barrels a year (which is 200 brew days per year on a _tiny_ 10 barrel system) that's an extra $200k added to your bottom line.

Yes, you need decent chunk of financing + equipment to get started. No, it isn't "real money" to most of the folks on HN. Compared to the margins on most foodservice businesses, though, it's amazing.

If it's a labor of love, he knows what he's getting into, and the financials make sense, then good luck to him :) It's not impossible, it's just not what the average person thinks the business is all about.

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