COVID-19 Brewery Strategy

Hello all,

With this COVID-19 Brewery/Bar shutdown, obviously every brewery in the country (the world?) is about to feel some serious hurt, us included. So here are some thoughts and ideas on quantifying that pain, cutting costs, seeking aid, and maximizing life-giving revenue in the meantime

Calculating Likely Debt

It’s important to know just how screwed you’re about to be, and perhaps the #1 such concern is the bills you’ll “have” to pay in the coming weeks. In order to do that for us, since I’d just worked out our 2020 Budget, I did the following (which you can do if you have a budget)

  • take the total expenses for March (discounts, COGS, and expenses)

  • subtract out (something like) half labor (taproom or all, depending), half taproom COGS, and half discounts

  • then, run a P&L for March and add up the expenses already on the books

  • the difference is roughly what you should expect to “have” to pay - for us, ~$75,000

Alternatively, without a budget you can do the same thing but average costs for Dec, Jan, and Feb to get a rough average total expense for March

Using this, you can start to play with the effect of cutting this-and-that, which leads me to

Things to consider cutting

What can go? Certainly not rent and utilities, but perhaps:

  • extraneous subscriptions

  • consultants (like me!), or perhaps niceties like assistants and book keepers, if you are willing to do all of that work for months after this ends, and you should really try to avoid cutting these

  • unprofitable departments, like a kitchen that’s never turned a profit (all that money you spent? It’s what they call in the biz a fixed cost), or maybe even distribution if they don’t draw significant money, but you may be hurting advertising by doing this

Things not to cut

  • advertising

    • you’ll desperately need the income they generate after you re-open (which you will!)

  • labor, to the bone

    • you’ll need a staff when you re-open, so taking a slight loss in order to keep your staff busy might be worth it; losing, I don't know, $100 per day net, but keeping two people working in that kitchen, may very well be worth it for morale

  • bills to the government, or with massive late fees, or that are important (like utilities)

    • you may have to pay some stuff late; figure out exactly what those are (or vice versa, as the “crucials” is probably a shorter list) now

Resources for you and your staff

Loans may be crucial for survival; as of writing this, there aren’t any specific to LA, but keep an eye on the CCBA’s update site, and there’s always the SBA loans (see the link)

And as for your staff, there are two moves: either the standard CA unemployment or, something I haven’t looked into too deeply, this US Bartender’s Guild thing

My door’s open

I hope all of this has helped, and because of the dire nature of this crisis, feel free to book an hour to talk with me completely for free