Starting any new brewery requires careful planning by the founders. Put simply, breweries that do not have solid and forward-thinking plans will not succeed. The ability to make a great end product is, by itself, not enough. To help you get started, I plan to publish a checklist of things related to the law you should do when you are starting your brewery. This is the third article of this series, which discusses which steps you should take before filing your paperwork with the Federal Government.
Step 3: Get Ready for the Feds
Opening a brewery requires compliance with countless local, state, and federal laws and regulations. You should not begin brewing your first drop of commercial beer until you have made absolutely sure that you have fulfilled all of these requirements. Before you even begin filing paperwork with the federal and state government(s), there are some things you can do to help streamline the process.
Make Sure You Finished Steps 1 & 2
Having a name squared away (and hopefully, having a federally registered trademark for the name) will help you immensely during this step and the next. Specifically, it will help you obtain financing (as you already own the rights to a quality name) and will help you fill out paperwork in the next step.
Having a registered business organization and a Federal Tax ID number will help you set up bank accounts, enable you to sign a lease on behalf of your organization, and enable you to properly fill out the huge stacks of local, state, and federal paperwork that are heading your way.
Find a Property and Sign a Lease
Deciding where you are going to open up shop is no small decision for a new brewery to make. It is, however, necessary to decide where you are going to be located before you begin filing paperwork. This can be a money drain on new breweries, as they may have to start paying for a lease now, months or even a year before their business will even open. Many landlords will be willing to negotiate lowered rent for a few months to give the brewery a chance to get compliant with the bureaucrats (FYI – the TTB currently has a stated goal of processing a new application in 95 days. Many new applicants, however, have reported waited much longer). Also, take care to make sure that the lease will only be fully enforceable if, and when, the permits and licenses necessary to operate are successfully obtained.
Make sure the location you have selected is properly zoned for brewing beer. Typically, the property should be zoned for industrial or light industrial use. Also, depending on where you live, you may run into trouble if you try to start a brewery too close to a church or school.
Order & Install Your Equipment
In the federal registration step (step 4), you will have to fully diagram and describe of the brewery premises. Also, your equipment must be fully installed by the time the feds review your application and come for an inspection.
In the next step you will have to divulge your funding sources and business partners, so that the TTB can do a criminal background check on those individuals. You may want to inform these individuals now that this is going to be required, so as to avoid any unexpected problems in the future. Paying a lease and ordering brewing equipment represents a high level of startup costs. Add in the licensing and application fees you will encounter in the next step, and you will quickly learn how important it is to have adequate funding to even get started.
In my experience, it is much easier to get a potential investor to buy into something when you already have something of value in hand. This is why I believe securing a federally registered trademark for a memorable name should be one of the first (if not the first) things a new brewery does. Even if you are not currently using a mark, you can still obtain a registration of a mark (so long as you plan to actually use the mark within three years of receiving the registration).