16 Jul Lasting Decisions
When starting a business, you find yourself making more decisions than you ever thought necessary. These range from (relatively) trivial things like “What tee shirt brand will we use?” to life-altering things like “Where do we want to put the business?”. Behind the scenes of most of the day-to-day decisions lies a much larger one that can be easily overlooked:
“What type of company do we want to be?”
At Cerebral Brewing, we are keenly aware of the consequences of losing sight of our vision… and how easy it is to be led by your pocketbook.
We’ve been wrestling with a bear of a decision for the past few months, but we couldn’t be happier with where we ended up. We are extremely proud to say that we placed an order for a fully American-made brewhouse, fermenters, brite tanks, and just about everything else through the guys at Portland Kettle Works (PKW) just a few weeks ago. We could feed you lies and say that we never even looked at Chinese equipment but we won’t patronize you. When we were writing our business plan we priced out brewhouses and tanks from 8 different suppliers — some American, some Chinese, and one Canadian. Portland Kettle Works was the pipe dream all along but reality began to set in as expenses started piling up. Over the course of a few weeks we had talked ourselves into the idea of purchasing the brewhouse through PKW and surrounding it with Chinese tanks with the logic that the tanks would be easier to replace. That way, when we started generating revenue we could swap them out for PKW tanks. At least that’s what we kept telling ourselves.
I won’t lie. The cost difference between Chinese and American equipment can be quite substantial… and as with any new business, it can be very easy to go over budget. We are looking at a total start-up cost in the mid six-figures with nearly every dollar accounted for in some fashion. I believe the term bootstrapped is a very appropriate way to describe us. Every expenditure requires that much more research when you’re not flush with cash, but we are far from the only brewery to have this problem. While having a budget is extremely important in starting (and maintaining) a successful business, you run into problems if it starts to become the first thing you look to when making a decision. We started to fall into this trap ourselves, but salvation was only 1,240 miles away (yes, I Googled that).
Things changed after a short trip to Portland. My wife and I were able to get into town a few days before friends to check out the Portland Kettle Works shop and talk to the guys behind it all. We knew their work was sound and their equipment was sexy even before visiting (we did our research) but our visit gave us a much better grasp on the decision we were about to make. We met with Thad (the owner), Joe (the salesman), and had brief interactions with the guys building the tanks (mostly them asking me to move out of the way of the forklift). Over a few beers we conversed with Thad and Joe about the brewing equipment industry as a whole and the trends that they’ve noticed over the past year, the recent rise in stainless steel pricing, and comparing/contrasting the Portland/Denver beer scenes (they’re not as different as you think).
We also talked about how far PKW has come since they began taking orders in 2011 and the troubles they’re facing at the moment. In a very logical sense, the business of making brewing equipment parallels the business of brewing. With the tremendous growth we’ve seen in the past few years, lead times on equipment manufacturing has increased exponentially. Thus, PKW is operating on the edge of not being able to meet demand. With a pilot brewery of their own in the works, dubbed ‘The Labrewatory’ (they’re hoping to be operational before the end of 2014), and an expansion on the horizon, it’s easy to see that these guys are committed to the growth and maturation of the industry.
Only 3 years old, PKW is still relatively new to the scene — especially compared to operations like JVNW, Inc.(33 years old) but they’re quickly making an impact. Companies like Cascade, Pipeworks, and Rogue (as well as Colorado breweries Manitou and Riff Raff) make for an impressive client list. We had the opportunity to share a few drinks with two other new clients that are on pace to open in the next few months — Drekker Brewing Company (Fargo, ND) and Main & Mill Brewing Co. (Festus, MO). We commiserated about the pains that precede opening day and shared in each other’s small victories over some great beer at Base Camp. It’s strangely invigorating to talk to someone going through the same trials and tribulations as you. Although I can’t prove it scientifically, I’m pretty sure beer helps as well.
The next morning we knew the right move. I started texting Chris and Dan (my business partners) and within a few minutes we were all on the same page. We realized there was no sense in meeting our goal to use American-made equipment halfway. We would go all-in with Portland Kettle Works… and in a unique way they are going all in with us. There’s a beautiful synergy that happens when two American small businesses work together towards a common goal — and that’s exactly what we’re about. With many more decisions to make as we move towards opening day (and beyond), this lesson will remain in our minds. There will always be a cheaper, faster, or easier way to move forward, but we will not be leading Cerebral Brewing down these roads.