The goal is to write a business plan for "Stark". Stark is a virtual marketing agency that produce internet marketing products and SEO services. Location: Oman. More details of Stark and and assignment grading instructions are attached. Additional Pro

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Team Number: 155

Strange Days Brewing Co.

Strange Days Brewing Co is an up and coming craft brewery in Kansas City, MO that will open with a

taproom. With a combined 12 years brewing experience, the brewery will focus on: building a

community experience, providing beer education, and having an imaginative, adventurous, and risk

taking philosophy. Beers will be sold out of the taproom in year one, but look to sell bottles and

distribute in the future.

THIS BUSINESS PLAN CONTAINS TRADE SECRETS AND OTHER CONFIDENTIAL AND

PROPRIETARY INFORMATION OF STRANGE DAYS BREWING CO. ACCORDINGLY, THIS

BUSINESS PLAN IS CONFIDENTIAL AND IS INTENDED SOLELY FOR THE INFORMATION

OF THE INDIVIDUAL OR ENTITY TO WHICH IT IS DELIVERED BY OR ON BEHALF OF

STRANGE DAYS BREWING CO. BY ACCEPTING A COPY OF THIS BUSINESS PLAN, THE

RECIPIENT AGREES NOT TO COPY, DISTRIBUTE OR OTHERWISE DISCLOSE THIS

BUSINESS PLAN OR ITS CONTENTS OR ANY OTHER RELATED INFORMATION TO ANY

OTHER INDIVIDUAL OR ENTITY WITHOUT THE PRIOR WRITTEN CONSENT OF STRANGE

DAYS BREWING CO., AND TO RETURN THIS BUSINESS PLAN TO STRANGE DAYS

BREWING CO. UPON REQUEST.

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NOTHING IN THIS BUSINESS PLAN, OR IN ANY MATERIALS OR PRESENTATIONS RELATING TO SUCH BUSINESS

PLAN IS INTENDED, NOR SHOULD BE CONSTRUED AS, AN OFFER TO SELL ANY ACTUAL SECURITIES OR ANY

OTHER INTEREST OR INVESTMENT OPPORTUNITY IN THE BUSINESS VENTURE DESCRIBED IN SUCH BUSINESS

PLAN. THE BUSINESS PLAN AND ALL SUCH MATERIALS AND PRESENTATIONS HAVE BEEN DEVELOPED FOR

EDUCATIONAL PURPOSES BY ONE OR MORE STUDENTS IN A UMKC COURSE OR OTHER PROGRAM OF

INSTRUCTION AND WILL BE ENTERED IN A VENTURE CHALLENGE COMPETITION (“COMPETITION”) WHICH

ENHANCES THE EDUCATIONAL EXPERIENCE FOR THE STUDENTS THROUGH AVENUES FOR FEEDBACK BY

JUDGES ON THE STUDENTS’ WORK.

AS PART OF THE OPPORTUNITY FOR INSTRUCTIVE FEEDBACK FROM INSTRUCTORS AND FROM JUDGES AT THE

COMPETITION, THE STUDENTS HAVE PREPARED VARIOUS TYPES OF HYPOTHETICAL FINANCIAL

PRESENTATIONS AND PROJECTIONS AND BUSINESS VALUATION CALCULATIONS AS PART OF THE

DEVELOPMENT OF THIS BUSINESS PLAN. TERMS SUCH AS “BELIEVE,” “ESTIMATE” AND “PROJECT” AS USED

IN THIS BUSINESS PLAN AND IN RELATED MATERIALS AND PRESENTATIONS ARE FORWARD-LOOKING

STATEMENTS AND ILLUSTRATIONS BASED ON VARIOUS ASSUMPTIONS AND PERFORMANCE ESTIMATES.

ALTHOUGH THE STUDENTS HAVE BASED SUCH FINANCIAL PRESENTATIONS AND PROJECTIONS ON

ASSUMPTIONS AND CALCULATIONS THEY DEEM REASONABLE, THEY COULD PROVE TO BE INACCURATE DUE

TO ECONOMIC CLIMATE, COMPETITIVE AND MARKET CHANGES AND CONDITIONS, RISK FACTORS AND

EVOLVING BUSINESS DECISIONS, OR OTHER FACTORS WHICH ARE DIFFICULT OR IMPOSSIBLE TO PREDICT.

THERE IS NO ASSURANCE THAT THE FINANCIAL CIRCUMSTANCES OR RESULTS ILLUSTRATED OR

CONTEMPLATED BY SUCH STATEMENTS AND PROJECTIONS COULD OR WOULD BE REALIZED, AND, AGAIN,

THE PURPOSE IN PREPARING THEM WAS EDUCATIONAL AND NOT TO CREATE ANY OFFER OF AN INVESTMENT

OPPORTUNITY.

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Table of Contents

I. Executive Summary 4

II. Company Description 5

III. Market Analysis 6

IV. Competitive Advantage 9

V. Management Team and Company Structure 11

VI. Marketing Plan

VII. Operation/Service Plan 14

VIII. Financial Projections 16

IX. Appendices 17

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Executive Summary

We at Strange Days Brewing Company acknowledge that we are living in strange times. We embrace

this idea, but also realize that at times we all need an escape from the disconnectedness and confusion

of modern living. There are many ways to accomplish this, ours happens to be beer. When we say

“beer” we don’t just mean the drink itself, but the excitement that comes with trying something new,

discovering unexplored flavor profiles, and sharing in this experience with friends...or strangers.

Strange Days Brewing Company will open a taproom in Kansas City proper to meet the ever- growing

demand for locally produced craft beer and provide a physical location to enjoy it. The initial business

strategy will be to serve all beer on premise and partner with food trucks and local restaurants to

provide food options rather than serving our own food. Strange Days philosophy on brewing, branding,

and running the business will center on the importance of risk- taking, adventure, & imagination,

enhancing consumer’s education on craft beer, and bringing people together to create fun & memorable

experiences.

The decision to start a taproom rather than a brewpub was carefully considered and chosen in order to

keep initial costs low, have less overhead costs, and allow our team to focus primarily on brewing and

establishing brand identity. Strange Days Brewing Company will not distribute initially to keep

overhead costs low. On-premise consumption of our beer and use of POS system will allow us to have

pulse on popularity of specific beers and seasonal trends to better anticipate demand upon going into

distribution in coming years. Once we have developed a strong following and understand demand for

specific beers we will plan to go into distribution locally and have received interest from local

distributor to work with.

The craft beer industry currently has 12 percent market share of all U.S. beer sales. Conservative

projections state that craft beer will have 20 percent market share by 2020, which shows that this

industry is ripe for continued growth. Craft beer has grown considerably in many parts of the country,

however the Midwest continues to be an under-served market according to industry experts.

Additionally, data suggests that consumers, especially millenials, place a growing importance on

locally produced products and are more likely to purchase products labeled as “local” and

“handcrafted.”

Our marketing strategy will be to target and appeal to craft beer enthusiasts and millenials as these

groups tend to have passion for craft beer and sharing what they are drinking and where they are

drinking through social media platforms. We will rely heavily on word of mouth sharing and social

media to build connection with current customers and connect with potential customers. Additionally,

we will be involved with customers face-to-face at beer festivals and other community events, such as

tastings and charity events. Our beer production will be representative of our risk-taking philosophy

and will be a tool for marketing as it will emphasize variety & special release beers, which craft beer

enthusiasts rate as being highly important to their purchasing decisions & brewery loyalty.

For first year of business, team will be composed primarily of original founder and bar staff. XX will

work full-time from day one and other founders will contribute weeknights and weekends until demand

facilitates need for more full time employees. Team will also utilize a board for important decision-

making and to provide expertise needed for success of the brewery.

Company Description

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Business Model

Strange Days Brewing Co. is a brewery and taproom that will be located in Kansas City, MO. In the

beginning, we will serve: our own beer, local wine, and barrel-aged cocktails through the taproom.

Everything in the taproom will be purchased on premises and will be either consumed on premises or

taken home via the purchase of a growler. Customers can bring their own food or purchase food

through partner organizations. Future goals will be distribution of kegs and bottled beer.

Problem

Currently, Kansas City currently has 15 breweries, while major beer cities have more than four times as

many breweries than Kansas City. Craft beer enthusiasts look for a location that provides a variety of

beer, a community experience, and knowledgeable beer staff, which is a current gap in the local market.

Other craft beer cities of comparable size (Portland, Denver, St. Louis, and Milwaukee) continues to

grow, Kansas City is still limited in the number of breweries that provide:

 Exciting, imaginative, and risk-taking beer philosophy

 Physical location in which to enjoy them

 Unintimidating environment for first time craft drinkers

 Beer education

Need Served

As the craft brewery market in Kansas City continues to grow, there have been a few things missing

from breweries. They lack beer education for customers, variety of beers, and an open environment for

all beer drinkers. This has created a gap that we feel we can fill.

Competitive Advantage

The majority of the time, a new craft beer drinker will enter a brewery and be hesitant on what to order.

They look for direction on what the brewery recommends and this will be our strategy on developing a

loyal customer. As we build our taproom, the focus will be to create an open environment and beer

education platform for anyone of our customers. These steps will allow us to create a customer

following that will come to us over other breweries.

Craft beer enthusiasts are always looking for the next great beer. They are looking for a beer that they

can discuss with their fellow craft beer drinkers. Through our 12 combined years of brewing

experience, our group has dedicated our brewing to imaginative and exciting craft beers. Our risk-

taking and adventurous brewing philosophy will attract customer’s interest with new and exciting

flavors. We feel this dedication will set us apart from other breweries not only locally, but also

regionally.

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Market Analysis

Craft Beer Market

Over the past decade, the craft beer market has changed from an emerging market to a strong growth

market. According to the Brewers Association, the total U.S. beer market grew only 0.5% in 2014, but

in the same period the craft market grew by 17.6% (see Figure 1) with that number expected to increase

in 2015.

Figure 1: Snapshot of 2014 U.S. Beer Growth

Based on current growth rate (CAGR) craft beer is expected to have 20% market shares by 2020.

Kansas City has a fraction of the breweries (around 15) compared to other similar-sized cities such as -

Portland, Denver, St. Louis, and Milwaukee. Figure 2 represents the BDI/CDI chart for the listed cities,

including Kansas City. If you were to take the graph and create the quadrants, you will see Kansas City

is in the upper right quadrant. After gathering the market and category sales for breweries ranging in

revenue from $2.5 million to $4.9 million each year, we believe Kansas City has a unique opportunity.

The compared cities have at least five to ten more breweries than Kansas City, which increase their

market share.

Figure 2: BDI/CDI Chart

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Customer Profile

Despite the tremendous growth this market has seen in the past decade, the stereotypical craft beer

drinker hasn’t changed much. Beverage Media indicates that by volume, 80% of craft beer was enjoyed

by non-Hispanic white consumers, over half of them in the 21-44 year age bracket. Our target customer

will be focused on the millennial group. The Brewers Association says that millennials (ages 25 – 34)

make up around 26% of the U.S. population. They account for 21% of the consumer discretionary

purchases, estimated at over a trillion dollars of direct buying power. By 2020 they will be 36% of the

adult population and will be the dominant consumer force.

Starting with a destination taproom, location is very crucial to the success of our business. After

researching all of the metropolitan area, we found Kansas City, MO. proper will provide the greatest

foot traffic. Figure 3 is information gathered from CLRsearch.com for Kansas City, MO and the

Kansas City Metropolitan (includes the top six suburbs of the metropolitan and Kansas City.) While we

will be located in Kansas City, MO., our business will attract craft beer enthusiasts throughout the

metropolitan area. The chart below shows our target age group makes up 13.63% or 133,551 of the

total population. Judy Herz, with The Brewers Association, states 46% of new craft beer drinkers come

from this group. This shows 61,000 potential customers that enjoy craft beer.

Figure 3: Population Snap Shot

Kansas City, MO Kansas City

Metropolitan

Total Population 468,608 979,834

Population Density 1,465 11,617

5 Year Population Projection

(2017) 484,712 1,024,307

Population Male 48.42% 48.30%

Population Female 51.58% 51.70%

Age 25 to 34 74,000 133,551

Age 25 to 34 in % 15.80% 13.63%

Survey

In March of 2016, we surveyed (full survey available upon request) 59 individuals to help us better

understand:

 Demographics, why and how often they go out, what they find important, what brings them

back to an establishment, and what they feel is missing or can be improved in a taproom.

After gathering the results, we found some trends that were common among all entries. The most

common themes were:

 Friendly and knowledgeable beer staff, great beer selection and quality, atmosphere, and events.

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The themes and previous data will help us structure our taproom layout, the atmosphere, what we

serve, and provide a better customer experience.

Operational Growth

Understanding the current environment, it is our mission to provide a fresh, local, and highly

imaginative craft beer that connects the Kansas City beer community. We will strive to elevate the

Kansas City craft beer culture and provide a stimulating beer experience. Our target market is more

inclined to purchase a beer that is labeled craft and they are always looking for new styles and flavors.

A recent Nielsen study of craft beverage alcohol conducted online by Harris Poll found that 35% of

adults 21 and older say they’re more interested in trying an adult beverage labeled craft. Among men

21-24, that figure jumps to 46%.

To help position us to serve our target customer, we will open a taproom that will serve beer on-site,

rather than through distribution. This will allow us to brew smaller batches and more variety. We will

cover in more detail the expected growth in the operations sections.

Pricing Structure

From day one, we will offer a variety of styles and sizes for our patrons. Figure 4 shows all of our

pricing options based on year round or seasonal beers. The tasters can be purchased individually or in a

flight (consists of four regular and one seasonal style.) Draft beer will be poured in twelve ounce or

pint (16 ounce) sizes. Growlers will be our largest sizes, coming in 32 ounce or 64 ounce sizes.

Figure 4: Pricing

Beer Style and Size Year Round Price per Ounce Seasonal Price per Ounce

Tasters (Individual) 4 oz $2.00 $0.50 $3.00 $0.75

Tasters (Flight) 4 oz per $8.00 $0.38 $2.00 $0.50

Draft Beers (12 oz) $5.00 $0.42 $6.00 $0.50

Draft Beers (1 Pint) $6.00 $0.38 $8.00 $0.50

Growlers (32 oz) $8.00 $0.25 $10.00 $0.32

Growlers (64 oz) $12.00 $0.18 $15.00 $0.23

In each category, our seasonal beers will have a higher price per ounce than our year round. This will

help offset the added costs to produce them. Some costs will include barrels to store the beer, rare

ingredients, and space for aging. Tasters, especially the flights, have biggest potential in revenue. The

tasters will allow the customer to sample a variety of beer before committing to a larger size. We will

be able to capture the trends of what styles are popular and generate higher revenue.

Millennials are driven to trying variety, so having multiple pour sizes will allow them more flexibility.

Pint beers will be a better value for customers that are looking to have one style. Growlers will hold

multiple beers per container and will be the lowest price per ounce. They are intended to give the

consumer the opportunity to take beer home, which will open seating for others that want to drink at

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the brewery. Having the beer exposed outside of the brewery will give us an opportunity to attract new

customers.

Marketing Strategy

Starting with just a taproom, communicating our product to loyal and potential customers while being

centrally located will be important for our growth. The following strategies will enable us to reach our

customers and build a strong brand.

1) Foot traffic:

● We plan to open in an area of high foot traffic in order to generate

consistent walk-in business.

2) Word-of-mouth & social media:

● Build connections with beer bloggers and craft beer enthusiasts

● The following are social media outlets we will use –

○ Untappd, Twitter, Facebook, Snapchat, and Instagram

3) Events and Festivals:

● Community interactions with consumers at beer festivals, beer dinners, and other

similar events.

● Hold events focusing on rare release beers to generate excitement and appeal to the

psychological & emotional wants of the craft beer drinker.

4) More than just beer:

● We will work to provide experiences beyond just beer in order to capitalize on other interests of

our customer base.

Competitive Advantage

We should start by saying we do not see any of the below breweries as competitors. We are in the same

category, but no one is really competing as we see plenty of space still for everyone. Additionally, we

have a lot of anecdotal evidence to support how nice (loaning ingredients) & supportive (beer

collaborations) other breweries have been. We have collected data of breweries in Kansas City to

understand the gap that needs filled.

Breweries in the Kansas City area limit themselves by focusing on a certain style due to either beer

knowledge, going straight into distribution, or lack of equipment. Our group has a combined 12 years

of home brewing. This time has allowed us to develop a brewing system that enhances uncommon hops

and yeasts. We have been able to create a worldly beer portfolio and we want to bring all of our styles

to the local community. Below is a table (Figure 5) showing high-level view and a detailed breakdown

of our direct breweries.

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Figure 5: High Level View of Competitors

Brewery Market Location Sales Plan

Red Crow Brewing Co Local Spring Hill, KS. Tasters, Pints, and Growlers

Kansas City Bier

Company

Multi-State Waldo, MO. Tasters, Pints, Growlers, and

Distribution

Martin City Brewing

Company

Multi-State Martin City, MO. Tasters, Pints, Growlers, and

Distribution

Cinder Block Brewery Multi-State North Kansas City, MO. Tasters, Pints, Growlers, and

Distribution

The Big Rip Brewing

Company

Local North Kansas City, MO. Tasters, Pints, and Growlers

Double Shift Brewing

Company

Local Crossroads, MO. Tasters, Pints, and Growlers

Key Success Factors

We understand the market is becoming dense with microbreweries and tap space in restaurants/bars and

also that shelf space in liquor stores are limited. Our competitors may seem to have an advantage due to

their resources, established customer base, and distribution channels in place, but we feel the customers

will choose us based on the following:

 Community experience

o Create brand loyalty through: a compelling and consistent story, branding, and messages

to consumers.

o Use input from our loyal customers.

o Beer festivals and events will allow us to engage with our customers.

o Work with local charities to promote their mission.

o Be the “go-to” location for all televised soccer matches in the soccer community.

o Events, group meetings, and private parties at our location.

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 Beer education

o Describing our beers to the customers.

o Hold private beer tastings, dinners, and classes.

o Potential brew sessions with home brewers and/or customers.

 Imaginative, adventurous, and risk taking philosophy

o Our own products we will serve out of our taproom: world style beers with our own

twist and barrel aged cocktails.

Management and Company Structure

Strange Days Brewing Co. will be formed as a limited liability company (LLC) in Missouri. This will

allow us to stay flexible if we need to add future partners. Starting with just a taproom, (will need close

to 3,000 sq feet) location is very crucial for our business. Through all the data research, Kansas City,

MO. will be the best option. The traffic flow will be denser and the events targeted to our customers in

this area are greater. As we grow and move into distribution, a larger location will be needed. We will

look to use our current location, but depending on space we will look for locations close to our

taproom. The larger location will not be opened to the public, as it will produce large batches for

distribution. Smaller batches will continue to be brewed at the original location for the taproom.

Advantages of Location

Cost: Located in Kansas City, cost per square foot will be higher than surrounding cities. At the

beginning, we will lease our 3,000 sq foot location and our range will be $2,500 to $3,500 per month.

By year 6, we look to purchase our building in preparation for distribution. Having control of our

building will make it easier when we renovate the building for larger equipment.

Local: Kansas City is an ideal location to launch our brewery. The city has many local

businesses and customers that believe in local products. They take pride in what Kansas City has to

offer and wants to see each business succeed.

Strange Days Brewing Co. management philosophy centers on community, teamwork, integrity,

professionalism, and enthusiasm. Initial Management will include only the founding team and a few

bar staff. The bar staff will be compensated hourly and through tips. This will allow us to keep our

costs low. As the business grows, additional employees will be selected based on their qualification for

each specific job and their “fit” within the company. Adding employees that fit our philosophy and

culture will be very important to us. Below are the owner’s roles and background and tables that show

Skill Profile of Team and Ownership and Compensation.

Cofounder, Head of Business Operation, Co-Brewmaster

 Brewing experience: Two and a half years’ experience in home brewing, which includes understanding recipe formulation and assisting in brewing different beer styles.

 Expected duties: Head of business operations and in charge of creating new revenue channels

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for the company, and planning for future expansion. From day one, he will be assisting in day-

to-day operations during evenings and weekends.

 Past work experience: Has more than five plus years’ experience in operations and manufacturing. He has been involved in the whole project process starting at the planning and

resourcing stage, moving through the build out and test phase, and finishing with the execution

of the product.

 Education and training: Chris holds both a Masters and Bachelors in Business Administration with an emphasis in Entrepreneurship from UMKC. Completed E-Scholars program in 2012

and 2016. Training includes Harris Lean Systems Red Book and Lean Level Scheduling.

Cofounder, COO, Co-Brewmaster

 Brewing experience: Two and half years’ experience in home brewing learning different styles and recipe formulation.

 Expected duties: Head of maintenance and brewery operations (includes equipment, ordering materials, formulating brew points, and maintaining everything within the property to keep up

to code.) At the beginning he will work evenings and weekends.

 Past work experience: Has worked primarily in manufacturing settings with a variety of roles ranging from scheduling/capacity planning, working with customers, and supervision/leadership

roles. Skills include analytic and strategic problem solving, cost reduction techniques, and

RCCM (root-cause-countermeasure.)

 Education and training: Graduated with a BS in Industrial and Manufacturing Systems Engineering from the University of Missouri. Completed the E-Scholars program through

UMKC in 2016. Training includes Harris Lean Systems Red Book and Lean Level Scheduling.

Cofounder, Head of Marketing/Branding and PR, Co-Brewmaster

 Brewing experience: seven years’ experience in home brewing learning brewing techniques, recipe formulation, experimentation, and executing a wide range of beer styles.

 Expected duties: Running the day-to-day operations, as he will be the first full time employee. Prepping, cleaning, and brewing majority of the beers. He will purchase all the ingredients for

the batches and in charge of quality control. Daily social media, communication for upcoming

events, and innovating new beers and education pieces will go through Nate.

 Past work experience: Spent in the field of mental health. Skills include: understanding individual & group behavior, and what motivates individuals to change (and not change.) Also

focused on knowing how to promote & articulate a positive vision of the future based on

individual/group wants and needs.

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 Education and training: Applied behavioral science & sociology from University of Kansas. Competed the E-Scholars program through UMKC in 2016 Training includes: motivational

interviewing, diversity awareness, and LEAP (Leadership. Excellence. Accelerating. Potential.)

Other key resources

 VP of Premium Beer Division for Standard Beverage

 Director of Girls Pint Out Kansas City

 Cofounder of Big Rip Brewing Company

 Cofounder/GM of Salem Ale Works.

 Cofounder of HSIT

 Bar operations consultant

 3rd party accountant

Marketing Plan

The plan below will align with our three foundations as a company:

1) Community Experience

2) Education

3) Imaginative, Adventurous, and Risk Taking.

The plan below will align with our three foundations: Community experience, education, and

imagination, adventure, and risk-taking. Our goal is to be known as the “go-to” community-focused

taproom in Kansas City that brews/serves world-style beers and, by the end of year one, sell 62,000

draft pours. We will target millennials as our primary customer and craft beer drinkers, soccer crowd,

and locals as our secondary customer. A strong social media presence will be important to our success

as we look to drive 20,000 customers through our door in year one and be a top five brewery in Kansas

City within the first five years. Positioning Strange Days Brewing Co. as the destination to watch all

soccer matches will capture the soccer community and extend our business hours in the morning.

Below are our goals, strategic initiatives, and tactics tied to our marketing plan.

State of the Business

Strange Days Brewing Co. is in the concept stage. We participated in three homebrew festivals and

served at numerous weddings/events as a homebrew group in 2015. We plan to participate in five

homebrew festivals in 2016 to continue to grow our brand.

Goals/Objectives

In year 1, we will have 2 goals, which are listed below.

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 Establish Strange Days Brewing as the “go-to” community-focused taproom in Kansas City.

 Sell 62,000 draft pours of beer in year 1. o Produce around 520 barrels (bbls) in year 1 with 16 different beer styles.

Strategic Initiatives

Our strategic initiatives will help executive execute the above goals, and some of these will overlap:.

 Drive 20,000 customers through the taproom in year one.. This is based on 22% of target market within the Kansas City Metropolitan. This also includes:

o Open 5 days/week (Wednesday through Sunday) and having an average of 120 customers/day.

 Since you won’t be getting 75 customers every day – maybe on Thurs.-Sat. you get 200 customers/day, and on the other days you’re only getting 20

customers/day – think about what you’ll need to do to drive those peak numbers

of customers in terms of marketing, and also what sorts of operational capability

you would need to service those peak numbers of customers (producing and

having enough beer on hand, enough staff, enough parking, enough floor space,

etc. )

 Saturdays and Sundays open around 7:00am.

 Establish Strange Days Brewing as the main destination to watch all soccer matches (domestic and international.)

o Partner and coordinate with local adult soccer leagues, groups, and teams.

 Be in the top 5 breweries (by ratings) for the Kansas City area on Untappd. o Site is dedicated to serving the entire craft beer community.

 Implement aggressive social media plan.

Tactics

 Currently doing and will continue to do when we open the taproom. o Partner with VeloWagon for all beer festivals, block parties, and private events (where

allowed.)

o Participate in five beer festivals this year (2016) to promote the brand and beer styles.

 When we open our taproom, face-to-face interactions with our customers o Educate customers of our style of beers to enhance the relationship.

 Locate taproom in a densely populated neighborhood. o Top areas include: Waldo, Columbus Park, Brookside, and Crossroads. o Partner with 3-5 restaurants as well as food trucks, to provide food.

 Partner with local soccer groups. o Host watch parties for major soccer events and European leagues.

Formatted: Bullets and Numbering

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 Implement loyalty program when taproom opens. o Allows us to track what beer styles are selling, when they are selling, and to whom.

 Social Media Plan Think about your team becoming regular contributors (blog posts or short articles) to

influential craft beer and/or local food publications. You could just talk about this latest

trend or that latest method to establish yourselves as experts and a reputable venture, at

the same time building recognition of your team and your brand

o All outlets will be used to communicate our story, brand identity, and provide a sense of belonging with community and fans.

 Private tasting with craft beer bloggers and other media outlets in the KC area. o When we announce we are going professional and the taproom is a few months from

opening.

Operations/Service Plan

Our location will promote an un-intimidating environment for all beer enthusiasts and non-beer

drinkers. We will build a community that will enhance the beer education while taking an imaginative,

adventurous, and risk taking philosophy.

General Approach to Operation

From day one, our location will consist of a taproom, event space, and brew house in Kansas City, MO.

The brew house will allow us to brew, ferment, and age our own beer. The taproom will allow us to

serve our brewed beer to the community. Our selection will consist of year round, “Flagship” beers,

Seasonal, and limited-release beers. We will offer local wine, barrel-aged cocktails, and snacks. The

event space will hold watch parties, meetings/private parties for organizations and companies, and our

own events.

Staff Selection: The staff will be limited to the original founders and a few bar staff for at least the first

two years. The bar staff will be selected by their craft beer knowledge and experience in the

bar/entertainment industry. We will meet with them weekly to cover beer selection, upcoming

events/festivals, and any insight to help improve our business.

The team members will be able to satisfy the needs of the business during the initial stages of the

business. We will have volunteers (family, friends, other brewers) to help during our larger events and

festivals.

Website and social media: These will be a very important push for our business. This will allow us to

stay connected with our customers and keep costs low.

We will work with HSIT (database and IT company) to develop our website and create/manage our

POS system.

POS system will manage all the sales, inventory, and communication between transactions, send

weekly reports, and collect beer data. The beer data will include: who purchases beer, how often, notify

us when another batch needs to be made, show customers the flow of the beers (integrating flow meters

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into the keg lines), and when kegs are about empty to get ready for the next one. The system will allow

us to see beer consumption and trends.

Day-to-Day Operations

Alec and Chris will help with serving the customers, prepping, and cleaning during evening and

weekend hours. Alec will be in charge of all equipment set-up and maintenance. His role will become

more involved when we add a bottling and kegging line. Chris will be responsible for mapping out

events and festivals that will take place at the establishment. Nate will be involved with the day-to-day

brew operations, ordering material, and social media. Below will show a brew day and when we are

open to serve.

During brew days, Nate will make sure all equipment is cleaned and prepped prior to any ingredients

being used. A safety checklist will be developed to make sure all valves are shut, high-level

maintenance conducted for all equipment, and water quality is where we need it. Group will follow

brew and fermentation schedule to ensure consistency and quality.

Taproom hours can be seen in Figure 6 below. We look to be open Wednesday through Sunday and

Tuesday nights will be held for staff training. Nate will open Wednesday through Fridays. Alec and

Chris will rotate Saturday and Sunday openings. Each owner will rotate closings. Opening and closing

checklists will be provided to ensure an efficient and consistent process.

Figure 6: Taproom Hours

Day Open Close

Wednesday 4pm 10pm

Thursday 3pm 11pm

Friday 3pm 11pm

Saturday 7am 11pm

Sunday 7am 11pm

The flow of the taproom will be very important to us. We want the customer to understand our

brand/identity right when they enter. We will have signs throughout describing our beers, what styles

they are, and why we brew them.

Product/Service Strategy

Each of our products will be served according to the beer style. Beer will be served out of kegs or brite

tanks through taps. Wine will be poured from the bottle and barrel age cocktails will be served out of

the barrels in which it is aging from. When the barrels have been emptied, we will fill them with beer to

age, which will be unique and excite customer’s interest.

Future Growth: Starting with a taproom will help us build our demand and brand, understand our beer,

and have a set location for customer’s to enjoy the beer. Our end goal is to move into distribution with

both kegs and bottles. The information below goes into more detail of how we plan to accomplish our

goals. Some of the items below were listed briefly in the Marketing Analysis section.

● Short Term (1 - 2 years): Start with a taproom and get involved in the community through beer

festivals and charity events. Work with local wineries, restaurants, and food trucks to enhance

17

the overall experience. Near the end of year 1, we will be experimenting with barrel-aged

cocktails and barrel aged beers. The cocktails will be stored in one of our whiskey, bourbon,

gin, tequila, or wine barrels to enhance the flavors. We will have beers aged in both standard

barrels and the cocktail barrels. Missouri laws will actually allow us to serve early in the

morning, which will attract the soccer community looking for a location to have a drink and

enjoy a game. The taproom without distribution will be lower overhead costs and allow us to

understand the more profitable styles and sizes. This will also give us the time to develop a

loyal customer base and understand what beer styles they like.

● Midterm (3 - 10 years): By the end of year 2 or prior we will launch our loyalty program. This

will allow us another channel to understand our customers (what style of beer they drink, when

they drink, how much they drink within a given sitting) and add some more value to their

experience. Selling bottles through our taproom will begin in year three and distribution of kegs

to local food and drink establishments by year 6. Prior to distribution, we look to expand within

our current location. If we need to purchase a larger building to facilitate the larger equipment

and bottling line, our goal is to keep the new location close to the current building.

● Long Term (10 years plus): Year ten we will expand our operations in preparation of regional

growth. The expansion will include brewing operations for special/seasonal releases that will be

bottled and sold throughout Kansas City and our taproom. In year twelve we will distribute

throughout the Midwest region and into large metropolitan cities outside of the region.

Financial Projections

All of our financial statements have been carefully researched and all of them are projections from our

findings. The financial statements that we provide are the startup costs, income statement (month-by-

month for year one and five-year), and cash flow statement (month-by-month for year one and five-

year.) We have projected two scenarios (new equipment and used equipment) for start-up cost. New

equipment scenario will require $183,000 and used equipment scenario will require $77,000. This will

cover all equipment for brew house and taproom, renovations, building lease, and a few other

businesses needs. We aim to purchase equipment, but depend on timeline to opening. Even though we

plan for used equipment, we will discuss new equipment (most likely scenario) to cover our high end

cost scenarios. Detailed Start-up costs can be found in Appendix A.

Our month-by-month and five year income statements show our sales, expenses, and net income. At the

end of our first year we plan to have sold 62,000 pints and have 20,000 patrons visit our taproom. We

expect to have $373,000 in combined revenue by the end of year one, but our net income will be in the

negative due to the high start-up costs. Start-up costs will be our initial big expense, but once we are in

operation, our major expenses will be the building lease and beer ingredients. Our year one month-by-

month income statement can be found in Appendix B.

The cash flow statements show that we will have a negative cash flow until year 2. This is due to the

high start-up costs for equipment and renovation. Appendix C will show year 1 month-by-month cash

flow statement. Our business shows a very strong cash flow, this is due to high margins from all of our

beverages and low overhead in the first four years.

18

Current Status

Our end goal is to have a professional brewery by spring of 2017. To date, we have placed first in two

home brew festivals and plan to participate in a couple more through 2016. These events will help build

our brand and following before we go professional. We plan to have funding complete by the end of the

2016 summer and have a location finalized in the fall. This will give us time to submit for our TTB

license, renovate the location, purchase and install all equipment, and have batches of beer ready to

serve when we open. The two figures below show the milestones that we have completed and what we

expect to get done.

Appendix

Appendix A: Start-up Costs for New vs. Used Equipment

New Equipment Used Equipment: 30% of New

Description Quantity Cost Per Total Depreciation yrs Quantity Cost Per Total Depreciation

5 bbl Brewhouse 1 $30,000.00 $30,000.00 15 1 $10,000.00 $10,000.00 5

Pumps 1 $700.00 $700.00 0 1 $700.00 $700.00 Keep the Same

Hose Accessories $300.00 $300.00 0 $300.00 $300.00 Keep the Same

Sink for brew room 1 $200.00 $200.00 1 $60.00 $60.00

Filtration System 1 $300.00 $300.00 0 1 $100.00 $100.00 0

Water Quality Equip $0.00 0 $0.00 0

Tankless Water Heater 2 $1,500.00 $3,000.00 2 $450.00 $900.00

Keg Cleaning System

CO2 $0.00 0 $0.00 0

Fermenters 4 $5,000.00 $20,000.00 15 4 $1,500.00 $6,000.00 5

Brite Tank 2 $4,500.00 $9,000.00 15 2 $1,350.00 $2,700.00 5

Cold Storage Room 1 $9,300.00 $9,300.00 10 1 $2,790.00 $2,790.00 3

Racking for Storage 4 $200.00 $800.00 4 $200.00 $800.00 Keep the Same

Refrigerator 1 $2,000.00 $2,000.00 10 1 $600.00 $600.00 3

1/2 Barrel Kegs 100 $93.00 $9,300.00 10 100 $30.00 $3,000.00 3

Milling 1 $2,500.00 $2,500.00 10 1 $750.00 $750.00 3

Barrels 10 $200.00 $2,000.00 0 10 $60.00 $600.00 0

Wash Sink for bar 1 $300.00 $300.00 1 $100.00 $100.00

Glass Washer 1 $2,000.00 $2,000.00 10 1 $600.00 $600.00 3

Beer Glass Washer 1 $500.00 $500.00 10 1 $150.00 $150.00 3

Glass Rinser 3 $150.00 $450.00 10 3 $50.00 $150.00 3

Glassware 1370 $3.00 $4,110.00 1370 $3.00 $4,110.00

Growlers 100 $3.00 $300.00 100 $3.00 $300.00

Coffee Makers 3 $80.00 $240.00 Prior to opening 3 $50.00 $150.00 Keep the Same

TV's 6 $1,200.00 $7,200.00 Prior to opening 5 $1,200.00 $6,000.00 Keep the Same

Rennovations 1 $50,000.00 $50,000.00 Prior to opening 1 $25,000.00 $25,000.00 Prior to opening

Bar Tables Look to have made

Look to have

made

Bar Chairs Look to have made Look to have

19

made

Legal Fee's 1 $5,000.00 $5,000.00 Prior to opening 1 $3,000.00 $3,000.00 Prior to opening

Cash Flow for opening

day 1 $20,000.00 $20,000.00 Prior to opening 1 $5,000.00 $5,000.00 Prior to opening

Total $179,500 $73,860

20

Appendix B: Year One Income Statement

Income Statement

January February March April May June July August September October November December TTL 1

Sales

Beer Sales:

30,150.00

30,150.00

30,150.00

32,662.50

32,662.50

32,662.50 32,662.50

32,662.50 32,662.50 25,125.00

311,550.00

Growler

Sales: 1575 1575 1575 1706.25 1706.25 1706.25 1706.25 1706.25 1706.25 1312.5 16,275.00

Wine Sales - - 3,000.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 3,000.00 3,000.00 2,500.00 2,000.00 26,000.00

Cocktail

Sales - - 2,400.00 1,500.00 1,500.00 1,500.00 1,800.00 1,800.00 2,100.00 2,100.00 2,100.00 2,700.00 19,500.00

Total Sales - -

37,125.00

35,725.00

35,725.00

38,368.75

38,668.75

38,668.75 39,468.75

39,468.75 38,968.75 31,137.50

373,325.00

Expenses—

General and

Administrative

Salaries

(Nate) 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00

48,000.00

Employee

Compensation

(Chris and

Alec)

1,666.00 1,666.00 1,666.00 1,666.00 1,666.00 1,666.00 1,666.00 1,666.00 1,666.00 1,666.00 1,666.00 1,666.00

19,992.00

Hourly Staff

(bar staff and

owners)

- - 5,280.00 5,280.00 5,280.00 5,280.00 5,280.00 5,280.00 5,280.00 5,280.00 5,280.00 5,280.00

52,800.00

Training

Expense 240.00 240.00 240.00 240.00 240.00 240.00 240.00 240.00 240.00 240.00 240.00 240.00

2,880.00

Start-up Costs 158,300.00

Legal Fees 5,000.00 - - - - - - - - - - - 5,000.00

Insurance

Expense 600.00 600.00 600.00 600.00 600.00 600.00 600.00 600.00 600.00 600.00 600.00 600.00 7,200.00

Building

Lease 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00 42,000.00

Cost of

Brewing

(brewing

2/week) 4,288.38 4,288.38 4,288.38 4,288.38 4,288.38 4,288.38 4,288.38 4,288.38 4,288.38 4,288.38 4,288.38 4,288.38 51,460.56

Utilities

Expenses: 1700 1700 1700 1700 1700 1700 1700 1700 1700 1700 1700 1700 20,400.00

Marketing 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 6,000.00

Total

Expenses 179,794.38 16,494.38

21,774.38

21,774.38

21,774.38

21,774.38

21,774.38

21,774.38 21,774.38

21,774.38 21,774.38 21,774.38

255,732.56

Gross Profit

(179,794.38)

(16,494.38)

15,350.62

13,950.62

13,950.62

16,594.37

16,894.37

16,894.37 17,694.37

17,694.37 17,194.37 9,363.12

117,592.44

Tax Expense

(35%) - - 5,372.72 4,882.72 4,882.72 5,808.03 5,913.03 5,913.03 6,193.03 6,193.03 6,018.03 3,277.09 54,453.42

Net Income

(179,794.38)

(16,494.38) 9,977.90 9,067.90 9,067.90

10,786.34

10,981.34

10,981.34 11,501.34

11,501.34 11,176.34 6,086.03 63,139.02

21

Appendix C: Year 1 Cash Flow Statement

Table 8: Cash Flow Statement

January February March April May June July August September October Novemeber December TTL Y1

Beginning

Cash

Balance 20,000.00

(159,294.38)

(175,288.76)

(159,438.14)

(144,987.52)

(130,536.90)

(113,442.53)

(96,048.16)

(78,653.79)

(60,459.42)

(42,265.05)

(24,570.68)

(1,164,985.33)

Total Cash

Inflows - - 37,125.00 35,725.00 35,725.00 38,368.75 38,668.75 38,668.75 39,468.75 39,468.75 38,968.75 31,137.50 373,325.00

Cash

Outflows

Investing

Activities:

Purchase

of Brewing

and Bar

Equipment 92,650.00 92,650.00

Purchase

of Glassware

and Growlers 3,560.00 3,560.00

Purchase

of Other

Restaurant

Equipment 12,090.00 12,090.00

Investment in

Property

Rennovations 50,000.00 50,000.00

Operating

Activities:

Salaries

(Nate) 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 48,000.00

Employee

Compensation

(Chris and

Alec) 1,666.00 1,666.00 1,666.00 1,666.00 1,666.00 1,666.00 1,666.00 1,666.00 1,666.00 1,666.00 1,666.00 1,666.00 19,992.00

Hourly

Staff (bar

staff and

owners) - - 5,280.00 5,280.00 5,280.00 5,280.00 5,280.00 5,280.00 5,280.00 5,280.00 5,280.00 5,280.00 52,800.00

Training

Expense 240.00 240.00 240.00 240.00 240.00 240.00 240.00 240.00 240.00 240.00 240.00 240.00 2,880.00

Legal Fees 5,000.00 - - - - - - - - - - - 5,000.00

Insurance

Expense 600.00 600.00 600.00 600.00 600.00 600.00 600.00 600.00 600.00 600.00 600.00 600.00 7,200.00

Building

Lease 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00 42,000.00

Cost of

Brewing

(brewing

2/week) 4,288.38 4,288.38 4,288.38 4,288.38 4,288.38 4,288.38 4,288.38 4,288.38 4,288.38 4,288.38 4,288.38 4,288.38 51,460.56

Utilities

Expenses:

Cable - - - - - - - - - - - - -

Electricity 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 14,400.00

Gas 200.00 200.00 200.00 200.00 200.00 200.00 200.00 200.00 200.00 200.00 200.00 200.00 2,400.00

Water 200.00 200.00 200.00 200.00 200.00 200.00 200.00 200.00 200.00 200.00 200.00 200.00 2,400.00

Trash 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 1,200.00

Marketing - - - - - - - - - - - - -

Financing

Activities: - - - - - - - - - - - -

Total Cash

Outflows 179,294.38 15,994.38 21,274.38 21,274.38 21,274.38 21,274.38 21,274.38 21,274.38 21,274.38 21,274.38 21,274.38 21,274.38 408,032.56

Cash Flow

(Net Income)

(179,294.38) (15,994.38) 15,850.62 14,450.62 14,450.62 17,094.37 17,394.37 17,394.37 18,194.37 18,194.37 17,694.37 9,863.12 (34,707.56)

Ending Cash

Balance

(159,294.38)

(175,288.76)

(159,438.14)

(144,987.52)

(130,536.90)

(113,442.53) (96,048.16)

(78,653.79)

(60,459.42)

(42,265.05)

(24,570.68)

(14,707.56)