Q: How important is operational process for my brewery?
A: As polite as I can say it, if you are not growing, you’re dying. Before I get preachy on you let me define growth: increasing profit. Dude, the question was about process, how did you get to profit? Well they go together. Growth (profit) is most likely by accident without processes. Growth (profit) is also temporary without process. This is why brewery growth stats are bogus. Most of them anchor on public tax information, which it tied back to BBL or gallons. Doubling production and not seeing the profit is mismanagement. Profit growth is the only thing that matters.
Back to process.
Did your brewer improvise the brewing process during the first 24 months of the brewery? Did they make up recipes? If they did, stop reading now.
I am assuming they did not so, why would the rest of the business continue to operate without process?
Here are some area’s of the brewery which we have proven processes for:
- AR / AP
- Expense reimbursement
- Daily cash
- Petty Cash
Q: Our investors are pushing our buttons for a distribution. We are not in a position to pay out a distribution, how can we keep them happy?
Let’s keep this simple, 2 points.
- As a founder, you have the right to keep unruly investors at within certain boundaries.
- As investors, you have the right to bitch-slap founders who jeopardize your investment.
When we help breweries with investor communication we jump on a schedule. The schedule depends on the age of the brewery. The communication has four parts and is simple;
- We need help with…..(optional)
This give them a snapshot of has happened since last communication. It also asks for help, which IMO, is cool. As for the distribution piece, that was an expectation gone wrong. My rule on distributions was….3 years. That is actually getting longer depending on the state of the brewery. Quick pushback for distribution can be. “We will address a distribution once the next expansion is complete.”
I will leave you with the secrets from an article I wrote a few years back titled 5 Secrets to Keeping Brewery Investors Happy:
- Create a board
- Schedule meetings
- Transparent, accurate financials
- Say “Thank you”
- Share vision and plan