NOTES: Brewing Up A Business


Below are my notes from reading Brewing Up A Business by Sam Calagione.

Rating: 7 / 10
Reviews & Details: Amazon

Generating Ideas

It is important to see what is happening in the world. What you do outside of work informs what you do at work.

Reading outside of your industry is an effective way to get a fresh vantage point.

Look at your biggest competitors. What are their strengths? Is there an opportunity to create a strength for your company that is diametrically opposed to that of your biggest competitor? You have to learn everything there is to know within your chosen industry. It’s as important to know your competitors’ weaknesses as well as your own.


At the very least you should write a business plan to prove to yourself that your idea is well thought out and worth pursuing. Your business plan in hard form and your business practices in everyday work situations will provide your coworkers with the information they need to decide if they should trust you and buy into your big idea.

Give your business plan to a few people from different walks of business life for their opinions. Their comments will tell you if your sound business proposition is as clear to the outsider looking in as it is to you.

Creating a pro forma financial plan, including presumed build-out costs and operating capital requirements, is very important. But it’s equally important to update and adjust your financial plan after you are up and running. When putting together a business plan, always assume costs are going to be higher and sales lower than you think.

The ideal business model maximizes short-term profits without compromising long-term growth and financial returns.

At the same time that you write a business plan for your company, it is helpful to write a values plan for yourself.

I recommend that any budding entrepreneur form a board of directors or board of advisers to bring an element of experience to your venture. It is critical that you take the time to run the board as officially and legally as possible.

If a budget is your road map for the coming year, then it makes sense to involve the people who care about the company’s success in that budget.


Running out of money is the number one reason small companies go out of business. Most business owners go into business because they possess a passion for the product or service they sell, but rarely do they possess the financial background necessary to successfully manage their finances to the full extent. They open their companies to devote time and energy toward creating and providing the service or product they are passionate about, not to toil over balance sheets and cash flow statements. This is in part why most small businesses fail.

Brewpubs had one-tenth the failure rate of restaurants that open without breweries. The biggest advantage to starting out as a brewpub was that we could make beer on much smaller brewing equipment than if we had opened a distributing microbrewery.

Having a financial system in place when you open your doors is critical to managing cash flow.

Once you do have a positive cash flow, it’s important to establish some sort of war chest that can get you through hard times.

It’s important to recognize just how valuable and critical every single percentage of ownership is. Your decisions regarding who you let invest in your company matter greatly, so make sure the investor is someone you trust, respect and can reason with.

The first and seemingly biggest question you are asking banks is: “Will you lend me money?” The equally important question that you need to ask them after they have responded yes or no to your question is “Why?”

I would recommend that any entrepreneur look into the SBA for possible assistance in financing a business; it’s an excellent resource.


We rarely sign contracts with terms of more than one year with any of our vendors.

Never make critical deals on a handshake.


Business integrity is a combination of your values, work ethic, and the value you provide to potential customers.

If your business is not perfectly aligned with your own values and beliefs, you will resent yourself when times get tough.

If you care more about how much you make than what you make, you are bound to fail or at the very least create a negative workplace environment.

The single most important component to our success is aligning the passion of the people who make the beer with that of the people care enough to buy it.

A good company is a group of good people gathered around a good idea.

If there is anyone working at your company who isn’t upholding the values you prioritize, your first objective should be realigning that person to the company.


Identifying motivated and talented people is extremely important.

Hire managers who are more capable and ambitious than you are in their areas of expertise.


You truly act as a leader only when you take the time to reward and recognize the people who help the community grow for the better, and redirect or let go of the people who are incapable or unwilling to help the community grow.

As a leader (or a parent – I’m looking at you Dad), it’s useless to say, “We are doing it this way because I said so.”

The most successful companies are those that recognize labor not only as an asset but as the most important asset a company has.

People learn best from watching, and you should never underestimate how much coworkers learn about the company by watching how the leader goes about a typical workday.

Nothing will establish your reputation more than your respect for the people around you.

You can only successfully incorporate a family dynamic into your company if the coworkers who care about the company are repaid by the company caring for them.

When coworkers feel they have contributed to a new product, service, or way of doing business, they develop a strong sense of loyalty to the company.

The more coworkers feel like they are listened to, the more they feel like they matter in the grand scheme of the company. The more they feel like they matter to the company, the more they care for it. They begin to believe that the future of the company is truly their future as well.

You need to create an environment of empowerment where coworkers perceive the company as something belonging to them as much as it belongs to you. This is why I speak of the people I work with as coworkers, not employees.

Cultivate your own unique perspective and incorporate it in the philosophy of your company.

For most small-business owners a day will come when the decision must be made to concentrate on either the left-brained or the right-brained business activities. It is a very rare leader who will be able to oversee everything and stymie neither the growth or the health of the company. You have to be honest with yourself and recognize where you are strong and where you are weak.


You need to accept that the decisions your managers make will not be the same ones you would make. You must acknowledge that this is okay and at the same time involve them in the long-term decisions that require your leadership.

In order to maintain communication, small-business owners should schedule management meetings at least once a month. This should be done whether there is only one person managing a facet of your business other than yourself or seven managers overseeing distinct parts of your company. Monthly meetings should be held in the middle of the month. This will give you and your bookkeeper time to put together a review of the previous month’s financial performance.

To manage effectively, you need to clarify your expectations of everyone who works with you. You must continually track, recognize, and reward the efforts and achievements of the people who work with you toward proving to your potential customers that yours is a worthwhile business proposition. Have an aggressive bonus program for all brewery coworkers based on net operating profit and other performance metrics. We set goals that are fair and within people’s control, and they are rewarded when they meet those goals.

To find out what benefits are most important to your coworkers, ask. We sent out a questionnaire to all coworkers annually asking them to list in order of importance the benefits that they would like most to receive. Whatever level of benefits you can afford to offer, start there. As your business evolves, ask for the input of all your coworkers about what is most important to them.

You send mixed messages if you only half-heartedly embrace the ideas of those around you. But if coworkers witness the boss getting excited about their idea as they do and then following through to make sure it gets a fair trial, then they and everyone around them will truly believe that they work at an innovative company.

You know you are running a company well when it doesn’t need you to make day-to-day decisions any longer.

Make sure everyone within your organization understands how what you are selling is different from and better than what is being offered by competitors.


It is not having the great idea that makes you a success in business; it’s executing it.


Since you cannot compete with big business on price, you must be sure that the value of your product is apparent in all aspects of your offering. If what you are selling is truly more special and extraordinary than similar products from bigger competitors, then you deserve to be paid more. When you can’t win on quantity you have to win on quality. You must charge more in order to provide the quality that differentiates you from the crowd. The consumer with the lowest expectations in not in your targeted demographic.

If the main category that your business falls into is overcrowded, then it’s time to create and define your own subcategory.

If you take the time to roam constructively, you will learn a tremendous amount about your company and its place in the competitive environment.


Through promotional materials any customer at any level can know not only what the beer tastes like, but what glassware it should be served in, how well it ages, what wines it would replace in a meal and what foods it would accompany well. As a small company it is especially important to err on the side of sharing too much information.

The consumer education process starts with the first interaction between the customer and the company. The publicity event, when executed correctly, can be the perfect forum for this interaction. You must analyze what you are trying to accomplish by holding an event, and focus on that objective. It costs time and money to pull these things off, and you want to make sure it is time and money well spent.

You need to get down on a single page what your company does, what products it makes, some quotes from respected sources touting the quality of your products, and directions toward where to buy and learn more about your products.

The more samples you give out to appropriate potential customers, the more you will see sales grow.

No matter how good a product or service is, it will remain irrelevant unless the buying public knows it exists. The way you gain customers is by gaining attention. The way you gain attention is by standing out from the other businesses you compete with. If you can disrupt business as usual, you will attract positive attention while shifting the spotlight away from your bigger competitors.

If potential customers are told about the merits of your service or product by someone they believe in, you have a fighting chance. This is why public relations is much more important for a small company than advertising.

We make sure the first time we release something, there is not enough of it to satisfy demand. By not satisfying demand initially we create more demand for the future.

Your marketing efforts will be unsuccessful if you create a brand on par with or below those of your competition.

Spend less time trying to figure out what your brand is and more time recognizing your brand in the world around you. Let your products and services earn your brand identity for you. Spend the time to explain yourself, and your customers will appreciate your effort as much as they do your offerings.

If you are willing not only to apologize for your mistakes and make it up to your customers, but also to actively defend your customers when their taste in your product is brought into question, that sends a powerful message.

You can build demand at the individual customer level, which leads to demand at the retail level, which leads to demand at the distributor level.

We dedicate roughly 3% of our annual sales to all aspects of marking, including advertising, press releases, social media, special events, our website, free samples and so on.


When the aggressive-to-empathetic ratio is way out of whack in one direction or the other that the salesperson is ineffective. The personality trait that best summarizes a sales-centric mentality is compassion. You need to be compassionate and empathetic to sell.

Remember that you are selling to human being with feelings, not a commodity.

You must always consider your value proposition from the perspective of the customer first. Once you have figured out what motivates the buyer to choose your offering, you should expand all of your sales activity around that reality.

You need to recognize that everyone in your company, regardless of title, is a salesperson.

When you are constructing your sales budget, make sure that your sales force is given a lot of responsibility for and input to the budget itself.


Closing the gap between your perception and the public reality of your company is something all small business people need to be engaged in. A simple and revealing means of identifying the gap between the perception and the reality of your company is the initiation of a program of customer feedback cards.

When you are small you can react quickly to customer feedback and your reaction will show your customers that you care.

If the customer had a legit gripe that can be corroborated by someone who was working at the time, we send the customer a gift certificate. We want them to come back and try us again.


You need to be conscious of the impending changes and the opportunities to initiate change within your own industry.

The more unusual the killer app is, the smaller the niche it will appeal to. When you are stalking a killer app for your own company, the process should include a forecast of expected results. Defining success simultaneously with the design of your killer app will keep you focused on achieving the desired results.

Innovate in pairs. It takes a lot of guts to try something new, and experience has taught me that if you are going to try something new you might as well try two things at the same time. Two things are less likely to fail than one. Conception, packaging, advertising, distribution – if all of the costs associated with a launch can be shared between two brands instead of shouldered by a single product, the launch itself can be more affordable and the products more sustainable.

Before bringing your innovative product or service to market, test it under an array of environments and with a selection of potential customers to make sure the bugs are worked out. Serving our new beers in our pub before selling them coast-to-coast allowed us to formulate our message and establish our unique voice.