Top Reasons Microbreweries Close & How to Prevent it

If you run a microbrewery, you probably know that while customers love local craft brewing, industry giants such as Busch and Miller are continually growing. Keeping up with the competition can be difficult, especially for small and mid-size businesses. Run a quick check on your business’s operations by reading through this list of the top reasons why microbreweries close, and then identify ways you can increase your odds of success.

Lack of a Safety Net

Many new entrepreneurs invest all their money into their businesses, borrowing as many loans as banks are willing to approve and promising investors exorbitant payouts. This strategy works for a while, but once disaster strikes, most business owners find that they have no savings to fall back on.

Your CT microbreweries insurance plan may be able to provide some assistance if you need business income coverage, so talk to your insurance agent about your policy’s details. For long-term success, commit to saving a portion of your income every month. Monitor your cash flow carefully to ensure that you’re not spending excessively without making a profit. If you’re having trouble understanding your bottom line, work with an accountant to get your finances back on track.

Increased Competition

Even though many small businesses are struggling right now, microbreweries continue to be popular companies for new entrepreneurs. Because there is more competition now, your old business model might not be effective. Similarly, you must work hard to catch your customers’ attention instead of relying on passive marketing techniques.

Reducing risks at your brewery means keeping an eye on your competition. Watch both local competitors and big businesses to see what products they’re offering, what specials they’re trying, and what money-saving tips they’re implementing. Monitor trends in pricing particularly carefully; as a small business owner, you may have a harder time lowering your prices than a franchise.

Supply Chain Issues

When you don’t have the materials to brew beer, it’s hard to make money. If your supply chain issues occur because you didn’t leave enough room in your budget or you forgot to order your materials, you may be stuck with this situation. If you don’t have your supplies because your vendors’ goods were stolen or destroyed, talk to your CT microbreweries insurance provider about contingent business income coverage to avoid bankruptcy.

Rushed Expansion

Rushed expansion is a leading cause of microbrewery closures, especially for first-time entrepreneurs. Once you start making a profit consistently, it may be tempting to open another location or invest in a new product line such as seasonal beers. Because you never know what will happen with the economy, it’s best to wait until you have an extensive savings account to start expanding your brewery.

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