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Small Business Saturday: Building a Brewery at Proclamation Ale Co.
For longtime musician Dave Witham, crafting beer at his new brewery, Proclamation Ale Co., is a creative process that’s equally, if not more, satisfying than making music.
That doesn’t mean launching a nano brewery has been easy for the Rhode Island resident — or without its own long hours. But his new line of business has its perks.
“It’s nice to do something creative that you’re getting rewarded for. Everyone wants to pay for beer,” says Witham. “And it’s the first job I’ve had where even when I’m here 60 hours a week, I’m not like, ‘Oh my God, what am I doing?’ It’s still work, but it’s fun and rewarding.”
Proclamation Ale opened the doors to its West Kingston, R.I., warehouse in January 2014. Witham’s personal journey brewing beer, however, began long before that — with the receipt of a home brewing kit as a wedding gift.
After five or six years of toying around with brewing at home and his passion for the hobby growing, Witham found himself at a personal and professional crossroads. He and his wife were having their first child and the music business was not paying very well.
At the same time, a hard look at the cost of putting a child in day care so that Witham could continue to work revealed the nearly lopsided financial reality of day care potentially costing more than Witham would earn as a music teacher and musician.
So he took the path less traveled — becoming a stay-at-home dad and small business owner.
“I thought, I can build this brewery while (staying at home) raising my daughter,” he recalls. “And I thought, hopefully by the time she’s ready to go to school it will have developed into something.”
Within just a year of opening, Witham is well on the way to accomplishing that goal. In the short time Proclamation Ale has been in business, it has managed to become quite successful, by various measures.
When starting out, Witham had set a goal of earning gross revenues of $80,000 to $100,000 the first year, a mark he has nearly reached.
There is also more demand for Proclamation Ale beer than capacity to produce it.
“It’s going really well. With any small brewer that starts up — everyone says the same thing and it’s a good problem to have — there is a capacity issue,” says Witham.
“In the beginning, we had 12 to 15 accounts. Then we pulled back because it was selling so fast. You don’t want to short people beer.”
Proclamation Ale currently offers four different beers: Tendril, Keraterra, Plattelander, and Zzzlumber.
Witham describes the flavor of the beers as hop-forward, and Belgian-style beers, including sours and saisons.
“Saison is a provisional farmhouse style,” he says. “Farmers would make it for their workers. The coolest thing about it, from a creative standpoint, is it’s a wide-open style. You can have a standard clean saison, or some are tart and sour.”
After almost a full year of owning his own small brewery, Witham has much advice for those looking to break into the business.
Developing a business plan is essential for opening a brewery, carefully plotting out your steps and goals. It’s equally critical to have ample funding, says Witham.
That’s because, he points out, many banks will not give loans to a new business unless you’re prepared to sign over your home, or some other significant asset, as collateral.
“Your business plan is going to get blown up as soon as you start buying stuff,” Witham says. “So make sure you have a cushion financially. … If you have a finite amount of resources — for instance, if you have $100,000 to start your business and you only have $105,000 to your name, I would look around for another $50,000 to have as a cushion.
“You need to have avenues to pull money from.”
Witham spent about $100,000 to open Proclamation Ale, but his operation is small. Typically opening a brewery costs about $250,000, he says.
When it comes time to purchase equipment for your brewery, Witham says, if you have faith in your product you should “go bigger.”
“Larger volume is not that much more expensive,” he says of equipment purchases. “I could have bought 210-gallon tanks, but they were only $700 per tank less then the 300-gallon tanks.”
As your business increases its volume, having spent that extra $700 per tank will make things a lot easier.
You should also expect to spend a couple hundred thousand dollars on the equipment, Witham adds.
“I spent close to $100,000 on equipment and I was only projecting doing gross revenue of $80,000 to $100,000,” he says.
Selling Your Beer
Next comes the question of where to sell your beer.
Witham did a lot of the initial sales himself, visiting local craft-beer-centered bars, and providing tastings for the buyers.
But here’s a key tip about deciding where to try to sell your beer: “If you’re a small, new brewery, and you walk into a place that only has a half-dozen taps, the chances that you will get one of those taps is much more unlikely,” says Witham.
In other words, look around for bars with a larger number of taps, increasing the odds that your beer will get some space at the bar.
Permitting and Timeline for Opening
Permitting is a significant hurdle to be aware of when it comes to opening a brewery.
Witham formed his LLC in May 2013, but was not able to sell his first keg until February 2014. That’s because of all the permitting hurdles on the federal, state, and local levels.
“There were a lot of permits and red tape that I had to chew through to open,” he says. At the federal level, you will be dealing with the Alcohol and Tobacco Tax and Trade Bureau, which he describes as understaffed.
Eventually Witham made it through all the hurdles, and is expanding — putting some of the money he is earning back into the business.
“It’s headed in the right direction and I’ve definitely proved it’s doable,” he says.
Proclamation Ale Co. is open 5-8 p.m. Fridays and 1-5 p.m. Saturdays for tastings and sales at 141 Fairgrounds Road, West Kingston, R.I.