32. The Brewmeister

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Hugh Sifu: [00:00:00] All right, guys. Welcome back to Thoughts of a Random Citizen. I'm your host as always Hugh Sifu. Today we're going to talk a little bit about the mindset of an entrepreneur. Pretty much just going to be a episode about something that popped up in my life recently, and a few ideas on the direction of when thinking of a startup where your mind should be, and also important things that you should definitely consider when you might not think about the mass amount of work a startup takes as well as your interest for that startup in a few weeks to months to years. Yes, anyways, without further ado, I'll kick it off for you guys.

For this episode, I wanted to fall a little bit back on entrepreneurship and specifically what a lean startup is all about, how to get other people to fund your initial startups, and as well how just a little bit of planning goes a long way, especially with the correct mindset. First of all, I love beer. In fact, I decided to actually open up a Peroni for this episode, and unlike Australia, where everyone thinks that they drink fosters when actually no one does. Everyone actually does drink Peroni's here in Italy. I also love alcohol and kombucha too.

Why I mentioned kombucha on an episode about beer? Well, besides the fact that you can brew alcohol in kombucha, I'll briefly explain. Being in the restaurant industry for over 10 years and working in fine dining establishments, [00:02:00] I had the luxury of trying all kinds of beers, wines, whiskeys, rums, gins, tequilas, cocktails, cordials as well as food, but that's not what we're talking about.

Now, as great as that sounds and was, the better part was actually having classes where you learned much more about those beers, wines, whiskeys, et cetera, and being able to appreciate the more expensive and elegant brands. Although I never purchased them, a nice restaurant will let you try it just so you can upsell it. I started beginning to understand and taste what premium quality was and not just the barefoot white wine from the grocery store bottle though, as good as they might be.

Now that I'm done sounding like a pompous douche, again, why did I mention kombucha? Well, after learning much of what there is to know about wines, and alcohols, I always had a slight interest in creating my own wine or beer or whiskey or gin someday. After learning how everyone creates theirs and learning the fine details of the graft, it just made me want to do it myself. Well, that's when a wonderful friend of mine introduced me to the life of kombucha some eight years ago, before it was everywhere.

Now, this friend was a genius in all things kombucha. I actually learned and still do brew small batch kombucha, where I fell even more in love with this drink after being able to craft your very own. This is where the entrepreneurial mindset comes in. I noticed after a bit of research that this thing was taking off and the industry was supposed to quadruple in the next 10 years, which is currently where we're at and it has done just that. I figured that back then I could have done something with this as a business.

[00:04:00] Front of the curve, it was a health drink, the costs were minimum and half of the items you need to sell kombucha will literally grow themselves. Now, despite almost making a business out of this, I decided to put that on hold because that business wasn't going to be a passion of mine. This is what's super important. Unless you have a passion for something, chances are, you're not going to follow through with it and that's not a bad thing. Don't force yourself to do something you don't want to do.

Learn what you can, enjoy the process, and save your energy and creativity for the things that you find you do have a passion in. Now don't get me wrong. I totally could have started that business and enjoyed myself. By all means, do that if it sounds like something you'd enjoy. For me, at that time in my life, I was actually still in college when this was happening, time was always the most important trade-off in my life. Nothing else even came close, definitely not money or anything else.

As long as I had the freedom to do what I wanted with my time, that is when I was the most happy. Now rant aside, let's fast forward to today and the beer part of this. Well, technically this episode is called the Brewmeister, so it could apply to kombucha as well. Boom, not really a full circle, but anyways, we continue. I was just in a cool pub in Brindisi, which is in the heel of the boot in Italy, visiting some friends who own the pub.

They brew their own beer and of course, I started asking questions, how do they brew it? Where it tastes really good? How did you learn to do that? Blah, blah, blah. Now I think I'm starting to realize why my girl can be a bit annoyed with me considering all I do is ask everyone, including her thousands of questions every day. I feel like that's my only conversation [00:06:00] is to just ask questions.

Anyways, I'm getting off track here. I come to find out that he has a friend who actually runs his own brewery and they allow small restaurants to purchase or large restaurants to purchase a 500 leader pre-ordered batch of beer that they will make however the restaurant wants it. For this example, however, my friend wanted it. They will then package the beer, label it and then bottle it in bottles, cans, or kegs however they'd like. When I heard this, my mind exploded because it was such an amazing idea that just fell into my lap.

Now, as always, this podcast is for everyone else, this podcast is my passion along with investing among a few small other things. No, I'm not going to start this amazing idea. I'm just here to share with you the potentials of this idea or an idea for your industry that can literally create individualized products for someone that they can call their own without having to say, open up a brewery and the benefits that it can do for others.

Maybe this is one of your guys' passions, but because of my entrepreneurial background and experience in the restaurant industry, I'm quite excited to walk through why this idea as simple as it is blew my mind and how the business model is pretty fantastic especially for startups, especially in this industry of startups, AKA a brewery. First off, you're going to need to either become or find a brewmeister.

When talking with my friend, the pub owner, he explained that he gets to decide everything he wants to do with the beer, [00:08:00] but essentially the brewmeister then takes that and ensures that everything my friend wants is in it, but then will actually properly craft the beer so you make well a beer. After that, the rest is a lot easier. They make the beer from start to finish and you get the beer delivered to your restaurant with whatever design or bottle that you've decided to come up with.

Then you're literally selling your own personalized beer in your restaurants. Now, this is fantastic for a few reasons. As a brewer, you've essentially moved from a B2C to a B2B model, which is where you make much more money. I know you're thinking, well, no, Brewer's typically work in B2B anyways, because they don't ever really sell directly to the customer.

Yes, but they're still the ones responsible for getting customers to drink their beer in meaning Anheuser-Busch has to still advertise to get people to drink Anheuser-Busch beer. When in this business model, you're selling to a restaurant and it's up to them to make it work. Obviously, you still have to make the good beer. Then they'll continue to be a customer, but you don't have to worry as much about the B2C side of things.

It's really just finding the restaurants to brew personalized beer for them. Not only this, but you can create recurring revenue streams with this model. When you get restaurants who actually find success with you. Second, after you get your first few customers, this should immensely help with your startup costs. Startup costs, especially for breweries are what stops most people from taking that first step. This is a lot easier [00:10:00] when you already have a check in your hand from customers before you even start. A well-written business plan with customers already signed up for you to brew their beer will also go a long ways in the eyes of the lender.

Now, this third one can get a bit dicey with the restaurants, which is likely why you'll want to make sure you figure it out upfront but you're going to want to try to make sure that you own the intellectual property for whatever beer you'll be producing to ensure if certain beers take off, it'll be you who benefits. While that might not sound so great to some restaurant owners, think about a royalty system as a fallback, and make sure that you're both satisfied.

I would never ever suggest dealing in bad faith, because that's just terrible business but again, most restaurant owners aren't going to want to venture out into brewing themselves, which is why they're using you and they'll just be happy to have a beer that is called their own, and that they can sell at their venue. This is why this is probably the most important thing you're going to want to figure out for the direction of where and what you're doing with your business. However, I'll leave that up to you guys. Now, I just thought of a few things to caution as well with this.

One, permits and licenses. One of the main reasons I didn't start brewing kombucha is because holy [bleep] do I hate red tape. Make sure you figure this one out almost first because it will take a long time and it will completely grind you to a halt if not completed or completed correctly because governments are super-efficient. Second, realize that it takes time to brew a batch of beer. Depending on a few factors, [00:12:00] it will take a minimum of five weeks to finish that first batch so while you'll have the funds, it'll be a while before you have more.

Something to keep in mind when organizing the startup, maybe alternate your start dates on the batches, I don't know, you'll figure it out but things to keep in mind. The last thing to caution space. Brewing beer is not a small thing. Plan accordingly, where and how you'll be doing it. If you have the money upfront, always and this doesn't just apply to beer, trying to design your building or system with the least waste possible because while the environment is great and all, you're talking about being able to use your own energy and reduce those super annoying things called fixed costs, that's a game-changer, 15 years down the road.

Think self-sustaining building and those fixed costs go bye-bye. Also, this is going to impact your initial startup costs but if you do have the funds, try to, in this specific example, grow the materials you use for beer like the barley and the hops yourself because not only will it create a unique spin to your business, but again, you don't have to buy from other people. It's that whole vertical business model.

Again, you don't have to be stuck on the beer aspect of this, it could really work for anything else, wine, although screw that because wine isn't easy, whiskey, kombucha, anything not in this industry, I don't really care, but you get the idea. Remember, passion is crucial, and while some might hesitate to take that first step on an entrepreneurial venture, create a rough outline of your plan, and then just take the step because you can create a perfect plan [00:14:00] and product for five years only to find out zero people want it.

Don't be stuck in that plan mode for too long. If you're really interested in entrepreneurial ventures, then head over to my website toarcunited.com and see what the book of the month is for October and it is a book that is specifically all about startups. It is one of my favorite books I've ever read. Super easy read, not super long, not complex by any means, and just a great way to figure out how to start up any business with the least amount of initial costs. When you're in business, and you're at the helm, you can never think too much but you can procrastinate for too long.

One last quote and I promise I'll shut up for this week, know the difference between interest and passion because one is where you'll look forward to work all day every day and the other you're indifferent torts and that matters a lot and just the general happiness of your day to day life. That's all I got for you guys. Hopefully, you enjoyed kind of how to get into the entrepreneurial mindset a bit. Hopefully, you got some good tips or maybe even ideas for your own thing that you want to do in the future. Other than that, I haven't had a sip of my Peroni in 18 minutes, yes, that's actually how you full circle. Anyways, I'm going to go. Have a great week, guys. Cheers.

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