How to start a microbrewery

Opening a microbrewery can be a tempting prospect for craft beer enthusiasts who want to turn their passion into a profitable business.

Microbreweries – small, independent breweries that produce limited quantities of beer – have emerged as a vibrant trend in the beer market, appealing to consumers looking for variety, creativity, and local craftsmanship.

As of 2022, there were over 2,400 beer microbreweries in the UK, and while the term was first used about the size of the brewery, it is also used to describe smaller breweries that take an innovative approach to brewing, championing experimentation and flexibility.

Although setting up a microbrewery can require a lot of effort and planning, the payoff could be worth it if you’re keen to get involved in the industry and feel inspired by the idea of creating your own brand of craft beer.

Read on to find out what you need to start your own brewery.

What skills do you need to run a microbrewery?

Running a microbrewery may suit creative, detail-oriented people who enjoy connecting with the local community – microbreweries typically serve a local or regional market.

Having a passion for brewing beer is a great starting point for running your own microbrewery, but any previous knowledge of the drinks industry will mean you already have valuable insight into your market and changing industry trends.

Experience in writing business plans, sourcing equipment, product development, and an understanding of quality control can all be useful – as well as scientific knowledge of what goes into the brewing process.

You could consider attending a brewing course to bolster your knowledge or gain hands-on experience.

To run a successful microbrewery, you’ll need the financial skills necessary to manage cash flow as your business grows or to find a good accountant or bookkeeper who can help.

Understanding marketing can also be useful for building brand awareness, while good communication and time management skills will prove beneficial when it comes to launching products.

Being adaptable can help you face unexpected challenges, too.

What are the initial set-up costs?

The initial start-up costs for your microbrewery will vary depending on several factors, including the equipment and ingredients you use, the size of your microbrewery, and how much you spend on marketing.

Equipment

To create a marketable beer to sell, you’ll need some key apparatus such as heating and cooling systems for the fermentation process, a control system, intensive cleaning equipment, kegs, and dispensing equipment.

It pays to thoroughly research requirements, as fermenting alcohol is a chemical process that requires professional knowledge about processes, operations, and health and safety issues.

Stock and beer ingredients

Your initial costs will also include essential ingredients such as malt, hops, and yeast, as well as the packaging for your product.

Location

Depending on your budget and business plan, you may decide to rent or buy the premises for your microbrewery.

This might be a pre-existing brewery that already has the correct layout and functionality you need, or you may wish to convert an empty location into a functional space.

If you plan to open a tap room (an on-site area where you serve your beer), you may also need to spend money on creating an inviting space for your potential customers to come for a drink as well as the necessary licensing.

Vehicles

If you plan to sell your beer through third-party vendors, such as bars and shops – or to deliver straight to your customer – you may need some form of business transport for your beer.

Costs involved in this could include buying a van, vehicle maintenance, fuel costs, and insurance.

Website

A website can showcase your beers and services to your customers, demonstrate business transparency, and sell your products online.

You can set up a basic website for free through platforms like SquareSpace or WordPress, but you may need to pay fees for specific features or website maintenance.

Read our guide on how to create a website for your business.

What licences do I need?

To run a microbrewery in the UK and sell products intended for consumption, you may need a number of licences to ensure you operate within industry regulations.

If you are setting up your own premises, you’ll need planning permission from your local authority before you can build your microbrewery, or convert an existing use building into a brewery.

You will need to register as a brewer with HMRC to become certified to sell beer and pay Alcohol Duty on commercially produced products with a strength of over 1.2% ABV.

It’s worth remembering that you may be able to pay a lower rate of Alcohol Duty under the Small Producer Relief scheme if your microbrewery is eligible.

If you plan to open a tap room on-site, you will also need a premises licence and personal licences for you and your staff to sell beer.

You can learn more about the legal and administrative realities of running a microbrewery from leading industry organisations such as the Society of Independent Brewers.

What insurance do I need?

Opening a microbrewery in the UK requires several types of insurance to protect you, your business, and your employees.

For your microbrewery, you will need to take out property insurance to cover any damage to your building, equipment, and inventory from events such as theft, fire, or natural disasters.

You will also need public liability insurance to cover legal fees and compensation costs if your business is held responsible for injury or property damage and product liability insurance to protect you and your business if someone becomes ill or injured as a result of your beer or brewing operations.

If you plan to sell and deliver your beer to retailers, you will need Goods in Transit insurance to protect your products if they are damaged, destroyed, or stolen enroute.

Once you have employed staff, you are legally required to have employers’ liability insurance, which covers claims from staff who become injured or sick because of the work they do for you.

How to make a business plan

Before you start your microbrewery, you will need to create a business plan.

A business plan is a document that describes what your business does, your core objectives, and how you plan to achieve them.

A good business plan might include how you plan to generate money and make your business sustainable, information about your goals, strategy, marketing, and sales plans, as well as a financial forecast.

As part of this process, you will need to research your business idea and the demand for your product.

Think about what you will sell, your customers, and where you will sell your beer.

Read our guide on how to write a business plan, and download our free business plan template.

How to finance your start-up microbrewery

There are several ways you could finance your microbrewery business.

You may choose to do this through personal financing, using your own money to fund your start-up, or by securing a loan from friends or family.

If you don’t want to borrow money, you could try seed funding or crowdfunding – find out more with our guide to the best business funding alternatives.

Alternatively, you could get a business loan to fund your microbrewery through Start Up Loans, a government-backed scheme.

We offer fixed-interest rate business loans of up to £25,000 to help you begin your start-up journey, as well as free business mentoring and expert guides.

Tips for microbrewery start-ups

There are several steps you can take to steer your microbrewery to success:

• correctly price your beer to cover your costs and make a profit – read our guide on how to price your products and services
• Register your business name with Companies House to stop other companies from using it and benefit from a layer of legal protection
• register yourself as self-employed with HMRC for tax purposes
• set a registered office address for your microbrewery – this is a legal requirement for all UK businesses of any size
• market your beer to your target customers – read our guides to marketing on a shoestring budget and how much your start-up should spend on digital marketing.