Cedar Creek Brewery

Home Brewer Starts Beer Company

Jim Elliott was able to take his home brew to a million dollar business. He had been in retail much of his life, then a school teacher for 14 years. He had been home brewing his beer for 7 years and everyone loved it. He talked to the wife and decided to start a brewery. Jim had made a good business plan to organize his thoughts and try to get the money he needed. He did not have a lot of money, but between his personal money and all his friends and family he scraped $150,000 together.

Jim’s credit was good but even with the help of the SBDC he was still turned down sixteen times by banks for the loan he needed to start his brewery.   He then turned to Facebook, the word got out and people started approaching him to invest. Through Facebook and “word of mouth”, Jim raised another $200,000 for 30% of his business. This was enough to start the Cedar Creek Brewery in Seven Points, Texas. (www.cedarcreekbrewery.com)

Their first year they did $200,000 in sales and everything went back into equipment and growing the business. Jim took no salary and they still lost a little money the first year, but the business grew. The second calendar year they will do about $400,000, still plowing money back into growth. They were doing well and Jim was able to take a salary the second year. They expect 20-50% growth at their current rate. They could grow much faster with more money, but slow and steady is working out pretty well. I asked Jim if he tough he would have $1,000,000 in the back in 6-7 years. He said he had not really thought of it that way, but yes that is about right. Keep in mind his business will probably be worth at least a few million dollars if he sold it at that point.

There are many good lessons here. Jim started a tried and true business and he did not have the money to do it, but found a way by raising money from others for equity. He used the SBDC and although they were unable to help him get a loan, he still said they were extremely valuable with their help. He had a solid business plan and he was started a business in an area he had experience. This is not a requirement, but puts the odds more in your favor. Expect obstacles, you may be turn down 16 times too. You need to find your tried and true business and start your research and business plan today.

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