Running your brewery business can be expensive. Many different costs can significantly affect your bottom lines, such as rent, equipment purchases, subscription charges, excess inventory, and much more. While many of these expenses are unavoidable, with some ingenuity, some can be negotiated or significantly reduced, allowing you to free up valuable capital and optimize your overall cash flow.
When your brewery business minimizes its expenses, it means that you will be in a better position to pay off existing debt and will have more cash on hand for future initiatives. You will have more money to invest in upgraded technology, hiring new employees, and initiating advertising and marketing campaigns.
1. Negotiate discounts on bulk purchases or early payments
Just like you want to receive prompt payment from your customers, your vendors look forward to receiving early payment from you as well. This will help them manage their cash flow, and if you are in good standing with them, you can negotiate an early payment discount in many cases.
Hops and malt are direct materials that go into making your beer. You can regularly shop around to get multiple quotes from different suppliers to get the best deals. You can also create good relationships with your suppliers and negotiate bulk discounts for your large orders, saving you a considerable amount of money in the long run.
2. Create a budget
Creating a detailed budget is crucial to the health and longevity of your brewery business. Budgets can help you control your cash and help you create a long-term growth plan to understand how much money you’ll need to fund future plans. They also show when the right time is to invest in new opportunities and determine how much your company spends on its expenses.
Creating a budget will allow you to see what your company costs are and highlight areas where you could save money and reduce your overall expenses. Once you have your budget in place, you can use it as a comparison tool against your actual costs to determine which areas you may be spending more than what you initially budgeted for.
3. Track your expenses
To budget effectively, you need to track all of your expenses closely. The prices of hops can fluctuate with changes to supply and demand, which could in turn affect your margins. Keeping track of your expenses will show you their trends and can help you be better able to predict their fluctuations in the future. This historical data enables you to identify expense trends in the past and lets you build a reliable budget for the future.
4. Outsource non-core tasks
Consider outsourcing any task that takes away from you being able to focus entirely on your brewery business goals. Activities such as bookkeeping, human resources, website design and development, social media marketing, content creation, paid advertising, data entry, and order fulfillment are easily outsourced to professionals who can get the job done faster and with more precision.
Outsourcing a task like bookkeeping or payroll means putting your financial well-being into the hands of trained experts who will work with you as a part of your team without having to pay for payroll deductions, benefits, or vacation pay. This will allow your brewery to actively save money on payroll costs while getting the financial expertise you need to keep growing your operations.
5. Invest in technology
Make the most out of technology by exploring new advancements to help your brewery business be more efficient. For example, you could consider using cloud-based technology instead of desktop software. Or, you could use a program like DextPrepare, which would reduce the need for manual data entry processes.
By searching for different ways to minimize your brewery's expenses, you can improve your brewery’s cash flow over time. While some of your expenses may be unavoidable, others can be negotiated or significantly cut back, increasing your bottom line and improving the financial health of your brewery.
If you would like to know more about tracking your expenses, our team at Enkel can help. With years of bookkeeping and payroll experience, we can help your brewery business grow and thrive. Contact us today to find out how.