Today I welcome a guest blogger: Danielle Rodabaugh. Danielle is in the business of helping new businesses get off the ground. This includes breweries. It amazes me how many people want (and plan) to open a brewery but do not fully understand what they’re up against. That’s why so many people apply for a Washington Microbrewery license, maybe even get approval, but the brewery never materializes.
The easiest part of the beer business is the beer. The hardest part is the business. Anyone interested in opening a brewery should be aware that there is more to it than simply making beer and selling it to someone. There are a lot of non-beery things to consider.
Below, Danielle outlines the very basics of what you should know when it comes to opening a brewery.
A legal guide to starting a brewery in Washington
by Danielle Rodabaugh
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Running a brewery requires more than a passion for all things beer and knowledge of the science that goes into the process. If you’re interested in starting a new brewery in the state of Washington, you must know how to run a business from a legal standpoint. To help you get started, this guide will discuss some legal concerns that every entrepreneurial-minded beer enthusiast in Washington should think about before deciding to pursue a career in brewery ownership.
Financial and Legal Advice
Starting up a brewery is a huge commitment that comes along with a multitude of detail-oriented tasks. Balancing your budget, paying bills and keeping an accurate record of tax records can be time-consuming. Ensuring your brewery complies with industry laws at all times can be tricky when you have a lot of other tasks to accomplish.
A simple oversight could result in legal action against your brewery, and that’s something no business owner wants to deal with. To avoid such a problem, find an accountant and a lawyer who have experience in Washington’s beer, wine and liquor industry. They can help keep your business on track now and offer you expert advice if the need arises in the future.
Business Formation
Forming a legal business is the first step to starting any business — even a brewery. Depending on the type of establishment you’d like to run, each type of business structure has its advantages and disadvantages. Your lawyer can help you decide which business structure might be most beneficial for your professional goals. If you plan to run your brewery with the help of others, you’ll want to consider management, costs/expenses, profit/loss sharing, liability and transferability before making your decision.
TTB Licensing
Every brewery in the country must be licensed through the federal Alcohol and Tobacco Tax and Trade Bureau (TTB). Depending on the type of brewery you’ll run, the exact licensing forms you’ll file will vary. However, all breweries must file a brewer’s surety bond to guarantee that all taxes will be paid to the government appropriately and in full. All the licensing forms you’ll need can be downloaded from the TTB Web site.
Washington State Licensing
You must also maintain a valid state-issued license to operate a brewery in the state of Washington. Microbreweries that produce fewer than 60,000 barrels in a year will pay a $100 licensing fee. Domestic breweries that produce 60,000 barrels or more in a year will pay a $2,000 licensing fee. In addition to brewing beer, microbreweries and domestic breweries that have a Washington brewery license may
- distribute and sell beer produced on premises
- sell beer produced by other breweries
- hold up to two retail licenses to operate taverns and/or restaurants
- contract-produce beer for a brand owner of malt beverages
- apply to sell their own bottled beer for off-premises consumption at qualifying farmers markets
These are just a few of the many steps you’ll have to take before you can start a brewery in Washington. The better you prepare yourself now, the better prepared you’ll be do deal with the speed bumps you could encounter in the future. You don’t want to find yourself in trouble later on — especially when it comes to legal matters. Effectively managing a brewery requires a great deal of planning and preparation, but this guide should help you on your way.
Danielle Rodabaugh is the chief editor at SuretyBonds.com, a surety provider that issues bonds to working professionals across the nation. As a part of the company’s educational outreach program, Danielle writes articles that help new business owners better understand how surety bonds affect the business licensing process. You can keep up with Danielle on Google+.
