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How To Manage Cash Flow In My Brewery?

More and more microbreweries are opening in India. Beer enthusiasts are eager to know more about different brewing techniques. They too want to get into this business and start experimenting with different types of craft beers. But opening a brewery is a capital extensive business. Since the Indian brewery models follow the traditional (Western and European) models, brewing methodology and equipment might be the same.

But the investment models and managing microbrewery cash flow does not change much. Money invested in any business needs to multiple and provide fruitful returns. And so, formulating a microbrewery cash flow management system is important. Some microbreweries might be bigger than others, but the technique and rules of managing cash flow do not change. The idea behind building an ideal microbrewery cash flow system is to make sure that the needed investments are made and all the debts are settled.

7 Tips On How To Manage Brewery Cash Flow

If you are a beer lover looking to open a microbrewery of your own, then you would’ve definitely wondered about the financial aspect of the business. If your concern is cash flow management, we have you covered! To know more, keep reading!

1. Establish Monitoring Process

The ideal way of managing a cash flow is by monitoring your income and expense. There are many different types of investments and expenses which are made in establishing a brewery. And so, it is essential that all of them are considered as per their ROI (return on investment). Any business can be expanded eventually once there is a substantial flow of income. But in the initial stages, making unnecessary investments or cutting corners where it is not needed can affect the performance of the brewery.

If you need an effective brewery cash flow monitoring system, then keep an eye out for overhead expenses. These expenses need to be eliminated. Overhead expenses change as the business grows. Initially, hiring a large staff, expensive fixtures and stocking too much liquor and inventory are different types of overheads which can be cut down. By mapping out how much you’re earning compared to how much you are spending or need to spend, you can locate the pain points of your business expenses. In long run, this helps save money and creates a safety net. Due to any unforeseen events, you can channel the money and protect your employees and your business.

2. Sales V/S Income

People who are new in business, learn the difference between these two the hard way. All kinds of businesses run on credit. And sales made on these credit purchases are not profits because the dues are yet to be paid. Whatever income is made off these sales, goes into settling the credit payments. Profit is the net income of the business. This is the revenue that needs to be invested and reinvested in the business for growth. A high level of sales might not mean a stable brewery cash flow. Keep an eye on the market and different trends, policies and norms for better opportunities.

Monitoring inventory is important for brewery cash flow!

3. Invest Wisely

In the initial stage of starting a brewery, every business owner needs to understand the difference between the need and want. Even with investors ready to pool in a large sum of money, going overboard might not be a good choice. A larger business setup, renting a huge area, stocking inventory and grand infrastructure, etc. means that in long run, all of it would need maintenance.

If it is a small or medium size brewery, then all the investments and expenses made are necessary. Ideal investments should be made in storage, staff, adequate infrastructure, and an efficient PoS system. Automation, in any stage of business, assists the staff in working efficiently and reduces the workload of the manager and the owner. Along with PoS, using waiter calling devices, KDS to your kitchen, captain ordering applications for your waiters and loyalty wallets for your customers, help improve the sales and overall growth of the brewery.

4. Manage Your Receivable And Payable

Businesses work on credit, but waiting till the last day to settle payments is not the ideal habit. As the brewery starts generating revenue, the first thing that the owner should do is settle the dues owed to the creditors. Once these dues are settled, the owner can have a clear idea of net profit and hence, plan ways to invest it for the growth of the business.

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At the same time, all the payments which need to be received should also be managed in a way such that a delay in any of the payments does not affect the brewery’s cash flow. Keeping a manual record of this crucial business aspect can be a hectic and laborious task. All of this can be automated with the help of a PoS and the reports provided by the software can make business mapping easier.

5. Optimise Your Brewery

As a brewery owner, you should understand the value of your space and its worth. Optimising your brewery space and area helps generate additional revenue. Many restaurants, bars and breweries host events in their spaces. This helps increase the footfall at your brewery, gives exposure to your business and even creates an opportunity for you to serve your newly created craft beer!

Another great way of optimisation is letting your head chef experiment with the brewery menu! Doing online menu launches, hosting happy hours or hiring influencers to review your brewery is a great way of social media marketing. After all, having a digital presence in today’s time is non-negotiable! As per research, more than 75% of people research restaurants before picking one. And so, if you haven’t yet, create a social media account and start posting!

petpooja helps brewery cash flow management.

6. Educate Your Staff

Often owners talk about customer loyalty, but staff loyalty is equally important. They are the people who are the hands behind the operations and management of your brewery and the customers. Your staff should be on the same page as you when it comes to managing expenses. By teaching them how to manage finances, keeping them updated about the growth of the business and involving their input in crucial aspects of operations, you can make them loyal to your business.

Train and cross-train your staff to reduce the labour turnover ratio. Hire an effective and experienced manager to assist and look after your brewery staff. By teaching your staff about inventory management, PoS system, customer services and management, you can leverage their performance to get more customers. These aspects improve the market positioning of the brewery and eventually, sales. After all, staffs are the one and only interaction point for the customers. If your staff does not know how to handle customers, that is one bad review added online and 10 different customers lost due to a negative review.

7. Take Regular Analysis

Regular growth analysis of your investment and your brewery cash flow is important in filling the loopholes. These analyses can help in finding the business areas or aspects which are working efficiently and the ones which need improvement and how. Closely monitor all the data at regular intervals. Eventually, when the brewery would go, you would notice how some of the issues have been absolutely resolved, and some have been replaced by others.

Hope this blog was helpful! Brewery and the art of brewing take a lot of patience and effort. But those who are enthusiasts for a chilled glass of beer, find a way through it!

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Ishika Tripathi
Ishika Tripathi
Ishika Tripathi is a Marketing and PR content writer at Petpooja. During her free time, Ishika is more likely to be found tucked in a quiet corner reading a book while her forgotten cup of coffee is growing cold next to her. Reach her at Ishika.tripathi@petpooja.com

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