Small Brewery Finance: Accounting Principles and Planning for the Craft Brewer

Small Brewery Finance: Accounting Principles and Planning for the Craft Brewer

by Maria Pearman
Small Brewery Finance: Accounting Principles and Planning for the Craft Brewer

Small Brewery Finance: Accounting Principles and Planning for the Craft Brewer

by Maria Pearman


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Your brewery is much more than just a small business—it's the fulfillment of your dream to share a love for quality craft beer and beverages. Build success from start-up to expansion with a solid foundation of finance principles geared specifically toward small beverage producers. Learn how to build and interpret financial reports and create basic pro-forma financial statements for launching a brewery, purchasing additional equipment, or determining a new location. Explore the various business models available to you as a craft brewery. Discover pricing models that maximize your profits. Learn how to build a budget and how to use it to hold staff accountable. This book is written to teach complex topics in simple terms. Written in an accessible style, it will help brewery owners and their staff understand the importance of a strong financial foundation. The insights and results-oriented content will help you run a more successful brewery.

Product Details

ISBN-13: 9781938469534
Publisher: Brewers Publications
Publication date: 10/04/2019
Sold by: Barnes & Noble
Format: eBook
Pages: 204
File size: 13 MB
Note: This product may take a few minutes to download.

About the Author

A Certified Public Accountant, Maria Pearman founded Radix Accounting in 2012 to provide accounting expertise and a deep operational knowledge to the alcohol beverage industry. Pearman has also taught for CPA review courses and within beer business programs at Portland State University and the University of Vermont. She resides in Portland, OR.

Table of Contents





1. From Dream to Reality: A Craft Beer Business Journey

2. Introduction to Financial Management

Basic Financial Statement Introduction

Accounting: General Structure of Transactions

Accrual Accounting versus Cash Basis Accounting

Chart of Accounts

Internal Controls

3. Balance Sheet and Income Statement

Balance Sheet



Fixed Assets (Capital Expenses)


EquityKey Ratios: Balance Sheet

Current Ratio

Quick Ratio

Accounts Receivable Days

Accounts Payable Days

Inventory Turnover

Industry Benchmarks for Key Ratios

Income Statement (Profit and Loss)

Cost of Goods Sold (COGS)

Accounting for Inventory and COGS

Gross Profit

Operating Expenses

Interest Expense


Net Income versus EBITDA

Key Ratios: Income Statement

Gross Profit


Net Income

4. Cash is King!

Cash Reserves

Statement of Cash Flows

Format of Statement of Cash Flows

Steps to Calculate the Statement of Cash Flow

Cash Flow Forecasting

5. Interpreting Financial Statements

Chart of Accounts

Every Statement Tells a Story

What the Balance Sheet Shows

What the Income Statement Shows

Generating Relevant Reports

Monthly Financial Review

Interpreting Financial Statements

Period-over-Period Growth


Gross Profit %

Payroll %



6. Finding Breakeven and Costing Beer


Finding the Accurate Cost of Beer

Brewpubs and Taprooms


Taproom COGS

Tools for Costing

Planning and Start-Up Phase



7. Options for Growth

Self-Distribution versus Third-Party Distribution

Retail versus Wholesale

8. Operating Budget

Types of Budgets

Sales Budget

Production Budget

Administrative Budgets

Other Budgeting Approaches


9. Sources of Capital

Debt versus Equity

Who Should Invest

Four Must-Have Documents When Working with Investors

Term Sheet

Pro Forma Financials

Operating Agreement

Subscription Agreement

How to Manage Investor Expectations

Annual Investor Meetings

Quarterly Updates

Investor Distributions

How to Prepare Pro Forma Financial Reports


10. Business Life Cycle


Early Stage




Employee Stock Ownership Plan (ESOP)

Appendix A. What to Include in Your Business Plan

Executive Summary

Company Description

Products and Services

Market Analysis

Strategy and Implementation

Organization and Management

Financial Plan and Projections


Appendix B. Sample Chart of Accounts


Brewery with Restaurant

Appendix C. Sample Full Budget Spreadsheet

Appendix D. Ten-Week Budget Calendar

Appendix E. Sample Term Sheet for XYZ Brewing Company, LLC

Appendix F. Choice of Entity/Significant Tax and Other Considerations



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