Business planning for a craft brewery in northwestern British Columbia

The goal of this project was to present a best-fit scenario for a craft brewery in northwest British Columbia (BC) and evaluate its potential profitability. A business plan template was used to evaluate the factors that may impact the potential success of such a venture. The research for this project collected information from a number of sources. Sales and production data was gathered from the provincially regulated Liquor Distribution Branch. Fixed asset equipment costs were gathered from leading industry suppliers and financial data on breweries operating in British Columbia was gathered from Industry Canada's Small and Medium Enterprise Benchmarking tool. Interviews with industry experts were also conducted to gain insight and validate this report with real life experiences. This project determined that it is possible for a small craft brewery to be profitable in northern BC. This is based on the tax returns of the majority of breweries operating in the province which were calibrated to market conditions in northwestern BC, forecasted revenues and known fixed asset investment costs. The outcomes of this project reveal that the market for craft beer in northern BC is small and is overshadowed by markets in southern BC and Vancouver Island where the majority of craft beer is made and sold. The northern portion of the province has only one mature brewery, which leaves room for new firms to enter the industry. While this may seem attractive, regulatory policies of the provincial government combined with high capital investment and significant brewing know-how are key barriers for starting a craft brewery. This may be partially attributable to why at least a third of all breweries in BC are not profitable. Overcoming these challenges is possible, but it is crucial that sufficient financial planning is undertaken. Investigation conducted as part of this project revealed that the majority of breweries in the province have financed their operations through significant levels of debt and posses negative equity