3 Steps to Business Purchasing
For most small craft beverage producers the often daunting task of purchasing new equipment can be a double-edged sword. Buying equipment even when prepared can be scary once you see the final invoice, but remember: it can also be fun! Getting new equipment is like unwrapping new toys on your birthday and taking them for a spin. There are just as many buying options; online, direct from the manufacturer, third party or trade shows as there are opinions on what to buy and how. In doing your research you will come across all sorts of opinions but ultimately it comes down to three very simple things:
1. How you want to run your business
2. What your immediate needs are
3. What your creative needs will be
The last one is the most difficult because you can't see into the future, however, you can see the future of what you would like to see. Here are some things to consider that will help you make an informed decision:
Look at cost per use and yield
Buying smaller, cheaper equipment at first may seem more manageable. Fermenters, stills, and tanks have a max capacity for use in a 24-hour span. Buying bigger up front will cost more in water, ingredients and time, however it will make more product which means more profit. It’s simple math is all, take the extra time and run two sets of numbers the equipment you need and the equipment you really want.
Equipment should always be part of your long-term strategy when starting out. Deciding capital outlays is very complex and when you see the final number it can be scary, but don’t use this as an excuse to buy cheaper or smaller. When it comes to planning sometimes fortune favors the bold - that’s if you can show that spending more now will save in the long term. Thinking big is very important in particular when purchasing a still. Often many distillers find that after spending months building their still, they suddenly need more capacity just to meet demand. Spend $60,000 on a still now instead of buying a $20,000 still and in 15 months having to buy the $60,000 still anyway.
Zen and the art of….
When it comes to production equipment, buying the cheaper smaller option can give you more headaches than it is worth. No matter what size you buy or how much you spend, maintenance fees and the cost associated with use will grow. These expenses can become your biggest problem if you don’t consider them in advance.
Ultimately the costs associated with size, use and maintenance should go into your planning and implementation, but in the end you will have to find what works for you and very few people get it right the first time. In the end all of the research, all the pricing, all the time spent agonizing over what equipment to buy will hopefully lead you to get what you need for sustainable growth.
Justin Koury is a Hospitality Consultant specializing in restaurant and retail operations management including menu design. He is a Graduate of Purdue university’s Hospitality program and attended culinary school in AZ. After working in the Chicago market for 10 years he recently moved to California where he hopes to expand as a consultant into the distilling world, helping producers understand the needs of the consumer.
He runs a podcast on iTunes dedicated to the Hospitality industry - Bringing you what's interesting and Important in the food and beverage world!
He can be reach at Justin@thegrapevineconsulting.com