Table of Contents
TABLE OF CONTENTS
Foreword
Acknowledgments
Preface
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
Assets
Inventory
Fixed Assets (Capital Expenses)
Liabilities
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
Depreciation
Net Income versus EBITDA
Key Ratios: Income Statement
Gross Profit
EBITDA
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
COGS
Gross Profit %
Payroll %
NOI %
EXERCISE
6. Finding Breakeven and Costing Beer
Breakeven
Finding the Accurate Cost of Beer
Brewpubs and Taprooms
Labor
Taproom COGS
Tools for Costing
Planning and Start-Up Phase
Adolescence
Maturity
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
Conclusion
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
EXERCISE
10. Business Life Cycle
Start-Up
Early Stage
Adolescence
Maturity
Exit
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
Conclusion
Appendix B. Sample Chart of Accounts
Brewery
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
Glossary
Index
