Small Brewery Running Costs: $30k-$34k Monthly Budget

Small Brewery Running Costs

Expect monthly running costs for a Small Brewery to range from $30,000 to $34,000 in the first year of operation (2026) This estimate includes the substantial fixed overhead required for production and taproom operations, plus variable costs of goods sold (COGS) Your largest recurring expenses are payroll, estimated at $17,167 monthly, and the facility lease, set at $7,500 per month This guide breaks down the seven core operational expenses you must track to maintain cash flow Understanding these costs is critical since the model shows a minimum cash requirement of $1,199,000 in January 2026 before reaching break-even by February 2026 Ignoring these fixed costs means you will quickly burn through your working capital

7 Operational Expenses to Run Small Brewery

#	Operating Expense	Expense Category	Description	Min Monthly Amount	Max Monthly Amount
1	Staff Payroll	Labor	Total payroll for 2026, including the Head Brewer, Taproom Manager, and two Taproom Staff FTEs, averages $17,167 monthly.	$17,167	$17,167
2	Facility Lease	Fixed Overhead	The Brewery and Taproom Lease is a major fixed cost, set consistently at $7,500 per month through 2030.	$7,500	$7,500
3	Brewing Ingredients (COGS)	Cost of Goods Sold (COGS)	Variable COGS for 2026, including Malt, Hops, and Yeast, averages $3,868 per month based on the $376,500 revenue forecast.	$3,868	$3,868
4	Utilities and Energy	Fixed Overhead	Fixed utilities, covering electricity, water treatment, and gas for brewing operations, are budgeted at $1,800 monthly.	$1,800	$1,800
5	Marketing and Promotion	Sales & Marketing	A fixed budget of $1,500 monthly is allocated for Marketing and Advertising to drive taproom traffic and product awareness.	$1,500	$1,500
6	Regulatory Costs	Compliance/Admin	Combined Business Insurance ($600) and Licensing/Permit Renewals ($400) total $1,000 in fixed regulatory costs each month.	$1,000	$1,000
7	Software and Admin	Technology/Admin	Monthly fixed costs for POS and Brewery Management Software ($350) plus Accounting and Legal Services ($500) total $850.	$850	$850
	Total	All Operating Expenses		$33,685	$33,685

What is the total minimum monthly operating budget required to sustain the Small Brewery?

To sustain the Small Brewery monthly, you need to cover fixed overhead, likely starting around $12,000, plus variable Cost of Goods Sold (COGS) tied directly to how much beer you brew and sell; understanding this baseline is crucial before diving into whether the Is Small Brewery Profitable In The Long Run? Honestly, many founders underestimate the fixed floor, assuming low initial production means low costs, but that defintely isn't true when you sign a lease.

Fixed Overhead Components

Taproom Rent: Estimate $5,000/month minimum for a viable community space.
Utilities: Budget $1,500 monthly for brewing power and water usage.
Insurance: Secure general liability and property coverage, about $1,000.
Admin/Software: Budget $500 for essential POS and accounting platforms.

Variable Cost Drivers

Raw Ingredients: Hops, malt, and yeast scale with every barrel produced.
Packaging: Cans, bottles, and labels are direct per-unit expenses.
Taproom Supplies: Glassware replacement and cleaning chemicals needed daily.
Local Sourcing Premium: Factor in the extra 5% cost for hyper-local grain contracts.

Which three cost categories represent the largest recurring monthly expenses?

The largest recurring monthly expenses for the Small Brewery are Payroll, the Facility Lease, and Raw Material Inventory (COGS), which together consume about 90% of total operating expenses; if you're planning setup costs, you should review How Can You Effectively Open And Launch Your Small Brewery? Understanding these three buckets is critical for managing cash flow stability, so look closely at the breakdown.

Labor and Space Costs

Payroll makes up 35% of total operating expenses monthly.
The physical location lease consumes 25% of operating costs.
Fixed costs like rent are hard to shift quickly, so staffing levels need tight management.
If you start with three full-time brewers and two taproom staff, labor costs are locked in.

Ingredient Cost Control

Raw Material Inventory (COGS) accounts for 30% of monthly operating spend.
This high percentage reflects the commitment to hyper-local sourcing for unique flavors.
This is defintely where supply chain negotiation matters most for margin protection.
Aim to keep your ingredient cost per barrel below $150 to protect contribution.

How many months of operating cash buffer are needed before the projected break-even date?

The required operating cash buffer for the Small Brewery must cover the $1,199,000 minimum cash requirement projected for January 2026 until the business achieves sustained profitability. This buffer is your runway; if break-even hits later than planned, this amount keeps the lights on. I've seen many founders underestimate this drag, especially when you consider how long it takes to ramp up sales, similar to the challenges discussed when looking at how much an owner of a How Much Does The Owner Of A Small Brewery Typically Make? might earn. You defintely need to map your negative cash flow month-by-month.

Cash Coverage Target

Cover the $1,199,000 minimum cash floor.
This required level is projected for January 2026.
Buffer months equal cash divided by average monthly operating loss.
If initial burn is $150k/month, you need 8 months coverage ($1.2M / $150k).

Calculating Runway Needed

Determine the exact month you project reaching break-even.
Subtract the break-even month number from your launch month.
If break-even is Month 18, you need 18 months of operating capital.
Always add a 3-month contingency for unexpected delays or cost overruns.

If taproom revenue falls 30% below forecast, how will we cover fixed costs without external financing?

If taproom revenue falls 30% below forecast, the Small Brewery must defintely identify and slash non-essential fixed operating expenses to manage the resulting cash burn rate immediately. You need a surgical plan to cover the gap between reduced cash inflow and fixed obligations like rent and loan payments.

Pinpointing Costs to Cut

Review all non-essential marketing spend, like local print ads or event sponsorships.
Temporarily freeze hiring for any role not directly involved in core brewing or essential service.
Determine the absolute minimum staffing levels needed for safe, compliant taproom service hours.
To guide these triage decisions, you need to know What Is The Main Measure Of Success For Small Brewery?
Pause capital expenditures, such as equipment upgrades or non-critical maintenance projects.

Protecting Monthly Cash Flow

If monthly fixed costs total $25,000, a 30% revenue drop means you lose $7,500 in expected coverage.
Your immediate cuts must exceed this gap; target savings of at least $8,500 monthly.
If general administrative overhead is $4,000, eliminating non-essential software subscriptions helps cover part of the hole.
Labor scheduling adjustments, cutting 10% of non-production payroll hours, might save another $3,000.

Key Takeaways

The estimated monthly operating budget for a small brewery in its first year (2026) ranges between $30,000 and $34,000.
Staff payroll ($17,167) and the facility lease ($7,500) constitute the largest recurring expenses, totaling over $24,600 monthly.
A substantial minimum cash requirement of $1,199,000 is necessary in January 2026 to cover initial overhead before the projected February 2026 break-even point.
Variable Costs of Goods Sold (COGS), primarily ingredients, are significantly lower than fixed overhead, averaging only $3,868 monthly based on initial revenue forecasts.

Running Cost 1 : Staff Payroll

2026 Staff Costs

Your planned staffing for 2026—one Head Brewer, one Taproom Manager, and two staff members—results in a fixed monthly payroll commitment averaging $17,167. This represents a significant portion of your initial operating burn rate before sales ramp up. This cost is defintely locked in.

Payroll Inputs

This $17,167 monthly figure covers salaries, benefits, and payroll taxes for four key roles needed to run the brewery and taproom in 2026. You must secure firm salary offers for the Head Brewer and Manager first. Fixed payroll is locked in regardless of taproom traffic.

Head Brewer salary
Taproom Manager salary
Two Taproom Staff FTEs
Employer payroll taxes

Managing Labor Spend

Labor is often the second-largest fixed cost after rent. Avoid overstaffing the taproom early on; high initial staff levels quickly drain cash reserves if revenue lags. Keep staff efficient by cross-training them across serving and light cleaning duties.

Hire Taproom Manager last
Use part-time staff initially
Monitor labor cost percentage

Payroll Risk

Since this payroll is a fixed commitment, any delay in opening or slow initial sales volume means you must cover the full $17,167 monthly cost from cash reserves. This is a primary driver of your initial working capital requirement.

Running Cost 2 : Facility Lease

Lease Certainty

The facility lease is your largest predictable operating expense, locking in $7,500 monthly through 2030. This fixed commitment demands high utilization of the taproom space to cover overhead quickly. That certainty is a double-edged sword, frankly.

Fixed Overhead Anchor

This $7,500 monthly payment secures the physical location for both brewing production and the customer-facing taproom. Unlike variable COGS, this cost is fixed, meaning you must generate enough sales volume to cover it every single month, regardless of how much beer you sell. It’s a non-negotiable baseline.

Lease is $7,500; utilities are budgeted at $1,800.
This fixed cost must be covered before payroll ($17,167/month) is accounted for.
The term extends consistently through 2030.

Maximizing Footprint ROI

Since the rate is locked at $7,500 until 2030, direct reduction is impossible now. Focus efforts on maximizing revenue density within that fixed footprint. Common mistakes include underestimating the required taproom size upfront or failing to budget for annual Common Area Maintenance (CAM) fees, even if they aren't listed here.

Negotiate renewal terms 18 months out.
Ensure tenant improvement clauses favor you heavily.
Track revenue per square foot closely; aim high.

Predictability vs. Risk

This long-term lease structure provides cost predictability, which is excellent for budgeting payroll and ingredient buys. However, if initial taproom traffic projections miss the mark, this $7,500 becomes a dangerous cash drain before you reach the break-even point. You need strong early sales velocity to absorb this commitment.

Running Cost 3 : Brewing Ingredients (COGS)

Ingredient Cost Baseline

Variable Costs for brewing ingredients, specifically Malt, Hops, and Yeast, average $3,868 per month in 2026. This figure is derived directly from the projected $376,500 annual revenue forecast for the microbrewery.

Ingredient Cost Inputs

This variable Cost of Goods Sold (COGS) covers the three primary inputs needed for every batch produced. You need supplier quotes for the expected volumes of these raw materials to confirm the $3,868 monthly spend. Honestly, getting these unit costs locked down is crucial. It’s defintely not a fixed cost.

Malt volume and spot pricing
Hops procurement rates
Yeast strain acquisition cost

Managing Ingredient Spend

Since your unique value proposition relies on quality and experimental brews, cutting ingredient cost too deeply hurts the product. Focus on securing better terms for high-volume staples like base Malt through annual commitments. Avoid last-minute spot buys for specialty ingredients.

Lock in annual Malt contracts
Optimize Yeast usage rates
Source specialty hops via forward contracts

Ratio Check

Based on the $376,500 revenue projection, the $3,868 monthly ingredient COGS represents about 1.2% of total sales. If this ratio creeps above 20%, you're either underpricing your beer or facing severe supply inflation that requires immediate pricing action.

Running Cost 4 : Utilities and Energy

Fixed Utility Budget

Fixed utility costs for brewing operations, covering electricity, water treatment, and gas, are budgeted at $1,800 monthly. This predictable expense must be covered before calculating contribution margin from your taproom sales volume.

Utility Cost Breakdown

These $1,800 cover essential fixed utilities needed to run the physical brewery space. This includes electricity for cooling tanks, gas for heating the mash tuns, and water treatment chemicals. Since it is fixed, this cost is independent of monthly production volume.

Electricity for chilling/lighting.
Gas for boil kettles.
Water treatment chemicals.

Managing Energy Spend

Managing utility spend requires focusing on energy efficiency in the brewhouse itself. High usage often comes from inefficient cooling or heating cycles during the brewing process. Track consumption monthly against output to spot operational waste.

Audit insulation on hot liquor tanks.
Optimize cleaning-in-place (CIP) schedules.
Negotiate fixed-rate energy contracts now.

Fixed vs. Variable Risk

While $1,800 is budgeted as fixed, understand that high production volumes can trigger usage tiers. Specifically, water usage for high-volume brewing or aggressive cleaning might push water treatment costs into a variable category, changing your cost of goods sold structure.

Running Cost 5 : Marketing and Promotion

Fixed Marketing Spend

The fixed budget for marketing is $1,500 per month, targeting local taproom traffic and product awareness. Given total fixed operating costs approach $30k monthly, this allocation requires high-return local tactics, not expensive, broad campaigns.

Budget Allocation

This $1,500 covers advertising spend for local promotion, like digital ads targeting nearby zip codes or sponsoring small community events. It represents only 5% of the total estimated fixed monthly overhead. You need specific quotes for local media buys to track effectiveness.

Covers local digital ads and print flyers.
Fixed cost, independent of sales volume.
Must drive immediate taproom visits.

Maximizing Local Reach

Avoid general social media boosts; focus spending on hyper-local geo-fencing ads around competitor locations or local events. Test one small campaign for $300, measure taproom lift via POS data, and scale only what works defintely. This spend must generate immediate return.

Track ROI by specific promotion code usage.
Negotiate package deals for 3+ months upfront.
Cut spending if taproom traffic doesn't increase.

Awareness vs. Traffic

This $1,500 is insufficient for broad product awareness campaigns. It must function purely as a direct response mechanism, focused on driving immediate, measurable foot traffic into the taproom to convert on high-margin draft sales.

Running Cost 6 : Regulatory Costs

Fixed Compliance Cost

Your required regulatory spend hits $1,000 per month, split between insurance and permits. This is pure fixed overhead, meaning it doesn't change whether you sell 100 barrels or 1,000. Plan for this $12,000 annual commitment.

Deconstructing Regulatory Spend

This $1,000 is split between liability coverage and mandated government paperwork. You need quotes for general liability and product liability insurance, plus estimates for annual permit renewals. This cost sits alongside your $7,500 lease and $17,167 payroll.

Insurance coverage: $600 monthly
Permit/License renewals: $400 monthly
Total fixed regulatory cost: $12,000 annually

Managing Compliance Fees

You can defintely shop around for better insurance rates, especially product liability, which is critical here. Audit your required permits yearly to ensure you aren't paying for licenses you don't actively use. Don't bundle services if it compromises specialized coverage needed for alcohol sales.

Shop insurance quotes every 12 months
Flag renewal dates 90 days out
Avoid over-insuring low-risk areas

Breakeven Context

If your blended gross margin on taproom sales is 55%, this $1,000 regulatory cost requires you to generate at least $1,818 in monthly sales just to break even on this single expense line. Every dollar above that covers payroll and ingredients.

Running Cost 7 : Software and Admin

Fixed Admin Burn

Your mandatory monthly software and admin overhead is fixed at $850. This covers critical systems like POS and necessary accounting support, forming a predictable part of your fixed operating costs.

Cost Breakdown

The $850 monthly expense splits between $350 for POS and brewery management software, and $500 for accounting and legal services. If onboarding takes 14+ days, churn risk rises.

POS/Brewery software subscription: $350.
Legal/Accounting retainers: $500.
Total fixed admin: $850 monthly.

Manage Software Spend

You can defintely trim software costs by avoiding premium tiers initially. Negotiate annual contracts for the POS system to lock in better rates, potentially saving 10% to 15% versus monthly billing. Ensure your legal retainer scope is tight.

Audit software features vs. need.
Pay annually to cut subscription fees.
Define legal scope clearly.

Impact on Breakeven

Because this $850 is a fixed overhead, it directly increases your required monthly gross profit floor. Every dollar of revenue must first clear this hurdle before contributing to payroll or inventory.