Beer begins with community for Liz and Curtis Chism of Council Brewing. In fact, it’s the inspiration for the brewery’s name. “For us, Council refers to the idea of a town council — a gathering place for the community to congregate and discuss key issues,” Curtis Chism explains.
What started with a home brewing kit nearly seven years ago has turned into a bustling business that serves the San Diego community and beer lovers across the nation.
The Chisms have learned a lot about the financial considerations and challenges of running a brewery during their journey to success. What they’ve known all along is they have to brew beers they like to drink — clean brews that make beer delicious, fun and accessible to all of their customers.
From Home Brews to a Home Run Business
When the Chisms realized their passion for beer extended beyond the four walls of their home, they pursued several different routes to open their brewery to the public. After a few partnerships fell through, they decided to pursue the business solo.
“We put together a business plan, sold our house and used the profits to get Council Brewing off the ground,” Curtis Chism says. “It wasn’t easy, but we were great at bootstrapping from day one.”
And bootstrap is exactly what they did. The dynamic duo focused on doing projects themselves whenever possible — particularly because of their background in construction project management.
They were also able to self-fund growth by hosting events and parties in the brewery’s tasting room. Events provided additional cash flow that they easily reinvested into the business.
Lastly, they were hyper-focused on equipment and purchases that were necessary for making great beer. Using large plastic kegs instead of stainless tanks and handwashing kegs are just two examples of how the couple made smart financial decisions without ever sacrificing the unmatched quality of their beer.
From Great Beer to a Great Business
It didn’t take long for Council Brewing to become a community staple and bustling business. With growth came additional financing needs though, and it was clear Council Brewing required a financial partner to fund new equipment and other brewery expenditures.
The Chisms knew the right financial partner had to understand the brewery business. “Local bankers would just stop by the brewery when I was in the middle of a brewing process and expect to talk,” Liz Chism says. “It was clear they thought running a brewery meant hanging out and enjoying beer most of the day.”
In the midst of this frustration, Live Oak Bank appeared. The bank was connected with Council Brewing through others in the brewery industry, and it was a strong match from the beginning. “Things ran really fluidly with Live Oak from the beginning because of their understanding of a brewery business,” Curtis Chism says.
Sour Beers & Beyond
With financing came two key benefits to Council Brewing: continued growth and increased convenience for the couple who were initially running every single aspect of the business.
Their first change was to upgrade equipment, including trading in their original plastic kegs for stainless steel, adding fermentation capacity and a bottling line. While the business and beer had been impressive without this specialized equipment, the ability to outsource some of the manual labor allowed the Chisms to focus more time on brewing new beers and running the business.
The next exciting upgrade was to expand the brewery’s sour beer program. Sour beers include gose and lambic brews, created specifically to have a sour but pleasing taste. “We call it the Magic Factory,” Curtis Chism adds. Magic indeed. Council Brewing’s creations have a 97/100 rating based on 846 reviews on RateBeer.com.
The sour beer program started with a microloan Live Oak was able to refinance to provide greater value to Council. The Chisms had previously run into issues with banks that did not understand how capital intensive breweries can be. They appreciated the expertise that LiveOak had working with craft brewers. “Our loan officer knew the equipment is expensive. He understood what we needed to successfully run our brewery,” Curtis Chism says.
Building a Community
Council Brewing has wisely reinvested in its business and leveraged financing to pursue its real passion: brewing great beer. This passion has also driven its success. The couple believes consistently introducing new beers helps drive their loyal customer base.
To further support the business, Council Brewing continuously promotes beer education and experiences that make the brewery a key part of its customers’ beer appreciation. It offers ongoing events such as beer dinners, tastings and education nights. These events, which often sell out, offer the community an opportunity to gather and learn more about the brewing process, beer pairings and different types of beer.
Building community was a critical factor in creating the tasting room layout at Council. A long table encourages people to congregate while the bartender is always accessible to provide recommendations or just chat with customers.
Lastly, the Chisms brew a variety of beers to ensure Council Brewing is a gathering place for all beer lovers. From Belgian beer to IPAs and sours, the brewery offers beers anyone can enjoy.
Council Brewing is a success story and a model for home brewers considering starting a business. However, sheer competition in the craft beer industry is a challenge for hopeful home brewers across the nation. In 2016, there were more than 5,000 breweries in the U.S., 99% of which were small and independent craft brewers according to the Brewers Association.
While competition is increasing, consumers increasingly prefer and select craft beer, so it’s not too late in the game. Hopeful brewers should be dedicated to making a high quality product that people like and, ultimately, will buy.
The Chisms were frugal from the start, counting on their own hard work and sweat equity first. All brewers can learn from Council: Every penny saved is a penny that can be reinvested back into the business.
Lastly, it’s critical to select a financial partner that understands the industry and the challenges brewery owners face. Live Oak Bank specializes in financing for wineries, vineyards, craft breweries and craft distilleries nationwide with loans customized to help brewery owners achieve their business goals.