“Know how to win by following the rules.” -Arnold Palmer<\/p>\n
In golf, there are rules to follow in order to win.<\/p>\n
You learn the rules of golf and follow them. You get a good coach and you practice. And then you do it over and over until the results are consistently what you want.<\/p>\n
It’s the same approach with your brewery finances. Except for one major difference: Golf is a lot harder to master than your brewery finances.<\/p>\n
Here are five rules to follow to keep your brewery financially sound:<\/strong><\/p>\n Rule #1 Create and follow a month-end financial process<\/strong><\/p>\n Your brewers don’t just wing it when they make beer. They follow a process. The process was honed over years or decades. It took time to perfect.<\/p>\n Once the process was perfected it provided a road map to follow to ensure a consistent, high-quality product. It’s the same idea with your month-end financials. You need to follow a process.<\/p>\n Use this month-end Checklist<\/a> as a starting point.<\/p>\n Rule #2 Build your financial plan<\/strong><\/p>\n Without a financial plan your income statement is in deep trouble.\u00a0 As they say, if you don’t know where you’re going (financially) you’ll end up someplace else. And you might not like it.<\/p>\n Building a financial plan takes time, something we are all short on.<\/p>\n So, if you’re time challenged, watch this 1-minute video<\/a> on how to build a brewery budget…fast.<\/p>\n Rule #3 Review and analyze actual financial results each month (or each week)<\/strong><\/p>\n The month-end checklist will help make sure you get complete, accurate and timely financial reporting.<\/p>\n The financial plan will act as a guide to get you to your desired financial outcomes.<\/p>\n A regular review and analysis<\/a> of actual financial results compared to your plan will help keep you on track.<\/p>\n Rule #4 Understand beer pricing, costs, and margins<\/strong><\/p>\n This is mandatory if you self-distribute or sell to wholesalers. Mandatory.<\/p>\n If you don’t know the true costs to produce and package your beer, it is impossible to know what your margins are.<\/p>\n And understanding your margins and expense structure is critical to staying financially sound.<\/p>\n This short article<\/a> provides basic terms and standard practices in the beer industry.<\/p>\n Rule #5 Properly value and safeguard brewery inventory<\/strong><\/p>\n Inventory valuation and cost of goods sold are the least understood, but most important, drivers of profitability in your business.<\/p>\n A good inventory count process will help safeguard and properly manage these important assets. Use this\u00a0 1-Page Outline Inventory Count Process<\/a> as a starting point.<\/p>\n A good brewery software will help properly cost your products so that you can get a handle on inventory valuation. Watch this free webinar replay<\/a> to learn more about brewery software options.<\/p>\n Wrap Up & Action Items<\/strong><\/p>\n Some rules were made to be broken, but not these ones.<\/p>\n Do this next:<\/em><\/p>\n\n