Closing a brewpub properly when the numbers do not work

Know when the numbers say stop

Look at three figures before anything else. First, contribution margin: what each pint, plate and bottle earns after its direct costs. Second, break-even: the monthly sales needed to cover rent, staff and loan payments. Third, runway: how many months of losses your cash can fund.

If sales sit well below break-even for several months and no change in price, menu or hours closes the gap, ask honestly whether the fixed costs can fall. If they cannot, the runway is a countdown. Closing while you still have cash is better than closing with none. Write the three figures on one page and review them monthly with your partners, so that the decision comes from numbers rather than from a bad week. A tidy exit also protects your reputation for the next venture.

Options to try before you close

There are other exits. You can cut opening hours to the busiest days. You can renegotiate rent or the loan schedule. You can sell the business or its kit as a going concern, which is the point of our guide on buying an existing brewpub seen from the other side. You can also hand over the brewery and keep only a contract brewing arrangement.

Whatever you choose, talk to your partners, your lender and your landlord early. Surprises make people harder to deal with. A landlord who hears the news from you in month three may agree a short exit. A landlord who hears it from a supplier in month six will not.

Get advice before you sign anything

Closing touches leases, loans, employment law, tax and the excise licence. Each has its own rules. Those rules differ by state and change. Speak to a lawyer and an accountant before you give notice to anyone. Ask the licensing authority what it needs, in writing.

This guide covers the questions to ask. It cannot tell you what your documents say.

Stock, beer and excise

Make a list of everything held: beer in tanks and kegs, packaged stock, raw materials, gas, chemicals. Alcohol stock is controlled, so ask the excise authority or your licensing adviser how to sell, transfer or destroy it and which records to keep. Do not pour beer down a drain or sell it outside your licence to clear space.

Stop buying raw materials early. Malt and hops that arrive after you have decided to close are cash you will not get back. Plan the last brews so that the last beer sells while you are still open. A tank of unsold beer on closing day is a cost you carry.

Staff and suppliers

Tell staff first and treat them fairly. Pay what is owed on time and follow the notice and settlement rules that apply. Your adviser will know them. People who are treated well give references and speak well of you in a small industry.

List suppliers and what you owe each. Return rented kegs, gas cylinders and glassware if you can. Check any deposit and ask for it back. Pay the small suppliers first if you must choose, because they are the people most hurt by a late invoice.

Selling the kit

A clean, documented brewhouse sells better than a tired one. Clean and sanitise the vessels, then check the pumps and valves. List what you have with capacities. Many sellers lose value by waiting. Brewing kit sits idle badly because gaskets and seals perish.

Price from what a buyer would pay, not from what you spent. A brewer who is opening a second outlet may want your tanks, as our guide on opening a second outlet describes.

Close the paperwork and the story

Surrender or cancel the licence in the manner the authority requires. File the final returns and keep your records for the period the law demands. Tell customers, thank them and honour vouchers or refund them if the rules say so.

Then write down what you learned. Note which beers and dishes sold. Note where the money went. Be specific about the cost of the site, the staff and the stock. A short note is useful if you open again. Our guide on happy hour margins shows one of the common leaks.

Common questions

When should I close a brewpub?

When sales stay below break-even despite changes to price, menu and hours and the cash runway is running out. Closing while you still have cash protects what is left.

What happens to the beer in my tanks when I close?

Alcohol stock is controlled. Ask the excise authority or a licensing adviser how it may be sold, transferred or destroyed. Rules differ by state.

Can I sell my brewing equipment?

Yes. Clean and document it, price it from what a buyer will pay and sell early, because idle kit loses value.