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bgkast
bgkast GRM+ Memberand PowerDork
6/8/22 10:43 a.m.

It seems to me, that as the second founder of the company, you should also be involved in these ongoing meetings between the owner and founder 3. This would allow you to both see what plans are forming and decisions are being made and to provide your input and ideas. 

If they won't provide you that respect I would suggest stepping up your search for other opportunities both in and out of the area. It sounds like this company is on the edge of going off the cliff, and without you having some say and control I wouldn't suggest riding it off said cliff.

It seems like brewing is your passion and my suggestion would be to stick with that career.  The Ex Novo position thatsnowwinnebago suggested is worth looking into, they are a good size well respected brewery around here. (and we'd love to have you in the area!)

Beer Baron
Beer Baron MegaDork
6/8/22 10:54 a.m.

In reply to bgkast :

That is one of the reasons I interpret their silence as not actually doing the necessary work. I consider that scenario to be the more generous one over them having serious discussions, but cutting me out of them.

I am passionate about brewing, but the brewing industry has developed very frustrating trends that make it less fun for me.

I think what I really want to do now is get into distilling. Either that, or work for a brewing company that focuses on German style beers, because that has broad appeal and customers expect clean, classic, traditional styles, not stunt beers.

Taking a trip to Virginia next week to visit my brother. Part of this will be research and discussion with my wife on what sort of relocation would work for BOTH of us. I know I will be happier working a job I enjoy, but am not passionate about, in a place where she is happy and comfortable; than I working a job I'm passionate about in a location where she is frustrated.

bgkast
bgkast GRM+ Memberand PowerDork
6/8/22 11:43 a.m.

In reply to Beer Baron :

Sounds like a good plan on the potential to relocate to a place that works for both you and your wife.

Stunt beers are just that, a trend. It seems to me that they may be taking the place of the "too many IPAs" trend.  

CrustyRedXpress
CrustyRedXpress GRM+ Memberand HalfDork
6/8/22 12:35 p.m.

In reply to Beer Baron :

I've seen fewer red flags at a CCCP military parade. You're being taken advantage of by owners who either can't or won't fix their business. 

Get out. Now. Go to another brewery, take the safety job and brew on the side, or leave the industry entirely for a while. It's great that you have a low cost of living, but it's not a reason to subsidize somebody else's lifestyle. You're too smart (and apparently hard working) to deal with stuff like that.

pres589 (djronnebaum)
pres589 (djronnebaum) UltimaDork
6/8/22 12:54 p.m.

I'm with Crusty et al saying that you should pull up stakes in a controlled fashion.  I wouldn't bolt for the first plausible opportunity elsewhere; make it a smart move, but make a move.  If things go seriously sideways you'll lose your job but unless you have no ability to live on unemployment + savings etc for a bit that's really not that bad.  Still preferable to be in a controlled flight configuration to a new role elsewhere.

They're messing with you to try and keep you placated.  That's how this reads.  I'd roll.

Beer Baron
Beer Baron MegaDork
6/8/22 5:52 p.m.
pres589 (djronnebaum) said:

They're messing with you to try and keep you placated.

That is not the case. Not saying things are good, but worst case scenario, they don't understand the situation or are deluding themselves. It's not malice, it's stupidity and/or indecisiveness. That doesn't make it healthy, but not what I think you think it is.

Beer Baron
Beer Baron MegaDork
6/8/22 6:13 p.m.

Had a productive talk today. I laid out my major concerns.

At least one significant change. They will be looping me in on all major discussions for developing a business plan to get the company healthy. At the very least, that gives me information I need to make an informed decision.

Not sure if my trying to impress on them the importance of the owner actually showing up and working sank in. Pretty sure Founder-3 got it. Not sure owner really understood why his general absence is really bad for morale, and it doesn't matter if he's getting work done at home or not, if he's not doing anything that anyone else sees.

Explained that being regularly bombarded with not having funds in the checking acount and such just kicks me in the gut and kills my morale. That this is the sort of stress that managers are supposed to insulate their subordinates from. Owner responded as I expected with a "that's what I've been dealing with, and what I've been feeling..." which I pointed out that I'm not an owner and don't have power to do anything about the situation though. Founder-3 seemed to get it. Don't think Owner quite understands.

Owner said that he is now looking actively at raising capital. That he may do so through bringing on investors or getting additional loans. Other things need to be decided before specifics on that.

Talked about certain order of the way they're doing certain things where I think they're putting the cart before the horse. Founder-3 clearly saw where I was coming from perceiving things as backwards.

One really weird moment. Owner made a comment to the effect of, "I consider you an owner..." and was really surprised when I told him I don't, and he wanted to know why. Well... there's nothing written down anywhere that says I have any ownership in the company so... I'm not an owner.

We'll see.

After this conversation, I'd say I'm at the point where I'm still looking, but not with the same level of urgency, as long as the owner shows up and makes it so I don't have to handle money questions that I have no power to do anything about.

The plan remains that I am moving forward with finding or creating a position for myself that meets my goals and needs. There is now more chance that might be with this company.

Beer Baron
Beer Baron MegaDork
6/8/22 6:26 p.m.

One highly illustrative thing the owner has done that I perceive as wrong and unhelpful, but why I'm not willing to condemn him is the whole thing of keeping salaried people on staff that the company isn't in a position to profit from their work. I think he is genuinely trying to help us and take care of his employees.

I just think it's shortsighted and ultimately doesn't help.

I think keeping employees on who could add value in the future but will be a weight on the company in the present is only beneficial if there is actually a plan in place to get to a place where they're adding that value, and absorb the meantime hit. Just paying an employee who is only weighing down a company I think ultimately hurts that employee. It keeps them from moving to a position where they would genuinely be valuable, and hinders the company's ability to grow to the point where they could be brought on and add value.

It's well meaning, but short sighted. I think the issue is he's too nice and not comfortable making the tough call to look at the fact that there's maybe 60 hours of work to do in the back of house and say, "Instead of paying two salaries, I'm going to pay one and do the extra 20 hours myself."

I think his focus is his divorce and kids. I get that. He's really not good at managing multiple competing priorities, and the latest, biggest thing, sucks up all the oxygen. That's not any way to run a struggling business, but anyway.

So... "back away calmly" rather than "run away now".

"Owner said that he is now looking actively at raising capital. That he may do so through bringing on investors or getting additional loans. Other things need to be decided before specifics on that."

 

This is a red flag to me. The craft brewing market is somewhere between mature and oversaturated. And competition with regards to new trends for people to spend their shrinking discretionary income is heating up. I hate to say it, But if he's looking to cultivate funding in order to keep the golden goose from leaving the house, that it's far too late. If I were a potential investor and someone were to approach me with an opportunity to invest in a brewery, established or otherwise, or listen to them but my likely response would be, does this endeavor include a time machine for me to go back 10 years. Which also goes to another major concern. It's the brewery is well established and isn't new to existence within the past 4 years, then they should be in a financial position to have equity or financial reserves to draw upon for improvements. If they don't after the heyday of craft brewing then they never will moving forward from this point and those loans will never get paid back until liquidation of the business entity and even then they will likely only be paid back on pennies on the dollar. 

 

It sucks when the work of those making the product is not reflected in the financial health of a company and such problems rarely fall at the feet of anyone other than ownership. 

Beer Baron
Beer Baron MegaDork
6/8/22 7:10 p.m.

In reply to Captdownshift (Forum Supporter) :

Investors wouldn't be to sink capital into this location. It would be opening up another facility.

We're also a distillery with a woefully undersized still. I think we want to focus on expanding the spirits side of things, especially our rum. There is still room in the market for that.

It still doesn't look terribly promising though.

In reply to Beer Baron :

Distilling is still on the upswing and I feel that it's a market that will plateau as opposed to peak and decline. One of the other key aspects is the wholesale side of distilling, getting into 4 and 5 star restaurants within the region with your spirits. 

Beer Baron
Beer Baron MegaDork
6/9/22 6:58 a.m.

In reply to Captdownshift (Forum Supporter) :

Thinking about things the next day. Conversation was positive, but didn't answer my critical questions. I think the big thing it solved was opening up communication about the situation, so I can ask those questions and get information I need without it feeling antagonistic. I feel like I've given the owner sufficient heads-up that I'm packing my parachute, even if he doesn't fully realize that's what I said or am still doing.

I also have a solid sense that Founder-3 gets it and is on the same page as me on the important details. We agree a healthy company pays raises. Our different perceptions were over relatively minor things that are like, whether we need to answer Question 3 or Question C first.

So next step, I'm going to draft and present my fairly blunt questions to the Owner and Founder-3, and confirm that the owner is on the same page as me on certain critical things. The conversation cleared the air that I can do this in e-mail.

Draft Questions I need answered:

What is The Owner going to do to get this company Healthy? What are the important steps along the way that serve as check-points?

When is he going to do them by?

Answers can allow for wiggle room, but it should be pretty objectively clear if a goal has not been accomplished by a deadline. Plans are not set in stone and will certainly change as situations change and new information becomes available.

My definition of "Healthy" company is:

  • Profitable - paying all expenses and manage all debts, access to resources to expand, able to pay all employees including raises and bonuses.
  • Clear roles - people know what their duties, responsibilities, and authorities are. People are insulated from having to worry about major issues or solve problems that they are not empowered with the resources to solve.
  • Communication system - all necessary information is communicated effectively to who needs it.
  • Safe workplace - physical safety, mental/emotional health and safety, free of harassment
  • Plans and prepares for the future and market changes
Captdownshift (Forum Supporter)
Captdownshift (Forum Supporter) GRM+ Memberand MegaDork
6/9/22 11:04 a.m.

I will add in addition to those questions for the owner, if you feel that you can trust founder 3 in complete confidence, It would be time to start the discussion with them about starting a new entity with different financial backing and ownership and to consider, only consider at this point, exploring that as a potential opportunity. I would add that the compensation package for any founders, and anyone involved in brewing or production should also include profit sharing. It's amazing how efficiency improves and losses are reduced amongst certain employees when a portion of their compensation is tied to profit sharing. 

Beer Baron
Beer Baron MegaDork
6/9/22 2:35 p.m.

In reply to Captdownshift (Forum Supporter) :

Yes. I think I can trust Founder-3 that way.

He and I had a talk today, he pointed out a couple of things from the meeting yesterday where he got the situation but wasn't sure the Owner really got it.

I think the only caveat to that with Founder-3, is I think he wants to wait a few months for a couple of things to shake out and give a few adjustments some time to see if they take. He doesn't have the immediate frustrations I have.

Also talking to Founder-3 today, he shared some of the ideas and thoughts about likely avenues of raising capital. They're not stuff I can share, but it is not quite the original Red Flag situation it initially sounded like.

I have profits interest, but that's not worth anything if the company isn't profitable. Founder-3 expressed his dislike for Profits Interest as incentive model as compared to bonus structure, because it's really easy for a company to move things around and reinvest in order to show no profit.

Founder-3 is also not blowing smoke up my ass and understands I'm not sitting around and hoping. He understands this market is hot and I haven't gotten a raise. He was in line with the basic questions of, "Is the company berkeleyed? How berkeleyed is it? Can we un-berkeley it? How much time, money, and work would it take to un-berkeley it?" and knows that I uniquely need answers to those questions.

bgkast
bgkast GRM+ Memberand PowerDork
6/9/22 3:02 p.m.

Sounds like some progress is being made. It also seems like the owner isn't focused on running the business like he needs to be, and should consider handing off some authority to make the tough but necessary decisions to you and founder 3. 

Keep your ear to the ground for other opportunities, but it sounds like you don't need to jump out of the airplane just yet.

In reply to Beer Baron :

I definitely understand the concerns with regards to profit sharing and playing games with the money, But that plane of games often involves making capital investments early which clearly hasn't been done in this instance, but I digress. The important thing is that you and founder 3 are on the same page, even if the timeline isn't of the same desire, as it's always potentially easier to start a new dance with a familiar dance partner. 

 

Beer Baron
Beer Baron MegaDork
6/9/22 5:03 p.m.
bgkast said:

Sounds like some progress is being made. It also seems like the owner isn't focused on running the business like he needs to be, and should consider handing off some authority to make the tough but necessary decisions to you and founder 3. 

I think that is what he is trying to do and wants to do. In many ways, that would actually be an ideal situation. But it has to be done in the right way, whoever runs things needs the resources to actually be able to do so. They also need to be appropriately compensated.

That all requires money, and the owner is really the one who has that.

Mezzanine
Mezzanine Dork
6/9/22 6:49 p.m.

I'm glad to hear there's some potential for an improvement here. 

I wanted to chime in on the safety job: I've worked in a variety of industrial settings over the last 15 years of my career and without exception the "safety guy" role has been an awful job to take. You'll be unappreciated by crews ("I don't need you to tell me how to do my job") and management ("there is no way we're going to spend money on that when we currently meet the letter of the law") alike.  It's a lousy position to be in. Your performance is most likely going to be judged by the behavior of others (i.e. safety performance of the facility). Your primary function is bureaucratic and making significant, positive impact is only likely to happen periodically. 

 

I too enjoy delivering training and keeping people safe, but I wouldn't take a safety job unless there was literally no other option. I realize this comes off as jaded and I really hope other people have seen safety coordinator-like positions where they were empowered to make positive change and be respected...but I haven't seen that. Don't give up on brewing just because there's a short-lived trend for stunt beers in the market right now. It'll pass. 

Datsun310Guy
Datsun310Guy MegaDork
6/9/22 9:07 p.m.

He said you're an owner but he owns 100% of the company?  Go pound sand.

I've been told to run my territory likes it's my own company but since I have no risk in the company there is a very limited reward.  

Beer Baron
Beer Baron MegaDork
6/10/22 8:26 a.m.

In reply to Datsun310Guy :

I wrote a long-ish response. I think it was potentially airing too much of someone else's dirty laundry than I want to do publicly.

Suffice to say - the situation is very not-good, but it is not as bad as you are envisioning it to be. The Owner is legitimately well meaning, but naive.

My struggle is because it is not clear whether the correct answer is 'stay' or 'go'. There is a lot bad and a lot good. This isn't me misguidedly refusing to see the reality of how bad the situation is. The only clear thing is that I need to Move Forward. If Founder-3 can make happen what he wants to see, this company could Move Forward in a direction I want.

The real question that I need to be working directly with Founder-3 to answer is, "How berkeleyed is this company? Can we get it to Move Forward and be Healthy?"

Beer Baron
Beer Baron MegaDork
6/10/22 8:35 a.m.
Captdownshift (Forum Supporter) said:

In reply to Beer Baron :

I definitely understand the concerns with regards to profit sharing and playing games with the money, But that plane of games often involves making capital investments early which clearly hasn't been done in this instance, but I digress.

It actually kind of has... but it has been done in a very "Ready - Fire - Aim" way.

He invested money in a row of 40bbl tanks to expand brewing. He got a small still so we could get into spirits. He has hired some incredibly qualified staff like you would want to head departments in a region-leading company, but right now we're costing more money than we're bringing in.

Captdownshift (Forum Supporter)
Captdownshift (Forum Supporter) GRM+ Memberand MegaDork
6/10/22 8:57 a.m.

How much distribution do you have? And do you have the canning, kegging and bottling capabilities to increase distribution? If the answer is yes to increasing canning, kegging and bottling, then the answer is to invest in outside sales people, especially if they have experience in brewing. 

Beer Baron
Beer Baron MegaDork
6/10/22 9:26 a.m.

In reply to Captdownshift (Forum Supporter) :

Distribution and packaging is one of our major problems. ...sort of.

We're self distributing now. We're only in the city here. We have one sales rep, and he has to do all deliveries out of the back of his Jeep that can only hold two 1/2bbls.

Our walk-in is too small to hold distribution volume of kegs. We don't have footprint for our own canning line. For market reasons, no one else in the company is interested in bottles. We're using mobile canning, but the overhead on that is such that cans are effectively a break-even marketing expense.

If we lean into liquor, that could be a good choice. Double-edged sword with Ohio, is that liquor is all state controlled. The advantage for us is that this bakes-in a statewide distribution network so long as we follow the bureaucracy.

Ramping up liquor production would also be the easiest thing to do. Bottling and storing liquor is so easy compared to beer. We'd need money for at least a larger stripping still, but that's not tough. We'd need more square footage, but that could be pretty much any warehouse space anywhere. Transporting bulk liquor is a lot easier than bulk beer.

Captdownshift (Forum Supporter)
Captdownshift (Forum Supporter) GRM+ Memberand MegaDork
6/10/22 9:58 a.m.

So that's a broken business model. The only way to increase revenue is to increase taproom prices, until the distribution is fixed. You'll need refrigerator trucks, drivers, 2 outside sales reps and a refrigerated cellar room/walk in that's at least 20x30. Any adjustments or plans that don't start with those items is a nonstarter. I brought up bottles for the distilling, almost nobody is bottling beer these days, even during the can shortage of 2020-2021. 

 

If beer isn't going to be cost effective, they need to stop brewing entirely and focus on distilling as the brewing will never be profitable. If ownership is willing to continue brewing without making a profit, Then I would question their interest in making a profit on the distilling side as well, unless they invest in their production and distribution of distilling prior to product being released. 

 

It sounds like the owner is far too content saying we make great stuff and it's a fun place to hang out and I'm proud of the quality product we make and it's a fun hobby of mine but he doesn't care if he makes money or if any of his employees make money. That's a toxic run situation. 

Beer Baron
Beer Baron MegaDork
6/10/22 10:07 a.m.

In reply to Captdownshift (Forum Supporter) :

I could debate whether or not the trucks need to be refrigerated. But yeah, pretty much.

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