Thursday, 2 August 2012

A great leap forward

The blame for the country's woes are firmly placed at the door of the banks. The political parties try to blame each other, and although I have my own views on that, by and large I feel that their squabbling is pointless irritation that detracts from the truth. The only conclusion I can therefore reach is that the banks have indeed been responsible for our downfall.

Our recent experience with the banks would bear this out. Despite the fact that several years ago they were happy to lend to any hair-brained scheme, now it seems an overreaction has occurred resulting in them not lending to anything but an absolute cast-iron certain project.

For the last 12 months we've been investigating various modest expansion options. This is based on the fact that we have managed to grow a demand that we found difficult to meet. So, cap in hand, all togged up all neat and that, to meetings with several banks. Mostly they went like this;

"We can't make enough beer because we haven't got enough shiny stainless steel" we would say, probably with more eloquence "Please may we borrow some money so we can expand?"

"No, you didn't make a profit yet"

"Ah, yes, we know, it's part of the plan. We've been developing markets and products and investing in the brand" We would patiently explain "Now we've done that, if you would care to look at our business plan, into which we've put a lot of effort, you will see that with the economies of scale, we project a profit in the future. But we do need to borrow some money to realise this"

"We're not lending you any more, you haven't made a profit"

And so the discussion would go around in circles. Apparently we could have lied to them, which is a tactic that works. We are not liars I'm afraid. We have many faults, and we try our best to improve, but we are not liars.

One day, around the time we were wasting our valuable efforts talking to ineffectual banks, we got told that there was a scheme giving out grant money. It's called the Rural Development Program for England, part of DEFRA. This is in turn funded out of Europe.

I've had experience of grants before, and generally it's a mixed bag. Sometimes it's good, and sometimes the money you get is not worth the red tape. This, it turned out, is probably going to be worth it.

We put in an expression of interest for funding for more tanks and a bottling machine. It seemed we were eligible because our town is rural. A rural town? I try not to think too hard about the contradiction.

We tried to keep the overall costs down because, even with the grant, it would be stretching our finances. We budgeted the investment for around £74k, which anyone who knows anything about decent brewery equipment will know doesn't buy much, especially if part of that is to include an automated bottling machine. We were hoping to get 40% grant aid on this.

I could bore you silly with the details of the complexities of putting together a grant application, but suffice to say you don't get the grant up front. Oh no, you have to spend the money first, including the VAT element, and then claim it all back. In the mean time hoping the cash flow works out OK.

Luckily there is another Government backed organisation called Enterprise Answers. They lend money to people who have been told to get lost by the banks. They are, by their nature, an expensive way to borrow money, but at least they do lend, and offset against the benefits of grant aid, it looked like we might actually get to expand and create a few jobs.

When we got the answer back we were somewhat surprised with the great news that we were authorised to spend a little bit more on the project. Thus allowing us to buy a slightly better bottling machine. Additionally, rather then us gaining a 40% grant they gave us 50%. The total grant funding rising from about £30k to around £42k. Delighted? Bloody estatic.

I was hoping to hold off telling this story until we had some proper stuff to show you, but I let it slip to a local reporter and he's been desperate to get it into his paper. It happened yesterday, so it's out there now, you lot should have known first, to be honest.

Anyway, the future looks good for us, we will soon be able to make more Hardknott beer. It's all a little bit scary because we are effectivly spending taxpayers money. There is stuff I have to worry about which involves audit trails and the like. Splendid, not. But we'll manage, one way or another.

We only need you guys to do one thing; drink our beer, whereever you find it, cask, keg or bottle we don't care, just get it drunk, then we can make more of it.

Simple, eh?

12 comments:

Ed said...

Excellent!

Steve Lamond said...

Fantastic!

Yvan Seth said...

Awesome!

RedNev said...

It's nice to hear some good news for a change ~ well done!

BeerReviewsAndy said...

Congrats!!!

Zak Avery said...

Congratulations, Hardknotts all

Brewers Union Local 180 said...

Woot!

Does the next grant buy the Hardknott pub conglomerate?

Filrd said...

All wot they said above and more, really great news!

Good luck to the lot of yeas! (best said in a Belfastian accent)

Cheers

treble9man said...

Well done you!
Must pop up and see the new empire soon.

Dave Bailey said...

Thanks everyone for the kind comments. You're all great!

Adrian Tierney-Jones said...

Hooray I’ll get a chance to try your beer without having to hike to some godforsaken part of the country…

Paul Bailey said...

Excellent news, and one in the eye for the banks who, in my experience, know nothing whatsoever about running a business.

btw. Why aren't your beers at GBBF this year?