MNGT 310-001

Assignment 3 – Business Analysis

On August 15, 2019, Sawstone Brewing Co. opened its doors to the city of Morehead,

KY. Sawstone Brewing Co. is a small local brewery located in the heart of Morehead: Main
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Street. While the business has only been open to the public for two short months, the preparation

started in October of 2017 and the construction in mid-2018. Currently there are three co-

owners: Derek Caskey, Nich Hollan, and Blake Nickell. Recently, I interviewed Blake to get

some more information about this local brewery. I decided to interview Blake because he is a

close family friend.

Business and Industry

All three owners are male while their employees tend to be female. Derek is currently a

full-time employee, Nich is in the process of increasing his involvement from part-time to full

time, and Blake is there part-time. They have a total of seven employees, all of which are part-

time. These employees consist of six bartenders and one woman that takes care of the business’

finances. Sawstone Brewing Co. in particular falls under the “taproom brewery.” According to

the brewer’s association official website, a taproom brewery is “A professional brewery that sells

25 percent or more of its beer on-site and does not operate significant food services. The beer is

brewed primarily for sale in the taproom, and is often dispensed directly from the brewery’s

storage tanks.” Breweries, unsurprisingly, fall under the “Drinking Places (Alcoholic

Beverages)” industry with NAICS code 722410 (NAICS Code, 2019)

Entrepreneur Background

Blake Nickell, a dad of three young boys: Lennon, Simon, and Finley, is just one owner

of Sawstone Brewing Co. He graduated from Morehead State University with a bachelor’s

degree in both Computer Sciences and Math. He is back at Morehead State as an Enterprise

Solutions Developer in the information technology department on campus. When he is not on

campus or at his brewery, he can be found at home with his girlfriend, Sarah, their boys, and
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their border collie: Maggie. Some of his interests include music, the outdoors (hiking &

running), and obviously brewing. Even before the start of the business, brewing has been

something that he has always been passionate about and he has been doing it now for over eight

years.

Business Opportunity

A few years ago there was an event on Main Street that changed Blake’s life. Derek,

Nich, and Blake had samples of their home brew (before the brewery). Then, they were just three

friends with a passion for brewing. They all shared the same dream: to open their own brewery.

However, they were all caught up on finding the perfect location. Their current landlord was one

of the people that tried their beer that day and he liked it so much he offered them a chance to

open their own brewery in one of his buildings. The right person tried their beer at just the right

time.

Preparation & Difficulties

The three partners prepared for the start up together. They would sit and talk about what

they believed the most important objectives to them were. This is how they created their mission

statement. “Sawstone Brewing Co is dedicated to promoting growth and positive change

by producing quality craft beer, educating the community on craft beer and participating in the

community by being a hub for local groups and organizations.” They also had to create their

business plan in order to capture potential investors.

The biggest difficulties in starting their business were (and still are) “the business stuff.”

There were more pieces than any of them planned for or even knew existed. Blake’s lack of

business knowledge has created the greatest difficulties for him personally. He even mentioned
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the idea of taking some business classes here at Morehead State University in order to help him

run his business. This part of the interview was interesting because I actually gave him some

advice on what classes, to me, have been the most informative when it comes to small businesses

and entrepreneurship.

Another issue they faced is their time management skills. This was an even bigger

problem early on due to the fact that all three of them needed to be there together. Now, they are

able to play on the strengths of each owners and divide the tasks accordingly. You have heard the

saying “two heads are better than one”, according to Blake, “maybe three heads are better than

two.”

Help and Guidance

Blake said that the main people he turned to for help and guidance were and still are his

two partners. He told me that when they were having difficulties making a decision, they would

take a vote and majority rules. It was one way they could help each other make decisions.

Another person he turned to was his landlord. Being a businessperson himself, he was able to

offer the brewery owners not only a space to pursue their passion, but advice as well. Finally, his

family played a big role in helping him stay passionate. There were many times that the stress of

opening his own business got to Blake, but he said that with the help of his family he was able to

keep going.

Growth Plans

Currently, the brewery has a three-barrel system, which only allows them to make 100

gallons of beer at a time. In the near future, they plan to increase this system by adding another

barrel. This extra barrel will increase the production of beer by roughly twenty-five percent.
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They also want to expand their business not only by adding another barrel, but by potentially

distributing their home brew across multiple venues including bars, restaurants, and events.

While they want to expand their distribution, they want to keep their beer here in the brewery’s

home state, Kentucky.

Business Slumps

During the weekend the brewery experiences an influx of people: however, on the

weekdays it experiences a bit of a slump. The lack of traffic on the weekdays causes a lack of

sales five out of seven days of the week. In order to make up for this, they decrease their staffing

during the week by cutting down on how many bartenders are there at any given time. They also

attempt to host events such as trivia night on the weekdays to draw people in, involve the

community a little more, and drive up their potential sales.

Triple Bottom Line

Blake’s lack of business experience and knowledge made this question a little tricky.

After doing my best to explain to him what “triple bottom line,” meant, he was able to come up

with two examples of how his business focuses on social and environmental sustainability. One

example was the event space on the second floor of the brewery. This space is used to encourage

events in order to increase community involvement. The brewery also displays artwork from

local artists upstairs, that are all for potential sale. The next example is more on the

environmental side. All the waste grain that the brewery produces is donated to a local farmer,

who happens to be Blake’s brother. The farmer then uses the waste grain to feed his cattle. They

not only help a local farmer, but they avoid the chance of improperly disposing of this waste

grain.
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Crossroads

The brewery is unable to keep its home brew on tap. There are twenty-four taps all

together and the goal is to keep at least half, twelve taps, filled with their home brew. Currently

they are only producing enough beer to keep between four and six taps supplied. However, as I

mentioned before, they are planning to purchase another barrel (storage tank) that will increase

the production by roughly twenty-five percent. This should allow them to keep more taps

supplied with their home brew.

Advice

When I asked Blake what advice he would give to someone who is thinking about

starting their own business, he laughed and replied, “only one thing?’ He said that most

important things to consider are to think big, stay true to your vision, and be aware of the fact

that it will take more time and capital to accomplish than you could ever expect. He stated that

one piece of advice that he was given and that he would share is to “take the money you think it

will cost and double it. The time you believe it will take you to open and add at least a year to it.”

He said that these things ran true for his experience in opening the brewery.

Analysis

I. Advice

Blake seems to have a pretty good solution for the crossroads that the brewery is

currently facing. I actually do not have any advice that could be of better use than the purchase

of a new barrel. While I do not have any advice for their crossroads, I do have some advice for

when it comes to their business slumps. The business’ slumps occur during the week when foot

traffic in the brewery is low. This lack of traffic in the brewery results in the loss of potential
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sales and revenue. The food trucks that sit up outside are really the only source of food for the

brewery’s customers. When these trucks are not there, customers would have to leave the

brewery to get something to eat. One way I believe the business can overcome this weekly slump

is product expansion. Product expansion according our textbook, Entrepreneurial Small Business

by Jerome Katz and Richard Green, is “a strategy whose goal is growth, based on selling existing

customers a product or service they have never bought before” (354). If the brewery would offer

their customers food options like wings, salads, or even sandwiches, I think that could help them

attract some weekly customers. During the week and after work, I know I do not enjoy making

dinner and regularly eat somewhere in town. Adding food to their product mix could attract those

getting off work looking for an easy bite to eat.

Not only could a product expansion help them improve their business slumps and

increase weekly sales, it could also increase beer sales in general. Customers who are eating will

be able to drink more beer without getting drunk/tipsy. It is almost the same concept as bars that

give out peanuts. In the brewery’s case, however, they will charge for food and get those profits

in addition to the extra beers.

II. Learning Experience

My experience from planning this interview to executing it has been very positive. Before

conducting an interview with Blake, I had no knowledge of breweries. Blake was able to share

some of his “industry specific knowledge” (Katz & Green, 2018, p. 35) with me during the span

of our interview. According to the textbook, industry specific knowledge is defined as,

“activities, knowledge, and skills specific to businesses in a particular industry”. I learned about

their barrel system and how they are able to produce 100 gallons and store their home brew in

these tanks. I also did a little online research prior to my interview and learned that these barrel
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systems are quite costly. With this in mind, it is no surprise that such a small-scale brewery is

only running on a three-barrel system, for now. I also learned about excessive grain. This is

something I would have never thought of, but actually found very interesting. The way the

brewery disposes of the excess grain is something that I can say I have great respect for. I am all

for giving back to the community, supporting local business, and being environmentally

responsible.

Conclusion

Before this assignment, driving by Sawstone Brewing Co., I never would have imagined

the passion and labor that drove Derek, Nich, and Blake to opening the business of their dreams.

However, after interviewing Blake I have more of an appreciation towards the business. Being

able to discuss the plans and process with Blake before the business even opened allowed me to

better understand just how much determination it takes to open a business. Even now that

Sawstone Brewing Co. is a very successful business throughout Morehead, the drive that the

owners take to keep the brewery alive and prosperous is inspiring. It has only been two months

since the opening of the brewery, but after interviewing Blake I believe that the business has a

very successful future ahead of it.

References

Craft Beer Industry Market Segments. (n.d.). Retrieved October 28, 2019, from

https://www.brewersassociation.org/statistics-and-data/craft-beer-industry-market-

segments/.

Katz, J. A., & Green, R. P. (2018). Entrepreneurial small business. New York, NY: McGraw-

Hill Education.
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NAICS Code: 722410 Drinking Places (Alcoholic Beverages). (n.d.). Retrieved October 28,

2019, from https://www.naics.com/naics-code-description/?code=722410.

Nickell, M. (2019, October, 22). Personal Interview.

Sawstone Brewing Co (2019). [Sawstone Brewing Co Logo]. Retrieved from

http://www.sawstonebrewing.co