Making the “hops” to entrepreneurship

Apparently, a love of good home-brewed beer is genetic.

Ryan Gray grew up near Denver helping out with his family’s microbrewery business, Keewanaw Brewing Company. Through his days tinkering around at the brewery in all its rustic barn-wood glory, Ryan found himself drawn to the hot, fragrant star of the show: the 16 bbl brewing system.

Fast-forward to high school, and Ryan was your “typical computer geek” — always fiddling with computers and breaking things apart to learn how to put them back together. This natural curiosity led him all the way to engineering school. After school, his parents pushed him out of the nest, so he and his wife packed up and moved to Wyoming, and eventually Houston.

His microbrewing hobby went with him — and eventually offered him the path to freedom he was looking for. After years of navigating a corporate environment, Ryan felt the entrepreneurial itch. “I came from a really structured corporate company, with only so much freedom to innovate and make changes. There just wasn’t any room for new thought.”

Ryan started out by making and selling parts for other home brewers who wanted to build elaborate systems and didn’t have the patience to order from suppliers halfway around the world. Within a year, he went from dabbling in a hobby to committing to Electric Brewing Supply full-time.

Making his dream a reality took a lot more than liquid courage: Ryan bootstrapped his business by borrowing against his personal 401k retirement fund, a calculated risk that quickly paid off. After officially forming Electric Brewing in January 2012, Ryan made his first sale that May — and his popularity took off from there. What else did he quickly love about business ownership, besides the explosive growth? “Freedom! Now I enjoy what I do, even though it drives my wife nuts some days.”

Ryan quickly found himself in an ale-as-old-as-time position that both plagues and blesses American small business owners: rapidly growing customer demand, and the struggle to keep up. It’s a nice problem to have, but it doesn’t make his delicate balance of sales and production capacity any easier. “My biggest challenge as a business owner is always cash flow: learning how to manage it, and making room for building out more inventory. Some weeks are good, and other weeks I’m wrestling with out-of-stock products.”

>> Do you keep running out of stock? 6 steps to nailing your holiday inventory <<

In the fall of 2014, with a hectic holiday retail season and move to Michigan looming on the horizon, Ryan and his wife put their work on ice and dove into a search for affordable inventory financing — and a lender who could offer a helping hand. “We ran into unexpected expenses, including a lull in sales. We needed funding to get inventory in before Christmas, and thanks to leasing agreements we signed, we had a lot of money stuck in limbo in deposits that we couldn’t use for inventory like we normally would.”

“Large banks are fast to talk with you but very slow at real action. Sales guys come in and make big promises, but eventually say, ‘Nevermind, we can’t do anything for you.’”

Filtering out the banks altogether, Ryan learned about Funding Circle from Facebook and applied on the spot. “Funding Circle was the first lender I contacted, because they offered the type of loan I was looking for: a structured term loan.” To compare, he considered another online lender, but their products were too expensive. “Shorter-term capital is convenient, but not a cheap borrowing solution by any means.”

Ryan quickly found Funding Circle to be the perfect pairing for his custom home brewing supplies business: notes of empowerment, practicality, and personalization. “My Funding Circle account manager and underwriter were very friendly, helpful, and easy to talk to. They worked hard to understand what we do and made sure the loan was successful for both of us.” With a loan of $45,000 over a two-year term in his pocket, Ryan and his wife were able to hire seasonal help and secure the inventory they needed to successfully ride the holiday wave.

“Funding Circle is a good solution when you’re small — especially in a market that’s full of banks looking for bigger companies.” 

Today, Electric Brewing Supply is the standard-bearer for advanced home brewing systems and has become one of the country’s leading distributors of stainless steel elements. Ryan recently expanded his space from 1,000 to 3,500 square feet (including a retail storefront!) and expects his operations to grow another 30-40 percent in 2016. He’s also looking forward to adding a couple new product lines into the brew.

Will another loan be in his future? “Making more and bigger products requires a big upfront investment on our part — before we can expect to get payment from customers.” When Ryan needs to top off his growth capital, he knows where to find it. In the meantime, he’s enjoying watching his business rise more quickly than his favorite German ale yeast.

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