2 & 10 … A Legal Budget for Successful Breweries, Wineries & Distilleries

It’s budgeting-season again for many business owners. As you’re putting together the budget for your brewery, don’t neglect to include legal expenses. A legal budget gives yourself advanced permission to call us for the legal needs of your brewery.

Your brewery’s legal budget should have two parts:

One) 2% of annual revenues: Planned to be spent in the next calendar year

Two) 10% of annual revenues: Saved in an emergency legal fund

First, your budget for annual legal expenses should be 2% of annual gross revenues. You’ll use these funds throughout the year to involve us in important decisions. Most big decisions involve legal considerations, and you’ll want to call us to discuss them. In 2014, you might have questions about your lease or an issue with employees. You might want to expand your distribution through a new distributor relationship. You’ll come up with new beers and new beer names and new beer labels, and you’ll want to make sure that you’re not violating existing trade names and trademarks. 2014 might be the year you are proactive about understanding legal challenges to your brewery and how best to avoid them. Your 2% annual legal expenses budget should handle all this.

Your 2% annual legal expenses budget is probably less than your brewery will spend on hops in 2014.

Used with permission. Creative Commons licensed.

Second, your budget should include a contribute to an emergency legal fund of up to 10% of annual gross revenues. You might be threatened with a lawsuit–or you might need to bring a lawsuit–and litigation is expensive. Exactly how much is needed in your emergency legal fund depends on the particular risks associated with your operation. Do you have beer names and beer labels that you need to protect? Are you distributing in several territories? Have you financed your equipment? Do you not have any of these issues, in which case your emergency legal fund can be much smaller than 10% of annual gross revenues? We can help you decide.

Give yourself permission to call us in 2014. Include an appropriate legal budget and you’ll see what good comes from regularly involving us in the growth of your brewery.

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