The Capital Cycle

This is what the capital investment picture actually looks like in a small brewery:

1. You start with inadequate equipment because that's all you can afford 2. You struggle with inefficiency and manual labour because of inadequate equipment 3. You identify the upgrade that would fix your biggest bottleneck 4. You can't afford it because your margins are thin — partly because of inadequate equipment 5. Something else breaks and the repair eats the money you were saving for the upgrade 6. Go back to step 2

It's a cycle that only breaks if you either secure significant outside investment (with all the strings that come attached), or if the business grows enough to generate surplus cash (which is hard when your equipment is holding you back). Most small breweries stay trapped in this cycle for their entire existence.