DISCLAIMER: This post is a general overview of how missteps can ruin businesses quickly. It is not legal advice. If you have concerns about your business strategy or activities, please make an appointment to discuss it with an attorney of your choosing and in your jurisdiction.
The recent closure of Armed Forces Brewing Company here in Norfolk, Virginia, feels less like a surprise the more I think about it. As a lawyer and small business owner, I’ve been advising entrepreneurs for decades. Unfortunately, I’ve also dissolved a few businesses for clients who made an already difficult game more complicated than necessary. Based on what I’ve read about the AFBC closure, this is another case study showing what happens when outdated business paradigms collide with the realities of today’s world. Below are actions reportedly taken by AFBC leadership that likely caused the business’ demise.
Alienating Potential Customers
Before the brewery opened, one of its board members and brand ambassadors angered many people in the communities surrounding its location by mocking transgender people and refusing to wear a mask on an airplane during the global pandemic. Later, he was arrested for public intoxication and misdemeanor assault. He also used a racial slur against a security guard who tried to help him. It appears AFBC removed his name from the business’ website, but he was still serving on the board soon after and without consequence.
This strategy of leaning heavily into divisive political rhetoric was a self-inflicted wound. Customers aren’t just buying a product; they’re buying into a set of values, as I touched on in the February 2025 Third Ear Thursday webinar with Tevis Trower and Mark Iorio.
My work emphasizes building inclusive and sustainable workplaces, and that principle extends to every aspect of your business. If you deliberately alienate a significant portion of your community, you’re not just losing customers; you’re eroding the very foundation of your business. As I often remind clients and participants in my continuing education courses, there is no constitutional right to run a business. It’s a privilege granted in exchange for the agreement to certain laws and social contracts. AFBC appeared to forget this.
Making It All About You
The founders’ self-promotion and political agenda overshadowed the actual product: beer. When the personal brands of an organization’s leadership take precedence over the customer experience with the product, the business model is likely Unsustainable (which is the title of my second book). We are moving away from ego-driven leadership to a collaborative, purpose-driven model. It’s not about you; it’s about the value you create for others. I have to keep that in check, too, if I want Third Ear Conflict Resolution to keep making a difference in the world long after I am gone.
Focusing on the Wrong Tasks
Even if the brewery had not alienated what it labeled the “local woke mob“and instead built a passionate following, it was destined to fail due to other missteps:
Lack of a Minimum Viable Product (MVP)
You can’t build a lasting business on hype alone. For any business to survive, it needs at least one product or service that sells enough to generate a profit. It needs a MVP. Although I had a pleasant experience at the brewery when Peter and I went to hear some of our favorite local jazz musicians, several people rated the quality of the beer and the customer experience low. The leaders probably could have invested more in product development, listening to customer feedback, and adapting to market demands.
Poor Financial Management
Employees reported AFBC had significant financial and legal struggles. One stated the Chief Executive Officer was more focused on securing investor capital than developing a product that sold. This meant the investors weren’t getting returns on their investments (ROI), and the business was unable to pay its bills.
Money mismanagement is a death knell for any business. It erodes employee, vendor, and customer trust, especially in small communities like Norfolk.
Weak Employment Partnerships
Publications suggest AFBC also had issues with hiring and employee management. Although the brewery hired experienced sales people and managers, their suggestions were ignored. Trust was further eroded by a lack of transparency and integrity. The business failed to pay vendors and employees until ultimately the announcement came. The brewery was closing. The CEO claimed it was not the fault of leadership but of the community it alienated.
A Call for Change
The demise of Armed Forces Brewing Company isn’t just a local story; it’s a microcosm of the systemic problems that plague our current business landscape. This is why I am writing my second book, Unsustainable: Why Our Workplaces Aren’t Working and What to Do About It. Offering alternatives to unsustainable business models that destroy the environment, communities, and individuals, it invites leaders to shift their focus from short-term profits to long-term value. We need to build businesses that are not only financially successful but also socially responsible. Additionally, we need to create workplaces where employees feel valued, respected, and empowered.