To start a winery and owning a wine business of your own might seem romantic, but you have to keep in mind that it is a business just like any other. You need to be determined and passionate, sure, but there are many technical and legal hoops that you need to jump through before you can consider your new enterprise a success.
Here are the steps you need to take and keep in mind as you go through the process to start a winery business on your own, along with some tips and tricks that will help you along the way.
Be very, very patient
Yes, to start a winery demands investing a significant amount of money in it. But, time might be an even more valuable investment that you’ll have to make when you take on an endeavor like this.
On average, it takes five years to plan and develop your vineyard until you see mature yields. After that, it takes another year to produce the first vintage and two or three more years to get your marketing plan in full swing. All things summed up, it can take up to a decade before you start making a profit.
Come up with a name and entity for your product
A carefully picked name can go a long way with branding to make your wine stand out and be memorable. So, before you do anything else, make sure that the name you want for your winery is available and that someone else hasn’t already claimed it.
To make sure that the name you want for your winery is not already claimed, check with the Secretary of State’s office in your state. While you are at it, check if there is a suitable website domain and Instagram handle available as well, since they will be vital marketing tools for promoting your winery.
As you start a winery, another vital step is to choose a business entity for your new wine business. Your best option would be to work as a limited liability company, as it offers you certain protections an individual might not receive while allowing for you to be taxed either as a sole proprietor or corporation.
Come up with a business plan and stick to it
The first step when writing a business plan should be extensive research about the industry and competition. The program should also include a company overview, market analysis, specifics on the product you plan to offer, financial projections, and more.
Keep in mind that creating your business plan is a fundamental step and it should not be a static document, so be prepared to change it as your business evolves, the market fluctuates, and your goals change along with it. The best approach is to write the document as if it is not meant for you but a potential investor, and write down the information you would like to see if you were to invest in somebody else’s company.
Once your operations are in motion, consider hiring a professional service to deal with this area of business, so you can focus on other aspects to start a winery and actually running your winery business.
Licencing, permits, and taxes
This is where things get really tricky, so brace yourself. The winemaking industry is heavily regulated, so your battle with paperwork is going to be long and hard but worth it in the end.
First of all, you will need to apply for and get a permit to operate your winery legally. Next, you’ll need to register your business with the FDA and ensure that it complies with local and state laws. Finally, your wine label must be approved by the Alcohol and Tobacco Tax and Trade Bureau (TTB).
Overall, your best bet for this step would be to hire a lawyer with experience in this aspect of the law.
Have your budget planned
Running a winery is an expensive enterprise. Even if you have your own land that is suitable for it, installing your vineyard can cost between $35,000 and $45,000 per acre. Some of the wine business startup costs you should consider include:
- Equipment, including refrigeration, cellar equipment, winery buildings, trucks, and receiving equipment
- Vines, berry cuttings or Fruit trees
- Fermentation and storage
- Bottling line
- Tasting room
- Payroll for your staff
- Shipping costs
- Marketing costs
While your expenses will be ongoing, the vast majority of your investment will go toward establishing your vineyard’s infrastructure and operations during your first two years of business, so plan accordingly.
You really want to start a winery, just keep in mind that a winery business is not for everyone. It demands time, money, and a set of special skills. Even if you know exactly what you are doing, you will need help from business planners, accountants, geologists, and many different folks that have to do their part to make your enterprise a success.
With the above in mind, go ahead and start a winery! All of the efforts will pay off once you create a bottle of wine with your label on it, so be persistent. Make a plan and stick to it and face every new challenge head-on and you will make it.
About the Author:
Michael has been working in marketing for almost a decade and has worked with a huge range of clients, which has made him knowledgeable on many different subjects. He has recently rediscovered a passion for writing and hopes to make it a daily habit. You can read more of Michael’s work at Qeedle.