01 Sep, 2017
Tips For Success In The Wine Business
It’s the dream of many entrepreneurs: Get rich, buy a vineyard, kick back on the porch and relax with a glass of your own wine. Keep dreaming, but be aware wine is a tough, competitive and expensive business that’s likely harder than your current day job. From other hand the great opportunity is also here: the costs of running a winery are great-and land prices are high — that many overleveraged, squeezed-by-competition wineries are ripe acquisition target nowadays.
Money matter. The most common cliché I know related to starting a winery is, «So you want to know the secret to making a small fortune in the wine business? Start with a large fortune!» It is no joke that it is easy to lose money while pursuing your passion and dreams of creating your own wine brand. The most common mistake, and a sure-fire path to losing money, is not being able understand the business end of wine. The key to financial success is to have a great and realistic business plan that also has fallback plans and realistic risk assessments. Business is business!
Time is money. There are many production models available for aspiring wine producers, each with strengths and weaknesses, and the time from starting your venture to having wine to sell, ranges from less than 90 days to tying up lots of capital for over 10 years. So make sure you’ve budgeted for a long period of spending without a single dollar of return.
Land. The key to owning your own vineyard is finding the right piece of land. And not any piece of land will do. Good grape growing areas aren’t the easiest to find, or the cheapest. While a soil test is a good place to start, it is not the only thing to consider. Too much shadow will give you a beautiful green vineyard — but you can kiss good grapes goodbye. Having the appropriate amount of water can make or break a deal so be prepared to set (and pay for) an irrigation system. Temperature is important; frost at the wrong time can destroy it all.
Advising. While «being one with the land» and doing it yourself might sound like a good idea, but it isn’t. Expert advice and a wealth of information are needed to run a successful vineyard. While you might be knowledgeable in some areas, the odds are you will need help.
Marketing. Before all things happening there is essential for success to understand, which market you would like to serve, what are the real customers needs there, what competitive advantages are you going to achieve, what is your target retail price and cost, how you will attract interest of the «gatekeepers» (wine writers, bloggers, distributors, retailers and restaurateurs).
Red Tape. Be aware, the wine industry is highly regulated in every country. From zoning and permits to wine production, storage, labeling regulations, and even the types of wines produced (e.g. effervescent, agricultural, standard), there are numerous regulations to comply with—each with their own record-keeping requirements.
Vision. Create a solid mission, vision and goals for your business. Nobody I have ever met told me, «I went into the wine business to spend my time fighting with the city, county, state and federal regulators, pounding the pavement making sales calls to apathetic and disinterested buyers and distributors, while buried in red tape, forms and paperwork»