Wednesday, January 20, 2010

Is A New Winery In Your New Year?

Starting a new winery is a daunting task.  People come at the problem from varied backgrounds and levels of talent.  Everybody has a different idea about what makes a winery a success. But few would argue that a winery needs to be a successful business.

Often the decision to start a winery happens in the blink of an eye.  Sure, you may have mulled, pondered and ruminated about it for a decade.  But for most people, it comes down to a single moment of conviction when your passion, drive and hope come together and you say: Let's do it.

Forget about the awards ceremonies, the glowing reviews and the adoration of thousands of wine lovers: that will all come in good time.  The first thing you have to do is make sure you have a good business plan.  Without the plan, you're like a ship without a rudder.

The wine business is capital intensive at start-up.  Returns on investment are delayed, reflecting both the nature of a business linked to an agricultural cycle and a slow inventory turnover.  Investors looking to make a quick buck should look elsewhere as a five year lag before returns in not uncommon.  In fact, without proper funding, your winery could be in serious trouble by the time your second or third harvest comes around.  You may find yourself strapped for funds and without the kind of cash flow you may have expected

The wine business is heavily-weighted to a brand-driven model.  You'll soon have questions about how to best promote and market your brand. Before some of the details become insurmountable, consider engaging the services of a consultant.

In the wine industry that could be someone purely on the business side who has a familiarity with the workings of banks, government and the law.  Or it can be someone from development and production, like myself (the friendly guy in the photo), who will be able to tell you what you'll need to achieve the kind of excellence we all strive for in wine. 

Whether you're starting a new venture or working with an established company, there's never a bad time to re-visit the business plan with a fresh set of eyes.  Consider the talents of a consultant when you need to clearly identify your wine business priorities and and create viable, profitable solution.

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