winery startup and business plan workbook

Winery Business Plan Template

Written by Dave Lavinsky

Winery Business Plan

You’ve come to the right place to create your Winery business plan.

We have helped over 10,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Wineries.

Below is a template to help you create each section of your Winery business plan.

Executive Summary

Business overview.

Great Grape Winery is a new wine producer and tasting room located in the heart of Walla Walla, Washington’s wine country. The company is founded by Nicholas Perez, an experienced winemaker who has been making wine for nearly two decades, and his wife, Angela, an operations director with a Master’s degree in Business Administration. Together, Nicholas and Angela have the expertise and education needed to start their new company, Great Grape Winery. Nicholas is confident that his ability to effectively manage the winemaking process, combined with Angela’s top-notch management skills, will allow them to run a profitable winery. The couple plans on recruiting a team of highly qualified professionals to help manage the day-to-day complexities of running a winery – winemaking, sales, marketing, quality control, and financial reporting.

Great Grape Winery will offer locally produced, high-quality fine wine for the wine connoisseur and the novice alike. Great Grape will be a one-stop shop for wine enthusiasts to purchase everything they need for hosting their own gathering featuring Great Grape’s fine wines, from bread and cheese selected specifically to accompany certain types of wine to the wine glasses and accessories needed to create an elegant presentation. Great Grape Winery will be the ultimate choice in Walla Walla for its picturesque views and high-quality wines. The winery will offer wine tasting, winery tours, and a chic outdoor seating area to meet up with friends or relax with a glass of wine.

Product Offering

The following are the products that Great Grape Winery will provide:

• Cabernet Sauvignon
• Cabernet Franc
• Wine glasses
• Wine glass charms
• Wine holders

Customer Focus

Great Grape Winery will target all individuals over the age of 21. The winery will target tourists and Walla Walla locals. Great Grape will also target a range of wine drinkers, from wine connoisseurs to novices. No matter the client, Great Grape Winery will deliver the best communication, service, and high-quality wine.

Management Team

Great Grape Winery will be owned and operated by Nicholas and Angela Perez. Nicholas will be in charge of the winemaking process and oversee all production staff. Angela Perez will be the Operations Director and manage the tasting room, sales staff, and customer relations.

Nicholas Perez is a graduate of the University of California with a Bachelor’s degree in Viticulture. He has been working at a winery in California for nearly two decades as a winemaker. Now, he wants to bring his winemaking expertise to the Walla Walla, Washington wine country.

Angela Perez is a seasoned operations director with over eight years of experience overseeing the operations for a small winery. Angela has a Master’s degree in Business Administration and is known for her keen attention to detail, organization, and efficiency.

Success Factors

Great Grape Winery will be able to achieve success by offering the following competitive advantages:

• Highly qualified team of winemakers, wine tasters, and experts on wine selection and pairing work side by side with friendly and knowledgeable sales and tasting room staff to ensure each customer receives personalized and attentive service and gets all of their questions answered.
• Great Grape sells its wine, food products, and wine accessories in-store and online, giving customers more flexibility in the way they can shop. The company will also have a monthly wine club subscription so customers never have to worry about running out of wine or missing out on new products.
• Great Grape Winery offers competitive pricing. The winery works with local suppliers and uses a cost-effective packaging process that allows the company to save money. This savings is then passed on to the customers.

Financial Highlights

Great Grape Winery is seeking $600,000 in debt financing to launch its winery. The funding will be dedicated towards securing and building out the facility and towards purchasing equipment and supplies. Funding will also be dedicated towards three months of overhead costs to include payroll of the staff, rent, and marketing expenses. The breakout of the funding is below:

• Facility build-out: $300,000
• Equipment, supplies, and materials: $120,000
• Three months of overhead expenses (payroll, rent, utilities): $150,000
• Marketing costs: $20,000
• Working capital: $10,000

Company Overview

Who is great grape winery.

Great Grape Winery is a newly established winery located in the heart of Walla Walla, Washington’s wine country. Great Grape will be the ultimate choice for its picturesque views and high-quality wines. The winery will offer locally produced, high-quality fine wine for the wine connoisseur and the novice alike. Great Grape will be a one-stop shop for wine enthusiasts. Customers can purchase everything they need to host their own gathering featuring Great Grape’s fine wines, from breads and cheeses that pair perfectly with the Great Grapes wine selection to elegant wine glasses and accessories. The winery will offer wine tasting, winery tours, and a chic outdoor seating area where customers can meet up with friends or relax with a glass of wine.

Great Grape Winery will employ a team of professionals who are highly qualified and experienced in winemaking, selection, and pairing. Great Grape Winery ensures that every customer that walks through the door receives exceptional customer service.

Great Grape Winery History

Great Grape is owned and operated by Nicholas and Angela Perez. Nicholas is an experienced winemaker who has a Viticulture degree from the University of California. Now, he wants to bring his winemaking expertise to Walla Walla’s wine country. Angela is a seasoned operations director with over eight years of experience overseeing the operations for a small winery. Together, they have begun to set up the business. Initial steps such as registering the business and securing all necessary permits and licenses have been completed.

Since incorporation, Great Grape Winery has achieved the following milestones:

• Registered Great Grape Winery, LLC to transact business in the state of Washington.
• Secured all required licenses and permits to open a winery in Walla Walla, Washington.
• Has a contract in place at the facility that will become the winery and tasting room.
• Reached out to numerous local vineyards to advise them on the upcoming winery in order to start getting supplier contracts.
• Began recruiting a staff of accountants, marketing and sales associates, winemakers, and tasting room personnel to work at Great Grape Winery.

Great Grape Winery Services

• Wine Tasting Services & Events

Industry Analysis

The global wine market was estimated to be $417.85B in 2020 and is forecasted to increase at a compound annual growth rate (CAGR) of 6.4% between 2021 and 2028. The segment of wine that had the largest share of the market in 2020 was table wine, with 84% market share. This type of wine is quite popular due to being relatively inexpensive and easily accessible. While less popular than table wine, sparkling wine is expected to gain market share between 2021 and 2028 as more people around the world, and particularly in the U.S., favor spritz beverages.

In the United States, the millennial age group drinks the most wine. Approximately 24% of wine consumers in the country belong to this demographic. Moreover, 28% of younger millennials drink wine on a daily basis. Trends in the wine market that appeal to millennials include small batch wines, natural wines, sparkling wines, lower-alcohol wines, and sustainable or biodynamic wines. Industry operators can maintain a competitive advantage by offering unique flavors, affordable and accessible products, and catering to the millennial demographic.

Customer Analysis

Demographic profile of target market.

The precise demographics for Walla Walla, Washington are:

Customer Segmentation

Great Grape will primarily target the following customer profiles:

• Millennial age group
• Gen Z who are over the age of 21
• Boomer age group
• Wine connoisseurs
• Walla Walla locals
• Walla Walla tourists
• Wine novices

Competitive Analysis

Direct and indirect competitors.

Great Grape Winery will face competition from other companies with similar business profiles. A description of each competitor company is below.

Valley Winery

Valley Winery makes fine wines from locally sourced grapes. Located in Walla Walla, Valley Winery is able to save on shipping costs by using local suppliers. The winery’s list of services includes wine tasting, winery tours, and private event hosting. Valley Winery makes a range of wines including white, reds, and dessert wines.

Valley Winery promises to deliver the highest quality products at reasonable prices. The winery follows a strict quality control process and only uses the best grapes for its wines. Valley Winery’s team of experienced winemaking professionals assures the wine is made with the best of care. Customers are guaranteed to love the company’s fine wines and if they don’t like a particular wine, the company will offer another type of wine at no additional cost or provide a refund.

Hilly Valley Winery

Hilly Valley Winery in Walla Walla, Washington provides outstanding wines for the pickiest wine connoisseurs. Hilly Valley Winery offers classic wines including Cabernet Sauvignon, Pinot Noir, and Syrah. The owners of Hilly Valley Winery come from a family of winemaking professionals so they understand how fine wine should be produced. The winery also boasts a small cafe where customers can relax with some wine and cheese. On weekends, the winery hosts wine tasting events and tours of the production facility.

Winning Wine

Winning Wine is a trusted Walla Walla winery that provides superior wines, breads, and cheeses for wine enthusiasts in the area. Winning Wine uses organic grapes processed through sustainable methods to ensure a green operation. The winery hosts special events, tours, and winemaking classes. Customers can purchase wine accessories in addition to fine wine while in the tasting room. Winning Wine’s fine wines sell for premium prices due to the company’s use of hand-picked grapes and sustainable production methods.

Competitive Advantage

Great Grape Winery will be able to offer the following advantages over their competition:

• Great Grape Winery works with local suppliers and uses a cost-effective packaging process that allows the company to save money.

Marketing Plan

Brand & value proposition.

Great Grape Winery will offer the unique value proposition to its customers:

• Friendly and knowledgeable employees ensure each customer receives personalized and attentive service and gets all of their questions answered.

Promotions Strategy

The promotions strategy for Great Grape Winery is as follows:

Word of Mouth/Referrals

Nicholas Perez has built a reputation over the years for producing exceptional wine. Many former customers have expressed great enthusiasm for the new winery and have expressed excitement over trying out the wine selection. Great Grape Winery will give customers discounts for referring their friends and families and spreading the word about the new establishment.

Professional Associations and Networking

Great Grape Winery will become a member of professional associations such as the American Society for Enology and Viticulture, the American Wine Society, and the Washington State Wine Commission. Nicholas and Angela will focus their networking efforts on expanding their customer and supplier networks.

Print Advertising

Great Grape Winery will invest in professionally designed print ads to display in programs or flyers at industry networking events, in Walla Walla tourism magazines, in wine trade publications, and in direct-mailers.

Website/SEO Marketing

Great Grape Winery will create and maintain an attractive, well-designed website. The website will be well organized, informative, and list all of the wines and other products currently available at Great Grape. The website will also include a regularly updated blog with interesting and educational articles about wine.

The company’s marketing director will manage Great Grape’s website presence with SEO marketing tactics so that when someone searches for “Walla Walla winery” or “winery near me”, Great Grape Winery will be listed at the top of the search results.

Social Media Marketing 

The company will maintain an active presence on various social media platforms including LinkedIn, Twitter, Instagram, Facebook, TikTok, and YouTube. The marketing director will post new content to these accounts multiple times throughout the week to keep the brand fresh in followers’ minds.

Email Marketing

Great Grape Winery will send email newsletters and promotional offers to customers who subscribe. The newsletter will provide informative content and the promotional offers will help drive traffic to the winery and the online shop.

The pricing of Great Grape Winery will be competitive so customers feel they receive value when purchasing wine from the company.

Operations Plan

The following will be the operations plan for Great Grape Winery.

Operation Functions:

• Nicholas Perez will be the Co-owner and Lead Winemaker. He will oversee the winemaking process and winemaking personnel.
• Angela Perez – Co-owner and Operations Manager who will manage the day-to-day operations of the winery, tasting room, sales staff, and customer relations.
• Justin Lee – Bookkeeper/Accountant who will provide all budgeting, accounting, tax payments, and monthly financial reporting for the company.
• Brenda Moore – Marketing Director who will implement the marketing plan for Great Grape.
• Larry White – Inspection and Maintenance Director who will provide all maintenance on the equipment and internal quality control inspections for the winery.

Milestones:

Great Grape Winery will have the following milestones completed in the next six months.

10/1/2022 – Finalize contract to lease the facility.

10/15/2022 – Finalize personnel employment contracts for the Great Grape Winery team.

11/1/2022 – Finalize contracts with grape suppliers and begin the winemaking process.

1/15/2023 – Begin networking at industry events and implement the marketing campaign.

2/1/2023 – Great Grape Winery opens for business.

Financial Plan

Key revenue & costs.

The revenue drivers for Great Grape Winery are the winery fees charged to customers in exchange for wine products. The company’s price range for its fine wines is $15-$50 per bottle.

The cost drivers will be the overhead costs required in order to staff a winery and the grapes that will be made into wine. The expenses will be the payroll cost, rent, utilities, winemaking supplies, and marketing materials.

Funding Requirements and Use of Funds

Key assumptions.

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

• Number of cases of wine produced per year: 6,000
• Average fees per month: $60,000
• Facility lease per year: $200,000

Financial Projections

Income statement.

Balance Sheet

Cash Flow Statement

Winery Business Plan FAQs

What is a winery business plan.

A winery business plan is a plan to start and/or grow your winery business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your winery business plan using our Winery Business Plan Template here .

What are the Main Types of Winery Businesses?

There are a number of different kinds of winery business , some examples include: Estate Winery, Farmstead Winery, and Custom Crush Winery.

How Do You Get Funding for Your Winery Business Plan?

Winery businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start a Winery Business?

Starting a winery business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Winery Business Plan - The first step in starting a business is to create a detailed vineyard   business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.  

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your winery business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your winery business is in compliance with local laws.

3. Register Your Winery Business - Once you have chosen a legal structure, the next step is to register your winery business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 

4. Identify Financing Options - It’s likely that you’ll need some capital to start your winery business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 

7. Acquire Necessary Winery Equipment & Supplies - In order to start your winery business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your winery business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a successful winery business and starting a winery business plan :

• How to Start a Winery Business

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Winery Start-up & Business Plan Workbook - Maryland Wine

Winery Start-up & Business Plan Workbook Produced in collaboration 1 Winery Start-Up Profile and Business Plan Workbook This Winery Business Plan Workbook was prepared by the Small Business Development Center at Southern Illinois University Carbondale in coordination with the Illinois Department of Commerce and Community Affairs – First Stop Business Information Center. The following organizations and individuals made valuable contributions to the development of this publication: Susan M. Daily, C.P.A. Business Counselor Small Business Development Center Southern Illinois University, Carbondale First Stop Business Information Center Illinois Small Business Office Illinois Department of Commerce and Community Affairs Stephen Menke, Enology Specialist Food Science and Human Nutrition College of ACES (Agricultural, Consumer, and Environmental Science) University of Illinois, Urbana-Champaign Bonnie Cissell, Executive Director and Marketing Specialist Illinois Grape and Wine Resources Council Imed Dami, Viticulture Specialist Plant and Soil Science Department Alan Dillard Limestone Creek, Jonesboro, Illinois Kyle Harfst Rural Enterprise and Alternative Agriculture Development Initiative The Office of Economic and Regional Development Southern Illinois University, Carbondale, Illinois The Indiana Wine and Grape Council The Missouri Grape and Wine Program 2 TABLE OF CONTENTS INTRODUCTION .......................................................................................................................3 THE BUSINESS PLAN – Title Page/Executive Summary .........................................................4 THE BUSINESS PLAN – General Business Information ...........................................................6 The Illinois Grape and Wine Industry.......................................................................................6 The Midwest Wine Industry....................................................................................................8 The United States Wine Industry ............................................................................................9 Business Description and Products Offered.............................................................................11 THE BUSINESS PLAN - Marketing ...........................................................................................12 Target Market .......................................................................................................................12 Competition..........................................................................................................................13 Marketing Strategy – Product ................................................................................................15 Marketing Strategy – Price....................................................................................................16 Marketing Strategy – Place (Distribution Strategy)...................................................................18 Marketing Strategy – Promotion.............................................................................................19 THE BUSINESS PLAN - Management/Operations....................................................................20 Business Organization ..........................................................................................................20 Business Registration ...........................................................................................................22 Management and Employees.................................................................................................23 Labor Planning .....................................................................................................................25 Payroll Taxes .......................................................................................................................26 Insurance.............................................................................................................................28 Suppliers .............................................................................................................................29 Professional Consultants.......................................................................................................29 Licenses & Permits - ATF .....................................................................................................30 Licenses & Permits – Local/County Liquor Control Commission................................................31 Licenses & Permits – Illinois Liquor Control Commission..........................................................31 Licenses & Permits – Illinois Department of Public Health........................................................33 Outside Influences ................................................................................................................34 THE BUSINESS PLAN – Financial Section...............................................................................35 Financial Projections and Supporting Information .....................................................................35 The 5 “C’s” of Credit ..............................................................................................................36 Cost Estimate for Establishment of a Five Thousand Gallon Winery ..........................................37 Winery Facility Establishment Cost Worksheet .......................................................................39 Equipment Planning..............................................................................................................40 Equity Investment Worksheet ................................................................................................42 Sources and Uses of Funds Worksheet ..................................................................................43 Sales Projection Worksheet ..................................................................................................44 Operating Expense Worksheet ..............................................................................................45 Personal Financial Statement ................................................................................................46 GOVERNMENT AGENCY FINANCING PROGRAMS ...................................................................48 ADDITIONAL RESOURCES .......................................................................................................51 Consultants..........................................................................................................................51 References - Books ..............................................................................................................55 References – Organizations, Newsletters, and Websites ..........................................................56 References – Magazines .......................................................................................................56 References – Winery Supplies and Equipment ........................................................................57 Quick Reference Guide to Wine Excise Tax ............................................................................59 References – Glossary of Wine Terms....................................................................................62 3 INTRODUCTION Starting a successful winery involves education in • viticulture, the science of growing wine grapes, • enology, the science of winemaking, and • business planning. A list of several excellent resources for viticulture and enology information is included in the resource section, but this workbook is intended to focus on the business aspect of starting a winery. It will serve as a guide to help you write your Winery Business Plan. After completing the workbook, you should have a clearer understanding of your business concept and the requirements and commitment it will take to turn your concept into a reality. You will also be more prepared to discuss your project with others, such as bankers or investors. It is important to remember that a Business Plan can serve two primary purposes: (1) to be your “road map” in setting up and managing your winery business and (2) to support a loan request. To develop a good business plan, you will need to do research ni all aspects of your business. A good business plan has the following general sections: • Title Page. The title page of your business plan should provide the reader with general contact information including the name of the winery and the name, address, and phone number of the owner(s). • Executive Summary. This introductory section provides the banker or investor a “first impression” of your business concept, typically in one page or less. Although it appears near the front of the plan, it is most effectively written after the rest of your plan is completed. • General Business Information. This section describes the type of business, the product(s) and/or services(s) offered, location, and the general business conditions affecting the Illinois wine industry. • Marketing. This section identifies the winery’s mission statement, target market, competition, pricing strategy, distribution strategy, and promotion plan. • Management and Operations. The purpose of this section is to describe the legal form of the business, skills available within management to successfully run the business, employee information, and other considerations necessary to successfully operate and manage the business. • Financial Information. This section should include a thorough analysis of the use of financing proceeds, five-year financial projections, and owner’s equity information. This workbook will take you through the process of developing all areas of the business plan. It may be necessary to alter the contents of the workbook to suit the particular circumstances involved in your business. Some areas may not relate to your business concept at all, and some areas may require additional information. Becoming an entrepreneur involves a deep financial and emotional commitment. It’s important to remember that you are risking your money and perhaps your financial security. Lending institutions and/or investors are also sharing the risk in your business venture, and your business plan is the necessary tool they will use to evaluate their willingness to assume that risk. Many small businesses fail, and often this is due to inadequate planning. While others can help with the planning effort, only you really know what you want your business to be. The Illinois Small Business Development Center Network is here to assist and counsel you through the planning process. For assistance in determining the location of the center in your area, or accessing other small business information, contact the Illinois Business Assistance Line at 1-800/252-2923, (TDD 1-800/785- 6055) or visit their website at www.illinoisbiz.biz. 4 THE BUSINESS PLAN – Title Page and Executive Summary The Title Page and Executive Summary provide the banker or investor a “first impression” of your business concept. Although they are the first parts of the plan to be read, it is most effective if they are the last parts you write. It just makes sense that you need to go through the entire business planning process before you can effectively write an executive summary that covers all the critical elements. BUSINESS PLAN Title Page The Title Page should be a professional presentation giving the reader general contact information. It should be neat, attractive, and short. The Title Page should: • Identify the winery and the document. • Identify the principals and the location and telephone numbers where they can be reached. GOOD GRAPES WINERY Some optional items that are often included on the Title Page are: John & Elise Winemaker • A graphic that represents the business. This is typically a 100 Wineglass Road picture of the business or product or a copy of the business’ trademark. Good Grapes, IL 65432 (555) 555-5555 • A few sentences that state the company’s mission or a short summary of the financing request. The items included on the title page may seem obvious, but it’s amazing how many business plans are submitted for financing that don't have a title page or have an incomplete one. Nothing will turn off an investor faster than having to look up your telephone number in the phone book because you left it off the title page. Executive Summary The Executive Summary is usually half a page to a page in length and is a basic summary of the key elements of the business plan. Sometimes the Executive Summary is all the potential investor or lender will read, so it must capture his/her attention. It should make an immediate impact on the reader and clearly state the nature of the business and, if you are seeking financing, the nature of the financing request. If the Executive Summary fails to move the potential investor into the depths of the plan, it has failed to do its job. The Executive Summary should include: • The name and address of the winery. • The owner(s) names. • Brief description of the winery. • Types of wines and other product(s) and/or service(s) to be offered. • Purchase terms, if buying an existing business. • Requested loan amount and how the loan will be repaid. • How the loan amount will be spent (broken down into broad categories). • Amount and form of owner(s) equity (owner’s investment in the business). • Expected outcome of business operations. 5 Executive Summary Write an executive summary that summarizes the rest of the business plan and sells your business idea to the potential investor. 6 THE BUSINESS PLAN - General Business Information The purpose of this section is to expand on the executive summary and explain in detail who you are, what you are going to do, and how you plan to do it. For a winery, this section typically includes: • A short description of the Illinois and/or United States wine industry. • What kinds of trends are responsible for the industry’s growth. • A detailed description of your winery. • The location of your winery. Proper site selection is one of the most important factors in establishing a winery. Typically, wineries have a strong tourism element. Therefore, access to the location will be important. While it is not important to be along a major highway, tourists need a reason to visit. • Types of wines to be produced. Will you be producing wine from Illinois grapes, imported juice, or other types of fruit? Will the wines eventually be produced from grapes harvested from your own vineyard? • Other products and/or services to be offered Small wineries typically offer additional products or services that appeal to the wine customer, such as a vineyard, gift shop, or art gallery. These additions make the winery more appealing to the tourist customer base and offer the winery additional sources of income. • What differentiates your winery from the competition. • A sense of where you want the business to be in three to five years, and how you plan to achieve these goals. • History of the business if the business plan is to be used to support the purchase or expansion of an existing winery. Details should include years in existence, current owner, current location, market share, strengths, weaknesses, and financial information for the past three to five years. The Illinois Grape and Wine Industry In the mid 1990’s, a number of grape growers, wine producers, legislators, and representatives from Southern Illinois University – Carbondale and University of Illinois – Urbana/Champaign met to discuss the idea of a state supported council. Several survey teams were formed to provide information relevant to the Illinois grape and wine industry. An industry profile was developed that showed significant growth potential for the wine industry in Illinois, both within the state and as an exported product. (1997 Illinois Winemakers Benchmarking Development Project) The following facts support this conclusion: • According to US Wine Stats, in 1996 Illinoisans consumed 25 million gallons of wine, $705 million in sales. • Illinois has retained a rank as the fifth largest wine consuming state in the country over several years. • Chicago is the second largest metro market in the U.S. in wine consumption, second only to Los Angeles. • Illinois ranked second in the consumption of champagne/sparkling wine in 2000, 1.50 million 9-liter cases. (Adams Wine Handbook 2001) • In 2001, California was the top market for brandy, with about 20% of all sales reported there, followed by New York, with 8% and Illinois with 6%. (Wines and Vines Magazine, 3/28/02) Although consumption of wine in this state is quite substantial, production of Illinois wines amounts to less than one percent of total gallons consumed. 7 To help Illinois producers capture more of that market, the Illinois Legislature established the Illinois Grape and Wine Resources Council (Wine Council) in 1997. The legislation included funds to support research, educational programs, and promotional efforts. The state continues to support the Wine Council with annual allocations from the state’s tourism fund. With the establishment of the Wine Council, and through the partnering efforts with the Illinois Grape Growers and Vintners Association, Illinois is experiencing a turnaround in the grape and wine industry, not only in increased production, but heightened awareness, appreciation, and, sales. In its first year of existence, the efforts of the Wine Council contributed to a statewide jump in Illinois wine sales from $2 million to $7.5 million. The Wine Council has focused on growing the industry by educating potential winemakers and vintners and establishing acceptance of Illinois wines in the marketplace. The wine garden at the Illinois State Fair and statewide marketing materials are examples of how the council is working to increase awareness of state wines. These efforts are paying off with a resurgence of the Illinois wine industry. In 1995, there were nine wineries in Illinois. By the end of 2001, there were 27 wineries in operation. Within the next ten years, tourism experts predict that Illinois wineries will create more than 1,300 jobs and generate more than $60 million in economic activity. Jo Da viess Step henson W inne bag oBo one McH enry La ke Most Illinois wine is made from grapes. Some specialty wines, especially in southern Illinois, are made from locally grown fruits, such C arro l as apples, blackberries, blueberries, cherries, peaches, and raspberries. Although the industry is still considered in its infancy, Ogle D eKa bl several Illinois wines have received national recognition for their Ka ne excellence. Du Pa ge C ook With establishment of the Wine Council, grape growers are also W hitesid e experiencing resurgence in their industry in Illinois. Prior to prohibition, Illinois was dominant in the grape growing industry, but statistics Lee showed that only 82 acres of grapes were in existence in 1996. Past estimates indicated that less than 20 percent of the wines made by Burea u Kend all W il Illinois wineries were made with Illinois-grown grapes. In 1998, only La Sa lel Grund y 10,000 gallons of wine were produced in Illinois using Illinois grapes. Roc k Island He nry This low percentage was not due to wineries’ distaste for Illinois grapes, Merc er but due to a lack of supply. As a follow-up survey to the 1997 Illinois Sta rk Putna m Kankakee Winemakers Benchmarking report, all wineries questioned indicated a W arre n Ma rsh all Iroqu ois preference for Illinois grapes, assuming quality and taste standards He nde r Knox were in place. Illinois vintners have responded and as of 2001, the Wine Council reported 175 vineyards operating in Illinois with 650 acres so n Lvi ing sto n of grapes planted. Pe oria Wo od ford M cD ono ugh Fu lto n T azew ell Mc Le an Fo rd H anc ock Ma so n C ha mp aign noili mr e V Lo ga n iertl u o M Sch uyle r De witt C ass M ena rd Piat t Ad am s Bro wn Mac on D ou glas M org an Sang am on Ed ga r Pike Sc ott C hristia n C oles Gre ene Ma cou pin She lby C lark Jersey M ad si on C raw ford Mont gom er y C m brlnd nuohl aC Fa ye tte Ef fing ham Bond Ja sp er C al y Law ren ce Ric hal nd C linto n M arion St. C la ir Wa yne sdr a wdE W aba sh M onro e W ashingto n Jefe rso n Ra ndo pl h Perry White H am itl on Franklin Ja ckson Sa ilne Ga lat ni W illm s' on Union Johnson Pop e Hard in Alex- a nde r Pulaski M assa c History of Illinois Wine Industry Year Acres Planted Growers Wineries Total Gallons 175 Produce d 2001 650 27 210,000 2000 520 100 20 1999 380 82 18 167,000 1998 240 14 1997 140 41 123,000 1996 82 10 1954 400 1925 +3,000 Information for this table was generously provided by the Illinois Grape and Wine Resources Council. 8 The Midwest Wine Industry In addition to Illinois, other Midwestern states are also experiencing a resurgence in their wine industries. Sales of Indiana wines have more than tripled since 1994 and Missouri wine sales have doubled in the same time period. Legislative support from the three state governments has been the force behind this dramatic growth. The Indiana Wine and Grape Council and the Missouri Grape and Wine Program were developed with the same goals as the Illinois Grape and Wine Resources Council for their respective states. This is similar to the strategy used by the California wine industry in the 1980’s. “Before the 1980’s, people didn’t think of California wine as fine wine, they thought of it as jug wine,” explains Bonnie Cissell, executive director of the Illinois Grape and Wine Resources Council. “Then California poured tons of money into marketing, and they were supported by their state legislators. So now, what is perceived to be good wine is strongly influenced by what comes out of California.” Due to weather, soil, and other factors, Illinois and the other Midwest states cannot cultivate the same wine grapes as California. “We can’t grow Chardonnay. We can’t grow Merlot. We grow French hybrids, which can withstand the cold temperatures and the high humidity,” explains Cissell. Rather than compare Illinois and California varieties, she suggests that wine drinkers judge Illinois wine on its own merits. Nationwide industry publications such as Vineyard and Winery Management Magazine are recognizing the progress in the heartland. The US wine industry as a whole is on the rise and the Midwest wine industry is benefiting from that growth. A Comparison of the Illinois, Indiana, and Missouri Wine and Grape Industries 1994 – 2001 Illinois data provided by the Illinois Grape and Wine Resources Council. Indiana data provided by the Indiana Grape and Wine Council. Missouri data provided by the Missouri Wine and Grape Program. Number of Illinois Indiana Missouri Grape Illinois Indiana Missouri Wineries Acreage 21 28 * 80 1100 1994 * 25 30 1994 * ** 1995 * 27 29 1995 * 105 * 1996 * 27 30 1996 140 * 700 1997 12 27 31 1997 240 165 * 1998 14 28 33 1998 380 ** 1999 18 33 33 1999 520 195 * 2000 20 * 36 2000 650 250 1000 2001 27 2001 Total Gals. Illinois Indiana Missouri “This year we're expecting approximately 1.5 million people will visit Produced our 30+ wineries. While we realize our numbers don't approach 69,345 292,000 those of larger wine producing states such as California or 1994 * 84,587 304,000 Washington, there's clearly no shortage of enthusiasm among wine 1995 * 101,800 329,000 lovers about what we're accomplishing with our special grape 1996 * 123,300 380,000 varieties right here in America's heartland.” 1997 123,000 156,308 388,000 1998 * 177,182 415,000 Excerpted from the Missouri Wine and Grape Program Website. 1999 167,000 218,829 450,000 2000 * “With a growth rate of over 25% for the past five years in gallons 2001 210,000 * * sold, the Indiana wineries and grape growers are prospering from the fruits of their labor.” Excerpted from the Indiana Grape and Wine Council Website. 9 The United States Wine Industry The wine industry in the United States has experienced steady growth over the past 25 years. Between 1945 and 1970, the consumption of wine in the United States was quite modest, but nevertheless fairly consistent in terms of both volume and revenue growth. Beginning in the early 1970’s, however, demand began to increase dramatically. The total gallons of wine consumed more than doubled in between 1970 and 1980, and continued to expand rapidly in the early 1980’s, due in part to the development and popularity of wine coolers. A decrease in wine consumption was experienced in the early 1990’s, but the dollar amount of retail sales continued its steady growth. Since 1995, the industry has again been experiencing significant growth in both wine consumption and retail sales of wine. Wine Sales in the U.S. 1975-2000 Year Volume Entering Trade Channels Retail Sales of Wine 2000 565 million gallons $19.0 billion 1999 551 million gallons $18.1 billion 1998 526 million gallons $17.0 billion 1997 520 million gallons $16.1 billion 1996 500 million gallons $14.3 billion 1995 464 million gallons $12.2 billion 1990 509 million gallons $11.7 billion 1985 580 million gallons $10.8 billion 1980 480 million gallons $6.2 billion 1975 368 million gallons $3.3 billion Source: Gomberg, Fredrikson & Associates (volume) and Wine Institute (value). Wine Consumption in the U.S. 1940-2000 Total Wine per Total Wine Total Table Wine Resident Gallons Gallons 2000 2.01 gals. 565 million 505 million 1999 1998 2.02 gals. 551 million 482 million 1997 1996 1.95 gals. 526 million 466 million 1995 1990 1.94 gals. 520 million 461 million 1980 1970 1.89 gals. 500 million 439 million 1960 1950 1.77 gals. 464 million 404 million 1940 2.05 gals. 509 million 423 million 2.11 gals. 480 million 360 million 1.31 gals. 267 million 133 million 0.91 gals. 163 million 53 million 0.93 gals. 140 million 36 million 0.68 gals. 90 million 27 million Source: Wine Institute/ Gomberg, Fredrikson & Associates. 10 General Industry Information Describe any general industry information you wish to include in your business plan. 11 Business Description Describe your winery. Be sure to include location, seasonal hours of operation, types of wines to be produced, any other products and/or services you are planning to offer, and what differentiates your winery from the competition. 12 THE BUSINESS PLAN - Marketing Marketing plays a vital role in successful wineries. How well you market your winery, along with a few other considerations, will ultimately determine your degree of success or failure. The key element of a successful marketing plan is to know your customers – their likes, dislikes, and expectations. By identifying these factors, you can develop a marketing strategy that will allow you to attract customers and fulfill their needs. • Develop a mission statement • Define and analyze your target market. • Identify and analyze your competition. • Develop a marketing strategy to reach your target market. Mission Statement A company’s mission statement captures, in a few sentences, your business purpose, its goals and objectives, and the philosophies underlying them. The mission statement tells your customers, employees, suppliers, and the community what your business is all about. Mission Statement Develop your company’s mission statement. Target Market Your target market is the group or groups that are most likely to buy your product or service. A clear target market is the heart of any marketing plan and can often be the difference between succeeding in business and failing. This group can be defined by: • Type – Are your customers individuals or other businesses such as liquor stores, gift shops, or restaurants? • Demographics (physical or population characteristics such as age, gender, or economic status) – Most obviously your market will be over the age of 21 and have some degree of expendable income. Further define this market based on the types and prices of the wine you will be selling. • Geographic Location – Are your potential customers mostly tourists or from your local market? • Lifestyle - What will your customers be looking to find at your winery? What do you think is your winery’s strongest selling point? This could be your wine, the experience of visiting the winery itself, the area, the people working in your winery, or something else entirely. Identify any trends in your target market that may affect your business, as well as market size. Demographic information can be located on the US Census website at www.census.gov. 13 Target Market Define your winery’s target market. Who, by definition, are the people who will be buying most of your wine? Target Market Analysis After you define your target market in general terms, the next step is to analyze some characteristics of this group. The more you know about your customer, the better prepared you will be to focus your marketing campaign towards these people. Where does your target market live, work and shop? What are your customer’s needs and wants? How big or approximately how many individuals is your target market? Which of these needs or wants will your winery meet and how? (check http://www.state.il.us/2000census ) Competition After you define your market, the next step is to define your competition. There are two ways to define competitors: • One is by product and marketing strategy – These competitors are businesses that use similar marketing strategies and sell similar products to your target market. These businesses are considered your direct competitors. Other wineries in your area are the most obvious form of this type of competition. • The second way is to define your competitors by your customers – Who is competing for your customer’s dollar? Ask yourself the question, “Where is your target market currently purchasing the products and services you are planning to offer?” Liquor stores, gift shops, restaurants, and other tourist-related businesses should also be considered as possible competition. It is common for tourist businesses such as wineries to work together with their competition to increase the tourism in their area. An example of this is the Shawnee Hills Wine Trail in southern Illinois. A thorough analysis of your competition is essential to any business development. Study your competitors’ operations and strategies and learn from their strengths and their weaknesses. Use the form on the following page to assist you with an analysis of your closest competitors. Make copies and use additional sheets if needed. 14 Competitor Analysis Competitor’s Name Where are they located? Include approximate distance from your location. Number of years in business What types of wine do they offer? What additional product(s) and/or service(s) do they offer? How are their products/services different from yours? What is your perception of their prices? Are they appropriate for their wines? How do they advertise and promote their product or service? How do you perceive their business: Steady? Increasing? Decreasing? What are their strengths? (Their strengths can also be your strengths.) What are their weaknesses? (Their weaknesses can be your opportunities!) How will your business compare to this competitor? Will you be working with this competitor to increase regional tourism? How? 15 Marketing Strategy • Product • Price • Place • Promotion Product One of the most difficult decisions in winery planning is deciding what wines to produce and in what quantities. Two operating assumptions are critical to a winery’s success: 1) The winemaker makes wines of sufficient quality to generate demand and maintain price levels. 2) The number of visitors to the winery and local and regional sales outside the winery are sufficient to consume at least 80% of bottled inventory per year and maintain price levels. (Stephen Menke, Enology Specialist, Illinois Grape and Wine Resources Council) A successful winery grows and makes what it can sell. In other words, make sure that your wines are a good fit to your market. The other products and services that you provide should also fit with your market and complement your winery’s image. Packaging is another element in the product mix. Your label becomes as important a part of your winery’s image as your wine. The image that the label portrays should fit with the types of wine you will be producing. The label may be the hook that creates the purchase and affects the consumer in his/her overall impression of the wine. Care should be taken in its design and implementation. There are several legal restrictions on wine labeling that are addressed later in this workbook. Wineries should also consider obtaining a trademark for the winery name, brand, and wine label. Product Mix Develop a product list and approximate quantities to be produced for the first five years. Remember, this is just a plan. In reality, actual quantities produced will be adjusted annually based on factors such as market acceptance, sales history, and raw material availability. 16 Price Lack of courage in pricing is the single biggest marketing error small business owners make. It is commonly believed that price derives all purchasing decisions, so in order to gain market share, all you have to do is have the lowest price. Wrong! You cannot afford this business strategy. Price is important, but is not the only reason customers purchase a product. Price, perceived quality, service and profitability are all tied together. While there is no magical formula for deciding your pricing, there are a few guidelines that will help develop a price strategy to work with. The first step is to break down your product or service into a tangible quantity. For a winery, this would obviously be a bottle of wine. The other products or services to be offered should also be broken down into tangible quantities. The second step is to develop a price for each of your tangible quantities. What you charge for your product or service depends on the following: 1) Direct material costs - All directly related out-of-pocket expenses for production of the product or service. • Fruit/Juice • Bottle • Cork • Label • Yeast/Additives/Capsule 2) Indirect costs – Your overhead costs should be included in the pricing decision. Overhead costs are the costs involved in running your winery including marketing, labor, utilities, loan interest, taxes, insurance, maintenance, accountant ef es, and other operating expenses. These are costs not directly related to the particular product or service, but they are costs that must be recovered. 3) Your labor – It is a common mistake for small business owners to forget to take their own labor into consideration when pricing a product. 4) What the competition is charging – Visit as many wineries as possible in your area and perform an analysis of their pricing of different types of wine. While you should consider what your competitors are charging, it doesn’t necessarily mean that their pricing strategy is the right fit for your market. 5) Perception of quality - The pricing of a wine is dependent just as much on the perception of quality as it is on the actual quality. This is due to the fact that not only does each person have a different palate of flavors and aromas and textures that he/she tastes, but also a high regard for or loyalty to certain grape varieties or certain wineries. This loyalty is based both on the customer’s palate and experience and upon a perception of the inherent capabilities for quality of the customer’s relationship with certain grape varieties or wineries. (Stephen Menke, Enology Specialist, Illinois Grape and Wine Resources Council) 6) What price structure the target market will bear. - Make sure your prices are a correct fit for your market. 7) What is an adequate profit. – The price of the product has to be sufficient to secure an adequate profit for the business owner(s). Items 4 thru 7 should be used as adjustments to the final price. If you find you must adjust your price down to your cost or below your cost, you may not be able to compete; that is, you may not have a viable product or service. Go back and see if you can cut your expenses or change your product mix without sacrificing quality. Another solution might be that your target market is not right; maybe you are targeting a lower income group than this product or service needs to succeed. 17 Pricing Strategy Develop a direct cost estimate and price list for your product mix. Name of Wine: Name of Wine: Price Per Bottle Price Per Bottle Cost Estimate per Bottle: Cost Estimate per Bottle: Fruit/Juice Fruit/Juice Bottle Bottle Cork Cork Label Label Capsule/Yeast/Additives Capsule/Yeast/Additives Other Costs Other Costs Total Direct Cost Total Direct Cost Gross Profit (Price Less Direct Cost) Gross Profit (Price Less Direct Cost) Name of Wine: Name of Wine: Price Per Bottle Price Per Bottle Cost Estimate per Bottle: Cost Estimate per Bottle: Fruit/Juice Fruit/Juice Bottle Bottle Cork Cork Label Label Capsule/Yeast/Additives Capsule/Yeast/Additives Other Costs Other Costs Total Direct Cost Total Direct Cost Gross Profit (Price Less Direct Cost) Gross Profit (Price Less Direct Cost) Pricing Strategy for Other Products: 18 Place - Distribution Strategy This section of the marketing plan answers the following questions: • How are you going to get your wine to your customer? • How will the wine be sold? Below are some examples of ways to move your product to your customer. Your strategy may involve one or more of these techniques. • Retail Onsite Sales – Tourists and Local Visitors • Festivals and Special Events • Wholesale Sales to Other Businesses such as Restaurants, Liquor Stores, and Gift Shops • Internet Sales – Limited to Certain States • Distributors Develop a distribution strategy for your business. Describe your selling strategy and how you are going to reach your customer. 19 Promotion Promoting your business entails using all available means to get a positive message to your customers about your product or service. This can be achieved using a website, signage, paid advertising, directory listings, publicity, direct mail, and business and community involvement. Marketing can be done individually or as part of a group. Take the time to visit the websites of other Illinois wineries and Illinois wine industry organizations (www.illinoiswine.org and www.wine-il.com) for marketing opportunities and ideas. Additional marketing information and assistance can be obtained from your local tourism development organizations and the Illinois Grape and Wine Resources Council. Your local Small Business Development Center can provide eBusiness counseling and resource referrals to guide you through the process of developing an Internet presence for your winery. (See the Reference Section at the end of this workbook for contact information.) Promotion Plan Develop a promotion plan for your winery. Calculate both a start-up and a monthly advertising and promotion budget. Contact web site development companies, newspapers, radio/TV/cable outlets, printers, sign shops, etc. to obtain price quotes. Item Source Start-up Monthly Cost ($) Cost ($) Internet: • Web page design • Domain name purchase • Hosting services Signage Radio TV/Cable Newspaper Tourism Publications Yellow Pages Printed Material: • Business cards • Brochures/Flyers Direct Mail (Postage) Festivals Membership Fees Other Total Advertising & Promotion Expense 20 THE BUSINESS PLAN - Management/Operations The purpose of this section is to describe the legal form and organization of the business, skills available within management to successfully run the business, employee wages/salaries, employment schedules, and other considerations necessary to successfully operate and manage your winery. Business Organization Several forms of business ownership are possible, including Sole Proprietorships, General and Limited Partnerships, Limited Liability Partnerships (LLP), Limited Liability Companies (LLC), "S" Corporations and "C" Corporations. Each form has advantages and disadvantages. Before deciding on a form of business ownership, an attorney should be consulted who specializes in these issues. Sole Proprietorship and General Partnership A sole proprietorship is a single ni dividual who owns and operates a business. There is no legal separation between the individual and the business. The owner benefits from 100% of the profits and is personally responsible for 100% of the debts and liabilities of the business. It is the simplest form of business ownership to start up and to maintain. Income is reported annually on the owner’s personal income tax return. More information on sole proprietorships can be found in IRS Publication 334: Tax Guide for Small Businesses. You can download this publication from the IRS website at www.irs.gov or you can receive one by mail by contacting the IRS at (800) 829-3676. A general partnership is very similar to a sole proprietorship except that there are two or more individuals who own the business. The partners are able to pool their resources and share control of a business. A general partnership is relatively simple to start up and to maintain. A written partnership agreement is not a legal requirement, but is strongly recommended to clarify each partner’s rights and responsibilities. Be aware that all partners remain 100% responsible for the debts and liabilities of the business, regardless of how the partnership agreement outlines work responsibilities and shares of profit. A separate set of income tax returns must be filed annually for the partnership, but the partnership itself is not subject to income tax. The individual partners report their share of the partnership income on their personal income tax returns. More information on partnerships can be found in IRS Publication 541: Partnerships. You can download this publication from the IRS website at www.irs.gov or you can receive one by mail by contacting the IRS at (800) 829-3676. When a business name is different from the owner(s) full legal name(s), the Illinois Assumed Name Act requires sole proprietorships and general partnerships to register with their local county clerk's office for registration under the Assumed Name Act. Limited Partnership A limited partnership is an organization made up of a general partner, who manages the business, and limited partners, who invest money, but have limited liability and are not involved in day-to-day management. The general partner(s) is/are 100% responsible for all the debts and liabilities of the business. The limited partner’s liability does not exceed his/her investment in the business. More information on limited partnerships can be obtained from the Illinois Department of Revenue at: Limited Partnership Section Limited Partnership Section 501 South Second Street 17 North State Street Room 1137 Room 357, Howlett Building Springfield, Illinois 62756 Chicago, Illinois 60602 217/785-8960 312/793-2872 TDD: 1-800/252-2904 TDD: 1-800/252-2904 Limited Liability Company A Limited Liability Company (LLC) is the non-corporate form of doing business that provides its owners with limited liability, flow-through tax treatment and operating flexibility through participation in management of the business. Anyone considering the formation of an LLC is strongly encouraged to use an attorney. 21 For more information on LLCs or to obtain LLC forms, you can contact the Illinois Secretary of State’s office at: Limited Liability Company Section Room 351, Howlett Building Springfield, Illinois 62756 217/524-8008 TDD: 1-800/252-2904 Registered Limited Liability Partnership If organized as a Registered Limited Liability Partnership (RLLP) under a specific section of the General Partnership Act, partners are not liable for the debts, obligations and liabilities of, or chargeable to the partnership arising from negligence, wrongful acts, omissions, misconduct or malpractice committed while the partnership is a Registered Limited Liability Partnership. For more information on RLLPs or to obtain RLLP forms, you can contact the Illinois Secretary of State’s office at: Registered Limited Liability Partnership Section Room 357, Howlett Building Springfield, Illinois 62756 217/524-4952 TDD: 1-800/252-2904 "C" Corporation A corporation is a distinct legal entity and is the most complex form of organization. A corporation may sell shares of stock, which are certificates indicating ownership, to as many people as is desirable. The shareholders then elect a board of directors, which elects a president and other officers who run the company on a day-to-day basis. Among the advantages of corporate formation are limited liability of the shareholder and ease of transferring ownership. The corporation provides a wall of liability protection between the business and the owners, but the owner should be aware that most banks will require a personal guarantee from the major shareholders as collateral on any corporate financing. If the name of the business includes the word “Corporation,” “Inc.,” “Incorporated” or “Corp.”, then the business must be incorporated. It is recommended that an attorney be consulted in forming a corporation. A set of corporate income tax returns will need to be filed annually. The corporation is taxed on the income of the business. Double taxation can occur when the income is distributed to the shareholders in the form of dividends. An annual report will also need to be filed with the Illinois Secretary of State’s office. Information on corporations can be found in IRS Publication 542: Corporations. You can download this publication from the IRS website at www.irs.gov or you can receive one by mail by contacting the IRS at (800) 829-3676. For more information on corporations or to obtain corporate forms, you can contact the Illinois Secretary of State’s office at: Business Services Business Services Room 328 Howlett Building 17 North State St., Room 1137 Springfield, Illinois 62756 Chicago, Illinois 60602 217/782-6961 312/793-3380 TDD: 1-800/252-2904 TDD: 1-800/252-2904 "S" Corporation An S Corporation is not a separate form of legal structure, but rather a special tax status granted by the Internal Revenue Service (IRS). In general, an S Corporation passes through income and expenses to its shareholders, who then report them on their personal income tax returns. To qualify for S Corporation status, a corporation must meet several requirements. A complete list of these requirements is available in the IRS instructions to Form 2553: Election by a Small Business Corporation. You can download this form from the IRS website at www.irs.gov or you can receive one by mail by contacting the IRS at (800) 829-3676. 22 For more information on S Corporations, contact the Illinois Secretary of State’s office at: Business Services Business Services Room 328 Howlett Building 17 North State St., Room 1137 Springfield, Illinois 62756 Chicago, Illinois 60602 217/782-6961 312/793-3380 TDD: 1-800/252-2904 TDD: 1-800/252-2904 Cooperative A cooperative is an association of persons united to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise. The cooperative entity is similar to a "C" Corporation, except the profits are passed through to the member-owners without corporate taxation, and each member-owner is entitled to only one vote. A cooperative exists to provide economic services to its members rather than just to generate a return on investment. A portion of all of its capital comes from members rather than outside investors. Capital is obtained by direct contributions through membership fees or sale of stock, by agreement with members to withhold a portion of net income based on patronage, or through assessments on some regular basis, such as per unit of product sold or purchased. More information on cooperatives can be found on the USDA Rural Development website at: http://www.rurdev.usda.gov/rbs/pub/newpub.htm. Business Registration Any form of business ownership that will be operating a winery will need to obtain a Federal Identification Number. Form SS-4 should be filed with the Internal Revenue Service. You can download this form from the IRS website at www.irs.gov or you can receive one by mail by contacting the IRS at (800) 829-3676. This form is also available at IRS and Social Security Administration Offices. Any form of business ownership that will be operating a winery in Illinois is also required to register with the Illinois Department of Revenue by filing form NUC-1. A Business Registration Kit containing this form can be obtained by contacting the Illinois Department of Revenue at: 101 W. Jefferson Street 100 N. Randolph P.O. Box 19030 Suite C300 Springfield, Illinois 62794-9030 Chicago, Illinois 60601 800/732-8866 TDD: 1-800/544-5304 Business Organization Discuss the legal form of the business ownership that you will be using. Include “Assumed Name Act” registration, Partnership Agreements, LLC, or Incorporation Certificate(s) as appropriate. List the names of all principals involved in the business. 23 Management and Employees The two essential ingredients for success in any business are a good business idea and the right people to turn that idea into a business. This section of the business plan shows the potential investor that the owner and his/her employees have the proper experience in the industry and the management skills to run the business effectively. It also shows the major tasks of the business and assigns people to be responsible for the completion of those tasks. Some tasks that should be considered for a winery include: • Winemaking • Tasting Room Reception • Viticulture (if a vineyard will be maintained) • General Bookkeeping • Management of Employees • Payroll • Sales • Payroll Tax Return Preparation • Marketing • Sales and Excise Tax Return Preparation • Management of Employees • Income Tax Preparation • Purchasing • Corporate Recordkeeping Key Persons and Management Discuss key persons and tasks for which they will be responsible. Include resumes of owners and key personnel. The resumes should include past-related employment experience; professional training and education; related certificate/degree(s) held; and other personal information related to business operations. Be sure to highlight winery-related experience. A sample resume format is shown on the following page. 24 Sample Resume Form Personal Information Name Address Telephone # Education High School College Technical Work Experience Positions/Duties Employer Dates Employed (From - to) 25 Labor Planning Develop a Personnel Hiring & Pay Schedule. List employees you will be hiring, general duties, hiring qualifications, salary, and proposed hiring date. You should also note whether the position will be year-round or seasonal. Job Title Duties Qualifications Wage Rate Hiring Date ___Seasonal ___Year Round ___Seasonal ___Year Round ___Seasonal ___Year Round ___Seasonal ___Year Round ___Seasonal ___Year Round Develop a Work Schedule. The work schedule should provide coverage for the scheduled operating hours of the winery. The seasonality in the winery industry should be taken into account in predicting labor costs. For cash flow projections, expenses should be estimated monthly for the first year and quarterly thereafter. Seasonal Job Title: Monthly Job Title: Monthly Job Title: Monthly Job Title: Monthly Work Wage Wage Wage Wage Hours Hours Per Hours Per Hours Per Schedule Per Week Week Week Week January February March April May June July August September October November December 26 Payroll Taxes Businesses employing workers in Illinois are required to register with the Internal Revenue Service (IRS), The Illinois Department of Revenue, and The Illinois Department of Employment Security. Information regarding registering with the IRS (Form SS-4) and the Illinois Department of Revenue (Form NUC-1) is included in the Business Registration Section of this workbook. Internal Revenue Service Federal Income Tax Withheld, Social Security Tax, and Medicare You withhold federal income tax from your employee's wages. To figure how much federal income tax to withhold from each wage payment, use the employee's Form W-4 and the methods described in IRS Publication 15: Employer’s Tax Guide. Social security and Medicare taxes pay for benefits that workers and their families receive under the Federal Insurance Contributions Act (FICA). Social security tax pays for benefits under the old-age, survivors, and disability insurance part of FICA. Medicare tax pays for benefits under the hospital insurance part. You withhold part of these taxes from your employee's wages and you pay a matching amount yourself. To find out how much social security and Medicare tax to withhold and to pay, see IRS Publication 15: Employer’s Tax Guide. Non-farm employers report these taxes on Form 941, Employer's Quarterly Federal Tax Return. You generally have to deposit employment taxes before you file your return. Federal Unemployment Tax The federal unemployment tax is part of the federal and state program under the Federal Unemployment Tax Act (FUTA) that pays unemployment compensation to workers who lose their jobs. You report and pay FUTA tax separately from social security and Medicare taxes and withheld income tax. You pay FUTA tax only from your own funds. Employees do not pay this tax or have it withheld from their pay. FUTA tax is generally paid at a rate of .8% of each worker’s wages up to $7,000 per calendar year. Form 940 or Form 940-EZ is filed annually to report this tax, but the tax needs to be deposited quarterly if the tax liability exceeds $100. More information on FUTA tax is available on the IRS website at www.irs.gov. More information on federal payroll taxes is available in IRS Publication 583: Starting a Business and Keeping Records. You can download this publication from the IRS website at www.irs.gov or you can receive one by mail by contacting the IRS at (800) 829-3676. The Illinois Department of Employment Security (IDES) A business is required to make unemployment insurance contributions to the IDES if: 1) The business employed one or more workers in each of twenty weeks in a calendar year; or 2) The business paid at least $1,500 in total wages during the calendar year. Most new employers are responsible for making contributions at the current rate of 3.1% of each worker’s wages up to $9,000 per calendar year. Reports must be filed quarterly listing the workers’ wages even if there is no contribution due. Contact the IDES to receive a State Unemployment Insurance New Employer Packet at: Illinois Department of Employment Security 401 South State, 4 North Chicago, IL 60605 (800) 247-4984 (In Illinois only) or (312) 793-4880 TDD: (312) 793-9350 Website: www.ides.state.il.us 27 Illinois Department of Revenue Illinois Income Tax is withheld from the employee’s check and remitted to the Illinois Department of Revenue. Illinois Income Tax is not withheld from compensation paid to residents of Iowa, Kentucky, Michigan, and Wisconsin, due to reciprocal agreements with each of these states. Form IL-941 must be filed on either an annual or quarterly basis. Employers who accumulate more than $500 unpaid withheld tax each month must send withholding payments more often. After registering, businesses will receive instruction from the Illinois Department of Revenue regarding their individual filing requirements. More information on Illinois withholding taxes can be found at the Illinois Department of Revenue website at www.revenue.state.il.us. Hiring a New Employee When hiring employees, have them fill out Form I-9, Form W-4, and Form IL-W-4. If your employees qualify for advance payments of the earned income credit, they must give you a Form W-5. Form I-9. You must verify that each new employee is legally eligible to work in the United States. Both you and the employee must complete the Immigration and Naturalization Service (INS) Form I-9: Employment Eligibility Verification. You can get the form from INS offices. Call the INS at 1-800-755-0777 for more information about your responsibilities. Form W-4. Each employee must fill out Form W-4: Employee's Withholding Allowance Certificate. You will use the filing status and withholding allowances shown on this form to figure the amount of income tax to withhold from your employee's wages. Form IL W-4. Each employee must fill out on Form IL-W-4: Employee's Illinois Withholding Certificate. Employers withhold Illinois Income Tax based on the number of allowances claimed on this form to figure the amount of income tax to withhold from the employee's wages. IDES New Hire Reporting. All employers are required to report persons hired or rehired within 20 days of their first day on the payroll to the IDES. This includes full-time, part-time, temporary, and rehires. The information needed is: Employee's name, address and social security number and the employer's name, address, and federal employer identification number (FEIN). This information can be reported on the IDES New Hire Reporting Form or a copy of the Form W-4 can simply be submitted. More information on new hire reporting can be found at the IDES website www.ides.state.il.us. Family Employees Because wineries are often family-run operations, the following information on family employees is provided. If you are a sole proprietor, and if your employee is a member of your family, use the following rules to determine if his or her wages are subject to employment taxes. Employing your child. Payments for the services of your child under the age of 18 who works for you in your business are not subject to social security and Medicare taxes. Payments for the services of your child under the age of 21 who works for you in your business are not subject to FUTA or state unemployment tax. But they may still be subject to income tax withholding. Employing your spouse . If your spouse works for you in your business, the wages you pay to him or her are subject to income tax withholding and social security and Medicare taxes, but not to FUTA or state unemployment tax. Employing your parent. If your parent works for you in your business, the wages you pay to him or her are subject to income tax withholding and social security and Medicare taxes, but not to FUTA or state unemployment tax. 28 Insurance Identify the potential risks of loss inherent to your business. These risks form the basis for your business insurance needs. Some of the typical types of business insurance are listed below: • Workers Compensation • Fire or Structural Damage • Business Liability (Product and Public) • Vehicle Coverage • Loss & Theft of Building Contents • Glass & Sign Breakage • Business Interruption • Dram Shop The following bonds are necessary to acquire the required licenses for operating a winery in Illinois: • Wine Surety Bond • Wine Operations Bond • Tax Deferral Bond After considering your insurance needs, and regardless of whether you deal with independent agents, insurance brokers or work directly with insurance companies, be certain that you've done some comparison- shopping before you sign up. Some sources of information on business insurance are listed below. • Illinois Department of Insurance – Maintains experience information on insurance companies. • Best’s Key Rating Guide – Maintains financial strength information on insurance companies. • Local insurance agencies – Check yellow pages for listings. Include copies of your insurance carriers’ cost quotes. Insurance Company Type of Insurance Upfront Monthly Cost Cost Total Insurance Costs 29 Suppliers Include information on major suppliers of grapes, juice, bottles, corks, labels, chemicals, cooperage, equipment, etc. Include their address, their product lines, and any special credit terms. Supplier Address & Phone # Products/Services/Terms Professional Consultants Provide a list of professional services providers to be utilized (e.g., attorneys, accountants, business consultants, enology experts, viticulture experts, etc.), the type of services to be rendered, and the anticipated costs. Professional consultants can add strength to your business idea by filling in weaknesses discovered in the analysis of management skills. Type Name Address & Telephone # Start-up Recurring Costs ($) Costs ($) Accountant Attorney Other (list): Total Professional Fees 30 Required Licenses, Permits, and Registrations After you receive your Federal Identification Number, Illinois Business Tax Number, and Assumed Name approval, if applicable, you can then start the process of obtaining the necessary permits and licenses to operate a winery in Illinois. This process can be time consuming, so be prepared! You should also make sure your location is properly zoned before starting this process. You must have a wine production facility for the Bureau of Alcohol, Tobacco and Firearms (ATF) to inspect prior to obtaining a permit. US Treasury Bureau of Alcohol, Tobacco and Firearms (ATF) In the alcohol beverage industry, the ATF regulates the qualification and operations of distilleries, wineries, and breweries, as well as importers and wholesalers in the industry. There are several forms that need to be submitted to the ATF to obtain the necessary federal permits. These forms can be downloaded from the ATF website at www.atf.treas.gov or you can receive a packet by mail by calling the ATF at (800) 398-2282. The Following Forms are Required Prior to Beginning Operations Form 5100.24 Application for Basic Permit under the Federal Alcohol Administration Act • You must file this application if you want a permit under the FAA Act to engage in the business of producing or processing distilled spirits or wine (includes for nonindustrial use.) • Send form in duplicate to the appropriate ATF office. Address listed below. Form 5110.25 Application for Operating Permit under 26 U.S.C. 5171(d) • Purpose is to identify the applicant, to identify the location where the plant will be located and to determine the eligibility of the applicant to obtain an operating permit. • Send form in duplicate to the appropriate ATF office. Address listed below. • Include statement of the type of business organization and of the persons interested in the business, supported by the corporate documents, articles of partnership, and/or statement of interest in the business. • List of the trade names to be used in connection with the operations specified in the application, showing the operation or operations in which each trade name will be used. Form 5000.18 Consent of Surety • Surety Bond purchased from Insurance Company • Send form in duplicate to the appropriate ATF office. Address listed below. Form 5120.36 Wine Bond • Wine Operations Bond purchased from Insurance Company • Tax Deferral Bond purchased from Insurance Company • Send form in duplicate to the appropriate ATF office. Address listed below. Form 5000.29 Environmental Information • Send form in duplicate to the appropriate ATF office. Address listed below. Form 5000.30 Supplemental Information on Water Quality Considerations – Under 33 U.S.C. 1341(a) • Send form in duplicate to the appropriate ATF office. Address listed below. Businesses located in Illinois should submit the above forms to: ATF 550 Main Street Cincinnati, OH 45202-3263 31 The Following Form is Submitted Prior to Beginning Operations and on an Annual Basis: Form 5630.5 Special Tax Registration and Return – Alcohol and Tobacco • This is an annual tax due before starting business and by July 1 each year after that. • $500 annual tax if annual gross receipts for business are less than $500,000. • You will receive a Special Tax Stamp from ATF after filing this form that is required for operation. • Mail form along with payment to Bureau of ATF, P.O. Box 371962, Pittsburgh, PA 15250-7962. • If further assistance is needed, contact: ATF National Revenue Center (800) 937-8864. The Following Form is Submitted for Approval Before Selling Each Type of Wine: Form 5100.31 Application for and Certification/Exemption of Label/Bottle Approval • Submit one form for each type of wine. • Attach proposed label to form. • Include a filled representative sample bottle. • When filing first Label/Bottle Approval Application include a copy of your ATF Basic Permit. You will then be issued a Vendor Code Number to be used on future applications. • Submit in duplicate to Product Compliance Branch, Bureau of Alcohol, Tobacco, and Firearms, Washington DC 20226. • The ATF publication: “The Beverage Alcohol Manual – A Practical Guide – Basic Mandatory Labeling Information for WINE Volume 1” is available for download free of charge at http://www.atf.treas.gov/pub/alctob_pub/bevalmmanual/index.htm. Federal Excise Tax Returns are Submitted on an Ongoing Basis Form 5000.24 Excise Tax Return • See the Quick Reference Guide for Excise Tax included in the Reference Section of this workbook. • Typically filed semi-monthly. • Submit to Bureau of ATF, Excise Tax, P.O. Box 360958, Pittsburgh, PA 15251-6958. Local/County Liquor Control Commission Local/County Liquor License Application Should Be Submitted After ATF Approval is Received You will need to secure your local or county liquor license prior to applying for state liquor licenses. Contact your city or county for the appropriate application procedures for your location. Illinois Liquor Control Commission Wine Manufacturers and Wineries (SIC 2084) operating in the state of Illinois are required to have a license issued by The Illinois Liquor Control Commission. License applications can be obtained from the Illinois Liquor Control Commission at: 100 W. Randolph 222 S. College Street Suite 5-300 1st Floor Chicago, IL 60601 Springfield, IL 62704 (312) 814-2206 (217) 782-2135 Fax: (312) 814-2241 Fax: (217) 524-1911 TDD: (312) 814-1844 Website: www.state.il.us/lcc 32 State Liquor License Application is Submitted Prior to Beginning Operations After Local/County License is Received Form IL 567-0015-A Application for State of Illinois Manufacturer’s Liquor License • There are five designations of Wine Manufacturer Licenses: ♦ A first-class wine-maker's license shall allow the manufacture of less than 20,000 gallons of wine per year, and the storage and sale of such wine to distributors and retailers in the State and to persons without the State, as may be permitted by law. Fee: $240.00 ♦ A second-class wine-maker's license shall allow the manufacture of up to 50,000 gallons of wine per year, and the storage and sale of such wine to distributors in this State and to persons without the State, as may be permitted by law. A second-class wine-maker's license shall allow the sale of no more than 10,000 gallons of the licensee's wine directly to retailers. Fee: $480.00 ♦ A limited wine-manufacturer may make sales and deliveries not to exceed 40,000 gallons of wine per year to distributors, and to non-licensees in accordance with the provisions of this Act. Fee: $120.00 ♦ A first class wine manufacturer may make sales and deliveries of between 40,000 and 50,000 gallons of wine to manufacturers, importing distributors, and distributors. Fee: $600.00 ♦ A second-class wine manufacturer may make sales and deliveries of more than 50,000 gallons of wine to manufacturers, importing distributors and distributors and to no other licensees. Fee: $1,200.00 • Supporting Documents Required ♦ Tax Bond – Surety Bond – See ATF requirements. ♦ RL-1 Liquor Tax Statement of Liability – Download from Illinois Department of Revenue Website www.revenue.state.il.us or contact the IL DOR to receive a form by mail at (800) 732-8866. ♦ Copy of Federal Label Approvals – Received from ATF. ♦ Registration Statement – Form IL 567-0014 from Illinois Liquor Control Commission. • When applying for any Wine Maker/Manufacturer license class, it must be accompanied by a Wine Maker Retailer License Specialty Retailer license application. Application is Submitted Prior to Beginning Operations and Renewed on an Annual Basis Form IL 567-0058-A Application for State of Illinois Specialty Retailer’s Liquor Licenses – Brew Pub – Caterer Retailer – Wine Maker Retailer • A wine-maker’s retail license shall allow the licensee to sell and offer for sale at retail in the premises specified in such license not more than 50,000 gallons of wine per year for use or consumption, but not for resale in any form; this license shall be issued only to a person licensed as a first-class or second-class wine-maker. A wine-maker's retail licensee, upon receiving permission from the Commission, may conduct business at a second location that is separate from the location specified in its wine-maker's retail license. • Fee: $100.00 • Supporting Documents Required ♦ Photocopy of Local Liquor License 33 Illinois Department of Public Health Permit Must Be Received Prior to Beginning Operations and Renewed Annually Wine manufacturing establishments in Illinois fall under the jurisdiction of the Illinois Department of Public Health. State law requires wine manufacturing establishments to comply with sanitation standards. For more information contact: Illinois Department of Public Health Division of Food, Drugs and Dairies / Office of Health Protection Food Program 535 West Jefferson St. Springfield, IL 62761 (217) 782-7532 Name of Issuing Agency Valid Time Date Start-up Recurring Permit/License Period Submitted/ Costs ($) Costs ($) Basic Permit ATF Date Received Operating Permit ATF Date Submitted: Special Tax ATF Date Received: Registration Illinois Liquor Date Submitted: Local/County Control Date Received: Liquor License Commission Date Submitted: State Wine Maker/ Illinois Liquor Date Received: Manufacturer’s License Control Date Submitted: Commission Date Received: State Specialty Retailers’ Liquor Date Submitted: License Date Received: Date Submitted: Date Received: Date Submitted: Date Received: Date Submitted: Date Received: Total Permit and License Cost 34 Outside Influences On Your Business Other issues that are not necessarily within the control of the business must also be addressed. Many of these issues may directly affect your sales both positively and negatively. Complete the following sections as they apply to your winery. Describe the economic factors that will affect your product or service. (Examples include: economic trends, spending trends, taxes, inflation, interest rates, etc) Describe any legal or governmental factors that will affect your business. Examples include: potential changes in laws or ordinances, OSHA, EPA, Illinois Liquor Control Commission, Health Department, ADA, and zoning regulations. Describe any environmental factors that will affect your business. Examples include: raw material availability, weather, pollution, and waste management. 35 THE BUSINESS PLAN – Financial Section Financial Projections and Supporting Information The heart of any good business plan is a thorough financial section. The financial section gives the banker the tools to evaluate the financial feasibility of the business plan and to determine creditworthiness. The financial section also gives the prospective owner the tools to see how revenue and expenses will play out in the business. The following worksheets will give you an idea what initial financial data needs to be collected to develop financial projections that will evaluate a winery project effectively. You may want to seek assistance from your accountant or a Small Business Development Center counselor to assist you in developing your financial projections. For any type of loan request, the financial section of the business plan should include the following: • Sources and Uses of Funds Statement –This statement should give the lender a detailed analysis of how the funds to start the business will be spent and where the money is coming from. Supporting information for this statement should include: § A breakdown of construction costs, if building a facility. § A detailed list of equipment to be purchased. § An explanation of requested working capital (cash requested for operating expenses). § A list of amount and form of Owner’s Equity. § Loan amortization schedules for financing requested. • Financial Projections – A five-year projection of financial data is suggested in most winery loan requests. These projections should include: § Projected Statement of Cash Flows – This statement shows the cash flowing into the business (e.g., sales) and the cash flowing out of the business (e.g., expenses and loan payments). The first-year cash flow should be shown on a monthly basis and the second through fifth years should be shown quarterly. This statement justifies to the lender that the business can repay the loan and still have cash in the bank. It is also a tool to determine the amount of working capital necessary to get the business through the start-up phase. § Projected Income Statements – Annual profit and loss statements should be provided for all five years. These statements show the projected income and expenses to determine the company’s net income or bottom line. § Projected Balance Sheets – A Balance Sheet shows the company’s financial position on a given day. It shows the company’s assets, liabilities, and owner’s equity. Balance Sheets should be provided as of the date of the loan and as of the year-end date for the five projected years. § Break Even Analysis – This analysis calculates the amount of sales the company needs to make to break even. This statement breaks down costs into fixed costs (costs that remain the same regardless of the amount of sales) and variable costs (costs that rise and fall in relation to sales). 36 § Financial Ratios – Lenders use financial ratios to evaluate your loan request. A few examples of ratios that should be included are: • Current Ratio = Current Assets/Current Liabilities – This ratio evaluates the liquidity of your business. It answers the question, “Can you pay your short term debt?” • Debt to Equity = Total Debt/Total Equity - This ratio evaluates your capital structure. A high debt- to-equity ratio can indicate a risk of insolvency (inability to meet long term debt). • Return on Assets = Net Income/Total Assets – This ratio indicates the investment profitability of the business idea. • Personal Financial Statement - This form must be completed for each principal who owns or will own more than 20% or the business, or who has a significant say in the operations of the business. • Personal Income Tax Returns - Three (3) years of personal income tax returns of the principals involved in the business are required. A principal is an individual or entity who owns or will be owning 20% or more of the business. • Letters of Commitment - If the plan includes multiple loans, each loan must be documented in commitment letters. Loans from financial institutions must have language indicating the loan amount, the specified term and interest rate, collateral, any other conditions attendant to the loan, and the fact that the loan is approved (loan approval can be contingent on securing other financing). • Business Historical Financial Information if Purchasing an Existing Business - Three (3) years of past income tax returns, financial statements (Balance Sheets & Income Statements), and aging of accounts receivable/payable should be included. The Five "C's" of Credit One of the most common questions a prospective small business owner has is “What is the bank looking for in my loan request.” Each situation is different but most banks utilize some variation of the five “C’s”. Capacity to repay is the most critical of the five C’s. The prospective lender will want to know exactly how you intend to repay the loan. The lender will consider the cash flow projections in your business plan, the timing of the repayment, and the probability of successful repayment of the loan. Payment history on existing credit relationships--personal and commercial--is considered an indicator of future payment performance. Prospective lenders also will want to know about your contingent sources of repayment. Capital is the money you personally have invested in the business (your owner’s equity) and is an indication of how much you have at risk should the business fail. Prospective lenders and investors will expect you to have contributed from your own assets and to have undertaken personal financial risk to establish the business before asking them to commit any funding. If you have a significant personal investment in the business, you are more likely to do everything in your power to make the business successful. Collateral or "guarantees" are additional forms of security you can provide the lender. If for some reason, the business cannot repay its bank loan, the bank wants to know there is a second source of repayment. Assets such as equipment, buildings, accounts receivable, and in some cases inventory, are considered possible sources of repayment, if they are sold by the bank for cash. Both business and personal assets can be sources of collateral for a loan. A guarantee, on the other hand, is just that--someone else signs a guarantee document promising to repay the loan if you can't. Some lenders may require such a guarantee in addition to collateral as security for a loan. Conditions focus on the intended purpose of the loan. Will the money be used for working capital, additional equipment, or inventory? The lender will also consider the local economic climate and conditions both within your industry and in other industries that could affect your business. Character is the general impression you make on the potential lender or investor. The lender will form a subjective opinion as to whether or not you are sufficiently trustworthy to repay the loan or generate a return on funds invested in your company. Your educational background and experience in business and in your industry will be reviewed. The quality of your references and the background and experience of your employees also will be taken into consideration. 37 Cost Estimate for Establishment of a Five Thousand Gallon Winery Alan Dillard, Limestone Creek 1250 State Route 127 South, Jonesboro IL 62952 (618) 833-4683 8/98 Assuming land acquisition and construction of a suitable production facility has been completed, costs for raw product, equipment and supplies are estimated as follows: Raw Product Materials 4,200.00 19,200.00 A combination of whole grapes and pressed juice is assumed. 15,000.00 4,109.00 Whole grapes - 7 tons (sufficient for 1000 gal.) @ $600/ ton Pressed juice for an additional 4000 gallons @ $3.75/ gallon 580.00 17,092.00 Material Subtotal 2,036.00 3,820.00 Production Equipment 450.00 One Sorrento crusher/de-stemmer 312.00 One bladder press model B-70, 40 gal. capacity 336.00 One Wine/juice pump model JPF 13, 13 gal./min. 320.00 One filter pump, 10" membrane - 100 gal./hr. Filter cartridges, .45 micron - 12 @ $28 75.00 Filter cartridges, .20 micron - 10 @ $32 Hose - 1" I.D. - 50 feet @ $1.50 14,232.00 Production Equipment Subtotal 1,250.00 1,400.00 Cooperage 150.00 Twelve 500 gallon Pasco vertical fermenters @ $1,186 60.00 Ten American Oak 225 Liter barrels @ $125 Eight 125 gallon white poly primary fermenters @ $175 950.00 Five 15 gallon S.S. barrels @ $30 200.00 Six 5 gallon glass carboys @ $12 1,345.00 Cooperage Subtotal 560.00 160.00 Bottling Equipment One 264 gallon variable capacity S.S. tank 12.00 One stand 4.5 ft. for above tank 35.00 One GAI six bottle filler, gravity fed type 60.00 One RCO Swiss corker, hand type 472.00 Four 8 ft. folding tables for bottling line 26.00 One bottle washer, model SR 3 One bottle drainer, wood One heat gun for shrinking capsules One Label Pro 5.5 label gluer Two gallons resin glue Bottling Equipment Subtotal 38 Laboratory Equipment 284.00 693.00 One Kerns model 25-30 pH meter 179.00 One Refractometer, ATCO temperature compensated 280.00 One acid test kit with stopcock burette and flask 72.00 17,750.00 One hydrometer and glass cylinder jar 25.00 62,944.00 One metric laboratory scale 57.00 200,000.00 One vertical chromatography kit 35.00 Two ten unit free SO2 test titrettes 15.00 One glass vinometer One Dextro check kit 6.00 Laboratory Equipment Subtotal 20.00 Chemicals/Supplies 18.00 Ten lbs. Potassium Metabisulfite 16.00 Eight lbs. Citric acid 16.00 Sixteen oz. Pectic enzyme 18.00 Twelve lbs. Bentonite KWK 29.00 Five Gelatin, 100 bloom Sixteen oz. Kieselsol 9.00 Sixteen oz. N/10 Sodium Hydoxide 4.00 Four oz. N/10 Potassium Acid Phthalate 3.00 One oz. Phenolphthalein 2.00 Two lbs. Premier Cuvee yeast 15.00 Eight lb. Cotes de Blancs yeast 55.00 Twenty grams Vinaflora Oenos M/L culture 55.00 Assorted fermentation bungs and locks 40.00 Chemicals/Supplies Subtotal 12,500.00 Bottling Supplies 3,250.00 Bottles - 25,000 @ .50 1,250.00 Corks - " " @ .13 750.00 Labels - " " @ .05 Capsules - " " @ .03 Bottling Supplies Subtotal Total Estimated Cost for all Materials, Equipment & Supplies Total Estimated Retail Value of Bottled Product (Based on average retail price of $8.00/bottle) Obviously, these figures and actual equipment is subject to some modification, but overall set-up costs should remain about the same. For example, if you use press apply labels, you don’t need the glue machine or glue. On the other hand, it would be very nice to have three 264 gallon variable tanks, so you could cross-blend and store more "odd amounts" of any particular wine. Price per bottle/income line assumes you make all wines of quality and in a style that will sell out each year! Also, cost of labor and taxes on the wine will eat into that 200K, so the net on those bottles will be a lot less than that. 39 Winery Establishment Costs For your planning purposes, actual current price quotes are needed. This worksheet is broken down into general categories. Supporting documents showing a breakdown of each category should be included in the business plan. Item Source Cost ($) If you already own the asset, be sure to include it in the Equity Investment Worksheet Land Site Preparation Building Total Winery Facility Establishment Costs 40 Equipment Planning List equipment, fixtures, furniture, vehicles, tools and other fixed assets that are needed for your winery and their associated costs. (Written quotes should be provided including item name, model number, cost, and installation expense, when possible). If leasing equipment, include a copy of the lease agreement. Items below are listed as possible equipment needs, but are not considered requirements. Item Description Source Cost ($) If you already own the asset, be sure to Production Equipment: include it in the Equity Investment Crusher/De-Stemmer Worksheet Bladder Press Wine/Juice Pump Filter Pump Filter Cartridges Hoses Cooperage: Fermenters: Barrels: 41 Equipment Planning (Continued) Source Cost ($) Item Description If you already own the asset, be sure to include it in the Equity Investment Bottling Equipment: Worksheet. Tank Stand Bottle Filler Corker Bottling Line Bottle Washer Bottle Drainer Heat Gun Label Gluer Laboratory Equipment: Other Equipment: Computer and Office equipment Fork Lift Total Equipment Cost 42 Equity Investment Helpful Tip! List all assets (land, buildings, equipment, fixtures, and cash) you now own Banks and lending agencies that had an original value greater than $500.00 that will be used in the usually require at least a 20% business. investment by the owner into the project. Item Description Year Purchase Current Amount Name of Acquired Price Value still owed Lien holder Land:(Include acreage and address) ($) ($) on the asset ($) Building(s):(Include type & address) Equipment:(Include Model # & Serial #) Cash Investment Total Equity Investment 43 Sources and Uses of Funds Worksheet Total Cost Uses of Funds Total Amount Land Building Equipment Other Fixed Asset (Specify) Other Fixed Asset (Specify) Working Capital: • Upfront Permit and Licensing Fees • Upfront Professional Fees • Initial Raw Materials • Initial Bottling Supplies • Initial Advertising/Promotion Costs • Additional Cash/Operating Expenses • Other (Specify) • Other (Specify) Total Uses of Funds Sources of Funds Equity Investment Financing Requested Other (Specify) Total Sources of Funds 44 Sales Projections Include sales projections for your winery. The following data should be taken into account in projecting sales for a winery: • Production Levels Typical Winery Seasonality Percentages • Spoilage/Breakage/Tasting • Pricing Structure January 3% July 10% • Market Size February 3% August 12% • Market Share March 4% September 15% • Seasonality April 4% October 18% May 5% November 8% June 9% December 9% Sales Projections Year 1 Year 2 Year 3 Year 4 Year 5 January February March April May June July August September October November December Total Sales 45 Operating Expenses – Develop an operating expense budget for your winery. If an expense is subject to seasonality, make sure to account for that in the statement of cash flows. Item Monthly Annual Amount Amount Cost of Goods Sold: (Often a % of Sales) ($) • Raw Materials ($) • Bottling Supplies ($) • Chemicals/Yeast/Additives ($) Accounting & Legal Services ($) Employee Salaries/Wages ($) Employee Payroll Tax (Estimated at 15% of Wages) ($) Insurance ($) Licenses & Fees ($) Machine Maintenance/Repair ($) Miscellaneous ($) Rent ($) Supplies ($) Taxes – Excise ($) Taxes – Property and Other ($) Travel ($) Utilities & Telephone ($) Miscellaneous ($) Vineyard Expense (If Applicable) ($) Other (specify) ($) Other (specify) ($) Other (specify) ($) Owner’s Withdrawal (If Sole Proprietor) ($) 46 PERSONAL FINANCIAL STATEMENT U.S. SMALL BUSINESS ADMINISTRATION As of: Name (Omit Cents) Business Phone (Omit Cents) Residence Address Residence Phone City, State, & Zip Code $- $- Business Name of Applicant/Borrower: $- LIABILITIES $- $- ASSETS $- Accounts Payable $- Notes Payable to Banks & Others Cash on Hand & in Banks $- Installment Account (Auto) $- Savings Accounts $- IRA or Other Retirement Account $- Mo. Payment Accounts or Notes Receivable Installment Account (Other) $- Life Insurance-Cash Surrender Value Only $- $- Mo. Payment $- (Complete in Section 8) Loan on Life Insurance Stocks & Bonds $- Mortgages on Real Estate $- $- (Describe in Section 3) $- (Describe in Section 4) $- Real Estate $- Unpaid Taxes $- (Describe in Section 4) (Describe in Section 4) $- Automobile - Present Value Other Liabilities $- Other Personal Property $- (Describe in Section 4) $- (Describe in Section 5) TOTAL LIABILITIES Other Assets NET WORTH TOTAL LIABILITIES & NET WORTH (Describe in Section 5) TOTAL ASSETS Section 1. Source of Income $ Contingent Liabilities Salary $ Net Investment Income $ - As Endorser or Co-Maker Real Estate Income $ - Legal Claims & Judgments Other Income (Describe below) - Provision for Federal Income Tax Description of Other Income in Section 1 - Other Special Debt Section 2. Notes Payable to Bank & Others Name & Address of Noteholder(s) Original Current Payment Frequency How Secured or Endorsed Balance Balance Amount (monthly, etc) $ -$ - 47 Name: Personal Financial Statement Page 2 Section 3. Stocks & Bonds Cost Market Value Date of Total Name of Securities Quotation/Exchange Quotation/Exchange Value Number of Shares Section 4. Real Estate Owned Property A Property B Property C Type of Property Address Date Purchased Original Cost Present Market Value Name & Address of Mortgage Holder Mortgage Account Number Mortgage Balance Monthly Payment Amount Status of Mortgage Section 5. Other Personal Property and Other Assets Section 6. Unpaid Taxes Section 7. Other Liabilities Section 8. Life Insurance Held I authorize SBA/Lender to make inquiries as necessary to verify the accuracy of the statements made and to determine my creditworthiness. I certify the above and the statements contained in the attachments are true and accurate as of the stated date(s). These statements are made for the purpose of either obtaining a loan or guaranteeing a loan. I understand FALSE statements may result in forfeiture of benefits and possible prosecution by the U.S. Attorney General (Reference 18 U.S.C. 1001). Signature: Date: Social Security Number: Signature: Date: Social Security Number: 48 GOVERNMENT AGENCY FINANCING PROGRAMS.. There are several government agencies that offer programs to assist small businesses in obtaining financing. The following list highlights a few of the programs available. Contact your local Small Business Development Center for a complete list of programs available in your area. Small Business Administration The SBA Loan Guaranty Program is one of SBA's primary lending programs. It provides loans to small businesses unable to secure financing on reasonable terms through normal lending channels. The program operates through private-sector lenders that provide loans that are, in turn, guaranteed by the SBA -- the Agency has no funds for direct lending or grants. SBA LowDoc • Maximum loan amount - $150,000. • Once a small business borrower meets the lender's requirements for credit, the lender may request a guaranty from the SBA through SBALowDoc procedures and receives an answer within 36 hours. • Length of Loan Terms § Working Capital – Up to 7 years § Equipment – Up to 10 years (or useful life) § Real Estate – Up to 25 years • Interest Rate – Negotiated between borrower and bank § Maximum Interest Rate for terms up to 7 years – New York Prime Rate + 2.25% § Maximum Interest Rate for terms greater than 7 years – New York Prime Rate + 2.75% § Additional 2% may be charged on loans less than $25,000 § Additional 1% may be charged on loans less than $50,000 The 7(a) Loan Guaranty Program • Maximum loan amount - $1,750,000. SBA guarantee cannot exceed $1,000,000. • Length of Loan Terms - Same as LowDoc • Interest Rate – Same as LowDoc SBA 504 Term Loan • Maximum loan amount - $3,000,000. • Loan Breakdown § 50% of loan financed by your lender § 40% of project financed by SBA through a Certified Development Company § 10% minimum financed by borrower (higher for new businesses) • Borrower must create 1 job for every $35,000 in SBA loan funds. • Length of Loan Terms § Machinery and Equipment – Up to 10 years § Real Estate – Up to 20 years • Interest Rates § Lender Portion – Negotiated between borrower and bank § SBA Portion – Below market fixed rate. Most lenders are familiar with SBA loan programs so interested applicants should contact their local lender for further information and assistance in the SBA loan application process. For further information on SBA loan programs, as well as the management counseling and training services offered by the Agency, contact: SBA Illinois District Office 500 W. Madison Street, Suite 1250 Chicago, IL 60661-2511 (312) 353-4528 Website: www.sba.gov 49 Illinois State Treasurer’s Office Treasurer Judy Baar Topinka Agriculture and Alternative Agriculture Link Deposit Loan Program One of the largest link-deposit loan programs in the nation, the Agriculture and Alternative Agriculture Loan Program is available to farmers statewide through over 1000 financial institutions, and to date has helped more than 10,000 farmers across Illinois. The program currently has committed over $1 billion in state funds toward the agriculture community. Agriculture is a major component of Illinois' economy, and lending operational and long term money at a rate that is attractive to both agriculture lenders and farmers assists in keeping the agriculture backbone of Illinois strong. A borrower may receive these loans by completing a simple application form with his/her financial institution and certify that he/she will be using the funds for goods and services related to the production of agriculture products and alternative agriculture products. Alternative agriculture products may include items such as grapes, strawberries, hydroponically grown food, Christmas trees and/or activities such as fish farming (aquaculture) and winemaking. Program loans are made for one year for the operating loan program, one to five years for the long-term loan program, and one to seven years for grape and vineyard production. A project is eligible for financing through this program if it can be shown that the project will create or enhance the borrower's production of agriculture or alternative agriculture products on land wholly located in the State of Illinois. For further information on the implementation of this program, please contact your local financial institution or: Office of State Treasurer Judy Baar Topinka, Illinois State Treasurer Agriculture and Alternative Agriculture Link Deposit Loan Program 1 West Old State Capitol Plaza Springfield, Illinois 62701 (217) 557-6436 Fax (217) 557-6439 Website: www.state.il.us/treas/Programs/agriculture United States Department of Agriculture (USDA) Business and Industry (B&I) Guaranteed Loan Program The Business and Industry (B&I) Guaranteed Loan Program helps create jobs and stimulates rural economies by providing financial backing for rural businesses. This program provides guarantees up to 90 percent of a loan made by a commercial lender. Loan proceeds may be used for working capital, machinery and equipment, buildings and real estate, and certain types of debt refinancing. The primary purpose is to create and maintain employment and improve the economic climate in rural communities. The maximum aggregate B&I Guaranteed Loan(s) amount that can be offered to any one borrower under this program is $25 million. For more information on USDA business programs contact: USDA Community and Business Program 2118 West Park Court, Suite A Champaign, IL 61821 (217) 403-6209 Fax: (217) 403-6215 TDD: (217) 403-6240 Website: www.rurdev.usda.gov 50

Winery Business Plan Template & Guidebook

Starting a winery business is an exciting and rewarding endeavor, but it can also be quite a challenge. Having the right plan in place is key to making sure your winery venture succeeds. The #1 Winery Business Plan Template & Guidebook provides comprehensive advice and tools to help winery owners make sound business decisions and secure the funding they need to succeed. This comprehensive guidebook will provide essential guidance on everything from legal considerations to marketing strategies, helping you set your business up for success.

Get worry-free services and support to launch your business starting at $0 plus state fees.

• How to Start a Profitable Winery Business [11 Steps]
• 25 Catchy Winery Business Names:
• List of the Best Marketing Ideas For Your Winery Business:

How to Write a Winery Business Plan in 7 Steps:

1. describe the purpose of your winery business..

The first step to writing your business plan is to describe the purpose of your winery business. This includes describing why you are starting this type of business, and what problems it will solve for customers. This is a quick way to get your mind thinking about the customers’ problems. It also helps you identify what makes your business different from others in its industry.

It also helps to include a vision statement so that readers can understand what type of company you want to build.

Here is an example of a purpose mission statement for a winery business:

Our mission at [Name of Winery] is to produce the highest quality, sustainably-sourced products, while providing exceptional customer experiences and creating meaningful connections with our local communities. We will strive to be a model of a socially responsible winery that is respected for its commitment to excellence and respect for the environment.

2. Products & Services Offered by Your Winery Business.

The next step is to outline your products and services for your winery business. 

When you think about the products and services that you offer, it's helpful to ask yourself the following questions:

• What is my business?
• What are the products and/or services that I offer?
• Why am I offering these particular products and/or services?
• How do I differentiate myself from competitors with similar offerings?
• How will I market my products and services?

You may want to do a comparison of your business plan against those of other competitors in the area, or even with online reviews. This way, you can find out what people like about them and what they don’t like, so that you can either improve upon their offerings or avoid doing so altogether.

3. Build a Creative Marketing Stratgey.

If you don't have a marketing plan for your winery business, it's time to write one. Your marketing plan should be part of your business plan and be a roadmap to your goals. 

A good marketing plan for your winery business includes the following elements:

Target market

• Who is your target market?
• What do these customers have in common?
• How many of them are there?
• How can you best reach them with your message or product?

Customer base 

• Who are your current customers? 
• Where did they come from (i.e., referrals)?
• How can their experience with your winery business help make them repeat customers, consumers, visitors, subscribers, or advocates for other people in their network or industry who might also benefit from using this service, product, or brand?

Product or service description

• How does it work, what features does it have, and what are its benefits?
• Can anyone use this product or service regardless of age or gender?
• Can anyone visually see themselves using this product or service?
• How will they feel when they do so? If so, how long will the feeling last after purchasing (or trying) the product/service for the first time?

Competitive analysis

• Which companies are competing with yours today (and why)? 
• Which ones may enter into competition with yours tomorrow if they find out about it now through word-of-mouth advertising; social media networks; friends' recommendations; etc.)
• What specific advantages does each competitor offer over yours currently?

Marketing channels

• Which marketing channel do you intend to leverage to attract new customers?
• What is your estimated marketing budget needed?
• What is the projected cost to acquire a new customer?
• How many of your customers do you instead will return?

Form an LLC in your state!

4. Write Your Operational Plan.

Next, you'll need to build your operational plan. This section describes the type of business you'll be running, and includes the steps involved in your operations. 

In it, you should list:

• The equipment and facilities needed
• Who will be involved in the business (employees, contractors)
• Financial requirements for each step
• Milestones & KPIs
• Location of your business
• Zoning & permits required for the business

What equipment, supplies, or permits are needed to run a winery business?

Equipment needed to run a winery business include:

• Vats (stainless steel or wood)
• Grape presses
• Barrels for aging the wines
• Bottles and sealing machines
• Corks and stoppers
• Filtering equipment
• Labeling machines
• Storage tanks

Supplies needed to run a winery business include:

• Grapes, juices and other ingredients for producing wine
• Glass bottles, cork stoppers, labels, capsules, cases and other packaging materials
• Cleaning supplies such as brushes, detergents, sanitizers, etc.

Permits needed to run a winery business include:

• "Basic Permit" (FDA approved) to manufacture wine (must be obtained from the Alcohol and Tobacco Tax and Trade Bureau)

5. Management & Organization of Your Winery Business.

The second part of your winery business plan is to develop a management and organization section.

This section will cover all of the following:

• How many employees you need in order to run your winery business. This should include the roles they will play (for example, one person may be responsible for managing administrative duties while another might be in charge of customer service).
• The structure of your management team. The higher-ups like yourself should be able to delegate tasks through lower-level managers who are directly responsible for their given department (inventory and sales, etc.).
• How you’re going to make sure that everyone on board is doing their job well. You’ll want check-ins with employees regularly so they have time to ask questions or voice concerns if needed; this also gives you time to offer support where necessary while staying informed on how things are going within individual departments too!

6. Winery Business Startup Expenses & Captial Needed.

This section should be broken down by month and year. If you are still in the planning stage of your business, it may be helpful to estimate how much money will be needed each month until you reach profitability.

Typically, expenses for your business can be broken into a few basic categories:

Startup Costs

Startup costs are typically the first expenses you will incur when beginning an enterprise. These include legal fees, accounting expenses, and other costs associated with getting your business off the ground. The amount of money needed to start a winery business varies based on many different variables, but below are a few different types of startup costs for a winery business.

Running & Operating Costs

Running costs refer to ongoing expenses related directly with operating your business over time like electricity bills or salaries paid out each month. These types of expenses will vary greatly depending on multiple variables such as location, team size, utility costs, etc.

Marketing & Sales Expenses

You should include any costs associated with marketing and sales, such as advertising and promotions, website design or maintenance. Also, consider any additional expenses that may be incurred if you decide to launch a new product or service line. For example, if your winery business has an existing website that needs an upgrade in order to sell more products or services, then this should be listed here.

7. Financial Plan & Projections

A financial plan is an important part of any business plan, as it outlines how the business will generate revenue and profit, and how it will use that profit to grow and sustain itself. To devise a financial plan for your winery business, you will need to consider a number of factors, including your start-up costs, operating costs, projected revenue, and expenses. 

Here are some steps you can follow to devise a financial plan for your winery business plan:

• Determine your start-up costs: This will include the cost of purchasing or leasing the space where you will operate your business, as well as the cost of buying or leasing any equipment or supplies that you need to start the business.
• Estimate your operating costs: Operating costs will include utilities, such as electricity, gas, and water, as well as labor costs for employees, if any, and the cost of purchasing any materials or supplies that you will need to run your business.
• Project your revenue: To project your revenue, you will need to consider the number of customers you expect to have and the average amount they will spend on each visit. You can use this information to estimate how much money you will make from selling your products or services.
• Estimate your expenses: In addition to your operating costs, you will need to consider other expenses, such as insurance, marketing, and maintenance. You will also need to set aside money for taxes and other fees.
• Create a budget: Once you have estimated your start-up costs, operating costs, revenue, and expenses, you can use this information to create a budget for your business. This will help you to see how much money you will need to start the business, and how much profit you can expect to make.
• Develop a plan for using your profit: Finally, you will need to decide how you will use your profit to grow and sustain your business. This might include investing in new equipment, expanding the business, or saving for a rainy day.

Frequently Asked Questions About Winery Business Plans:

Why do you need a business plan for a winery business.

A business plan for a winery business provides important guidance on how the winery will be established and operated. It defines the winery’s goals and objectives, outlines how it will achieve those goals, and details the resources required to do so. A business plan also serves as a tool for potential investors to assess the financial viability of the winery. Additionally, such a plan helps winemakers evaluate different strategies and scenarios in order to create more efficient operations and improve profitability.

Who should you ask for help with your winery business plan?

You should consider consulting with a professional business consultant or your accountant. They can provide specialized advice on the most appropriate business and financial models for your winery. Additionally, there are numerous online resources and books available to help you develop a business plan, such as SCORE, the Small Business Administration, and the American Vinicultural Society.

Can you write a winery business plan yourself?

Yes, it is possible to write a winery business plan yourself. Creating a comprehensive and thorough business plan requires research into the local market conditions, competition, the winemaking process, and any regulations or laws that may affect your operations. You will also need to provide financial assumptions, such as capital costs or operating expenses, with supporting information. Additionally, you should include a marketing strategy to reach your target market and maximize your sales potential.

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Through meticulous research and firsthand experience, I uncover the essential steps, software, tools, and costs associated with launching and maintaining a successful business. By demystifying the complexities of entrepreneurship, I provide the guidance and support needed for others to embark on their journey with confidence.

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Winery Business Plan Template

Written by Dave Lavinsky

Over the past 20+ years, we have helped over 10,000 entrepreneurs and business owners create business plans to start and grow their wineries. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through awinery business plan template step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What is a Winery Business Plan?

A business plan provides a snapshot of your winery as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for a Winery

If you’re looking to start a winery, or grow your existing winery, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your winery in order to improve your chances of success. Your winery business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Wineries

With regards to funding, the main sources of funding for a winery are personal savings, credit cards, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable. But they will want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.

The second most common form of funding for a winery is angel investors. Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding, or, like a bank, they will give you a loan. Venture capitalists will not fund a winery. They might consider funding a winery with a national presence, but never an individual location. This is because most venture capitalists are looking for millions of dollars in return when they make an investment, and an individual location could never achieve such results.

Finish Your Business Plan Today!

How to write a business plan for a winery.

If you want to start a winery or expand your current one, you need a business plan. Below are links to each section of your winery business plan template:

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of winery you are operating and the status; for example, are you a startup, do you have a winery that you would like to grow, or are you operating a network of wineries.

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the winery industry. Discuss the type of winery you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.

Company Analysis

In your company analysis, you will detail the type of winery you are operating.

For example, you might operate one of the following types of wineries:

• Vineyard wineries: these are traditional wineries with acres of land used to grow and harvest grapes for wine.
• Destination winery: this type of winery emphasizes location and experience and is typically situated in a scenic area.
• Urban wineries: an increasingly popular winery where grapes are shipped into an urban venue and wine is made in-house.

In addition to explaining the type of winery you will operate, the Company Analysis section of your business plan needs to provide background on the business.

Include answers to question such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include placement goals you’ve reached, number of new contracts, etc.
• Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

While this may seem unnecessary, it serves multiple purposes.

First, researching the winery industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your strategy particularly if your research identifies market trends.

The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of yourwinery business plan:

• How big is the winery industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential market for your winery? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of yourwinery business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: professional women, college students, event planners, couples, and bridal parties.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of winery you operate. Clearly college students would want different service options, and would respond to different marketing promotions than bridal parties, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve. Because most wineries primarily serve customers living in their same city or town, such demographic information is easy to find on government websites.

Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.

Finish Your Winery Business Plan in 1 Day!

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With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!

Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other wineries.

Indirect competitors are other options that customers have to purchase from that aren’t direct competitors. This includes wine bars, liquor stores, and wine subscription services. You need to mention such competition to show you understand that not everyone interested in purchasing or tasting wine will go to a winery.

With regards to direct competition, you want to detail the other wineries with which you compete. Most likely, your direct competitors will be wineries located very close to your location.

For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

• What types of customers do they serve?
• What types of wine do they offer?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide superior products?
• Will you provide products or services that your competitors don’t offer?
• Will you make it easier for customers to access your wine?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For awinery business plan, your marketing plan should include the following:

Product: in the product section you should reiterate the type of winery that you documented in your Company Analysis. Then, detail the specific products you will be offering. For example, in addition to a winery, will you provide catering, food menus, or special event services?

Price: Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the products and services you offer and their prices.

Place: Place refers to the location of your winery. Document your location and mention how the location will impact your success. For example, is your winery located in a tourist-heavy area or is it near a busy retail district, etc. Discuss how your location might provide a steady stream of customers.

Promotions: the final part of your winery marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

• Advertising in local papers and magazines
• Reaching out to local websites
• Social media marketing
• Local radio advertising

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your winery, including all facets of the winemaking process, tank cleaning, tasting preparation, and logbook maintenance.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to serve your 1,000th customer, or when you hope to reach $X in revenue. It could also be when you expect to grow your client database to X amount or launch in a new location.

Management Team

To demonstrate your winery’s ability to succeed as a business, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally you and/or your team members have direct experience working in vineyards or with wine. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing wineries or successfully running small businesses.

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.

In developing your income statement, you need to devise assumptions. For example, will you sell 50 bottles per day or 100? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets : Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $100,000 on building out your winery, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $100.000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a winery business:

• Location build-out including design fees, construction, etc.
• Cost of equipment like cultivation equipment, fermentation tanks, and temperature control systems
• Payroll or salaries paid to staff
• Business insurance
• Taxes and permits
• Legal expenses

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your winery blueprint or location lease.

Putting together a business plan for your winery is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the winery industry, your competition and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful winery.

Don’t you wish there was a faster, easier way to finish your Winery business plan?

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.   Click here to see how Growthink’s professional business plan consultants can create your business plan for you.

Other Helpful Business Plan Articles & Templates

Everything You Need to Consider for a Vineyard Business Plan

• Post author: theadmin

When venturing into starting a vineyard, a comprehensive and effective vineyard business plan is crucial.

It’s the blueprint for success, outlining the steps you need to take to turn your dream into a thriving reality.

The journey of vineyard ownership is not just about growing grapes; it’s about crafting an experience and a product that resonates with your customers. 

Whether you’re aiming to create a boutique vineyard or a larger-scale operation, understanding the nuances of the business, from market analysis to vine care, is fundamental. This guide will provide you with the insights and tools necessary to navigate the complex yet rewarding world of vineyard management.

Market Analysis

The first step is understanding your target market. Conduct thorough research on local wine preferences, consumer trends, and your competition.

This information will guide your decisions about which grape varieties to grow and the types of wine you’ll produce.

Location and Climate Considerations

Choosing the right location is paramount. Your vineyard must be in an area with a climate conducive to grape growing, rich soil, and ample water access.

Research and select a location that ticks these boxes and aligns with your market analysis.

Designing Your Vineyard

Next, focus on vineyard layout and grape variety selection. Plan your vineyard’s design carefully, considering the types of grapes that will thrive in your chosen location and appeal to your market.

Financial Planning

A robust financial plan is essential. Include initial setup costs, ongoing operational expenses, and projected income.

Vineyards are long-term investments, so be realistic about the time it will take to become profitable.

Marketing and Sales Strategy

Develop a marketing strategy that encompasses branding, pricing, and distribution. Consider both direct sales, like a tasting room or wine club, and wholesale opportunities.

Risk Management

Identify potential risks, such as climatic challenges or market fluctuations, and devise strategies to mitigate them. This might include insurance or diversifying your wine offerings.

Sustainable Practices

Incorporate sustainable farming practices to benefit the environment and attract eco-conscious consumers. Think about organic methods, water conservation, and using renewable energy.

Team Building

As your vineyard grows, so will your need for a skilled team. Plan for hiring staff, including vineyard managers and marketing experts.

Regulatory Compliance

Ensure compliance with all relevant regulations related to vineyard operations and winemaking. This includes obtaining necessary licenses and adhering to health and safety standards.

Adaptability and Learning

Stay abreast of industry trends and be prepared to adapt your business plan as needed. The wine industry is dynamic, and staying flexible can help ensure long-term success.

Cultivating Success in the Vineyard

Starting a vineyard is a journey filled with challenges and opportunities, requiring meticulous planning and a strategic approach – the foundation of a successful vineyard business plan. The rewards of this venture are immense. Own A Napa Vineyard offers a unique opportunity to own a vine with benefits like hands-on lessons, exclusive wine discounts, and the option to have grapes from your vineyard shipped to your home.

Start your winemaking journey with Own A Napa Vineyard and see your vision flourish in the heart of California’s renowned wine country.

You Might Also Like

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How to Start a Winery: Key Elements of a Winery Business Plan

Owning a winery may seem like an adventurous or romantic family business to some. That doesn’t mean it’s an easy job. Whether you’re looking to break into the market or expand your existing winery business, you may be up for a challenge if you’re lacking the right set of tools. As you embark on this journey, you need a well-thought-out winery business plan in your back pocket. This outlines essential business information, including growth goals, products and inventory, organizational structure, historical and forecasted sales, accounting, and more.

Your winery business plan is a vital resource that provides your team with the necessary structure to keep your business afloat. It also ensures everyone is working toward the same goals. From navigating production timeframes to considering distribution costs, there are a lot of details that must be sorted out to ensure you’re prepared for the future. Although your business plan is a written document, it should be fluid and easily adjusted. As you make tweaks to your winery business on the fly, you will need to pivot your business plan to reflect these adjustments. Without total alignment among you, your team, and your business plan, you’ll have limited visibility into your winery’s future.

As you navigate this guide, fill out and share this free business plan worksheet to set goals for your winery in stone.

Table of contents

Executive summary, company description, market analysis, organizational structure, product inventory, marketing and sales, funding request, financial projections, pro tip: successfully manage your winery with business management software, business decisions, what to include in your winery business plan.

While your business plan should be customized to your winery and your specific growth goals, some key elements should always be included in a business plan. Consider including the following sections in your winery business plan:

At the top of every business plan lives the executive summary. Use this section to provide the reader with a high-level overview of your winery’s information. Such as history, mission, team, location(s), products, differentiators, growth goals, and financial goals. While there may seem like there is a lot to cover, don’t get too into the weeds in the executive summary. You will elaborate on many of these elements later on in the business plan.

Many wineries have years of stories to share, especially when they’re family-owned and passed down from generation to generation. But that doesn’t mean a new urban winery isn’t equally as exciting! Use the company description section to share what differentiates your winery from others in the local market.

• What was the reason for opening your winery doors?
• What trials and tribulations have gotten you to where you are today?
• Do you produce your product on site?
• Are you only a winery or do you produce other craft beverages such as beer or cider?
• Have you been awarded any achievements worth mentioning?
• Does your staff hold any certifications that set them apart?
• What financial milestones have you hit?

Provide a detailed understanding of your winery’s purpose. Offer a sneak peek behind the curtain at what is important to you as the business owner.

You always need to have a pulse on what’s happening within your winery. It’s also equally as important to understand what you’re up against in the local winery market. Perform a market analysis and include any of your findings in this section. Then you can easily pinpoint where other wineries are succeeding and what opportunities you have to close any untapped gaps.

Do other businesses offer vineyard tours and tastings? Are they focused solely on reds or does their menu include an assortment of wines? How often are they making changes to their menu? Do they offer food to accompany their wine? Is there a monthly wine club that loyal customers can join? Do they sell their product by the bottle on site or in local stores? Are they investing in traditional or digital marketing to extend their customer reach? Before you can expand your customer base, you need to know who and what you’re up against so you can make strategic business decisions that align with your growth goals.

Many factors will play a part in determining the size of your team and the organizational structure of your operation. Including your production volume, whether you have a tasting room, and your distribution model. Use this section of your winery business plan to outline the team based on their business section. Make it clear who holds leadership positions and who handles production, accounting, front-of-house operations, etc. 

To run a successful winery, you need to be able to meet the demand of your customers. If you aren’t able to successfully forecast the materials and ingredients needed to produce and package wine, you won’t have inventory to sell. To ensure your winery can handle your production demands, you need to create an inventory management process that is visible to each member of your staff.

When you are running low on a key inventory item, what is the preferred method of informing your staff? How should your team handle the purchasing and forecasting of required materials? Winery software can help make this process more predictable. You’ll still want to outline standard operating procedures that work best for your team.. 

Behind every successful winery are effective marketing and sales teams. While you may produce the best-tasting wine in your local market, you can’t succeed if your product isn’t being purchased by your target audience. The only way to do that is to market to them.

There isn’t a one-size-fits-all approach when it comes to marketing. You can use these questions to help put together a strategic marketing campaign that will drive sales and increase your revenue:

• What are you currently doing to drive new customers to your winery?
• Is your focus driving customers to your tasting room or to your website for online orders?
• Are you engaging in tactics to drive repeat purchases, like clubs, allocations, or subscriptions?
• Are you leveraging digital tools such as social media, email marketing, paid digital ads, etc.?
• Are there additional opportunities for you to get involved with the local community?
• When a sale is made, how is the order handled, the customer invoiced, and the products distributed?
• Do you have a system to track the order history of your customers?

Understanding how you can increase your reach and improve the sales process will lead to a smooth-running operation that hits (and often exceeds) any goals you have set for your winery.

You may be looking for a loan or additional funds to take your winery to the next level. If you’re using the business plan to source additional funding for your venture, you should use this section to outline the amount of funding needed and how you plan to use those funds. Doing so will provide potential investors with complete visibility into how their money will be used. Also how it will be distributed throughout the business.

At the end of the day, revenue is key to owning a successful winery business. Use this section of the business plan to demonstrate your winery’s profit growth. Also where you expect the business to be in five years, ten years, etc. Setting financial projections, especially those that are broken down into quarterly segments, makes it easier for you and your team to track your growth against the targets and pivot as needed. Invest in accounting software that can make bookkeeping easier and more accurate. Then you can better manage cash flow and quickly identify any gaps you need to close to hit your targets.

When possible, it’s a great idea to add supplemental materials to this section. Including bank statements, income statements, cash flow statements, loan information, and any additional documentation that clearly outlines your winery’s financial metrics.

To conclude your winery business plan, use the appendix to house any supporting materials that provide additional clarity into anything you’ve included above. Examples include cost worksheets for capital expenses and operations, budgets , the winery layout, contracts, and relevant licenses or permits.

As a business owner, you understand that running a business is a lot easier said than done. From hiring a trustworthy team to distributing products and marketing your winery, there are a lot of factors that come into play. Without effective business management tools, it can be increasingly difficult to handle everything on your plate. Especially as you continue to grow your winery business.

By investing in winery management software , you can feel confident knowing that nearly every aspect of your business is being tracked and monitored. Freeing up your valuable time to focus on the big picture. When browsing the various winery management software options on the market, look for a tool that can help you:

• Track winery inventory and reorder key materials when stock gets low
• Forecast wine production costs for future batches by analyzing historical cost data
• Create sales invoices that automatically sync to your existing accounting software
• Track wine production and sales activities and provide data-driven insights
• Offer visibility into sales, production, and more via any device

Using winery management software, you’ll be investing in a tool that can influence the success of your business. By equipping your team with a central hub for all business information, you can have peace of mind knowing you have the data to solve any problem that may arise.

Get an in-depth breakdown of the different types of winery software »

Why Your Winery Needs a Business Plan

Even if you’ve been running a family-owned winery for years without a business plan, we recommend taking the time to put one together now. From understanding little details like how long it will take for the grapes to grow to how your business loans will be dispersed throughout your operation. A business plan is an effective way to give clear visibility into your winery’s present performance and future plans. Here are a few reasons why having a winery business plan is critical to your company’s success:

Anyone can have goals for their business. If you don’t write them down and hold yourself accountable for them, they likely won’t be met. A business plan lays out your winery’s financials, marketing and sales strategies. Also other elements that must be accounted for when setting growth goals. By having clear visibility into where your winery currently stands, you can make realistic goals. Also hold yourself to the designated benchmarks quarter after quarter.

Depending on your vision for your winery, you may need a loan or investor to help you achieve it. Your winery business plan outlines your company’s history, financials, and sales strategy. This helps investors determine if your company is worth investing in. Using additional funding opportunities , you’ll be able to accelerate your winery’s growth.

You are making difficult business decisions from time to time as a business owner. But those decisions can be made even more difficult if you lack insight into what’s going on with your winery business. With an up-to-date business plan, you will have a pulse on business operations, winery production, and goal tracking, helping you to make more informed decisions that are backed by data.

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Table of contents

How to start a winery business.

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Owning a winery and making wine is an almost romantic notion for many people but few can transform that dream into a successful business. The wine business is tough but there’s incredible potential there. If you’ve been thinking about starting a wine business and setting up a winery here’s what you need to do to set yourself up for success.

Why Start a Winery Business

A winery business will typically have higher profit margins compared to a different wine business, such as a retail shop. It also has total control of the product so you can bring your vision for the perfect wine to life. There are more business opportunities available for wineries. You could sell in bulk to wholesalers and distributors, and provide white-label manufacturing services in addition to running a tasting room. 

The biggest disadvantage is that it’s a very capital-intensive business. There’s a lot of money required to purchase a vineyard and all of the equipment required to run a winery. It may take several years for a new winery to be profitable so considerable patience will be required before you can break even, let alone turn a profit.

14 Steps to Starting a Winery Business

Considerable thought must go into any new business endeavor and that’s particularly true for starting a winery business since it requires a lot of start-up capital and compliance with the strict regulatory framework for alcohol. The following steps highlight everything you must do to ensure that you hit the ground running once your business starts operating.

Research the Winery Industry

You likely have some idea already of the type of wine that you want to produce. Now would be a good time to research the target market to see the opportunities that exist for your product. It will also educate you about the challenges in the market so you can adapt your plan accordingly. 

Since this is a highly regulated industry, make sure that you are fully aware of all the laws that apply to winery startups, so that your business doesn’t run into any legal troubles when it launches. There will also be many permits and licenses that you’ll need to obtain so find out which ones will be required for your business and prepare the paperwork accordingly. 

Choosing the location of your winery is also going to be a very important decision. If you’re looking to grow grapes, you want to be in a place where the temperature and soil are just right, as both will heavily influence the product quality.

Choose Your Business Model

The business model will determine how your winery is going to operate. Perhaps you prefer total control of the product from seed to bottle or you’re happy to source grapes from farmers to produce your wine, it ultimately comes down to your preference and vision for the business.

• Growing the Grapes

This business model provides you with the most control over the entire supply chain. You choose the vineyard’s location and the type of grapes to be grown, thus enabling you to create the perfect wine brand. In addition to making your own wine with those grapes, you could also sell them to other wineries that don’t have vineyards and further increase revenues.

• Producing the Wine

Having a winery alongside the vineyard is a great example of vertical integration. Harvested grapes are processed quickly and are transformed into the ideal product. Even if you don’t have a vineyard, you can source grapes from different regions to produce your wine.

• Hosting Guests at the Winery

Wine enthusiasts show a lot of interest in the process behind the making of their favorite brands. Leverage that interest by providing curated tasting room experiences as well as visits to the vineyard.

Draft a Business Plan

A business plan serves as the roadmap for setting up and growing your business. It highlights the opportunities and challenges, the regulatory framework, the capital requirements, and the cost outlays. The business plan should evolve as your business grows so that it’s able to adapt to changing dynamics.

Target Customers

You need to know who the buyers are for the product you’re creating. A solid business plan will include research based on which you’ve determined the target market. Look at the demographics in the markets where you’re going to sell the wine, understand their preferences and align your product to them and closely monitor the trends to understand the market potential for your product.

Projected Costs

It can be expensive to set up a winery business. Land acquisition for the winery will be one of the biggest costs as it can range from $10,000 to $30,000 per acre, potentially even higher in regions like Napa Valley. Expect to spend several hundred thousand dollars and even north of $1 million on the various equipment and machinery required to build a production facility.

Pricing Strategy

You need to consider several market factors when deciding on how to price the product. $12-$25 is typically considered to be the sweet spot for vineyards, particularly those that rely on tasting rooms to generate the bulk of their revenue. If you’re in the business of growing grapes and supplying them to other winemakers, consider what the competition is charging and what the demand is for those types of grapes before deciding on what the price will be.

Name of Business

Choosing a unique business name is of vital importance. It’s what will set your brand apart and make it instantly recognizable. That’s particularly important for a winery business as it will be too difficult to stand out of the crowd otherwise. Take some time to decide what the right name for your business will be. It should be unique and easily understandable.

Secure Funding

Since starting a winery business tends to be very capital-intensive, you’d likely have to tap into several sources for funding. This could be through loans and grants that you can apply for at banks and organizations that support small businesses. 

You could also look to crowdfunding if there’s enough interest in your idea to raise funds from the public. Naturally, there’s always the option to dip into your savings if you’ve been setting aside money to launch your business.

Select Your Grape Type

Grapes are essential to your winery business and you need to pick the most suitable one for your wine business. There are primarily three different types of grapes that are used for the production of wine.

• Vitis Vinifera

The Vitis Vinifera grape is used in the vast majority of wine produced. Its varieties include Pinot Noir and Cabernet Sauvignon. It’s native to the Mediterranean though there are varieties that are native to the eastern United States.

• Vitis Labrusca

The Vitis Labrusca is native to eastern North America and the majority of its grape varieties are red. It’s capable of withstanding a colder climate and can yield wines that are more similar to the European types.

• Vitis Rotundifolia

Native to the southeastern and south-central United States, the Vitis Rotundifolia species is well-suited to warm and humid climates. They’re primarily used to make desserts and artisan wines. 

Choose a Location

The location of a vineyard is of paramount importance. Understand the climate and soil of the place where you want to set up a vineyard. It should be conducive to supporting a good harvest. The location will also dictate the type of grape you can grow as different varieties require different climate conditions. 

Consider ease of access to the location as well, particularly if you intend to operate a tasting room, as it should be relatively easy for people to visit the vineyard. A strong local wine-driving culture is also important as it will ensure support for the business in the community.

Decide on Your Business Structure

Choosing the right business structure is an important part of the process. It determines what legal and regulatory requirements your business is subject to, how it’s going to be taxed, and what compliance may be necessary.

Sole Proprietorship

A sole proprietorship is an unincorporated business with a single owner. There is no separation between the business and the owner. They remain personally liable for the obligations of the business. Its biggest advantage is that a sole proprietorship is easy to set up as it has minimal documentation and paperwork requirements.

General Partnership

General partnerships work much in the same way that sole proprietorships do. They consist of two or more owners who share similar personal liability for all obligations. General partnerships are easier to set up as well since they have similarly minimal documentation requirements.

Limited Partnership

In a limited partnership, a managing partner is chosen by all of the other partners who are then responsible for managing the business. The other partners have no management control. The managing partner takes on unlimited liability whereas the other partners have the liability limited up to the amount that they have invested.

Limited Liability Company

A Limited Liability Company (LLC) separates the business from the owner so the exposure to their personal assets in case the business is unable to meet its obligations is limited. LLCs are required to be registered with the secretary of state where they’re based. They’re also annual filing requirements and additional paperwork involved to set them up.

Corporation

A corporation is a completely separate business entity from its owners and as such, it provides the maximum liability protection. Corporations are capable of acquiring assets, entering into contracts, suing or being sued, and issuing stock to raise funds from investors. Corporations are relatively more expensive to set up and also need to follow strict regulatory requirements for filing and disclosures.

Register Your Business

Depending on the type of entity that you’ve chosen, you may be required to register it with the relevant authority. For example, the LLC’s paperwork needs to be filed with the secretary of state where it’s based. Businesses are also required to obtain an Employer Identification Number or EIN from the Internal Revenue Service (IRS).

Acquire the Necessary Licenses and Permits

There are significant licensing and permit requirements for businesses that deal with alcohol, including registration with the ATF . There will also be state and local regulatory requirements specific to where you’re based, so it’s best to research the requirements that apply to your business. Ensure that you comply so that the business can operate seamlessly once it’s launched.

Open a Business Bank Account

Opening a business bank account is essential when setting up a business. You’ll be able to separate your business and personal finances which enables you to exercise prudent financial management. It will also make your life easier come tax season as any guesswork will be eliminated in trying to classify transactions. Opening an account can be done at any preferred bank. 

You’ll typically be asked to provide business registration and personal identification documents as this is a regulatory requirement for banks. They may also offer you additional services such as business credit cards or small business loans, but this usually involves extra due diligence.

Source the Grapes and Other Supplies

If you’re only producing wine and not running a vineyard, sourcing grapes will be one of your biggest challenges. You need to set up a solid supply chain that ensures an adequate supply of high-quality grapes that you can then use to produce wines. 

This will require reaching out to different vineyards, understanding their production capacity and constraints, and supply agreements. Other supplies for wine production will also be required. This will include fermentation tanks, boilers, and bottling machines.

Get Business Insurance

Business insurance is necessary to protect against any potential liabilities. The standard coverage should include general liability and workers’ compensation in addition to commercial property so that your equipment and structures are protected. Insurance coverage is also available for orchards and vineyards that protect against damage to vines and harvested grapes. 

Hire and Train Your Staff

Hiring and training staff will be time-consuming but it’s important to get this part of the process right. You can’t be running everything yourself so the people you put in charge of different aspects of the business must not just be passionate about what they’re doing but must have adequate training so that they’re able to do their job effectively. 

Take your time to find the right candidates for each position and then provide them with adequate training either in-house or through training consultants to ensure that they’re fully equipped to do a great job. 

Advertise Your Business

Once you have the business up and running, it’s time to get the word out about it. Do this through social media marketing campaigns and by running Pay Per Click ads online. You can also invest in Search Engine Optimization (SEO) efforts to increase brand awareness through content marketing. Focus on attending industry events and networking through professional organizations to establish your business as a serious player in the industry.

Raise a Glass to Your Success

It may seem daunting to launch a winery business and while it certainly has its challenges, it also offers unmatched opportunities for business owners to expand and eventually grow their revenue streams. 

Diligent bookkeeping is the foundation of every good business and with doola Bookkeeping , you can eliminate the stress of having to accurately track income and expenses to focus on what matters the most: taking your business to new heights.

How much does it cost to start a winery?

The cost to start a winery can typically range from $300,000 to over $1 million depending on the type of wines being produced, the equipment being acquired, the location of the winery, and any additional services that it may be looking to provide.

Is a winery a profitable business?

For those who have a great understanding of the industry, a winery can be a very profitable business as it provides them with the opportunity to not only make their own wine but also produce wine for other companies.

Can you start a winery without a vineyard?

It is possible to start a winery without a vineyard as you don’t necessarily need to own one. You can source grapes from vineyards and use them to produce wine under your own brand.

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• Sample Business Plans
• Food, Beverage & Restaurant

Winery Business Plan

A lot of people like fine and customized wines, but not everyone has the talent to whip up wines that’ll suit the tastes and preferences of different people.

Moreover, with people valuing experiences more than products, the popularity of wine-tasting and making sessions is growing every day.

If you are planning to start a new winery business, the first thing you will need is a business plan. Use our sample winery business plan created using Upmetrics business plan software to start writing your business plan in no time.

Before you start writing your business plan for your new winery business, spend as much time as you can reading through some examples of manufacturing-related business plans.

Industry Overview

The wine industry stood at a market value of 417.85 billion US dollars in 2020 and is expected to grow at a rapid rate going forward.

Also, according to Glassdoor , the average winemaker salary across the nation stands at $84,015 per year, being $43,000 on the lower end and $132,000 on the higher end.

The rising consumption of wine across the globe is one of the major reasons for market growth.

Alongside the growth of wine consumption across different cultures, the way people shop for wines has grown too. Most people prefer to buy wines from retail stores and online.

Also, with increased changes in people’s lifestyles, everyone prefers beverages with lesser or no alcohol content. This has led to an increase in the popularity of wines.

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Things to Consider Before Starting a Winery Business

Decide upon your distribution method.

Although you can always make the switch, it is advisable to study and pick the most profitable distribution channel for your winery business.

A winery has several distribution channels like stores, eCommerce sites, restaurants, hotels, etc., with stores and online sites being the most popular ones nowadays.

Hence, you should conduct a thorough analysis of various factors and pick the channel that fits the best for your business.

Pick a favorable location

A good location is important for a winery business. Not only should the weather and atmosphere be favorable for your winery, but it should be accessible as well.

It helps you make your business more cost-effective in terms of transport costs and also more reachable for your distributors.

Have a list of equipment and machines you’ll need

From farming equipment to tools and machines for extracting and storing wine, a winery needs a bunch of equipment.

Hence, figuring out the functioning of all the systems and tanks before you start is essential for smooth procedures and working of your winery.

Decide on a brand name and message

Though the brand building is an ongoing process, picking a memorable name and brand message is essential. It gives your customer base to remember you something by.

Also, a message that you follow through with can become a strong mark of effort and quality.

Write Your Business Plan

If you can make unique and innovative wines know how to juggle proportions and blend to suit the tastes of different people or would like to have a scenic vineyard that can also become a source of income for you, then a winery business might help you have a fulfilling and profitable profession.

Reading sample business plans will give you a good idea of what you’re aiming for. It will also show you the different sections that different entrepreneurs include and the language they use to write about themselves and their business plans.

We have created this sample Winery Business Plan for you to get a good idea about what a perfect winery business plan should look like and what details you will need to include in your stunning business plan.

Winery Business Plan Outline

This is the standard winery business plan outline, which will cover all important sections that you should include in your business plan.

• Mission Statement
• Vision Statement
• Customer Focus
• 3 Year profit forecast
• Business Structure
• Startup cost
• Products and Services
• Industry Analysis
• Market Trends
• Target Market
• SWOT Analysis
• Sales Forecast
• Direct Mail
• Public Relations
• Advertising
• Ongoing Customer Communications
• Pre-Opening Events
• Pricing Strategy
• Service Functions
• Administrative Functions
• Important Assumptions
• Brake-even Analysis
• Profit Yearly
• Gross Margin Yearly
• Projected Cash Flow
• Projected Balance Sheet
• Business Ratios

After  getting started with upmetrics , you can copy this sample winery business plan template into your business plan and modify the required information and download your winery business plan pdf or doc file.

It’s the fastest and easiest way to start writing your business plan.

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Download a sample winery business plan

Need help writing your business plan from scratch? Here you go;  download our free winery business plan pdf  to start.

It’s a modern business plan template specifically designed for your winery business. Use the example business plan as a guide for writing your own.

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Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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Winery and Vineyard Feasibility Workbooks

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Revised March 2023. Starting a vineyard or building a winery requires a great deal of money. Just how much money will depend on the wants and needs of the business and the timing of future income. Iowa State University Extension has developed two cash flow tools to help plan the new business. The tools are populated with realistic data. All input data can be changed to fit the needs of the business. These Excel workbooks have been created to aid in the development of a cash flow for a vineyard or a winery. The workbooks assume that the user has a good understanding of grape or wine production, marketing, management and accounting principles. Any results developed with these workbooks should be reviewed by a certified public accountant. The Ten Year Winery Financial Planning Workbook can be used for any size of a winery. The program is very flexible when it comes to options for sources of capital, equipment, marketing, staffing, fixed and variable expenses and sales projections. The program allows up to three term loans. Income sources are the average price per bottle of wine sold, but there are three options to sell wine: in the winery, retail or wholesale. Gift Shop income is also included. Reports include Asset and Depreciation Schedule, a two-year monthly cash flow, a ten-year cash flow, Income Statements and Balance Sheets with a percentage analysis. The Cost to Establish a Vineyard workbook is designed to report all the income and expense of a one-acre vineyard for up to 13 years. There are three different vineyard workbooks, each for a different trellis style.

• High Trellis
• Geneva Double Curtain
• Vertical Shoot Position

All do the same thing but costs are different for each. Labor costs can include overhead costs like insurance, taxes and vacation costs for up to six different job skills. Machine costs are based on horse power, fuel cost and rental value. Interest Expense is calculated for each new year's expenses as well as all carryover debt to the point in time when income pays off all past expenses. Each year's expenses print as well as a Summary Report of all Income and Expense to date.

• Winery Ten Year Financial Planning Workbook (Version 9)
• Estimated Vineyard Establishment with a High Trellis and Production Cost Per Acre
• Estimated Vineyard Establishment with a Geneva Double Curtain and Production Cost Per Acre
• Estimated Vineyard Establishment with a Vertical Shoot Position and Production Cost Per Acre
• Total Wine Package Video , Iowa State University Extension Value-Added Agriculture Program and the Agricultural Marketing Resource Center, 2006 - These four videos address aspects of researching the feasibility of constructing a winery or establishing a vineyard on your operation. The videos are designed to give producers insight into the research needed before construction takes place. The complete Total Wine Package video is available in DVD format by emailing [email protected] or sending a written request to: Wine Video Agricultural Marketing Resource Center 2625 N. Loop Drive, Suite 2430 Ames, Iowa 50010

The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin, gender, religion, age, disability, political beliefs, sexual orientation, and marital or family status. (Not all prohibited bases apply to all programs.) Many materials can be made available in alternative formats for ADA clients. To file a complaint of discrimination, write USDA, Office of Civil Rights, Room 326-W, Whitten Building, 14th and Independence Avenue, SW, Washington, DC 20250-9410 or call 202-720-5964.

The names, words, symbols, and graphics representing Iowa State University are trademarks and copyrights of the university, protected by trademark and copyright laws of the U.S. and other countries.

How To Write a Wine Business Plan + Template

Creating a business plan is essential for any business, but it can be especially helpful for wine businesses that want to improve their strategy and/or raise funding.

A well-crafted business plan not only outlines the vision for your company, but also documents a step-by-step roadmap of how you are going to accomplish it. In order to create an effective business plan, you must first understand the components that are essential to its success.

This article provides an overview of the key elements that every wine business owner should include in their business plan.

Download the Ultimate Business Plan Template

What is a Wine Business Plan?

A wine business plan is a formal written document that describes your company’s business strategy and its feasibility. It documents the reasons you will be successful, your areas of competitive advantage, and it includes information about your team members. Your business plan is a key document that will convince investors and lenders (if needed) that you are positioned to become a successful venture.

Why Write a Wine Business Plan?

A wine business plan is required for banks and investors. The document is a clear and concise guide of your business idea and the steps you will take to make it profitable.

Entrepreneurs can also use this as a roadmap when starting their new company or venture, especially if they are inexperienced in starting a business.

Writing an Effective Wine Business Plan

The following are the key components of a successful wine business plan:

Executive Summary

The executive summary of a wine business plan is a one to two page overview of your entire business plan. It should summarize the main points, which will be presented in full in the rest of your business plan.

• Start with a one-line description of your wine company.
• Provide a short summary of the key points in each section of your business plan, which includes information about your company’s management team, industry analysis, competitive analysis, and financial forecast among others.

Company Description

This section should include a brief history of your company. Include a short description of how your company started, and provide a timeline of milestones your company has achieved.

If you are just starting your wine business, you may not have a long company history. Instead, you can include information about your professional experience in this industry and how and why you conceived your new venture. If you have worked for a similar company before or have been involved in an entrepreneurial venture before starting your wine firm, mention this.

You will also include information about your chosen wine business model and how, if applicable, it is different from other companies in your industry.

Industry Analysis

The industry or market analysis is an important component of a wine business plan. Conduct thorough market research to determine industry trends and document the size of your market. 

Questions to answer include:

• What part of the wine industry are you targeting?
• How big is the market?
• What trends are happening in the industry right now (and if applicable, how do these trends support the success of your company)?

You should also include sources for the information you provide, such as published research reports and expert opinions.

Customer Analysis

This section should include a list of your target audience(s) with demographic and psychographic profiles (e.g., age, gender, income level, profession, job titles, interests). You will need to provide a profile of each customer segment separately, including their needs and wants.

For example, a wine business’ customers may include restaurants, grocery stores, wine bars, and home consumers.

You can include information about how your customers make the decision to buy from you as well as what keeps them buying from you.

Develop a strategy for targeting those customers who are most likely to buy from you, as well as those that might be influenced to buy your products or wine services with the right marketing.

Competitive Analysis

The competitive analysis helps you determine how your product or service will be different from competitors, and what your unique selling proposition (USP) might be that will set you apart in this industry.

For each competitor, list their strengths and weaknesses. Next, determine your areas of competitive differentiation and/or advantage; that is, in what ways are you different from and ideally better than your competitors.

Below are sample competitive advantages your wine business may have:

• Passion for wine
• Extensive industry knowledge
• Proven business model
• Strong branding and marketing
• Robust sales and distribution network

Marketing Plan

This part of the business plan is where you determine and document your marketing plan. . Your plan should be clearly laid out, including the following 4 Ps.

• Product/Service : Detail your product/service offerings here. Document their features and benefits.
• Price : Document your pricing strategy here. In addition to stating the prices for your products/services, mention how your pricing compares to your competition.
• Place : Where will your customers find you? What channels of distribution (e.g., partnerships) will you use to reach them if applicable?
• Promotion : How will you reach your target customers? For example, you may use social media, write blog posts, create an email marketing campaign, use pay-per-click advertising, or launch a direct mail campaign. Or you may promote your wine business via a public relations campaign.

Operations Plan

This part of your wine business plan should include the following information:

• How will you deliver your product/service to customers? For example, will you do it in person or over the phone only?
• What infrastructure, equipment, and resources are needed to operate successfully? How can you meet those requirements within budget constraints?

The operations plan is where you also need to include your company’s business policies. You will want to establish policies related to everything from customer service to pricing, to the overall brand image you are trying to present.

Finally, and most importantly, in your Operations Plan, you will lay out the milestones your company hopes to achieve within the next five years. Create a chart that shows the key milestone(s) you hope to achieve each quarter for the next four quarters, and then each year for the following four years. Examples of milestones for a wine business include reaching $X in sales. Other examples include launching a new service, signing up X number of customers, or hiring key personnel.

Management Team

List your team members here including their names and titles, as well as their expertise and experience relevant to your specific wine industry. Include brief biography sketches for each team member.

Particularly if you are seeking funding, the goal of this section is to convince investors and lenders that your team has the expertise and experience to execute on your plan. If you are missing key team members, document the roles and responsibilities you plan to hire for in the future.

Financial Plan

Here you will include a summary of your complete and detailed financial plan (your full financial projections go in the Appendix). 

This includes the following three financial statements:

Income Statement

Your income statement should include:

• Revenue : how much revenue you generate.
• Cost of Goods Sold : These are your direct costs associated with generating revenue. This includes labor costs, as well as the cost of any equipment and supplies used to deliver the product/service offering.
• Net Income (or loss) : Once expenses and revenue are totaled and deducted from each other, this is the net income or loss.

Sample Income Statement for a Startup Wine Business

Balance Sheet

Include a balance sheet that shows your assets, liabilities, and equity. Your balance sheet should include:

• Assets : All of the things you own (including cash).
• Liabilities : This is what you owe against your company’s assets, such as accounts payable or loans.
• Equity : The worth of your business after all liabilities and assets are totaled and deducted from each other.

Sample Balance Sheet for a Startup Wine Business

Cash Flow Statement

Include a cash flow statement showing how much cash comes in, how much cash goes out and a net cash flow for each year. The cash flow statement should include:

• Cash Flow From Operations
• Cash Flow From Investments
• Cash Flow From Financing

Below is a sample of a projected cash flow statement for a startup wine business.

Sample Cash Flow Statement for a Startup Wine Business

You will also want to include an appendix section which will include:

• Your complete financial projections
• A complete list of your company’s business policies and procedures related to the rest of the business plan (marketing, operations, etc.)
• Any other documentation which supports what you included in the body of your business plan

Writing a good business plan gives you the advantage of being fully prepared to launch and/or grow your wine company. It not only outlines your business vision but also provides a step-by-step process of how you are going to accomplish it.

A well-written wine business plan is an essential tool for any entrepreneur looking to start or grow a wine company. Your business plan is your roadmap to success. By following the tips outlined in this article, you will be well on your way to writing a winning business plan for your wine company.  

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Vineyard purchase process

A Vineyard Business Plan – Where to Start

Something that we regularly talk through with our clients before they purchase a Bordeaux vineyard is careful consideration of a vineyard business plan. Not so easy early on when it feels like there is still so much to learn about vineyards, wine making and all the regulations associated with operations. In this article we offer a framework for thinking about a vineyard business plan – or at a minimum a place to start.

With over 7,500 vineyard chateaux in Bordeaux producing wine, it would not be a stretch to state that there are 7,500 different business plans. One of the motivations for understanding a vineyard business plan before the purchase of a Bordeaux vineyard is to try to target estates that have an existing business plan that is similar to the strategy that you are considering.

In very simple terms the buyer of a Bordeaux vineyard is wise to determine their motives for the acquisition at the very outset. Unless budget is not a limiting factor, it will be important to give appropriate priority weighting to the following criteria:

• Lifestyle – great for visiting and entertaining, often a second home, highly attractive environment, close to amenities, quality neighbours, limited management responsibilities and a bottle with your name on it.
• Condition of buildings, equipment and vineyards – all buildings and installations are turnkey operationally perfect, and no CapEx of significance needed for at least 3 years.
• Profit – consistent long-term profitability, stable distribution and market demand.
• Owner’s personal engagement – owner is day to day director, hands on and living on the property or very nearby.
• Large scale – high volume, higher efficiency, long term goals, big enough to support a full management team and operate autonomously. Often over 50 hectares.
• Prestige . – Terroir and intrinsic land quality, famous appellation
• Brand strength – independently affirmed for more than 10 years as a recognizable quality trademark associated with excellent wines. Demand equals or exceeds supply.

The majority of Bordeaux vineyards for sale are under five million Euros in value but equally these vineyard estates will only have one or two criteria listed above close to 10 out of 10. To get all of them at a 10 out of 10 weighting, the estate will be over Eur100 million in value and a household name. The way that a buyer of a Bordeaux vineyard assembles these criteria will direct the business plan, budget and even the acquisition process.

For example, a typical lifestyle case study might have the following weighting:

• Lifestyle 8/10
• Condition of buildings and vineyards 7/10
• Profit 2/10
• Owner personal engagement 2/10
• Large scale 3/10
• Prestige 4/10
• Brand strength 4/10

The Vineyard Lifestyle. A common vineyard buyer motivation is to participate in one of the most enviable lifestyles in the world. If lifestyle is the primary motivation, the purchase of a Bordeaux vineyard may fall into the category of a hobby vineyard. In this instance the chateau residence and setting are likely to be more important to a buyer. While these buyers will both appreciate and perhaps even desire the other criteria, they eventually recognize that it is not economically interesting to invest in criteria that they may not need or have time for.

To provide a contrast, a buyer may put less weighting on lifestyle with more priority being put on prestige, terroir and brand strength . In this instance, the acquisition is driven by different motives and the buyer may not even care if there is a residence at all. They require the best possible raw materials for the vineyard and the most prestigious appellation that their budget can support. They might spend €20 million Euros on a dilapidated residence in an average setting but with some of the best parcels of vines in a prestigious appellation.

Once the vision, motivation and budget for the purchase has been established, we can focus on business plans at estates that correspond or that have the potential to correspond with them. But what about the financial aspect of the vineyard business plan? All vineyards are businesses after all and so capital and cash will always play a role to a greater or lesser extent.

We have devised a very simple way to help our clients understand the basics of vineyard cashflows . Using this as a foundation will inform the buyer as well as our team, how to construct their operational business plan after the purchase of the vineyard is completed.

The financial business plan of a vineyard therefore follows this formula:

Annual bottle production x Cost per bottle = Total operating cost

Annual bottle sales x average price per bottle = total revenue

As an example, a typical vineyard financial model might look like this:

Annual bottle production = 100,000

Cost per bottle = 5.00 euros

Total operating cost = 500,000

Annual bottle sales = 75,000

Average price per bottle = 7.00

Total Revenue = 525,000

Net profit €25,000

It is simplistic, but it is a great place to start a discussion since it reveals the categories where risk and sensitivity can be analysed and understood.

To discuss vineyard business plans further please contact Michael Baynes at [email protected] .