The success of any business largely depends on how well you start the business, proper planning before getting the business rolling is thus indispensable, and a winery is no exception. There exist two possibilities whenever one venture into a business; either loss or profit, however, every entrepreneur will endeavor to maximize on all the available avenues to make profits. Wine and vines business is a prolific business worldwide with an estimated market value of 20.4 USD in the United States alone as of 2016. However lucrative and promising the winery industry may look, there are still challenges and failures are considerable. An adequately guided start will significantly affect success rates as far as a winery is concerned.

You have just done your research well on all the possible and viable business opportunities, and you’ve settled on starting a winery, it is fascinating, but you are not sure on how to get started. This article offers a guideline that will help you in setting up a winery business. Following these guidelines religiously will help you minimize on costly mistakes often due to ignorance.

How to start a small winery

A Forbes article highlights a good business start-up plan as one of the crucial ingredients to success in the winery business. A good start promises a desirable ending and outcomes; thus, it is essential that you are adequately acquainted with the basics while starting a small winery business. After considering and ascertaining that all determinants and business motives are satisfied then you should assemble the necessary resource coordinate and focus on starting a winery. Vital consideration before starting a winery include;

 

• Compliance with legal requirements

 

Before thinking of starting a wine production unit, it is essential that you acquire the necessary permits and licenses to avoid conflict and possible closure by the regulatory authorities. This requirement will vary from one country to another; therefore, it is essential that you get vivid regional updates concerning licensing requirement and procedures before starting a winery. Another critical document that should not be forgotten when starting a winery is the insurance coverage as there is a higher predisposition to risks in this kind of business. Consult an actuary to get the best coverage plan and terms.

 

• The strategic location of the premises

 

The position is critical both in production and sales. Customers will be attracted to wineries in easily accessible places thus your winery should be strategically located to assure you of frequent customers. However, you can identify a niche virtually anywhere establish a winery and make a kill from such virgin fertile lands. It is essential that you do a feasibility test before channeling your cash to winery business in an area. Some of the factors that can guide you to choosing one area over another may include; the dominant age group in that particular locality, urban communities are more likely to embrace wines than the rural population and the conservative nature of a given society.

 

• Accessibility of raw materials

 

Raw materials are crucial in starting a winery, the availability and accessibility will hugely affect production and consequently revenues. Grapes are the primary raw material in a winery and thus you ought to consider their availability before establishing a plant. Having a reliable grapes supply will be vital in determining the success of a winery; thus you must be in contact with a vineyard. There are typically three ways on how to start a winery;

• Creating a vineyard; this is a very viable option that is economical and will ensure undeterred supply of grapes for the winery provided accurate projections are done during planting and maintenance. However, this method can be unfavorable in situations that require swift action since the vine takes a relatively long time to mature and ripen up.
• Buying an existing vineyard; this looks favorable in time-limited situations whereby quick startup is desired, this has proven costly but if you acquire the right vineyard the returns are usually handsome, and you can recover the used cash in a pretty short duration.
• The third option is establishing a storefront winery which focuses mainly on retail services. You outsource wine from a set and reputable producer, market the products and sell them at a suitable location. This method is advantageous in that it enhances specialization thus promises greater efficiency in the winery. An individual is charged with a specific task which he can excellently deliver.

 

• Supply and distribution

 

After production and processing, shipping is the next event that will require in-depth consideration and strategizing. You can have quality finished products, but with weak or unreliable distribution chain you will make enormous loses since most of the wine will either get damaged in transit or stale in your warehouse. When starting a winery, you should connect with retailers in different parts of the country as well as establish an elaborate transport system to ensure your products get to the market in good time and safely.

 

• Cost implications

 

Capital availability will be useful in the execution of a business plan and modifying the course of the winery business to maximize profits. The time and cash you invest in your winery will probably be proportional to return levels.

How much does it cost to start a small winery?

Quoting an exact figure will be a big fat lie. Every winery business has unique financial needs, and there is minimal standard costing or valuation criteria. However, vital conventional measures that will give you an estimate on how much money you need to start a small winery include;

• Available resources; the depth of your pocket will determine the much that you are willing to invest in establishing a winery. In the event of limited capital, you must squeeze the expenditures to avoid financial constraints.
• Intended size of an enterprise; the size of the enterprise will project the kind of remuneration needed as well as space thus cost implications. Small and mid-size winery mostly don’t require massive staffing, therefore, you are likely to minimize recurrent expenditures.
• Locality and requirement; the cost of doing business vary from one region to another; this variation is pegged on infrastructure status as well as legal requirements.