Trimakas

So is anyone actually making money??

15 posts in this topic

Hi,

I'm down here in NC and in the process of starting a distillery.. I've run quite a few businessess before with varying degrees of success. I have a feel for the effort behind starting a distillery, especially the sales cycle.

In the back of my mind I have a feeling that the spirits business is more of a passion than a profit. Meaning making some money (profit) is doable, but making great money is extremly difficult. And great money being anything more than minimum wage when you're putting in probably 60 - 80hr weeks.

So to put a sharp point on the discussion, if on a regular basis you work 70 hrs a week, times 50 weeks a year, 3,500 hrs.. Times $10/hr would be about $35,000 a year.

Are folks out there making more than that? And if so how long did it take to get over that hurdle?

Thanks and no need to provide specifics, but it would be great to know over or under for those of us considering the jump.

Thanks

T

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Good morning,

The scale of your distillery and the power of your marketing and branding will be the only way to answer your question. We've all seen well funded distilleries make no money because they had crappy product or a poor marketing and sales plan. We've all seen shoe string operations make "angel tears" with a good brand and story and make money right out the door.

I know many people are cagey about their performance in this industry. In 16 months we've gone from 1.5 FTE to 21 employees with sales 5-7X of our Pro Forma and well into the black financially.

Long story short, people are making a go at it in this industry and people are failing hard. Your business and product acumen will determine your path.

Cheers,

John

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In my case, I still work a full time job, (Local Hospital), oversee the distillery store, (in a downtown location) and run the distillery. Start at 6:00 am and don't get home till 9:30 pm. No i haven't made any money yet. Do I see light, yes, in few months I'll give up the hospital job.

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In my case, I still work a full time job, (Local Hospital), oversee the distillery store, (in a downtown location) and run the distillery. Start at 6:00 am and don't get home till 9:30 pm. No i haven't made any money yet. Do I see light, yes, in few months I'll give up the hospital job.

MASH, how long you been in the business from getting permit till now?

TRIMAKAS-

Throwing money at the wall does no good.

Take the lead from others out there; Have a local group do your bottling for the cost of a lunch, Once the facility allows it have classes, at a REASONABLE PRICE, $500 for 2 days is a bit over the top when all you're doing is your normal distilling anyway. Sell 'tasting flights' where the clients keep the glasses. And remember they aren't customers, they are clients, folks you want to keep an ongoing working relationship with. Customers just purchase and leave.

You should expect to do tastings at every little event in the are, if the law in your area allows it.

There's a lot of small marketing things that you can't put a dollar/cost on that you don't think about when drawing up the business plan.

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It's up to you. Plain and simple. The better your preparation and product , the better your chances. Yes the money is there. GO GET IT AND DON"T LOOK BACK! NO REGRETS>

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From permit to now, 9 months, but in Virginia the ABC controls all sales and it took 6 months to get it on the shelves and 3 months to get sales traction. In fact I do 22 tastings and more a month with my faithful Sweetwater Girls.

Yes I am sofa king tired.

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I have been selling product for only 4 months and thought this would be a good time to check back in with this topic. We are selling moonshine and working on brandy and gin recipe. I'm curious to know three years later from the start of this thread, if anyone cares to comment on what it takes to make money in this industry. The answer will be different for everyone depending on their expectations but I suspect some are very satisfied with their performance and other are quite discouraged. Who is rocking it? Who is treading water and who is sinking? What worked and what didn't? Lots of new prospective distillers may want a reality check. I was told how difficult it would be and did it anyway. That's just the way I roll.

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1 hour ago, Scalawag said:

Lots of new perspective distillers may want a reality check. I was told how difficult it would be and did it anyway. That's just the way I roll.

I'll have a drink to that! I was recently asked what is the biggest lesson I've learned so far....after a long pause, my answer was, "To learn how to temper expectations." I was once told a rule of thumb by an old liquor industry member and thought it was just him trying to discourage new entrants....so I kind of shrugged it off, but boy, do those words ring true today! He said, "If you can cut your sales by 4, double your timeline, triple your estimated costs and still make your business plan work then go for it, otherwise, I'd think twice."

To answer your question, we are just over a year out of the gate and fairly happy with our results so far. We are at least able to keep the doors open and lights on! That being said, the thing that boggles my mind is the cash flow issue. My wife and I are bootstrapping this thing ourselves so it is sooooooo hard to watch barreled whiskey sit there and do its thing....It's like shoveling a pile of money in the corner and TRYING to forget about it for a few years! And not sample those barrels dry! :P 

Just my $0.02 for the morning...now time to go look for more coffee and bottle some booze!

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13 minutes ago, Stumpy's said:

To answer your question, we are just over a year out of the gate and fairly happy with our results so far. We are at least able to keep the doors open and lights on! That being said, the thing that boggles my mind is the cash flow issue. My wife and I are bootstrapping this thing ourselves so it is sooooooo hard to watch barreled whiskey sit there and do its thing....It's like shoveling a pile of money in the corner and TRYING to forget about it for a few years! And not sample those barrels dry! :P

Here, here. A small distillery making whiskey, and trying to grow organically, is a trial in patience. 4 years, and we are just at about breakeven. But that reflects the need to double production of whiskey yearly, that requires aging 2-4 years, and more. Every year we plow all we earn back into making more whiskey, and that includes the need to upgrade equipment, etc. We did not, and perhaps should have, just run GNS through the still for vodka or even gin, which would have generated an easy startup revenue stream, but instead have been making everything grain-to-glass, even the vodka and gin.

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I think it's a good idea to have a post regarding the market today, in 2016.

It seems a few years ago if one started a distillery, made mediocre product, had mediocre branding/marketing, and a mediocre plan involving not a lot of startup money that they would be selling hundreds of cases per month.  I am contacted about once a week by people interested in starting up, and most of them just see the success stories and are completely blind to the failures or the people hanging on by a thread.

I've been on the shelves since June 2015.  We're making a profit and seem that we're doing OK (ask us again next month LOL).  I started with with a very frugal plan and very, very little debt, we've been lucky here and there but overall it's taken a lot of ridiculously hard work for zero pay--in fact there were plenty of months where I was writing a personal check to the company.

Things are looking well for us and we're not out of the weeds yet. I've had to sacrifice a lot to get where we're at (I rarely see friends or family). I look at photos from just two years ago and say "Man I look young. So many less wrinkles and grey hair than I have now".

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Our first product has been on shelves for about 3 months now, and its doing well. I still work a 8-5 day job, do tastings every weekend and liquor stores, and fit in distillery operations whenever I'm not doing those 2. I designed my business plan to keep the overhead as low as possible, have 0 employees right now, but am already half way to breaking even on monthly expenses, in just 3 months of product availability. I know that once I can afford to quit my day job I will be able to grow the business faster, but I cant really complain about my growth at the moment.

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Mash, "If you can cut your sales by 4, double your timeline, triple your estimated costs and still make your business plan work then go for it, otherwise, I'd think twice."

      The above seems on target with my experience....Glad to hear you are starting to meet expenses. 5 products in a year seems like you have been pushing hard. We hope to accomplish something similar.

Blue Star, how long before you figure you will have product on the market?

Skaalvan, looks like things are moving in the right direction. Very glad to see it.

MOOK, sounds like we are in very similar circumstance. Looks like rum is your sole product at this point? Whats next?

     Thanks for all the feedback...I wonder if any of the distillers that have been succeeding at this for a while will care to share any valuable nuggets of insight for us startups??

I would also like to say at this point, that I could not have gotten this far without help from a couple of key consultants along with my wife and friends. Thanks to all.

 

 

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On 9/1/2016 at 9:42 AM, Scalawag said:

I would also like to say at this point, that I could not have gotten this far without help from a couple of key consultants along with my wife and friends. Thanks to all.

I 100% agree with that on consultants, and completely forgot to mention that.

In this industry there's an infinite amount of time and money that can be wasted on trial and error, trying to figure out what works and what doesn't work.  There's an infinite amount of problems and setbacks that can arise during construction and especially during your first year being in production.  What you thought/hoped was going to work, and it ends up creating even larger problems right when you're trying to keep the liquor stores and your distributor well stocked and happy.

Enormous shout out to Matt Miller (mattABV on here) for his help over the last ~2 years.  I had two major problems which stopped me dead in my tracks that were immediately resolved with a phone call and a quick visit from Matt.  These problems would have probably cost a week or more in production delays and money spent in a panick just trying to find some form of a patch.  Ever have your daily driver break down and you need to have it running and go to work so you buy new plugs/wires/cap/rotor/coil all at once just hoping one of those was the culprit?  It gets expensive real quick (especially if you spent that money and your car/distillery still doesn't run).

Matt listened to me, said "Here's exactly what your problem is, and here's the exact, most economical solution" and I was back making and SELLING booze.


Consultants are like your business lawyer. You hate using them to form your business and you hate calling them because you think it costs a lot of money each time.  However, the proper foundation during startup and the phone call when you desperately need that advice will save your ass and be the best investment you ever made.

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Wow! Thanks my friend. As you would agree, having help when you need it is a blessing. I only wish we could have started working together earlier in your venture. I too agree with above posts. One key ingredient to making money is spending your money wisely and having an efficient system and sop. having a consultant to support and guide you throughout the process saves you time and money. And yes sometimes your ass. Making money is what we all dream about doing and having a consultant you can count on and trust is key to saving time and making money.

All future and existing distillers should have one in your corner. 

 

Matt

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Manage your cash flow, find and adhere to a SOP (recognizing that some stuff doesn't always work the way you planned for it to), and understand that this is pretty much an Economy of Scales game and you need to find the most efficient means to scale up (two distillations a day vs bigger still).  

As an aside, unless you are skilled in this industry please don't offer classes right out the gate.  Wait a few years until you really know what you are doing, train some people, then open classes if you still want.  I don't mean anything against the OP nor do I know anything about their experience, just offering my 2 cents on training programs in general.  

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