Time line for opening

[nabtastic]

Hey,

I've been looking for clarification on the chronological order for opening a distillery ... mostly I want to ask if you have to actual sign a lease before you can start the paperwork or if you can sign a contingent lease? So..

1) have building inspected by fire marshall, ttb for bond approval, fda?

2) sign lease, business licenses etc,

3) file bond approval

4) file for Fed and state DSP approval

5) upon receipt of DSP, begin spirits production, file for formulation approval

6) file COLA once formula is approved

7) sell products?

overly simplified, I'm aware. Mostly looking for a generalized timeline. I currently work for a small distillery so I'm familiar with the laws post licensing, but I wasn't around for the beginning. I'm also aware that different states/counties have significantly different practices for dealing with these issues.

Thanks in advance for any comments or further questions. Also, much thanks to anyone that can direct me to an existing thread for this topic, as I'm sure it's been asked before - I just can't seem to find it.

NAB

[Jedd Haas]

0. Check local zoning rules to determine if a distillery is even allowed in your location.

[Paul Tomaszewski]

Once you have a suitable site, think 1-2 years until you have approved products (labels) that you can sell. I've heard of shorter and longer, but that time frame seems to be the general trend.

[nabtastic]

Thanks guys,

So Paul, you're saying that it's very reasonable to eat rent for well over a year? TTB is saying that a DSP is sitting at 88.7 days (last time i checked), 2 months for formulation, and 2 months for COLA (provided it's correct). I'm with you though, I had a couple guys from NJ come through saying they were 2 years waiting on fire approval for a brewery! Out of curiosity though, It seems like the biggest hold up will be with local zoning / codes correct? The Fed seems fairly straight forward, but I only deal with Formula and COLA...

Thanks again.

[Panoscape]

Jeds right. The first thing you do is sit down with your city planner. Have in hand the backing that you are rated as an F1 and you'll have an easier time finding a place to set up. F1 rating is to have no more than 60 gal. of more than 60% abv or 240 gal. of less than 60% abv on the floor at one time. So, it looks like this:

1. Register your business with Feds, State and City

2. meet with city, get requirements and location approval

3. find location and pay for fire protection inspector to do a review ($500). Submit review to city.

4. Start paying for rent, bond, insurance

5. Fill out State and Fed paperwork. You will need location and bond in place.

6. Meet with State agriculture / food safety division officer for site requirements

7. site build-out / city permits / contractors

8. Schedule city, fire and food safety reviews

9. Make changes to site after review, there's always changes.

10. Wait for state and fed approval, then wait some more.

11. Receive state and fed approval

12. sign up for cola/formula and apply for pay.gov

13. Get your cola approved so you can bottle.

14. start the marketing machine!

[Ursa Major]

I totally agree with the above. Don't underestimate the hassles that state/local entities can put you through, start there. In my experience it took WAY longer to get Local/State approvals than it did to get Federal approval.

[nabtastic]

Panoscape - excellent response! That is exactly the answer I was looking for (not hoping for I've still got several years of working in the industry before I want to head out on my own.. Gotta pay your dues.

Ursa, I used to live in Homer, AK when I was younger - god I miss those days. I'll have to tell family to stop by next time they're in you're neck of the woods.

Jedd, thanks to you as well. I hadn't actually thought about not being allowed to open up anywhere.

Appreciate the help.

NAB

[dhdunbar]

As a consultant, I work with many persons who are starting out. My advice is consistent with the above. People contact me and want to get started submitting applications with TTB. Most often my response is "thether your enthusiam." If you were flat out lucky, you might get away with not dealing with local issues first, but that is where you will generally find stumbling blocks. For TTB, we can usually find a way that you can do what you want to do (well, you must pay taxes and have a secure premises, etc) if you can find a way to do it under state and local laws.

There is absolutely no predicting how long delays might ensue for building permits and approval of occupancy. I'm not an attorney, so this is not legal advice, but if possilbe, make leases and sales agreements contingent on obtaining all necessary permits and approvals. Your real estate agent or attorney can assist with the actual language. Provisions re lease hold improvements can delay the day the rent starts, but more likely than not you will have some time when you are making payments without being able to operate. The trick is timing the completion of the DSP buildout with the TTB approval of the applications, so that you can begin getting your production procedures down. As you point out, unless your business plan has deep pockets, you don't want all those expenses with no prospect for cash flow.

The timeline of 89.8 days you quote for federal approval is optomistic. I just had a DSP for whom I did the application, and to which TTB voiced no objection, sit in TTB for 142 days. The owner was patinent because the 107 day average (that is for September; August was 82 and July 118, so it varies a lot) did not come up until just before the congressional lock-out. Remember too, the days do not start to count until TTB has passed the application through its "triage" process, which can take two weeks or more. I like to think that I'm practiced enough in applications to beat averages, but I make no promises and stress that my clients must rely on the average and hope for better and not worse. I can't promise to work miracles.

The time for label approval also varies. If you must get an approved formula for the product - many whiskeys, flavored vodka and gin not made by original distillation in the production accountare among those that require a formula - which TB calls pre-COLA evaluation, add 40+ average days to the process. You will not be able to submit the COLA until you have the approved formula. Again, no one should make promises about working miracle with these times.

So, when I do a timeline for clients, and I do it for all, I start with the assumption that local issues have been resolved. We can turn out a federal an applicaiton in less than two weeks if they do their part. I could do my part it in a day or two actually, but two weeks is realistic. Two days is not going to happen. From there we have 110 days average and I call it 120 to allow for triage, until approvl. You can't register to use COLA and formulas on line until the permit is in hand. Add three weeks to the process. We are at 140 days or so. If no formula approval is required, add 45 days for COLA approval. If a formula is necessary, add 85 days. That puts you out 180 to 220 days after submission of the application until you can label.

That is reality.