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Everything posted by stillcreek

  1. Depends on what your doing. Are you building a distillery or building a brand? Big difference. Distilleries are hard assets, brands have to be built up and can me moved around, outsourced etc. A brand doesn't have a value until it has a share of the market. As for as having bar owners/investors as partners, Texas has a 3 tier system, actually 4 for on premise. This would be a violation or tied house. As a manufacturer I'm not allowed to even own property that has a tenant with a liquor license. Lots of abuse goes on within the State as in Distillery, Distributor and Retailer all being owned by the same people just not on paper. Usually the license is held in a family member or fraternity brothers name. Additionally In Texas, unless you have a ton of capital or lots of resources it's dang near a loss to go through the 3 tier system as a lot of people are going the tasting room route or sell in bulk as the margins are greater. If your not putting any skin in the game other than sweat equity I don't know what that's worth, not much as a shareholder/partner. The model i used might be a good fit as it was set up to protect a silent investor/partner that wanted to remain off the LLC for personal reasons and maintain protection of their investment. I drew up a line of credit with a right to convert to equity. Check with your attorney on that route. Equity would be base on loan amount with a cap, venture capital approach. Sweat, leadership, and creativity is fine but investors only care how your going to pay them back. Also if your not producing the conversion option would give them a right to remove you. How are you going to get paid? Are you going to take a salary or percentage based on the gross? What are your forecast for sales? If your planning on generating revenue from the retail end, you'll need to be picked up by a distributor, the next challenge is getting it to the shelf. A lot of the mom and pops don't want to deal with unknown brands and the big chains are littered with Texas Brands and so called Texas brands. The big chains will turn you on in a store or two and then let you push the product and allow expansion from that point forward. Plan on spending about $150.00 per tasting. If your doing on premise about $300.00 to $400.00 as your having to pay promotional people and buy your product back as house prices. Another route is you could do an IPO to raise capital, there is a law firm/accounting firm/marketing firm in Houston that can take you public and probably raise 1 million plus of capital. You'll need roughly 150K out of pocket in order to raise that 1 million plus. They acquire and set up a dormant shell company, file on the OTC Pink Sheets and put the market makers in place, (think wolf of wallstreet) and run with it. They handle all the filings and constant press releases. You incorporate in Nevada and/or Panama as Panamanian corporations apparently don't have to disclose who the investors are, (that's a whole another can of worms). The upside is that if your serious and want to raise capital it's a possibility, the down side is last i checked the firm will charge you roughly 17K per month in their fees for the record keeping and SEC compliance audits/statements.
  2. Van we could have leased you our little distillery down the road. 5 acres just built out the tasting room to about 90% all the equipment, turn key and none of that stuff your dealing with. Just renewed the license and not really doing much with the facility.
  3. That's a start - figure out what it's going to cost you on a per bottle/case basis - hard fixed costs - estimate your variable cost which will come down on volume - Cost of fixed assets and all that other fun capital budgeting stuff - Once you work all the numbers out the biggest challenge will be distribution - Getting your product to the shelf and how? Seems to be the area that chokes most of us out of business. Research your state laws and systems, what you can do and what you can't. More than likely as a small guy you'll be in competition with your distributor or liquor chain. Zoning and permitting are the easy parts. It would be wise to visit with the local fire inspector - a few guys have been up and running for years when the fire marshall paid a visit and required substantial improvements.
  4. Congrats - I'd leased you one down the road - Check with the Fire Marshall soon since your inside the City limits - one of the distilleries just got hit with a ton of improvements after about a years operation - you avoid that stuff being in the county - another one got hit with having to build a blast proof room for their grain processing - Big Thicket was close to you - they had a nice place
  5. Vodka? Why? Only 1K brands out there - It's all marketing - hard to compete in the 3 tier system - PM me if you need more details - Get ready for a rough ride in Texas
  6. Good to know - we had to recall out first order - It became a mess when we were audited
  7. Those are the least of your problems - Your biggest challenge will be dealing with distributors and trying to get placement. You'll learn quickly that your probably in competition with your distributor and your retailer.
  8. Never met him or seen him, he stays really low key, personally I'm rarely at the distillery. We had talked about doing some charity events if we ever finished the property and extend him an invite. We've used some local craftsmen that know him and said that he doesn't drink or ever has. - Mr. Norris just built a 50,000sqft bottling plant for water across the street from his ranch. http://cforce.com/
  9. Previously listed for lease and no responses - Looking at selling off the distillery - turn key - roughly 40K, great location in the country but close to major college town and about 10 million people within a two hour drive. long term lease available on the property with lots of room to grow and expand. Distillery building is 1,500. square feet, tasting room, unfinished is roughly 700sqft. 5 acres perfect for concerts and events. Five minutes from Chuck Norris's house and C-Force Water - we use the same aquifer.
  10. Our distillery is in Anderson, close to College Station about 10 minutes from Chuck Norris's ranch and his CForce bottling plant. We make Vodka out the same water Chuck Drinks and sales. Your better off messing with Whiskey for profit and distribution, even specialty Spirits. We've been at it since 2013, We're at a point that it would be better to sale or lease and contract back to make the product. The plant and operations part is a lot of headache and liability, all the energy goes into marketing. Have you visited with distributors? Do you have a wholesale price point and a shelf price point that your targeting? Your going to need to be priced at Titos or below on the shelf and it's an extremely hard sale. I'm not sure how familiar you are with Specs or the inter workings. talked to other distillers first hand. The laws and system are stacked against you in Texas unless your well capitalized and can afford to push and market, we're grass roots so it's a challenge. After its all said and done i estimate we lose about $6.00 a bottle selling through the 3 tier system and the big chains. Sounds bad but i know of one brand that lost about $120.00 a bottle. They were publicly traded and after reading their financials thats roughly what it was. PM if you have any questions?
  11. Great another Texas Vodka. George if you have your TABC out of the way and paid the fees you've done it backwards. The TABC license has to be renewed every two years, make sure the clock hasn't started. It's a tough business in Texas due to the 3 tier system and competition for distributors and market share. Still dragon is a good bang for the buck we've have two systems for 4 years.
  12. Hayden I'm in Texas and deal with all these guys. There is no formula as you can't control the retailers price. $24.00 dollar Texas Vodka is a hard sell I know first hand. You need to be less than $20.00. My product sales from $16.99 to $22.62 and wholesales for the same price. Your going to need to wholesale for $8.00 or less. Your a vodka your nobody everyone is a vodka. Even at an $8.00 wholesale there is not guarantee the retailer is going to price you fair. You might be on the shelf at $24.00 and the guy selling at 10.00 is on at $19.00. At the end of the day we probably lose $6.00 a bottle for every bottle we sell. Plan on doing a lot of tastings if your in Specs and budget about $140.00 per tasting - You have to buy your liquor at retail and then pay a tasting company about $35.00 to $45.00 per hour, hope the girl shows and doesn't text on her phone the whole time. Not sure what your talking about regarding TABC tax on small scale distilleries. Distilleries don't pay tax to the TABC unless they're donating product to a charity or selling in the tasting room. The tax is picked up by the Wholesaler. FYI the wholesaler is going to take 25% to 50% margin yes I said 50%. your $15.00 product is going to end up on the shelf at around $40.00
  13. We've got a small distillery in Central Texas, kicking the idea around of leasing out the distillery. The main building is approximately 1,500 sqft with a separate building built for a tasting room 640sqft that is unfinished. Nice 5 acre property with a small lake, rolling hills in the area. Lot's of Saturday, motorcycle/sports car traffic. Great set up for tastings, concerts, festivals etc. limitless potential. 60K college students 20 miles away and roughly over 7 million people within an hour and half radius. This would be for a 5 year triple net lease with a 20K - 25K deposit held in escrow. We would still retain our brands and develop new ones, just thinking about getting out of the operation end of things and focus more on sales and marketing. Permits are current and would have to be assigned or new ones applied. This is a turnkey small distillery, nothing fancy but 4 years of hard work already in place.
  14. Base on distributor margins - Is the general markup your seeing before or after laid in costs? Example - Distributor requires a 30% margin. - retailer marks up 40 points. Mfg Wholesale = $10.00 - Wholesaler marks up 43%, (30% margin) = $14.30 - Retailer marks up 40% (29% margin) = $20.02 or $19.99 shelf price or Mfg Wholesale = $10.00 - Wholesaler adds .75 laid in costs marks up 43%, (30% margin) = $15.37 - Retailer marks up 40% (29% margin) = $21.52 shelf price. What's the bottom your seeing a distributor willing to go on a minimum margin or per case price after laid in cost?
  15. Depends on your size of production - If your doing a 1K cases a month I can see a value - If your a startup, it's a great deal for the guys selling it. Most of the distilleries that I'm seeing in Texas struggle to do a few hundred cases a year, for us it's a complete waste of money that can be spent on sales and marketing.
  16. Congrats - Looks like your the 5th new distillery coming to the Houston area - for a total of 12
  17. I was going to ask you do your pizzarias sell beer/wine or any type of spirit? If so, check with the TTB. I was warned by the TTB that if I owned property and a tenant had a liquor license or sold beer with or without my knowledge I could be in serious trouble. Additionally that said don't drink beer or have beer in your fridge or that would be a violation keep it outside the leased premises. Anyone else get this warning when you were licensed?
  18. Try enolplastic in California - We had the capsules custom fitted and made for our bottles with our logos and gold foil stamping. Ran roughly .04 a capsule plus about $800 for the tool and die set up.
  19. I'm not seeing storage tanks, Federal Bond, State Bond, Insurance, Bottling Equipment, Labelers, Cappers, your about 2K off on your lab equipment, Tool & Die setup, Labels, Bottles, Closures - the list goes on - probably double the number to be safe - If your in a city - you could have sprinkler issues, blast proof rooms etc.
  20. Anyone see the value in the service? Seems extremely overpriced for a small guy. Just my two cents.
  21. I'd say triple the initial numbers for starters - then set aside at least 100K for you rents maybe more - On the safe side, I'd say $400,000.00 - $500,000.000 total capital maybe more - your going to need capital to pay taxes on your production once it leaves the warehouse. If your in the city you may have to blast and explosion proof certain areas plus a commercial sprinkler system that could set you back 100K getting things to code. You may also have to go through zoning, you want to do this on the front end, set aside 5K to 10K if required, (I do zoning for a living). Also, once your up running those numbers are for not taking salaries, your also going to need about 10K to 20K in marketing dollars. I don't know much, it's a lot of trial and error - we're about 2 3/4 years into it. A year of actual production, 100 cases sold the first year and 200 so far this year. We started with about 200K which includes owning the land, buildings and equipment so we're debt free with minimal overhead. The biggest challenge is getting placement through your distributor. Once you have placement get ready to spend a few grand a month on a tasting army. A lot of cash and time will go to sales and marketing. Get ready to add another 20 a week plus on top of your day job just for making sales calls, building relationships and keeping records. Anyone feel free to comment or am I way off on my experience so far, am I way off? Thoughts? Additionally, you won't be able to sell booze from day one. You can't start making a product until after you have your State and Federal licenses. Once you received those you will need to apply for a password to Cola, took me 45 days to wait for the password, once you have your Cola access then you apply and wait. Once approved tool & die and printing times for labels. I'd add six month to a year after your licensed before your starting to sell. Once your up and running you'll have to find a distributor willing to take you and then be prepared to start making sales calls. I didn't factor tasting room as we're not up and running in the area at the present, still a work in progress.
  22. Congrats!! Get ready for a rough ride.
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