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Glenlyon

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Glenlyon last won the day on January 5

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  1. Barrels can only be stored in an excise warehouse which must be owned or locked with a long term lease and controlled by the holder of the excise licence (the distillery). Therefore, storing barrels is the least of your concerns, I would submit.
  2. Between the FM, chief electrician and planning department, they insisted we have a high hazard building designation. So that meant every electrical outlet was going to cost us a grand and look ugly to boot. Not so good for the look of the tasting room. And, they wanted everything drywalled up the wazoo, including covering our super cool and exceedingly expensive overhead massive timbers. After much wrangling we convinced them to allow us to create a 2 hour firewall between the distilling area and the tasting room, so that in the event of a fire, the patrons in the tasting room would have time time flee. Our tasting room is tiny. We could have a massive fire and still hang out in the tasting room talking about it. Eventually, everyone would saunter away.... Anyway that allowed us to trick out the tasting room normally and save the timbers. However, in the back, we weren't so lucky - we had to install the super expensive explosion proof outlets - so, predictably, we only installed a couple and they were very inconvenient to use. So now we have a bunch of extension cords. Dumb fucks. I pointed that out to the three players after words and they all just shrugged. At least I had met the requirements.
  3. When we were going through a similar process we wound up agreeing to all kinds of things way too early. Keep good notes, nod knowingly and don't agree to any conditions up front. If you have to go through a re-zoning process anyway - you want to make sure you have negotiating room and things to trade later for when all those previously keen neighbours suddenly turn against you.
  4. So here is proof of your argument - this year we created a very tasty creamy vanilla beverage. Locally, its a sensation, we sell shitloads. However, once we extend beyond a 60 minute drive time, there is zero interest in the product. For us to expand beyond that limit would require another concentrated marketing push, but the further we get away from the distillery the harder it is to get people interested. So, your theory is valid. Here's how we figured out our 'backyard'. We got a map, pin pointed the distillery and then created a series of radiating rings at different milage. 1 mile, 2 miles, 5 miles, 10 miles, 100 miles. Geography soon limited our potential, but that method gave us a very real view of what we were up against. So, we started with radio. I think radio was effective, but very slow. We've taken a pause after a year, in favour of another highly targeted media - significant posters at key tourist choke points with corresponding ads in local yearly tourist guides. We also do a bit of newspaper and local foody magazine ads, but we're pretty choosy. Advertising adds up quick. Social media of course is important, but not a total solution.
  5. I just reviewed this thread from the beginning and harkening back to business school, there is certainly enough material here for your to build a compelling case for any banker. Also, my advice is only probably only relevant for people who are considering distilleries that produce 100,000 litres or less - anything bigger than that is out of my league. Let me finish with a final thought or two. First, this just happened to me... So, the other day I show up to a market. I'm late, only 30 or so minutes to opening. To my dismay I see a competitor has already set up their booth in a superior spot and I find I'm relegated to a tight corner and a measly 6' table. Bummer. Worse yet, their booth looks great. Lots of branded swag. Company colours well utilized. A good selection of ancillary products. I have to admit, I was a bit thrown. Our table was a white table cloth some christmas lights a few rocks and our bottles. Soon the market opened... The market was spotty, the crowds ebbed and flowed - yet, the entire time we had people milling around our table and buying our bottles. Across the way, our would-be competitors looked on in horror - only making a few sales. In that five hour period, we grossed over $3k and I doubt they broke $250. The moral of the story is - no matter how rosy you create your plan to support your idea - your real mission is to build your audience, create loyalty and close sales. The way to do that is to create a great customer experience. Selling your booze should simply be a souvenir of that experience. Because I paid for my entire operation as I built it with no outside cash and because I started small and worked up. When I finally did approach the bank for a line of credit so I could buy some new equipment, they couldn't give me money fast enough - they barely looked at the books. All they looked at was the monthly revenues. The real beauty of this business that they pointed out, no accounts receivable and no accounts payable and six digit monthly revenues. The perfect business. I'm looking forward to next year with great enthusiasm!
  6. The worn out adage often touted is "Win your backyard." Its the best way of looking at that problem and you are right about the laws of diminishing returns. All people are creatures of habit and if their habit is to stop by the local liquor store on the way home - it's going to be challenging to get them to come to your place. People need a compelling reason to act - we often get people who say they've driven by our signs a hundred times before they chose to stop. What caused them to stop? Whim? Word of mouth? Advertising? Thirst? That's why we often open around community events like a culture crawl. That gives people implicit permission to stop in. Once they stop and realize they like the products and the environment, they will come back - with friends. 87% of your target market will drink - however only a small percentage of those people will want to go out of their way to drink your liquor. Those people will be older, wealthy and careful in their choices.
  7. Numbers are meaningless in the face of creativity. In fact, if you stop and think about it - you can only generate as much revenue as you can produce alcohol. So, the size of still and your anticipated production capacity will soon dictate your potential revenue/cash flow. Remember, spending two years creating a business plan isn't about creating a plan for your business - it's to help you understand the dimensions of the business - so, everything is thought out. That way, when you open your doors and come into contact with the enemy - you'll know how to maneuver in the heat of battle.
  8. Technically, I believe it would become a 'spirit' at that point.
  9. When we first opened we'd only sell one bottle at a time and we only had vodka - it was pretty sad those first few months. Then we introduced gin and then kept selling out of one or the other. We laugh at it now, but nothing is worse than selling out of a product halfway through an event. Now most of the sales are for multiple bottles as we've gotten a lot smoother when it comes to selling the product. Also, now we have 22 products that we cycle through and you never know what you might encounter when you visit - several products are creations or interpretations of our own and they always sell well when we release them.
  10. We only do bottle sales. Also, when I was referencing sales in my previous post - that's different from actual bottles sold. For example one guy came in and bought 9 bottles, but that was only one sale. So each sale may be one or multiple bottles. Inside sales are tasting room sales and outside sales are direct sales we make through markets we attend, restaurants and liquor stores. We've been selling a lot more through liquor stores recently I've noticed. We get a lot of returning customers who bring friends. That kind of word of mouth is gasoline. The consultant is a good idea - I've used a variety depending on the problem. Restoration of an old building sounds expensive! But, fun I'm sure. I hope you own it!
  11. So, just closed the tasting room for the day. We were open from noon to four. So just some context here - based on my previous musings... Our distillery is located a $60 ferry ride away from the big city. The village in which our distillery resides has a population of about 2000 and the greater geographical area contains about 30000 people in the winter time and roughly double that in the summer. The distillery is located on a five acre farm in a 1000 sf custom built building. We run a 65 gallon still and a 26 gallon still. We're open three days a week (weekends). Our tasting room holds about eight people comfortably. We opened about a year and a half ago. Since then we've sold a slightly more than 11,000 bottles. Today we sold about $2K, with about $800 of that coming from the tasting room and the rest from outside sales. 40 sales in all. All in this weekend we'll clear about $6000. The important point here is that you need to be selling in more than one outlet on your active sales days. Here is something else you may want to consider... if you've read any of my other posts you'll soon learn, I am not a fan of investors. No disrespect to them - but they play a different game. Also, consider your potential partners very carefully. I started with one.... but, am now much happier on my own. Also, equipment size is a big discussion onto itself. Big or small - the question rages. We went small and yes, we did suffer some significant disadvantages from the small scale. But, after a year and a half of solid work, I've made hundreds of mashes and run my stills into the ground. "Get up you lazy dogs!" I say to them every morning and I've worked out a lot of problems that could have cost big time. Now, I would feel comfortable walking into any distillery in NA knowing I could make and distill a mash that is going to deliver desirable results. And, I sell everything I make, practically as fast as I can make it, which might have been harder to achieve had we started bigger. But that all depends on your market and goals, of course. That will be a good story for your bank
  12. Another helpful metric is how much people spend per visit. Our customers spend about $70 per visit on average and we will close 80% of the customers who come through the doors.
  13. The problem with beginning projections is that the answer is - it depends. You would have to start with considering your geographical market area and your location. Are you farm based or opening in the middle of town? What size town? Are there competitors nearby? Each one of those location options will largely dictate what kind of traffic you might reasonably expect - tourism, locals, etc. Then, how much alcohol can you physically make? That will depend on equipment size and your labour force. You might have good market potential, but if you are the only one actually making the booze - it can be a hard slog just to keep up with the tasting room, much less outside orders - which, in themselves - are very time consuming. On the other hand, if you make too much booze, that can be a problem if you can't sell it. So you have to make sure you find the right pacing for your business. Are you planning to sell by the glass in a lounge/restaurant? More profit, but requires more labour, more inputs. More labour, more inputs = more overhead. Even though we have low fixed costs the variable monthly overhead can be quite substantial, even for our tiny place, so make sure you are on top of your COGS. In terms of product, you should be focused on a 40 - 45% margin on bottle sales. Less means you are losing money fast, more means you may yet be profitable soon. Keep your base products reasonably priced and make sure the high end specialty stuff is priced for profit. We spent a lot of time working out our original projections and in review they were not even close. We are soon discovered that they were meaningless in the face of battle - but, the banks loved them.
  14. I guess the buy out would have to big enough top make it worthwhile. If you think about it, even a million dollars doesn't go that far these days. Out here in super expensive BC, it would gone in a flash. So, after taxes, fees, capital gains, debt payouts, etc. the buyout sum could shrink considerably. Therefore, if the business is currently profitable and manageable, it might be better to hang on for future opportunities. If the business is not making money, it might be better to sell, but your reward at the end will be even smaller.
  15. I didn't bother with a propagation system, too complicated for me right now. I also haven't been slowed by not boiling my mash. I just simply harvest the yeast and move it along. So far so good. I'm many generations from my original batch as still going strong.
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