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Interesting points of Distillery Startup Workshop

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Taken for there: https://www.facebook.com/groups/homedistillers/permalink/1883327375129284/

Question:

I have a quick question and wanted to see if you could help.

I’m with Oregon State University and we have an upcoming Distillery Startup Workshop for those who want to learn how to get started with your own craft distillery.

Before it begins, I wanted to see if we can make it even better.

Question –

What is your top getting started in distilling question that we absolutely need to cover?

Thanks for your time.

-Greg-
Communications Manager
Oregon State University

Answer 1 :

Hendre' Barnard I present a Craft Distilling Business Workshop every 2 months, so out of experience I can tell you the questions most asked are (in semi accurate order):

1. How do I sell my product? (Marketing Strategy)
2. How do I get a license? (Licensing Procedure)
3. Can I make money doing this? (Feasibility Study)
4. How big do I need to start? (Cash Flow Analysis and Distillery Design)
5. Where do I get my equipment, raw materials and consumables? (Logistics Chain)
6. What should my label, story, brand look like? (Branding Strategy)
7. Where do I find people to work in my Distillery? (Human Resource Management and Recruiting)
8. Is <INSERT PRODUCT CATEGORY> the right product to begin with / to make? (Target Market Analysis)
9. How does Excise work? (Revenue Service Regulations)
10. How easy is it to fund my Distillery? (Asset Finance, Business Loans, Crowdfunding)

I can also tell you that the first place you have to start is legislation, as a large percentage of clients that attend are sometimes completely ignorant of what they are and are not allowed to do with a commercial product opposed to what they have been playing around with at home, and normally within the first hour or so, they realize they completely have to change their plan.

Even silly things can have big impacts. I get so many guys that walk in with this attitude of “I’ve started so many businesses in my life, I know how to do this.” Not understanding though that this is an industry with very unique challenges, and every decision you make impacts on your success and profitability, not to mention your Return on Investment and Break-even Points.

Just take Bottle choice as an example.

Bottle is too tall, and you won’t be purchased by Bars and Pubs. Bottle too wide and Liquor stores are not interested. Tourists want small bottles and will pay a premium for them. Choose a weird shape and you cannot label it. Round bottle labeling Machines are cheaper than flat bottle labelers. Hand labeling becomes a bottle neck (no pun intended) in future growth that can only be fixed by employing more people (upping your wage bill). Unique bottles stand out, but are more expensive and come in larger minimum order quantities. Imported Bottles look good, but lead times in ordering means you have to carry more stock which impacts cash flow. Etc. etc. etc. I could go on and on. And this is only one small little topic.

You also need to make them aware of the need for additional income streams – setting up a Craft Distillery just to make booze is stupid. You should be capitalizing on multiple levels – tastings, tours, sales of branded and brand related items, functions and events, bar or pub setup, live music, etc. And all of this impacts on choice of location, distillery design, interior design and décor, branding, etc.

I also do not recommend combining distillation training with business training. There is not enough time.

If I can use our training as an example: we have a 5 day Comprehensive Distilling Course that covers the basics of all spirits, from fruit to grain to rum to gin to agave. That is sufficient knowledge to help someone get started with the process of product development. In that time, normally shortly afterwards, they come for 4 day Craft Distilling Business Training – 1 day Legislation, 2 days Design, Feasibility, Cash Flow Analysis and Business Plan, and 1 day Marketing Strategy. Only closer to the time when are ready to install their equipment and the licensing process is almost complete, do we do 5 day onsite Distillery Operations Training, teaching them and their staff (now recruited) how to work the up-scaled equipment, record keeping, hygiene and cleaning protocols, HACCP protocols, administration, stillage disposal, waste management, maintenance scheduling, etc.

Filling and Running a still during what is supposed to be a Course on how to go commercial may be fun, make for good pictures and fills time, but that’s not why the attendees are there.

Also – keep the classes manageable. People that attend something like this have a LOT of questions. They want value for money and want to feel that they left there with all their questions answered. You cannot do that with big classes.


Answer 2 :
David Sundin You should have a class called "Congratulations: You now own a marketing company. Your product is liquor."

 

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