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Critique my business plan - ready to lease space in Denver

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DenverDistiller, I am currently opening a distillery in the area. PM me and I will fill you in on my experience so far. It has certainly been a roller coaster but I think it is a great idea. Word of caution, an architect will make or break you. Know what you want to do, study the code, and find a way to make it work... And also plan on spending double what you originally planned!

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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.

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Alright guys, thanks for all your advice & input - we've decided to forgo the NNN Denver property, and get a MUCH cheaper location in the mountains - $1500 per month, which will give us a lot more time to get our product dialed in.



Thanks for all your advice and taking the time to comment.



Zak B


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Here's my NRC, as it presently stands if you'd like to compare. I'm building so obviously a lot of $$ is tied up in land and construction. Will be producing whiskies and rums, all on-grain. Initially I'll use the still as my cooker.

rkLdqmr.png

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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.

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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.

It was an early pass. Many numbers have gone up, as expected.

Tanks are there. Bond is MRC not NRC; same with insurance. Bottling / labeling is there under packaging. Labels, bottles, closures, etc are all consumables (again MRC). New construction so sprinklers are a given. Total NRC is hovering around $450 now.

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I also own a business and i am setting up a distillery. One of you biggest obstacles is your rent. I own mall pizzerias and i pay a flat 10% of gross sales rent. Malls are offering very advantageous lease deals. ( free electric) percentage rent ect ect. The foot traffic is also great. Im setting my Distillery/taste room/gift shop in my mall.

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I also own a business and i am setting up a distillery. One of you biggest obstacles is your rent. I own mall pizzerias and i pay a flat 10% of gross sales rent. Malls are offering very advantageous lease deals. ( free electric) percentage rent ect ect. The foot traffic is also great. Im setting my Distillery/taste room/gift shop in my mall.

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?

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Bond is MRC not NRC; same with insurance. Bottling / labeling is there under packaging. Labels, bottles, closures, etc are all consumables (again MRC). New construction so sprinklers are a given. Total NRC is hovering around $450 now.

I am presuming:

MRC stands for monthly recurring charge?

NRC stands for non-recurring charge?

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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?

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No, my pizzeria is in the food court. I have steady foot traffic, free electric, and very reasonable rent. Im looking at another location in thw food court for the distillery and tasting room / gift store with the same favorable terms. Why shoud you send the rewards of your labor to your landlord? They only deserve no more than 10% of your sales.

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