kkoch

Stevea, You provided tons of great information regarding the process to evaluate and determine if/when to invest in a business, but the OPs original question (and the one I was referencing with my post) was regarding ROI's which I do not see in your post. Totally agree with you that if the business has an unrealistic plan that accounts for the items in your post then they will probably fail and/or be a cash drain. Bottom line: If an investor doesn't do proper due diligence and are comfortable with the level of risk/reward, then they shouldn't be investing.

Well, thanks for sending me off into a 30 minute google exploration of vapor pressures, NPSH and all sorts of organic chemistry stuff! And to top it off, I never determined if it was a) feasible and safe! Since alcohol is a high vapor pressure liquid - that happens to be highly flamable - I'd want to do some significant research before putting this in place. Makes sense in theory though with proper precautions.

There is no one single answer except "it depends". The appropriate return depends upon too many factors - the amount, percentage of equity, time table, risk, etc. Assuming you can afford to lose all of your investment (high probability with any "new" business), you will want a better return than you would receive from a safe (or safer) investment such as bonds, stock market (yes, odd, but it is still safer than investing in a new business), or CD's. Only you will be able to determine if the risk/reward matches your personal financial comfort zone. Ever watch Shark Tank? As goofy as that show is, they still provide a good primer on investment decision making.

And most important - be sure to get paid or a strong LOC before shipping anything!!!

Hey NAB...some of the challenges with exporting are related to the country you are exporting to. Each has different regulations on labeling, customs, etc. It'll depend on quanitites, but you'll probably find that the Importer will want your product in a bonded warehouse so they can consolidate a container shipment with other products. Pop me an email if you want to discuss further. Ken

You might want to check with some of your local Universities. The faculty from the right department(s) might be willing to help you out with formulations (and interns/learning opportunities for their students).

Quick note as I haven't gotten back to the boards, and am headed to a meeting... First, if you are in a state that requries or has distribution contracts as the norm, be sure to review the termination clauses! I've seen too many brands get burned when they switch distributors - having the old wholesaler "dump" product on the market at a discount, flooding the channel and making it impossible for the new distributor to gain any traction. Or, forced to buy your product back at cost + storage! Totally avoidable if you think through the options. More general comments later, but as part of my business is consulting - and I don't want to make this a commercial - it'll be a few more of those general items! Ken

Josey, Before you get eaten alive by this "large distributor" we should talk. Drop me a note/email. Based on your questions, you haven't had much experience with distirbution systems (e.g. 3-tier) and I'd hate for your education to be learned from working with them versus from someone who has lived both sides of that relationship.

I'd recommend you talk with your lawyer and accountant. There are several pros and cons for each type of corporate structure - related to much more than just control and dividends (think taxes, liabilities, governance, etc.). Some can be addressed by a solid set of By Laws regardless of structure, but you'll want to explore all of the "what ifs" regarding how you plan to raise capital via equity and/or loans (both now and in the future) and how you plan to operate and provide an ROI that your investors want.

Check out Sugar CRM. I've used it before and the free version may be plenty for your needs.

Jwymore, A future SEC change (yes I'm optomistic) will allow better and easier direct stock sales to the public via the crowdfunding model. This current change allows a company to publically advertise for accredited investors - huge opportunity for a startup if you do not have a rolodex of high net worth individuals that you can ask for referrals.

Just saw that the SEC has begun to move forward (after about a year of delays)... http://techcrunch.com/2013/07/10/sec-general-solicitation-ban-lifted/ This is good news for those looking to attract accredited investors, but as it pointed out: a) not yet effective and the date hasn't been announced, and still requires significant filings and responsibilities on the part of the company raising funds. I still think this is a great step towards a more open investment marketspace and access to capital. Those of you seeking funding, how does this help/hinder your plans?

Another post where distillers are referencing paying for shipping costs. If you guys are doing this (excluding those that ship to a consolidator/storage warehouse/fulfillment house), you are absorbing a cost that your distributors should be paying. Now, this may be different for State Control Board situations; so if you don't call that difference out it looks like you are giving away good money! As a former distributor - I would have LOVED it if you'd pick up my freight costs which were huge on LTL and multi-stop runs!

Thought I'd revisit this thread for a minute....am working with a winery on setting up new distributors/wholesalers. Asked them what profile they wanted and I think he nailed the most important quality: "I just want a great company that is well respected and pay's their bills on time." The tough part is finding those that do!

The wholesales made their own arrangements with shippers/consolidators and just worked with the manufacturer/warehouse to coordinate pick/pack/load dates and times. Other than "samples" the wholesalers took possession (and responsibility for all costs) at the dock and owed for freight and product. If a wholesaler is trying to get you to pick up freight, they are trying to get deeper discounts from you than what I've seen as "normal".