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progmac

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Everything posted by progmac

  1. certainly an ordinary and necessary expense, i would say http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Deducting-Business-Expenses
  2. Thanks for the reply! I feel like I'm starting to get a picture of how this is going to work. If I were an investor, funding a small established product is exactly where I would want to spend my money.
  3. thanks for the info on your equipment setup. i think realistically i'm looking at taking this thing down to a 50-60 gallon still, diversifying the product, and opening a tasting room. on the product side, i'm struggling to come up with a vodka that i feel like is adding something of value to what is already out there. with gin i feel more confident in being able to produce a unique product. how many small batch organic vodkas can really take hold, you know? what were your build costs like?
  4. Thanks for the reality check. I misunderstood what I could expect lending-wise and that is totally fine. That makes sense about leveraging assets that I'd rather not touch. I'd rather not, but ultimately it is what I've got to work with and we are having honest talks about if we are willing to lose "everything." And more or less, we are. It sort of helps that we lived in a second/third world country for a number of years. Perspective, you know? I am not glib about it, I am will work tirelessly to make sure that we are building a business to stand the test of time. At this point, I'm not showing any profit until year 5, assuming initial sales of 750/1300/2000/2500/3200 cases in the first 5 years. I haven't thought about what that will look like month-to-month. And at that time I would be holding down my 9-5 plus doing this in the evening, plus being a father and husband. Not an easy task.
  5. I know that many of these topics have been covered in different iterations. I'm continuing to read through everything on this site - the information is priceless. I have been working on the early Alpha version of my business plan for about five months. It isn't much, and I had a kid in the meantime, so, well, but anyhow I feel like I'm working through it. I met with a local business incubator that I know has space for light manufacturing / food type uses. I also and more importantly, wanted to talk with them about mentoring and business coaching services they offer. I certainly had a wonderful discussion with the man in charge -- a man who has successfully coached many businesses. I'm going to skip straight to the numbers. I've figured about $350k to get started - $150k for equipment, $150k for buildout, and $50k for initial inventory and other (I have a more detailed cost break down). I have about $50k in equity in my house, maybe $20k in cash, and that much again in retirement funds. My plan is to make Gin and Genever (from grain) on a 150 gallon system. I know that Gin is nowhere near the volume of Vodka and that Genever is basically unheard of... I was a little dissappointed when he said their space wouldn't work. Ceiling requirement aside, he was pretty well convinced that a distillery was an incompatible use with what they have there. I think he thought it would be explosive or something. But anyhow, that isn't the end of the world. What really took me back was when he said any kind of bank financing was pretty much out of the question. He said for the "second still," sure, but until I have a track record, no way. He suggested I start coming up with an exit strategy of how Angel investors could make a 5-to-1 return. Now, I understand venture capital and the risks, but coming up with 350k with no bank component blows my whole business plan out of the water. I'm curious if others are having luck with banks at this scale or if using venture capital is pretty much a foregone conclusion. If so, that's okay too, and I'll just have to start small. Like, WAY small. But I can live with that.
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