80 Proof

I have had a couple of inquiries on the research paper that I wrote for a university course regarding the financial risks associated with starting a microdistillery. I have attached it for anyone interested in reading it.Microdistillery Financial Risks.pdf

If I may say - it's going to be very, very difficult to get any kind of conventional loan for opening a distillery, even if you want to put your house up on the blocks as collateral. Banks do not like this industry.

Really, the only manner that I have seen people get funded is through personal investments, not institutional. I'm sure that it happens and I am sure that it happened, but I'm not aware of any and I must know...oh, 20 distillers/distilleries?

THAT SAID - the SBA is really looking to spread some money out there these days, and I wonder what they will say at this point to a well-written plan with solid backing and someone attached with great credit... One issue that I'm not sure if it'd be more or less easy was if someone went the contract direction - it's good because it's less expensive, but bad because there are no hard items to seize if things go badly...

I'm going to ask my local SBA reps and see what they have to say about this.

Thank you for sharing your knowledge and information.

My big problem is finding funding. I had a truly award winning business plan for a business I now own, but I could not get a dime from a bank for this business. The distillery is no different. I'm hear watching and learning, the day will come when I have the funds to start this business.

Thanks, Wilder. One of the reasons I went back to school is because I am having trouble figuring out how to start a distillery. Do you know why you couldn't receive funding? Was it due to high entry costs, financial analysis ratios, etc.?

I have been asked if I plan to publish my paper in this forum. I am willing to post my paper in this topic if there is interest. I hope to hear from some of you.

Andy

Greetings,

My name is Andy (forum handle is 80 Proof) and I am writing a research paper for my MBA program on the financial risks associated with the microdistilling industry. I would greatly appreciate the help from those entering the industry and those who are established. If you would like to help but don't want your information visible to the world, please email me at amartsolf@bresnan.net.

I am interested in hearing your thoughts on the following:

1. Were entry costs a barrier for you to enter the microdistilling industry and how did you overcome the entry cost barrier?

2. Is your product mix a result of needing to generate revenue or more a desire to produce a variety of spirits? It has been my observation that microdistilleries tend to produce vodka and gin in order to get product to market and generate revenue, yet there is a great interest in producing spirits, such as whiskey, that age in barrels for years.

3. Do excise taxes pose a financial risk to your operation?

4. Was financing for your business start-up difficult to obtain?

5. Have you calculated a break-even point? If so, how long?

6. Have you calculated any financial ratios for your distillery such as return on assets (ROA), gross profit margin, and operating profit? If so, will you share and if not will you use calculators at www.bankrate.com/brm/news/biz/bizcalcs/ratiocalcs.asp ?

7. What is the greatest financial risk that you face in the microdistilling industry?

Thanks,

Andy

Hello,

My name is Andy and my forum handle is 80 Proof. I am new to the forum. I am working on my MBA (trying to use up my GI Bill) and hope to open a distillery in the future. I am here to learn and ask questions. I hope to interact with all of you soon.