The Beginning. Help is needed.

[Absinthe Pete]

My freakin' brain is overloaded. I've been reading for weeks now on here and 27 CFR Part 19.

...I know, I know most of you are now thinking that if I complaining now I haven't seen nothin' yet....TRUST me I'm not complaining, just overloaded.

Please oh Please if this is posted somewhere else on here or online direct me to it, I certainly don't want to tick anyone off here as everything HERE IS SO DAM HELPFUL, seriously.

What my questions to the people here is what is a general outline of what needs to happen and what certain things are called.

From what I've gathered you need a permit from TTB (duh), a business license from the city you are in (duh squared), I'm making light but seriously I'm trying to nail down everything I need to research so I don't forget anything.

TTB Permit for DSP

Business License from City doing business in.

Approval from zoning, but not quite sure what I ask them as I'm just doing the leg work so I know what I'm getting into.

When you get a building need a fire inspection, ask about if waste water is a problem (people on here talk it about).

A bond, is it just one bond? What kind and how do I know how much for?

Is there something from local city that I need to operate a distillery besides a business license, what kind of approval am I looking for?

Do I need something from the state? I'm in California.

I will more than likely be the only owner, do I need to form a LLC or something else, what if I have bad credit?

What kind of inspections take place and what do I need to be prepared for?

So if there anything else I need to know from the point of starting to the point I can produce alcohol, I will worry about all the stuff that comes after I can start business once I understand this stuff.

Before responding if you think these are questions I should find out for myself or will naturally learn through research then just say so. I'm serious about this. Thanks.

[scohar]

I will more than likely be the only owner, do I need to form a LLC or something else, what if I have bad credit?

...

I'm serious about this. Thanks.

I wasn't going to respond, but decided someone should answer you.

First thing you need to do is calm down. Your post is practically incoherent and you haven't even started. Don't expect easy answers from this forum. Spend a year (yes, you must be patient!) doing your homework and building a business plan.

I will suggest, however, that if you are the only owner, and you have bad credit, it suggests that you may not be the right kind of person to start a business like this. A disciplined approach to money translates into the discipline you will need for DAILY federal records, MONTHLY reporting to the TTB, and (probably) QUARTERLY tax payments.

You might want to think about this really hard before you squander hundreds of thousands--if not millions--of your personal wealth on this "neat idea."

[delaware_phoenix]

Yes, you'll need a permit from the state of California.

A bond is needed for covering the alcohol taxes due after you've sold spirits but before you make the tax payment. You'll need one to cover the Federal tax and another one for the State tax. Being in CA is good as there are lots of insurance agents for wineries, and they are the people to go to. If you cannot get a bond, you either have to self-fund your bond (figure from $16K on up). Without a bond you can't operate. But getting the bond is fairly late in the process (relatively speaking).

Start on your business plan. As part of that, you should make a list of all the equipment you need, and perhaps separate lists for each one listing the possible suppliers, prices, etc.

Bad credit isn't a show stopper, but it will make it difficult to borrow the money for your project, assuming you don't have lots of money already. Start now in cleaning up your credit.

You don't need to be an LLC. You can form a sole proprietorship. However, if in the future you do decide to have another partner, you'll have to change your business structure (with attendant revised applications to TTB).

Good luck.

Edited April 27, 2010 by delaware_phoenix

[Jonathan Forester]

Hi There. To repeat what the others said. You need to slow down. You need to organize yourself. This is a multiple year process. Realize you are going to have to spend at least a year on research. Everyone and every distillery is different. If you are overwhelmed now, before you have even started your real research, you will crash and burn before you even know the realities of your situation.

First you need to take that list you have up above and make all those points headlines. Eventually you need to contact all the agencies you mention and find out what each one requires.

You need to start a business plan. It will start as a five page outline. Then as time progresses you will fill in each section, and start new sections. When done expect it to be 40-60 pages long. If you go into this halfway, it won't happen. If you go into this thinking it will happen in a year or so... it won't happen. Get several business plan outlines online and use them as starters.

Buy all of Bill Owens books on distilling. They are rough guides to use as a starting place. If you can make it to the ADI conference next week, May 2-5, do so. Or else plan to next year.

Buy every book on distilling you can find. Members here have put together lists.

Visit distilleries. As many as you can. See what products they make. Why? What size are they? How many employees. Ask questions. Make friendships. Go back and visit again a few weeks/months later when you have new questions.

Visit spirits shops and see what products they have. Which are selling well? Which aren't? Ask questions.

If you can coherently ask questions here. one at a time, folks will help. Right now you are all over the place. So sit back and organize. Get pads of paper and put up sheets of paper on a wall. Have markers and start headlines, then fill them in. whenever you have a new area of inquiry, or an old one expands, start new sheets. Right now you are just gathering information. Then at some point it will all come together. You need to put down on paper why you want to open a distillery? What type of distillery? What type of products? Location? Size?

Good Luck,

JMForester

[Scott @ Twenty2Vodka]

Well, you have clearly been doing a lot of reading, and have made some good first steps. This forum is a great resource for what others have done, and answering real specific issues like when you need to make a decision on which pump to use to transfer your highproof spirits from tank A to tank B with out exploding. 27 CFR is a great resource for how you must operate in accordance with the Feds, and your state will also have some sort of set of rules. Now that you've tapped these resources and are beginning to get a grasp on the components to this machine, it's time to travel outside of the web and start talking with experts in each key industry.

While i was starting up, i created something i called a "Player's Board" using two 2x3 cork boards i purchased at walmart. On the player's boards were 36 (yes, thirty-six) different players who were all either working on something for me at the time or were going to be 'activated' once another player finished their job. Players included our 3-4 equipment manufacturers, 4-5 lawyers, building contractors, government agencies, insurance/bond, banks/lenders, accountant, etc. Each had a half of sheet of paper of space on the cork board, and i noted everything everyone was working on using post-it notes...2 actually each. the top post-it note was what they were working on currently, and the bottom post-it note was their next task. i'll try to dig up a picture and post it.

Start by visiting your town office, introduce yourself to the receptionist and tell them what you want to do. They will point you to the first person you need to talk to.

-Scott

[Absinthe Pete]

I'm not crazy. Haa you laugh.

I'm actually a very organized person, but me brain be overloaded.

I don't expect anything to happen quickly and as I said I'm just working on the research.

Thanks for the comments so far.

Basically I was just asking what steps need to be perfomed in order to get the actual permits.

[Jonathan Forester]

download the Fed permit from TTB

Contact the state liquor authority and/or go to their site and download their permit.

then read them and set up what steps YOU need to follow. We can't tell you this. At this point you have to do the foot work / research.

I'm not crazy. Haa you laugh.

I'm actually a very organized person, but me brain be overloaded.

I don't expect anything to happen quickly and as I said I'm just working on the research.

Thanks for the comments so far.

Basically I was just asking what steps need to be perfomed in order to get the actual permits.

[Beauport Bob]

Great advice so far.

If I could add:

A big reason there is no legal "template" is because each State, County and local municipality is different. There is also no "one fits all" for different types and goals for distilleries.

Plan to take tasks as you need them. No need involve the locals before you know what you are doing, open flame vs steam, etc.

Time managment: People function task best at different times of the day. Since you have a road ahead of you, now set up a schedule of when and more importantly when not to address issues. Give to your day job what is your day job...... This way you can fully focus your time with each.

Outside involvement: allow people to be involved who can help you, when they can help you. Do not allow distractors or bottom feeders to cling too long. I've mentioned this before, if you have a business college nearby, likely they will have an "Enterprise" or "Incubator" program. They may know nothing about distilling, but they can be very helpful on business design, etc, if you are patient and give them the tools. And usually very inexpensive.

Workshops: Really get some fermentation background at a brewery or winery. Yes go to Bill Owens' ADI conference, as Jonathan Forester recommended. Also the Still Manufacturers, put on workshops targeting the start-ups. Very good place to start.

Above all do not be unaware of the money required. It is not a shoestring operation.

Good luck , BR

[Absinthe Pete]

Thanks I've downloaded the Fed app., but not the Calif.

As for making alcohol that's not the problem, the reson I want to start this venture is I love doing it, been doing it for 19 years.

I'll keep plugging along...

[Scott @ Twenty2Vodka]

The author of The Compleat Distiller, Mike McCaw is an ADI member. If you like his book, buy it. It's only $25 and he makes himself available if you ever have questions.

Support the industry where you can.

$25 from his website. http://www.amphora-society.com/The-Compleat-Distiller_p_0-1.html

-Scott

[Absinthe Pete]

Thanks for the suggestions, though I'm not a first timer on the alcohol side. I've been on speaking terms with both Mikes for years. I have all their books, bought with cold hard cash or rather cold hard paypal.

[RS_jenssen]

i did buy the book and some other books money well spendt!

[porter]

Thanks I've downloaded the Fed app., but not the Calif.

As for making alcohol that's not the problem, the reson I want to start this venture is I love doing it, been doing it for 19 years.

I'll keep plugging along...

And unless you've been working for a legal distillery, don't throw around that you've been 'doing it' too loudly. We all know you shouldn't go into business without prior knowledge, but it isn't too cool to flash around being illegal.

Remember the story of the little birdy who was warm and cozy inside the cow pie, until the fox heard him singing and had him for lunch.

Just an FYI ............

[Absinthe Pete]

I appreciate the concern, but I was actually talking about wine making for the past 20 years.

[MarkR]

We are also new to the business, planning on opening a craft distillery in western Washington next spring. We just spent an afternoon with the local government folks, who are all enthusiastic about our joining their city, and leaned a lot. Check with your city/town folks about:

Zoning requirements

Parking

Water

Sewer

Electrical power

Hours of operation

Other users of any building you want to be in. Generally can't share with residential uses.

Other businesses close by who share customers

Fire dept. This is a tough one, they have federal guidelines to live to.

We are spending a ton of time on the business plan, partly because the exercise forces the right thought processes, partly because we need to attract investors. Check with local SBA folks, usually there are mentors in the area who are very helpful.

We went to a two day class by Bavarian/Holstein, pretty good info if you have studied ahead of time. I think Kothe also runs them, but farther from CA.

A lot of the processes are similar to those in the wine industry, we are getting a lot of information (cleaning, pumps, fermenters etc.) from our cousins who work with grapes.

Anyway, good luck and keep the head up. There will be plenty of roadblocks, just keep good notes, a positive attitude, and plenty of patience.