Help

[tomdallen]

I'm looking for help to determine return on investment (ROI) on a craft distillery. I need help because I have the notion of starting a distillery and have some ideas as to what I want to make, but what I need is for someone (consultant) to help me thru the process of determining the cost of the business.

What amount of product do I need to make for the market here? Then follows all the other issues: size of equipment, type of equipment, building size, all the costs required for roi calculation.

Looking for a consultant which can help me on this part of my Business Plan.

Any suggestions on this??

Thanks!

[Salishseaorganicliqueurs]

Hi Tom,

Your ROI is dependent upon what you are making, where you are located, the quality of your product(s), whether you are able to self distribute and how much you can self distribute vs. using a distributor, and how much effort you put into marketing. It really isn't possible to calculate ROI without more details. Though I can tell you this, the biggest killer of new distilleries is undercapitalization. Starting a distillery can be a very expensive process. While you can start a small distillery for under $100,000 it would take a lot of work and you would pretty much have to be a jack of all trades and do a lot of the work yourself. Depending on what size of distillery you are wanting to start you can expect start up costs to run from $90k-$250k for a small distillery producing a couple thousand cases a year to a large one producing hundreds of thousands of cases a year which could easily cost several million dollars (look at Tito's Vodka for example). If possible you probably want to calculate out your yearly operating costs and look into raising a few years worth of operating costs, in addition to your start up costs. That way you will have a couple years to get your product out and into the market and won't end up undercapitalized. Afraid this is the best advice I can give you without knowing more. I'm sure other people will comment as well.