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Lessons Learned

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After working on our project for a couple years, I can look back and think about things we could have done differently. What makes me really think is all the decisions left ahead of us. When do you start work on any of the many imminent projects? How long do they take? Where have other people made mistakes and what can the rest of us learn from them? Essentially, what is the best path to take in the face of:

  • Distributor Selection (Three Tier State)
  • Equipment Size (How big is big enough?)
  • Vendor Selection (grain, glass, water)
  • Real Estate (Lease or Buy)
  • Financing (Investors or Loans)
  • Marketing (how much, what kind, to whom, when)

Looking back, I can say we should have been more serious about our first business plan rather than go through the process twice. We should have focused on more action at times, and less research. We did learn that full scale equipment and facility are NOT required for licensing approval in all cases, which was a good lesson learned.

I guess it would be nice to share what folks have encountered so far, and what they are willing to do to help others facing those same decisions. So, if there was one thing you would do differently, what would it be?

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  • 3 weeks later...

I've thought about these questions a lot since you posted but never enough to articulate my thoughts on it, well now's the time to try...

Distributor Selection- So far seems to be a total crapshoot, hard to answer because you can only have one distributor in any particular territory so how do you know someone else may have been any better than what you have now?

Equipment size- Glad I started as small as I did (250 ltr still) while there are times our fermenters and bottling tank seem too small, It hasn't been a real problem yet and I'm greatful I didn't spend more money than I did to get bigger equipment. I also realize that when the time comes to increase capability it will be relatively inexpensive to do so- the equipment I'm using now will always be useful.

Vendor Selection- Happy with the vendor choices I've made, no regrets in this area with some possible exceptions of bottle suppliers.

Real Estate- We had no interest in buying not knowing how the business would develop. Been where we are for 3 years, and we are now working on relocating to more space and better location with a ten year lease. It might be different if you're in a rural location or in a tourist area but for us renting short term worked well for startup.

Financing- Used money from a previous venture to finance, so very little outside debt (line of credit for bottles). I sleep well at night although I work my tail off to make sure my investment is protected. I have investors too but they are in this for the long haul and not expecting dividends for many years.

Marketing- Still trying to figure this out, our target customers are not who we expected them to be and that's a good thing because what we've found is that it's no where near as narrow a niche as we thought at first. Of course along with this is the need to educate customers and we spend a lot of time and energy doing this. Getting people to break old habits is the toughest part- I was at a customers the other night and he told me how much he prefered our vodka to Ketel yet he just has a habit of picking up the Ketel bottle when he wants a drink. That's frustrating. But in the end I think we're taking the right steps- it's just going to take time.

Overall, not sure I'd do anything differently at this stage of the game.... anyone else?

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  • 2 weeks later...

That is exactly the kind of information I think it is helpful to share. Not easy topics to respond to in a forum setting, I understand. Thanks for responding!

We aren't at the point yet where we're in serious discussions with distributors, but have had preliminary talks with two. One nice (read: quirky) thing about Maryland, though, is that we have four dispensary counties which are like little mini-control systems within a three tier state. We can sell directly to them even with a distributor signed.

We are reaching decision time on equipment, and your response to size was interesting. We're looking at going bigger early, in the interest of scalability. I guess in the end we will do what the budget allows and it is that simple.

The bottle supply issue is one that gives me pause, I think the best solution in our minds is to pick a stock bottle, one not ever in short supply, and buy direct from the manufacturer. They cost will be more up front, but you're going to use the bottles. Seems a lot of problems occur when the middle man comes into play, or when dealing with custom bottles.

Jon Cook

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