What to do next.

[ralphie513]

My name could be signed at the bottom of the post by Mash dated april 8 and it would be almost impossible to know I didnt write it. But, before i do something rash I and going to toss around my thoughts and future plans for a couple weeks. I might have a post in the for sale section soon.

[Glenlyon]

Its been a while since I've read Mash's post, but if memory serves, taxes largely bit him on the ass.

So, although you haven't described your peril in detail, let's assume for this conversation, taxes are the root of the problem to start.

Taxes in alcohol are well, particularly taxing. There are a lot of details to consider and I'm talking about the CND system, I know the US system with of of it's attendant regulations can be even worse.

So, right off the top, to turn your operation around you need to look at your tax situation and how can you manage it or eliminate it. Don't forget you are collecting all kinds of taxes: excise taxes, sales taxes, property taxes, sources deductions for employees, income tax, etc.

The first thing you need to wrap you mind around is that you DON'T OWN THE TAX. Mr Trump (or Mr Trudeau for us Canadians) does. So any taxes collected need to be skimmed off at the source and paid on the spot. Get ahead of this and your life will simplify in a heartbeat. 

I know all of this because I have been dogged by taxes my whole business life and have paid some godawful bills to catch up. I'm old now and not near as rich as I used to be, but much wiser and happier.

Taxes are a serious drag, but are recoverable (the tax department will work with you of you can present a plausible plan to recover) and once you've figured that out, like all business owners everywhere, the next thing you need to come to terms with is debt.

How much do you have and what kind is it? Did you borrow a lot to start up?  Or, is trade debt that's built up over time?

Again, debt is something you can recover from. Long term debt is more difficult, but predicable. Short term trade debt builds because foolish business schools and accountants will tell you to buy on terms and then stretch the terms to maximize interest. That's great if you have loads of cash, but does NOT work for most small businesses, because you are probably under capitalized and don't have the cash in the bank to begin with. A far, far better strategy is pay as you go. Forget trade debt if you can, I can't stress this enough. Pay as you go. You'll sleep much better a night, and you'll get better deals and service from suppliers.

Every day, whether they like it or not, all business owner always wake up facing three questions. Should I borrow money? should I sell assets? or, should I sell more product? Only the third option will steer your ship of state in the right direction. So you have to ask yourself - am I selling enough product at the right price? Answer this question and you will be able to recover from debt and taxes.

Throwing in the towel is easy. But nobody said the liquor business was easy. Its a tough, constantly demanding business where your reputation matters and where the government has an opinion on your every move. You've got to be savvy to survive. Consider the posts that @microshiner have been posting about brand placement and value propositions. Ask yourself, are you selling to the right market for your needs?

Do you have a business plan? If not write one. It will help to guide your decisions and its never too late. Writing things down can make them seem less intimidating and more manageable.

   

 

[ralphie513]

Thanks Glenlyon, But your not even close.

I have no tax issue

I have no debt.

I am not new to owning and running a business, been doing it for 30 years, but this is different. 

First,  I get multiple responses to the same questions from TTB constantly. 1 example, when first getting started I sent in the required Beginning Operations notice. This can be found in ECFR  19.292

months later I receive an email from a "specialist" with a big long explanation on why the letter was not required, I still have the email. Another example, During one COLA application I get another "specialist" thats going through the already approved formula questioning everything and asking for changes to the formula. So apparently this person handles that approval too. I give specific answers with reference for them to read so they understand their own regs. I get put on hold for review for weeks. They showed me. 

Example 3, I needed to make an amendment to the DSP permit so I send everything thats needed and get denied because I dont have the authority to make the change. Umm, I own the building 100%, no bank. I own the equipment 100%, no bank. The permit is in my name. I put in a call, I ask, If i dont have the authority to make a change who does? Answer, " we will review and let you know" weeks later I get the answer, oops sorry your info was incorrectly put in the computer. 

Moving on to State problems.

When first starting I contact the office thats supposed to explain everything that one needs to do. 

I follow all instructions and think everything is done after receiving permits, liquor license, sales tax number. 

Ok now we can start fermenting, right? Nope. I find out I need another "secret" certificate. It must be a secret since the first office that details all the requirements you need doesnt even know about this, I have that email too that reads, "we are unfamiliar with this certificate".  So in goes the application, sent certified mail, you know so it needs to be signed for and I know a person actually got it. 10 days later after still not being notified it was received I call the post office. Its lost in a city in the opposite direction of where it was supposed to be going. I ask whats the problem? Answer from post office "dont know its just sitting there"   So I decide to send in another application using priority envelope this time. Both apps get received on the same day. Great, now I have 2 applications there. This will be interesting to explain.  I wait 10 days before placing a call to the department handling the application, so it has time to get there from the mailroom and all. I say to the very nice lady on the phone, I'm just calling to see that you received my papers. Nope I dont see em, you might need to give it a few days to get to us after its received in the mailroom. Uh, it was received 10 days ago, how far away is the mailroom? She says well let me check something else, ohhhhh there it is. I ask how long it takes to approve and my answer, "1 week". Oh great, thanks. 2 months later I get it. 

Then there is the state label registration.  The form has to be filled out in pdf, no hand written will be accepted. No problem. Except the required info differs from the COLA. They give no line to insert "Fanciful name" that I had to use because of being a specialty. Now they dont know how to process it because there is no line for any "Fanciful name"      That was 2 months ago.

Then there are the problems with the help which everyone here knows about and I wont list. 

Man, this just aint worth it. Is it?

 

[Southernhighlander]

That's the government bureaucracy that so many crave, at work.  It all starts with, we need the government to take care of us, except in this situation it's supposed to be all about the revenue, but with the way they do things I wonder if they really want the revenue. I comply with what ever they want with a smile, but I'm a libertarian at heart.  I hope that you don't give up and keep moving forward.  That's the key, just don't give up.  Also don't say or write anything that will piss them off.  They are God in this situation, just like the safety and other inspectors, but I'm sure that you already know that.  I think that you will get through it if you keep trudging forward.  One ray of hope, is that as long as the new tax and trade bill passes small distilleries'  fed liquor tax is going to go down over 80%.  Let's all keep our fingers crossed.

 

[Roger]

Cograts on actually trying to ferment something ! Seems few and far between. 

Now if Cosco would just start selling Tote's of Craft whiskey. 

[Glenlyon]

My sincere apologies for over over simplifying your problems, but your post was a bit vague off the top.

After reading your response, clearly you want to move to BC. The regulations we toil under are trivial in comparison to the US system.

[ralphie513]

Yes, it was vague. I wasnt in a mood to elaborate at the time. 

I have lots more I could add.  Maybe later.

Also, the person that designed the monthly reports should be super proud. 

[Falling Rock]

Most here will agree that this is a frustrating trial of attrition!

Hey, my State just made me spend $5,800 and weeks later said, " Oh, ah, sorry, you didn't need that."

I changed my Grand Opening six times due to additional reg's surfacing. If I had a loan over my head I'd have been done.

Costco sells totes of industrial ethanol. They just have small companies bottling it for them.

[Ironton]

I'm with Falling Rock here, seems as though you are just going through the process of opening a craft distillery. But hey, if it was easy everyone would be doing it (just look at craft beer).

We've had our building code rewritten 4 times since we started design phase and each time has caused us to go through a new review.  Six reviews and 1 year later we are finally breaking ground on demo. 

As far as TTB and COLA goes, I will be exchanging Christmas Gifts with the supervisors of the "specialists" this year... since I got to know them so well over the last year. 

Keep your head up and keep moving. Once you're open, you're going to miss this part of it, lol.