Legal structure
My accountant and my attorney advised me on business structures: sole proprietorship versus corporate options. My insurance agent became a consultant for insurance and liability issues. I also discovered that sometimes answers my local consultants gave would conflict. What to do? Who to believe? Bit on the ass by reality At of the end of the 1986 sales year, 800 cases of wine had been sold from the 1,000 cases produced. The bad news was that on these 800 cases I had made a total profit of about $1,200, or $1.50 per case. I believed that I would make $1 per bottle for a minimum of $12 per case, or almost $9,600 total. How could I have been so wrong? How could I have blown so much sunshine up my own ass? Is your wine good enough? Don’t ask Mom!
If your wife or girlfriend asks you, “Does this dress make my rear-end look fat?” is she apt to get an honest answer? So, imagine asking Mom or Uncle Harry, “Is my wine any good?” If you want to know if your wine is of commercial quality, ask distributors, restaurateurs, and wine shop owners — the groups that will be asking the public to buy your wines. Equipment purchase strategy and balance Understand and think in production units. Example: One ton of grapes will produce, on average, 150 gallons of wine. This means 750 bottles or about 65 cases, 750 corks, 750 neck foils, and 845 labels. But corks are sold in 1,000 count bags, neck foils are sold in boxes of 2,500 units per color and bottles are sold in pallet units.
The Honeymoon
There is a honeymoon period for each new winery when their first release sells out in record time. This phenomenon is not dependent on the quality of your product nor is it because of the high value of your wine. The honeymoon period is a function of your being a novelty!
When Things Go Wrong
When things go wrong, it is more important to ask, “What can I do to fix this,” than it is to say, “Who can I blame, since I obviously have no responsibility for the current mess.” Blame is a short-term response to what may be a long-term problem.
The Bar Call
In the wine business, there is the “bar call,” which is the spoken sound of your business name. ”Bar calls” cannot be registered like trademarks and service marks but they do attach to registrations.
Selling to Retail Customers
I had product knowledge from being a winemaker, grower, and owner for more than 30 years. I wanted to use my knowledge in such a way that it would help the customer rather than appear as if I was showing off. For example, the tasting sequence affects our experience and enjoyment of wine. “Think of how the first swig of orange juice tastes after you’ve brushed your teeth. The orange juice didn’t magically start tasting bad, but the sequence of coming after toothpaste made the first few sips taste bad.” No matter how knowledgeable you are, you’re either viewed as unbelievable or condescending if your audience does not validate your message in their own minds.
Selling and Service to Wholesale Customers
I provided free training to restaurant staff on how to properly open bottles, provide table service and make recommendations to diners about wines. This established in the mind of the wholesale customer that I saw their financial success as important to me. When calling on restaurants, I would have specific suggestions about which of my wines might fill a gap in their wine list. I was prepared to tell them their per ounce cost of my wines to show price-worthiness in a by-the-glass wine program.
Staffing From the Staff Perspective
Your staff’s stability and mental comfort is enhanced if they receive a written statement of their salary ladder. What do they make while they are being trained? When might they expect to be eligible for a raise, and of how much? What is the top salary that you can afford to pay? Are there other ways that they can increase their earnings, such as through commission sales or extra hours (catering, banquets)?
Staffing From the Owner’s Perspective
Here are questions that require honest answers. Some answers may change as you learn more about yourself, your labor market and your customers, so don’t be wedded to previous decisions. 1. Are you, your spouse, or children going to work in the business? If so, what will they do? How much will they work? What is reasonably foreseeable that could go wrong--transportation issues, school time, parenting demands? 2. Do you plan to enjoy a life outside of your business? Vacations? 5. How much of the production will you be performing? Are you a ‘brick-and-mortar’ winery, a ‘virtual’ winery, or something in between? Setting up a tasting room Check the fire codes for occupancy, fire extinguishers, and door-clearance requirements. Remember the Americans with Disabilities Act (ADA) requirements for door sizes, handicapped-accessible restroom(s), and seating access. Remember that wine is adversely affected by heat, sunlight, and vibration. Arrange your tasting room so the hot afternoon sun will not fall on racks of wine bottles.
Beer in A Wine Bar
When I started my wine bar in the tasting room, I discovered that I needed to have beer. What I had not anticipated was that among groups of customers who came in there was usually one or more beer drinker. The group dynamic was to make sure each group member could get their favorite type of beverage. The net effect of this behavior was for the entire group to go next door to a pool parlor where everybody could get their beverage of choice.
Grapes
Don’t attempt to save money on grapes! You can make bad wine out of good grapes, but you can’t make good wine out of bad grapes
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