Winery business plan for starting your own business
If you want to start a business that brings joy to the lives of people, a winery can be a good venture to start. In this business plan for winery we will tell you in detail how to open a winery business and how to run it in a profitable manner. All you need to make this business a profitable one is to invest your money the right way and make wine that tastes good. If you have the passion and lack direction, this is a complete strategy for business that will help you move in the right direction to get the business started and make it worth your while.
Let’s now see the details of this business plan which is closely related to the business plan for a liquor store.
Executive Summary
2.1 The Business
Caylee’s Winery will be a registered wine manufacturer and seller in Cape Town South Africa. The focus of this business will be to make grade A wine and sell it to local and international customers. This example winery will tell you all there is to know about how to start winery.
2.2 Management of Winery
Even if you are starting a micro winery, you need to have strong management to run the business with ease and efficiency. For that reason, the first thing to finalize is to make a management structure that can make wine business plans work.
Caylee knows that quite well and will hire three managers to run the business. These persons will be responsible for procurement, operations and sales respectively. Caylee will be the CEO and all matters would be brought to her notice on a daily basis.
2.3 Customers of Winery
The second most important thing in any franchising business plan is determining who will be the customer of the business you want to start. After careful analysis of the market, Caylee has decided that the following customers will be entertained by her winery:
- Privat customers who want the wine for themselves.
- Business customers who want to sell the wine.
- Bars that serve the wine.
- Restaurants and hotels that serve the wine.
2.4 Business Target
Caylee is starting this business with just one goal in mind and that is making money. That target can be achieved by focusing the energies of the business on the following objectives:
- Producing Grade-A wine that tastes good.
- Having loyal repeat customers for the business.
- Making partnerships with the local businesses that sell wine like liquor stores and retailers.
- Becoming the leading supplier of wine in the area and then making an international brand.
Company Summary
3.1 Company Owner
Caylee Marie Anthony will be the owner of the business. She has worked as a wine taster for some notable companies around the world for more than a decade. That means she is the perfect candidate for this winery business plan example and knows all there is to know about how to open a winery.
3.2 Why the Winery is being started?
Before you can learn in detail how to start a wine company, you need to know why the business is being started in the first place. Caylee, the owner of the business recently got her inheritance, and she wants to start a business of her own. She went through a lot of options and studied a microbrewery business plan and a gourmet food store business plan but all she knows is how to start wine business and she is going for it.
3.3 How the Winery Business will be started?
Step1: Detailed Planning
The first thing that needs to be done to start a winery or any other business is to plan everything in detail. This planning is the stage where we will make sure we start the business in such a way as is profitable for the owner. After careful planning, Caylee has finalized the location of the business and what services she will be providing.
Step2: Developing a Brand
Wine is a luxury enjoyed by the rich and the rich believe in brands. To make sure that the customers can trust her business and that she can get the high-paying customers, Caylee is putting all the effort to make a brand for her business. Once the brand has a name, there will be lots and lots of sales.
Step3: Establishing the Winery
Once the work on branding has started, a date for the opening of the winery will be given and the work on making the winery will start. The winery’s construction will be started and it will be built as soon as possible.
Step4: Online Presence
Internet is the name of the game these days and that means, for the winery to be successful it needs to have a strong online presence. A website for the winery will be made and social media pages will also be created. This will be done not only to make the name known to the customers but also as a way for the customers to connect to and shop from the winery online.
Step5: Marketing
With all that done, an extensive marketing campaign will be launched to market the business and make it well-known in the people who are expected to be the customers.
| Start-up Expenses | |
| Legal | $254,000 |
| Consultants | $0 |
| Insurance | $30,000 |
| Rent | $34,000 |
| Research and Development | $20,000 |
| Expensed Equipment | $45,000 |
| Signs | $4,000 |
| TOTAL START-UP EXPENSES | $387,000 |
| Start-up Assets | $341,000 |
| Cash Required | $366,000 |
| Start-up Inventory | $38,000 |
| Other Current Assets | $267,000 |
| Long-term Assets | $273,000 |
| TOTAL ASSETS | $1,285,000 |
| Total Requirements | $1,672,000 |
| START-UP FUNDING | |
| Start-up Expenses to Fund | $387,000 |
| Start-up Assets to Fund | $1,285,000 |
| TOTAL FUNDING REQUIRED | $1,672,000 |
| Assets | |
| Non-cash Assets from Start-up | $1,664,000 |
| Cash Requirements from Start-up | $390,000 |
| Additional Cash Raised | $52,000 |
| Cash Balance on Starting Date | $41,000 |
| TOTAL ASSETS | $2,147,000 |
| Liabilities and Capital | |
| Liabilities | $29,000 |
| Current Borrowing | $0 |
| Long-term Liabilities | $0 |
| Accounts Payable (Outstanding Bills) | $48,000 |
| Other Current Liabilities (interest-free) | $0 |
| TOTAL LIABILITIES | $77,000 |
| Capital | |
| Planned Investment | $1,672,000 |
| Investor 1 | $0 |
| Investor 2 | $0 |
| Other | $0 |
| Additional Investment Requirement | $0 |
| TOTAL PLANNED INVESTMENT | $1,672,000 |
| Loss at Start-up (Start-up Expenses) | $398,000 |
| TOTAL CAPITAL | $2,070,000 |
| TOTAL CAPITAL AND LIABILITIES | $2,147,000 |
| Total Funding | $1,672,000 |
Services
One of the most important things to discuss is to determine the services that will be provided by the company.
Note
Just like the business plan for farmers market, it is important that we finalize the services before the launch and that makes tis section an important part of any wine store business plan.
Before you go for starting a winery business, it is important that you carefully read this business plan for a winery.
Wine Production
This should come as no surprise since it is a winery. This will be the major service to be provided by the winery.
Beer Production
Why not make some beer while we are making wine already? That’s exactly why we will be making beer as well.
Mobile Bars
Private parties and pool parties that need a mobile bar with all the delicious wines will also be entertained by Caylee’s Winery.
Wine Home Delivery
Our website will act as the sale point for home delivery of our finest wines to the people who need.
Marketing Analysis of Winery
If you want to know how to make your own winery and make serious profit from it, running an extensive marketing analysis is necessary. The next part of this business plan for winery is all about that. You need to consider these things in detail if you want to know how to open your own winery and in the end you will have a detailed wine marketing plan template as well.
5.1 Market Trends
As we did in the electrical contractors business plan, it is important to observe the market trends before we enter this business. Looking at the wine consumption statistics in South Africa and worldwide, it can be seen that the consumption of this thing has only increased over the last several years. That makes this business worth investing money in.
5.2 Marketing Segmentation
The expected customers of Caylee’s Winery will be from the following market segments:
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5.2.1 Private Customers
The people who want to have a good glass of wine before bed or after dinner will be among the main customers of the business.
5.2.2 Wine Retailers
Local wine stores and other retail stores that sell wine will also be one of the main market segments we will be serving from the platform of Caylee’s Winery.
5.2.3 Bars
Bars and restaurants where wine is served will also be among the chief stakeholders of the business.
5.2.4 Wine Exporters
Companies that export wine out of South Africa will be the last market segment we’ll be working with.
| Market Analysis | |||||||
| Potential Customers | Growth | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR |
| Private Customers | 30% | 38,000 | 40,000 | 42,000 | 45,000 | 47,000 | 10.00% |
| Wine Retailers | 25% | 23,000 | 26,000 | 27,000 | 29,000 | 30,000 | 10.00% |
| Bars | 26% | 22,000 | 23,000 | 25,000 | 27,000 | 28,000 | 10.00% |
| Wine Exporters | 19% | 17,000 | 19,000 | 22,000 | 24,000 | 25,000 | 11.00% |
| Total | 100% | 100,000 | 108,000 | 116,000 | 125,000 | 130,000 | 10% |
5.3 Business Target
- To establish a credible name in the liquor industry.
- To increase sales enough to make massive profits from the business.
- To expand the production capacity to double every year.
- To become a well-known wine brand in the world
5.4 Product Pricing
The prices of the products offered by Caylee’s Winery will depend on who is purchasing them. We will offer the lowest prices to the B2B customers and exporters and will charge the maximum price form the private customers.
Marketing Strategy
No wine boutique business plan can be successful without a marketing strategy and the marketing strategy of Caylee’s Winery will be discussed in this section. It is cardinally important to have a strong marketing strategy if you want to know how to get into the wine industry. This is because this industry is a very saturated one and people tend to trust only the established brands. Caylee ran a competitive analysis and came up with a sales strategy that is discussed below.
6.1 Competitive Analysis
- We have come to know that there is not even a single established winery in Cape Town area.
- Most of the wine sold in South Africa is imported which makes it expensive. We can deliver the same or better quality by locally producing the product.
- The rates of the competitors high and we can enter the market by starting with a lower rate and then increasing it.
6.2 Sales Strategy
- Caylee’s Winery will be advertised and marketed using all available marketing channels in the area.
- Prices will be kept lower in the start to get customers.
- Attractive deals and discounts will be offered to first-time customers to hook them on our product.
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
| Sales Forecast | |||
| Unit Sales | Year 1 | Year 2 | Year 3 |
| Wine Production | 41,000 | 43,460 | 46,068 |
| Beer Production | 40,000 | 42,400 | 44,944 |
| Mobile Bars | 56,000 | 59,360 | 62,922 |
| Wine Home Delivery | 38,000 | 40,280 | 42,697 |
| TOTAL UNIT SALES | 175,000 | 185,500 | 196,630 |
| Unit Prices | Year 1 | Year 2 | Year 3 |
| Wine Production | $60.00 | $69.60 | $80.74 |
| Beer Production | $64.00 | $74.24 | $86.12 |
| Mobile Bars | $55.00 | $63.80 | $74.01 |
| Wine Home Delivery | $49.00 | $56.84 | $65.93 |
| Sales | |||
| Wine Production | $2,460,000.00 | $3,024,816.00 | $3,719,313.75 |
| Beer Production | $2,560,000.00 | $3,147,776.00 | $3,870,505.37 |
| Mobile Bars | $3,080,000.00 | $3,787,168.00 | $4,656,701.77 |
| Wine Home Delivery | $1,862,000.00 | $2,289,515.20 | $2,815,187.89 |
| TOTAL SALES | $9,962,000.00 | $12,249,275.20 | $15,061,708.79 |
| Direct Unit Costs | Year 1 | Year 2 | Year 3 |
| Wine Production | $58.00 | $66.00 | $76.00 |
| Beer Production | $62.00 | $71.00 | $82.00 |
| Mobile Bars | $53.00 | $60.00 | $70.00 |
| Wine Home Delivery | $47.00 | $53.00 | $61.00 |
| Direct Cost of Sales | |||
| Wine Production | $2,378,000.00 | $2,868,360.00 | $3,501,137.60 |
| Beer Production | $2,480,000.00 | $3,010,400.00 | $3,685,408.00 |
| Mobile Bars | $2,968,000.00 | $3,561,600.00 | $4,404,512.00 |
| Wine Home Delivery | $1,786,000.00 | $2,134,840.00 | $2,604,504.80 |
| Subtotal Direct Cost of Sales | $9,612,000.00 | $11,575,200.00 | $14,195,562.40 |
Personnel plan
The next thing that has earned a place on this winery business plan sample is the detail of the staff needed to run the business. This is a logical thing that people are needed to make wine before it can be sold. For that reason, we need to decide just how many people do we need. Because, have too many people and you’ll end up distributing all the earnings as salaries and have too less people and there will be no one to run the wine making operations.
7.1 Company Staff
The following people will be needed to run the wine tasting business plan:
- Caylee Marie Anthony will be the owner and CEO of the business.
- 3 managers for procurement, operations and marketing.
- 6 winery workers
- 2 wine tasters.
- 2 Delivery drivers.
- 2 Office workers.
- 2 guards.
- 1 reception clerk.
- 1 Accountant.
7.2 Average Salary of Employees
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| Procurement Manager | $13,000 | $14,300 | $15,730 |
| Operations Manager | $14,000 | $15,400 | $16,940 |
| Marketing Manager | $13,000 | $14,300 | $15,730 |
| Winery Workers | $58,000 | $63,800 | $70,180 |
| Wine Tasters | $19,000 | $20,900 | $22,990 |
| Delivery Drivers | $27,000 | $29,700 | $32,670 |
| Office Workers | $16,000 | $17,600 | $19,360 |
| Guards | $18,000 | $19,800 | $21,780 |
| Reception Clerk | $7,000 | $7,700 | $8,470 |
| Accountant | $7,000 | $7,700 | $8,470 |
| Total Salaries | $192,000 | $211,200 | $232,320 |
Financial Plan
The only thing that is needed to complete this business plan winery is the discussion of the money involved in starting and running this business. As a winery is a large establishment, a lot of money will be needed to start the business. A rough sketch of the money needed to start the business is given below. It closely resembles that of a soap manufacturing business plan.
- Money needed to buy land to make the winery.
- The cost of civil works for the winery.
- The cost of equipment and machinery needed for making wine.
- The salary of employees.
- The cost of buying raw materials.
- Bonds, securities, insurance, and registration costs.
8.1 Important Assumptions
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 8.18% | 8.19% | 8.23% |
| Long-term Interest Rate | 8.40% | 8.46% | 8.49% |
| Tax Rate | 24.03% | 24.12% | 24.48% |
| Other | 0 | 0 | 0 |
8.2 Break-even Analysis
| Break-Even Analysis | |
| Monthly Units Break-even | 5340 |
| Monthly Revenue Break-even | $132,500 |
| Assumptions: | |
| Average Per-Unit Revenue | $235.00 |
| Average Per-Unit Variable Cost | $0.63 |
| Estimated Monthly Fixed Cost | $163,900 |
8.3 Projected Profit and Loss
| Pro Forma Profit And Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $9,962,000 | $12,249,275 | $15,061,709 |
| Direct Cost of Sales | $9,612,000 | $11,575,200 | $14,195,562 |
| Other | $0 | $0 | $0 |
| TOTAL COST OF SALES | $9,612,000 | $11,575,200 | $14,195,562 |
| Gross Margin | $350,000 | $674,075 | $866,146 |
| Gross Margin % | 3.51% | 5.50% | 5.75% |
| Expenses | |||
| Payroll | $192,000 | $211,200 | $232,320 |
| Sales and Marketing and Other Expenses | $139,000 | $145,000 | $148,000 |
| Depreciation | $2,200 | $2,350 | $2,480 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $3,000 | $3,000 | $3,100 |
| Insurance | $2,100 | $2,100 | $2,100 |
| Rent | $3,300 | $3,500 | $3,600 |
| Payroll Taxes | $29,000 | $30,000 | $31,000 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $370,600 | $397,150 | $422,600 |
| Profit Before Interest and Taxes | ($20,600) | $276,925 | $443,546 |
| EBITDA | ($20,600) | $276,925 | $443,546 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | ($4,120) | $55,385 | $88,709 |
| Net Profit | ($16,480) | $221,540 | $354,837 |
| Net Profit/Sales | -0.17% | 1.81% | 2.36% |
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
| Pro Forma Cash Flow | |||
| Cash Received | Year 1 | Year 2 | Year 3 |
| Cash from Operations | |||
| Cash Sales | $58,000 | $62,640 | $67,651 |
| Cash from Receivables | $18,000 | $19,440 | $20,995 |
| SUBTOTAL CASH FROM OPERATIONS | $76,000 | $82,840 | $89,467 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| SUBTOTAL CASH RECEIVED | $76,000 | $83,000 | $90,000 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $39,000 | $42,000 | $44,000 |
| Bill Payments | $24,000 | $27,000 | $31,000 |
| SUBTOTAL SPENT ON OPERATIONS | $63,000 | $69,000 | $75,000 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| SUBTOTAL CASH SPENT | $63,000 | $68,040 | $73,483 |
| Net Cash Flow | $20,000 | $21,000 | $22,000 |
| Cash Balance | $26,000 | $27,000 | $29,000 |
8.5 Projected Balance Sheet
| Pro Forma Balance Sheet | |||
| Assets | Year 1 | Year 2 | Year 3 |
| Current Assets | |||
| Cash | $274,000 | $306,880 | $337,568 |
| Accounts Receivable | $22,000 | $24,640 | $27,695 |
| Inventory | $4,100 | $4,592 | $4,900 |
| Other Current Assets | $1,000 | $1,000 | $1,000 |
| TOTAL CURRENT ASSETS | $283,000 | $316,960 | $356,263 |
| Long-term Assets | |||
| Long-term Assets | $10,000 | $10,000 | $10,000 |
| Accumulated Depreciation | $20,000 | $22,400 | $25,200 |
| TOTAL LONG-TERM ASSETS | $23,600 | $26,432 | $29,736 |
| TOTAL ASSETS | $294,000 | $329,280 | $370,440 |
| Liabilities and Capital | Year 4 | Year 5 | Year 6 |
| Current Liabilities | |||
| Accounts Payable | $19,300 | $21,616 | $24,296 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $18,700 | $20,944 | $23,541 |
| Long-term Liabilities | $0 | $0 | $0 |
| TOTAL LIABILITIES | $17,000 | $19,040 | $21,401 |
| Paid-in Capital | $30,000 | $30,000 | $31,000 |
| Retained Earnings | $53,000 | $57,770 | $63,547 |
| Earnings | $199,000 | $216,910 | $238,601 |
| TOTAL CAPITAL | $285,000 | $310,650 | $341,715 |
| TOTAL LIABILITIES AND CAPITAL | $302,000 | $329,280 | $370,440 |
| Net Worth | $298,000 | $324,820 | $357,302 |
8.6 Business Ratios
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | INDUSTRY PROFILE | |
| Sales Growth | 7.24% | 8.02% | 8.89% | 3.00% |
| Percent of Total Assets | ||||
| Accounts Receivable | 9.25% | 10.25% | 11.36% | 9.80% |
| Inventory | 5.44% | 6.03% | 6.68% | 9.90% |
| Other Current Assets | 2.19% | 2.43% | 2.69% | 2.40% |
| Total Current Assets | 150.02% | 151.10% | 152.00% | 158.00% |
| Long-term Assets | 11.48% | 11.58% | 11.64% | 12.00% |
| TOTAL ASSETS | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 4.93% | 4.97% | 5.02% | 4.34% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 0.00% |
| Total Liabilities | 7.54% | 7.60% | 7.67% | 7.38% |
| NET WORTH | 100.78% | 101.59% | 102.52% | 110.00% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 94.32% | 96.87% | 99.58% | 99.00% |
| Selling, General & Administrative Expenses | 93.50% | 96.02% | 98.71% | 97.80% |
| Advertising Expenses | 1.49% | 1.53% | 1.57% | 1.40% |
| Profit Before Interest and Taxes | 41.28% | 42.39% | 43.58% | 33.90% |
| Main Ratios | ||||
| Current | 34 | 35 | 36 | 32 |
| Quick | 32 | 32.8 | 33.62 | 33 |
| Total Debt to Total Assets | 0.18% | 0.18% | 0.17% | 0.40% |
| Pre-tax Return on Net Worth | 74.08% | 74.70% | 75.00% | 75.00% |
| Pre-tax Return on Assets | 95.23% | 99.99% | 104.99% | 111.30% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 33.19% | 34.22% | 35.28% | N.A. |
| Return on Equity | 55.98% | 57.72% | 59.50% | N.A. |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 7.7 | 7.8 | 7.8 | N.A. |
| Collection Days | 100 | 100 | 100 | N.A. |
| Inventory Turnover | 32 | 33.6 | 33 | N.A. |
| Accounts Payable Turnover | 15 | 16 | 16.3 | N.A. |
| Payment Days | 27 | 27 | 27 | N.A. |
| Total Asset Turnover | 2.5 | 2.5 | 2.6 | N.A. |
| Debt Ratios | ||||
| Debt to Net Worth | -0.04 | -0.03 | -0.04 | N.A. |
| Current Liab. to Liab. | 1 | 1 | 1 | N.A. |
| Liquidity Ratios | ||||
| Net Working Capital | $243,000 | $256,608 | $270,978 | N.A. |
| Interest Coverage | 0 | 0 | 0 | N.A. |
| Additional Ratios | ||||
| Assets to Sales | 0.86 | 0.87 | 0.87 | N.A. |
| Current Debt/Total Assets | 1% | 0% | 0% | N.A. |
| Acid Test | 29.23 | 29.4 | 29.6 | N.A. |
| Sales/Net Worth | 2.1 | 2.2 | 2.2 | N.A. |
| Dividend Payout | 0 | 0 | 0 | N.A. |