cheers.

Having done this recently with our first vintage in 2002, the winery is in the black. And that’s at price point of $18-$30 / bottle. OK - I’m not bringing in a salary yet - I’m not considering the total debt on the property against the winerie’s earnings (but I also live on the property and can take this on my fed income tax), my entire inventory is paid for - and my annual case production is only around 800 cases annually. Here are my tips - and what I learned:

Just do it - if you are passionate about wine.
Write yourself a good business plan - this spreadsheet is a good start.
Don’t assume all direct sales ($300/cs) - consider that when starting out, you will need other channels to move your product and develop the brand and reputation. This will decrease your revenue potential during the first couple of years.
Keep it small at first - unless you have a rich uncle and swelling bank account. There is nothing wrong in starting out small, keeping debt low and developing the brand.
Expect a lot of hard work - unless you have a fat wallet and want to pay someone else to do it all for you. I’m holding down a fulltime professional career, while establishing the winery.
Last but not least - 2000 case annual production magic number - that can easily be achieved over a 5 year period.

I agree with Josh - plan on doing this for the long haul. I intend on doing so - and I’m only 45.

Do it! I know a guy who could probably help.

Joel,

While I agree with you, and that’s how I’d prefer to look at profit, if you’re going to look at a winery from a purely financial standpoint, this spreadsheet is the proper way according to Allan.

I guess the point of the exercise is to fight the very impulse you cite. It’s also why our houses aren’t realy the great investment that we think they are when you factor in upkeep, taxes, etc (http://www.smartmoney.com/mag/index.cfm?story=feb02-investment).

But like you say, we’re in it for the long haul, and we’re also irrational, so the costs somehow seems to make sense to us.

By the way, when you’re looking at a business as an going concern you can’t look at he debt created by the initial outflow beyond the interest paid for debt financing. Simple analogy - my house. I haven’t “broken even” on it (yet - GO CA REAL ESTATE!!!), but I’m not worried about that because when I sell it I’ll get that initial equity back. So, yes, that read line is WAY down there but let me ask you this - Do you think Amazon.com has broken even from the $500M it took to start? (Actually I think it has only recently - 2001 - started to really make money).

Anyway, winery owners should be getting into it for the LONG haul (generations) in my mind. So that initial outlay won’t seem like more than mortgage payment to a home owner.

“What’s the best way to make a small fortune as a winery owner? Start with a large fortune.”

I’d be interested in hearing about what your Capozzi spreadsheet looks like, if you’re willing to share.