small vineyard business plan

Winery Business Plan Template

Written by Dave Lavinsky

Winery Business Plan

You’ve come to the right place to create your Winery business plan.

We have helped over 10,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Wineries.

Below is a template to help you create each section of your Winery business plan.

Executive Summary

Business overview.

Great Grape Winery is a new wine producer and tasting room located in the heart of Walla Walla, Washington’s wine country. The company is founded by Nicholas Perez, an experienced winemaker who has been making wine for nearly two decades, and his wife, Angela, an operations director with a Master’s degree in Business Administration. Together, Nicholas and Angela have the expertise and education needed to start their new company, Great Grape Winery. Nicholas is confident that his ability to effectively manage the winemaking process, combined with Angela’s top-notch management skills, will allow them to run a profitable winery. The couple plans on recruiting a team of highly qualified professionals to help manage the day-to-day complexities of running a winery – winemaking, sales, marketing, quality control, and financial reporting.

Great Grape Winery will offer locally produced, high-quality fine wine for the wine connoisseur and the novice alike. Great Grape will be a one-stop shop for wine enthusiasts to purchase everything they need for hosting their own gathering featuring Great Grape’s fine wines, from bread and cheese selected specifically to accompany certain types of wine to the wine glasses and accessories needed to create an elegant presentation. Great Grape Winery will be the ultimate choice in Walla Walla for its picturesque views and high-quality wines. The winery will offer wine tasting, winery tours, and a chic outdoor seating area to meet up with friends or relax with a glass of wine.

Product Offering

The following are the products that Great Grape Winery will provide:

• Cabernet Sauvignon
• Cabernet Franc
• Wine glasses
• Wine glass charms
• Wine holders

Customer Focus

Great Grape Winery will target all individuals over the age of 21. The winery will target tourists and Walla Walla locals. Great Grape will also target a range of wine drinkers, from wine connoisseurs to novices. No matter the client, Great Grape Winery will deliver the best communication, service, and high-quality wine.

Management Team

Great Grape Winery will be owned and operated by Nicholas and Angela Perez. Nicholas will be in charge of the winemaking process and oversee all production staff. Angela Perez will be the Operations Director and manage the tasting room, sales staff, and customer relations.

Nicholas Perez is a graduate of the University of California with a Bachelor’s degree in Viticulture. He has been working at a winery in California for nearly two decades as a winemaker. Now, he wants to bring his winemaking expertise to the Walla Walla, Washington wine country.

Angela Perez is a seasoned operations director with over eight years of experience overseeing the operations for a small winery. Angela has a Master’s degree in Business Administration and is known for her keen attention to detail, organization, and efficiency.

Success Factors

Great Grape Winery will be able to achieve success by offering the following competitive advantages:

• Highly qualified team of winemakers, wine tasters, and experts on wine selection and pairing work side by side with friendly and knowledgeable sales and tasting room staff to ensure each customer receives personalized and attentive service and gets all of their questions answered.
• Great Grape sells its wine, food products, and wine accessories in-store and online, giving customers more flexibility in the way they can shop. The company will also have a monthly wine club subscription so customers never have to worry about running out of wine or missing out on new products.
• Great Grape Winery offers competitive pricing. The winery works with local suppliers and uses a cost-effective packaging process that allows the company to save money. This savings is then passed on to the customers.

Financial Highlights

Great Grape Winery is seeking $600,000 in debt financing to launch its winery. The funding will be dedicated towards securing and building out the facility and towards purchasing equipment and supplies. Funding will also be dedicated towards three months of overhead costs to include payroll of the staff, rent, and marketing expenses. The breakout of the funding is below:

• Facility build-out: $300,000
• Equipment, supplies, and materials: $120,000
• Three months of overhead expenses (payroll, rent, utilities): $150,000
• Marketing costs: $20,000
• Working capital: $10,000

Company Overview

Who is great grape winery.

Great Grape Winery is a newly established winery located in the heart of Walla Walla, Washington’s wine country. Great Grape will be the ultimate choice for its picturesque views and high-quality wines. The winery will offer locally produced, high-quality fine wine for the wine connoisseur and the novice alike. Great Grape will be a one-stop shop for wine enthusiasts. Customers can purchase everything they need to host their own gathering featuring Great Grape’s fine wines, from breads and cheeses that pair perfectly with the Great Grapes wine selection to elegant wine glasses and accessories. The winery will offer wine tasting, winery tours, and a chic outdoor seating area where customers can meet up with friends or relax with a glass of wine.

Great Grape Winery will employ a team of professionals who are highly qualified and experienced in winemaking, selection, and pairing. Great Grape Winery ensures that every customer that walks through the door receives exceptional customer service.

Great Grape Winery History

Great Grape is owned and operated by Nicholas and Angela Perez. Nicholas is an experienced winemaker who has a Viticulture degree from the University of California. Now, he wants to bring his winemaking expertise to Walla Walla’s wine country. Angela is a seasoned operations director with over eight years of experience overseeing the operations for a small winery. Together, they have begun to set up the business. Initial steps such as registering the business and securing all necessary permits and licenses have been completed.

Since incorporation, Great Grape Winery has achieved the following milestones:

• Registered Great Grape Winery, LLC to transact business in the state of Washington.
• Secured all required licenses and permits to open a winery in Walla Walla, Washington.
• Has a contract in place at the facility that will become the winery and tasting room.
• Reached out to numerous local vineyards to advise them on the upcoming winery in order to start getting supplier contracts.
• Began recruiting a staff of accountants, marketing and sales associates, winemakers, and tasting room personnel to work at Great Grape Winery.

Great Grape Winery Services

• Wine Tasting Services & Events

Industry Analysis

The global wine market was estimated to be $417.85B in 2020 and is forecasted to increase at a compound annual growth rate (CAGR) of 6.4% between 2021 and 2028. The segment of wine that had the largest share of the market in 2020 was table wine, with 84% market share. This type of wine is quite popular due to being relatively inexpensive and easily accessible. While less popular than table wine, sparkling wine is expected to gain market share between 2021 and 2028 as more people around the world, and particularly in the U.S., favor spritz beverages.

In the United States, the millennial age group drinks the most wine. Approximately 24% of wine consumers in the country belong to this demographic. Moreover, 28% of younger millennials drink wine on a daily basis. Trends in the wine market that appeal to millennials include small batch wines, natural wines, sparkling wines, lower-alcohol wines, and sustainable or biodynamic wines. Industry operators can maintain a competitive advantage by offering unique flavors, affordable and accessible products, and catering to the millennial demographic.

Customer Analysis

Demographic profile of target market.

The precise demographics for Walla Walla, Washington are:

Customer Segmentation

Great Grape will primarily target the following customer profiles:

• Millennial age group
• Gen Z who are over the age of 21
• Boomer age group
• Wine connoisseurs
• Walla Walla locals
• Walla Walla tourists
• Wine novices

Competitive Analysis

Direct and indirect competitors.

Great Grape Winery will face competition from other companies with similar business profiles. A description of each competitor company is below.

Valley Winery

Valley Winery makes fine wines from locally sourced grapes. Located in Walla Walla, Valley Winery is able to save on shipping costs by using local suppliers. The winery’s list of services includes wine tasting, winery tours, and private event hosting. Valley Winery makes a range of wines including white, reds, and dessert wines.

Valley Winery promises to deliver the highest quality products at reasonable prices. The winery follows a strict quality control process and only uses the best grapes for its wines. Valley Winery’s team of experienced winemaking professionals assures the wine is made with the best of care. Customers are guaranteed to love the company’s fine wines and if they don’t like a particular wine, the company will offer another type of wine at no additional cost or provide a refund.

Hilly Valley Winery

Hilly Valley Winery in Walla Walla, Washington provides outstanding wines for the pickiest wine connoisseurs. Hilly Valley Winery offers classic wines including Cabernet Sauvignon, Pinot Noir, and Syrah. The owners of Hilly Valley Winery come from a family of winemaking professionals so they understand how fine wine should be produced. The winery also boasts a small cafe where customers can relax with some wine and cheese. On weekends, the winery hosts wine tasting events and tours of the production facility.

Winning Wine

Winning Wine is a trusted Walla Walla winery that provides superior wines, breads, and cheeses for wine enthusiasts in the area. Winning Wine uses organic grapes processed through sustainable methods to ensure a green operation. The winery hosts special events, tours, and winemaking classes. Customers can purchase wine accessories in addition to fine wine while in the tasting room. Winning Wine’s fine wines sell for premium prices due to the company’s use of hand-picked grapes and sustainable production methods.

Competitive Advantage

Great Grape Winery will be able to offer the following advantages over their competition:

• Great Grape Winery works with local suppliers and uses a cost-effective packaging process that allows the company to save money.

Marketing Plan

Brand & value proposition.

Great Grape Winery will offer the unique value proposition to its customers:

• Friendly and knowledgeable employees ensure each customer receives personalized and attentive service and gets all of their questions answered.

Promotions Strategy

The promotions strategy for Great Grape Winery is as follows:

Word of Mouth/Referrals

Nicholas Perez has built a reputation over the years for producing exceptional wine. Many former customers have expressed great enthusiasm for the new winery and have expressed excitement over trying out the wine selection. Great Grape Winery will give customers discounts for referring their friends and families and spreading the word about the new establishment.

Professional Associations and Networking

Great Grape Winery will become a member of professional associations such as the American Society for Enology and Viticulture, the American Wine Society, and the Washington State Wine Commission. Nicholas and Angela will focus their networking efforts on expanding their customer and supplier networks.

Print Advertising

Great Grape Winery will invest in professionally designed print ads to display in programs or flyers at industry networking events, in Walla Walla tourism magazines, in wine trade publications, and in direct-mailers.

Website/SEO Marketing

Great Grape Winery will create and maintain an attractive, well-designed website. The website will be well organized, informative, and list all of the wines and other products currently available at Great Grape. The website will also include a regularly updated blog with interesting and educational articles about wine.

The company’s marketing director will manage Great Grape’s website presence with SEO marketing tactics so that when someone searches for “Walla Walla winery” or “winery near me”, Great Grape Winery will be listed at the top of the search results.

Social Media Marketing 

The company will maintain an active presence on various social media platforms including LinkedIn, Twitter, Instagram, Facebook, TikTok, and YouTube. The marketing director will post new content to these accounts multiple times throughout the week to keep the brand fresh in followers’ minds.

Email Marketing

Great Grape Winery will send email newsletters and promotional offers to customers who subscribe. The newsletter will provide informative content and the promotional offers will help drive traffic to the winery and the online shop.

The pricing of Great Grape Winery will be competitive so customers feel they receive value when purchasing wine from the company.

Operations Plan

The following will be the operations plan for Great Grape Winery.

Operation Functions:

• Nicholas Perez will be the Co-owner and Lead Winemaker. He will oversee the winemaking process and winemaking personnel.
• Angela Perez – Co-owner and Operations Manager who will manage the day-to-day operations of the winery, tasting room, sales staff, and customer relations.
• Justin Lee – Bookkeeper/Accountant who will provide all budgeting, accounting, tax payments, and monthly financial reporting for the company.
• Brenda Moore – Marketing Director who will implement the marketing plan for Great Grape.
• Larry White – Inspection and Maintenance Director who will provide all maintenance on the equipment and internal quality control inspections for the winery.

Milestones:

Great Grape Winery will have the following milestones completed in the next six months.

10/1/2022 – Finalize contract to lease the facility.

10/15/2022 – Finalize personnel employment contracts for the Great Grape Winery team.

11/1/2022 – Finalize contracts with grape suppliers and begin the winemaking process.

1/15/2023 – Begin networking at industry events and implement the marketing campaign.

2/1/2023 – Great Grape Winery opens for business.

Financial Plan

Key revenue & costs.

The revenue drivers for Great Grape Winery are the winery fees charged to customers in exchange for wine products. The company’s price range for its fine wines is $15-$50 per bottle.

The cost drivers will be the overhead costs required in order to staff a winery and the grapes that will be made into wine. The expenses will be the payroll cost, rent, utilities, winemaking supplies, and marketing materials.

Funding Requirements and Use of Funds

Key assumptions.

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

• Number of cases of wine produced per year: 6,000
• Average fees per month: $60,000
• Facility lease per year: $200,000

Financial Projections

Income statement.

Balance Sheet

Cash Flow Statement

Winery Business Plan FAQs

What is a winery business plan.

A winery business plan is a plan to start and/or grow your winery business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your winery business plan using our Winery Business Plan Template here .

What are the Main Types of Winery Businesses?

There are a number of different kinds of winery business , some examples include: Estate Winery, Farmstead Winery, and Custom Crush Winery.

How Do You Get Funding for Your Winery Business Plan?

Winery businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start a Winery Business?

Starting a winery business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Winery Business Plan - The first step in starting a business is to create a detailed vineyard   business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.  

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your winery business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your winery business is in compliance with local laws.

3. Register Your Winery Business - Once you have chosen a legal structure, the next step is to register your winery business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 

4. Identify Financing Options - It’s likely that you’ll need some capital to start your winery business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 

7. Acquire Necessary Winery Equipment & Supplies - In order to start your winery business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your winery business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a successful winery business and starting a winery business plan :

• How to Start a Winery Business

Other Helpful Templates

Brewery Business Plan Template Wine Bar Business Plan Template

How to Start a Vineyard Business

A vineyard cultivates grapes for wine, juice, and fresh fruit for local markets and consumers. Some vineyards process the grapes for consumption in-house, while others concentrate on the farming aspect, selling directly to wineries in the area.

Ready to turn your business idea into a reality? We recommend forming an LLC as it is the most affordable way to protect your personal assets. You can do this yourself or with our trusted partner for a small fee. Northwest ($29 + State Fees) DIY: How to Start an LLC

Start a vineyard business by following these 10 steps:

• Plan your Vineyard Business
• Form your Vineyard Business into a Legal Entity
• Register your Vineyard Business for Taxes
• Open a Business Bank Account & Credit Card
• Set up Accounting for your Vineyard Business
• Get the Necessary Permits & Licenses for your Vineyard Business
• Get Vineyard Business Insurance
• Define your Vineyard Business Brand
• Create your Vineyard Business Website
• Set up your Business Phone System

We have put together this simple guide to starting your vineyard business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas .

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

What will you name your business?

• What are the startup and ongoing costs?
• Who is your target market?

How much can you charge customers?

Luckily we have done a lot of this research for you.

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Vineyard Business Name Generator

If you operate a sole proprietorship , you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name , we recommend researching your business name by checking:

• Your state's business records
• Federal and state trademark records
• Social media platforms
• Web domain availability .

It's very important to secure your domain name before someone else does.

Find a Domain Now

Powered by godaddy.com, what are the costs involved in opening a vineyard business.

Because a significant amount of land is required to grow your grape crops, it is important that you do extensive research regarding required start-up capital. Most vintners do not realize a profit for the first three years. Your first year’s budget will be approximately $12,000 an acre. The plants, equipment, tools, pesticides, and trellising are included in this estimate. Second year costs decrease to $1,200 to $1,500 per acre and third year costs will be approximately $1,000 an acre. These figures do not include the cost to purchase or lease land. As a vineyard owner, it is critical that you invest in land that has soil with the right PH balance, proper sunlight, and irrigation. Your land will be one of your highest expenses, so thorough research prior to making any decisions is critical. Purchasing a plot of land in prime vineyard country can set you back anywhere from $100,000 to over $350,000 per acre.

What are the ongoing expenses for a vineyard business?

Managing a vineyard is complicated, with a number of ongoing expenses. In addition to land lease/ownership expenses, your budget should include approximately $8,000 per acre over a three-year period. After the first three years, the crops should be producing grapes, reducing your annual costs to $1,500-$2,000 per acre. Costs include labor, insurance, irrigation, vine cuttings, and machine repair and maintenance.

Who is the target market?

As mentioned, target markets for grape vineyards are not limited to wineries. Since wine grapes are the most profitable, this is the niche that many vineyard owners choose to target. Regardless of which option you choose, be sure to thoroughly research market saturation in your area. Aligning market needs with your passions will make your business venture much more enjoyable and, in turn, profitable.

How does a vineyard business make money?

Vineyards can be set up to process the grapes in-house or to distribute harvested grapes to other local businesses. Before making an initial investment, carefully consider your options. Market needs, coupled with your personal knowledge and experience will assist you in identifying which path will yield the highest profit.

For a vineyard in full production, recent studies indicate an annual return of $2,500 to $5,000 per acre. These numbers vary depending upon quality and demand.

How much profit can a vineyard business make?

Profits vary depending upon a number of factors. A 35-acre vineyard earning an annual return of $2,500 per acre will see a profit of approximately $88,000.

How can you make your business more profitable?

While the investment and operating costs will be significantly higher, many vineyard owners open their own winery onsite. The increase in annual profits make this a worthy investment. If you own more land than you wish to cultivate, consider leasing acres out to other aspiring vineyard owners in the area. Entrepreneurs with extensive knowledge could educate others on the subject in exchange for education and/or consulting fees.

Want a more guided approach? Access TRUiC's free Small Business Startup Guide - a step-by-step course for turning your business idea into reality. Get started today!

STEP 2: Form a legal entity

One crucial aspect that cannot be overlooked when starting your vineyard business is the importance of establishing a solid business foundation. While sole proprietorships and partnerships are the most common entity types for small businesses, they're a far less stable and advantageous option than LLCs.

This is because unincorporated business structures (i.e., sole proprietorships and partnerships) expose you as an owner to personal liability for your business's debts and legal actions, while LLCs protect you by keeping your personal assets separate from your business's liabilities.

In practice, this means that if your vineyard business were to face a lawsuit or incur any debts, your savings, home, and other personal assets could not be used to cover these costs. On top of this, forming your business as an LLC also helps it to appear more legitimate and trustworthy.

More than 84% of our readers opt to collaborate with a professional LLC formation service to kickstart their venture. We've negotiated a tailored discount for our readers, bringing the total down to just $29.

Form Your LLC Now

Note: If you're interested in more information before getting started, we recommend having a look at our state-specific How to Start an LLC guide (DIY) or our in-depth Best LLC Services review (for those opting for a professional service).

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

You can acquire your EIN through the IRS website . If you would like to learn more about EINs, read our article, What is an EIN?

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil .

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history , which can be useful to raise money later on.

Recommended: Apply for an easy approval business credit card from BILL and build your business credit quickly.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

Federal Business Licensing Requirements

There are federal regulations regarding what can and cannot be added to, sold as, and processed with food. Attached is a resource from the Food and Drug Administration detailing the process of starting a food business: How to Start a Food Business

In addition, it is important to abide by all federal and state laws regarding the sale of alcohol. More information can be found in the section labeled Liquor Licensing & Food Regulations. 

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a vineyard business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits .

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses .

Certificate of Occupancy

A vineyard business is generally run out of a large piece of land. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO).  A CO confirms that all building codes, zoning laws and government regulations have been met.

• If you plan to lease a location :
• It is generally the landlord’s responsibility to obtain a CO.
• Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a vineyard business.
• After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
• If you plan to purchase or build a location :
• You will be responsible for obtaining a valid CO from a local government authority.
• Review all building codes and zoning requirements for your business’ location to ensure your vineyard business will be in compliance and able to obtain a CO.

Liquor Licensing & Food Regulations

Businesses involved in the sale of alcoholic beverages are required to obtain a liquor license from the appropriate state or local agency. A comprehensive list of laws by state (including necessary licenses, zoning laws, etc), curated by the Alcohol and Tobacco Tax and Trade Bureau, is included here .

When selling food, you will need licensing from a local health department; all establishments serving food are required to pass a health inspection. Tips for faring well on a health inspections

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance . This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance . If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

FInd out what types of insurance your Vineyard Business needs and how much it will cost you by reading our guide Business Insurance for Vineyard Business.

STEP 8: Define your brand

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners , we'll give you helpful tips and advice for creating the best unique logo for your business.

Recommended : Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker .

If you already have a logo, you can also add it to a QR code with our Free QR Code Generator . Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.

How to promote & market a vineyard business

When writing your business plan, carefully consider your target audience and start building those relationships. Attend conferences and workshops, networking whenever the opportunity presents itself. Building these relationships on the front end will ensure you have a reliable buyer once your crops are ready for harvest, as many buyers will add their input and knowledge during the entire crop growing process.

How to keep customers coming back

Your goal is to find a select number of customers, based on your crop’s yield, and maintain a long-lasting relationship with those clients. To do so, it is critical that you consistently deliver quality grapes. Crops should be on time and free of disease. This, coupled with strong customer service, will ensure customer retention.

STEP 9: Create your business website

After defining your brand and creating your logo the next step is to create a website for your business .

While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.

Here are the main reasons why you shouldn’t delay building your website:

• All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
• Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
• Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.

Recommended : Get started today using our recommended website builder or check out our review of the Best Website Builders .

Other popular website builders are: WordPress , WIX , Weebly , Squarespace , and Shopify .

STEP 10: Set up your business phone system

Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.

Recommended Business Phone Service: Phone.com

Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.

Is this Business Right For You?

Owning a vineyard is a lifelong dream for many people. Entrepreneurs with a significant amount of capital and a passion for horticulture are best suited for this business venture. Managing a business of this magnitude requires dedication and a love for working outdoors with plants.

Want to know if you are cut out to be an entrepreneur?

Take our Entrepreneurship Quiz to find out!

Entrepreneurship Quiz

What happens during a typical day at a vineyard business?

Managing an operation of this magnitude requires consistent, hands-on care of your crops. Your vineyard’s success is dependent on placement of crops, lighting, water quality, and health of the soil. Since this type of crop can be very sensitive to these outside elements, testing and supervision should remain consistent year round. Management of your vineyard’s crop, however, is just one component. You must also cultivate and nurture relationships with current and prospective customers. This ensures your crop has a final destination once harvesting is complete.

What are some skills and experiences that will help you build a successful vineyard business?

There is a great deal that goes into managing a healthy and profitable grape vineyard. Substantial knowledge in plant production, pest control, harvesting, and post-harvest handling is a must. This, however, is just one ingredient. Your vineyard will require the hard work of multiple staff members. Therefore, your skill set must include employee management, attention to detail, financial management, marketing, and the ability to delegate. In this industry, it is important that you recognize your strengths and weaknesses, building a team of professionals that complement your abilities. Hands-on experience would prove invaluable to your vineyard’s long-term success.

If selling your grapes to wineries is part of your business plan, knowledge of what grapes are best for each type of wine is important. Developing a close relationship with the winemakers you plan to sell to will ensure the right decisions regarding crop maintenance are made. There are a number of educational resources available to aid you in your in your quest for a successful vineyard. Purdue University Extension and the Indiana Wine Grape Council have quality educational programs. Attending conferences and workshops, reading printed publications on the subject, and one-on-one consultations would all prove helpful as you get started on this business venture.

What is the growth potential for a vineyard business?

The wine industry, particularly in the Midwest, has grown exponentially over the last decade. While new wineries continue to open, vineyards have not expanded at the same pace. As a result, demand for quality grapes is high. This has led to significant business opportunities for entrepreneurs with dreams of running a grape vineyard. While grapes grown for wine typically yield more growth and profit, there is still great opportunity in the juice and table fruit facets of the industry.

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Take the Next Step

Find a business mentor.

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

Learn from other business owners

Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.

Resources to Help Women in Business

There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:

If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.

What are some insider tips for jump starting a vineyard business?

Experienced vintners offer the following advice:

• When researching your land investment, the United States Department of Agriculture or the National Institute of Food and Agriculture extension should prove to be an invaluable resource.
• If you are unfamiliar with the various types of grapes, the National Grape Registry offers a complete and detailed listing, as does The Vitis International Variety Catalogue.
• Should you require guidance in selecting a location for wine grapes, The Alcohol and Tobacco Tax and Trade Bureau can provide you with the necessary information.
• You will need to plan ahead when it comes to ordering your grape vines, as grape nurseries grow vines for the next year’s planting season. When placing your order, be sure to specify that you wish to only have one year old vines. This will help ensure you receive healthy, productive plants. Prior to placing your order, make sure the nursery provides you with proper certification.

How and when to build a team

Vineyards of three to five acres can be managed by one person throughout most of the year. You will require additional hands during pruning and harvest season. Farms over five acres will require year round assistance. Each team member must be knowledgeable about grapes and vineyards, able to identify any issues as they arise. Students and migrant workers are a viable option for the more laborious seasonal help. Labor studies indicate years two and three require the largest number of man hours - almost five thousand hours for a 35-acre farm in the second year and a little over four thousand hours in the third year.

For a business of this magnitude, it is recommended that you seek professional guidance. A financial advisor, attorney, and insurance agent can offer you the guidance needed to make informed decisions regarding the management of your enterprise. Many experienced vineyard owners hire a vineyard management company to ensure a strategy for success from day one.

Useful Links

Industry opportunities.

• VineSmart: Vineyards for sale

Real World Examples

• Sterling Vineyards
• Sequoia Grove

Further Reading

• Things to consider before starting a vineyard
• Vineyard investment

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How to Start a Winery: 5 Steps to Starting a Wine Business

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To take on the challenge of how to start a winery, you need to be determined, fearless and passionate about your craft — although owning a vineyard seems romantic, starting a business in any industry is work, and the wine business is a tough one.

Just take a look at the success story behind Russell Bevan of Bevan Cellars . Bevan bought his first 10 acres in Napa Valley’s Sonoma County in 2004, but it wasn’t until 2013 that he got his first 100-point Robert Parker score for his 2011 Cabernet Sauvignon. Shortly thereafter, his mailing list jumped from 500 subscribers to 3,000 in two days — and he saw a positive turnaround in the business’s bank account for the first time since he started his wine business.

Between 2004 and 2013, the vintner lifestyle didn’t always taste so good. There was a time when Bevan’s family stopped returning his phone calls, because they knew there was a chance he was calling to borrow more money. “I cashed in my 401(k) and I had a quarter of a million dollars in credit card debt at one point,” he says.

Those undeterred by the challenges of owning a vineyard need more than determination alone to get their ventures up and running — they’ll need some numbers, too.

How to start a winery: 5 steps to success

Starting your winery is going to take you quite a bit of time, but if you follow these steps you'll be off to a good start.

1. Come up with a name and choose a business entity

Before you get in too deep with creating your wine business or winery, you need a name and a business entity in mind. You should make sure that the name you want for your winery is available and that some other winery out there hasn't already snagged it. This will be hugely important when it comes to actually selling your wine too because a name can go a long way with branding to make your wine stand out and be memorable.

You can check to make sure that the business name you want is available and you can probably reserve it online. Simply check with the secretary of state's office in your state. Keep in mind you also want the domain name for the name you choose to be available so you can create a website and other online marketing tools, like an Instagram account.

You'll also need to choose a business entity for your new wine business. There are plenty of entities to choose from, but you might want to go with a limited liability company, as it offers you certain protections an individual might not receive, while allowing for you to be taxed either as a sole proprietor or corporation.

2. Write a business plan

When writing your business plan you should include extensive research about the industry and competition. Be sure to include a summary of the business to start, and then a company overview, market analysis, specifics on the product you plan to offer, financial projections and more.

You can either use a business plan template or come up with your own. Either way, it should be comprehensive and include quite a bit of research. It's also not a static document — it should be updated as your company grows and your goals change. Try and think of it from a potential investor's perspective: What information would you want to be included if you were looking into investing in a company?

3. Navigate licensing, permits and taxes

The winemaking industry is heavily regulated, so licensing and permits can get complicated — so complicated, in fact, that there are wine-compliance companies that do nothing else but help winemakers navigate local and federal wine regulations .

You’ll need to first apply for and acquire a permit to legally operate your winery, but the regulations don’t stop there. You’ll also need to register your business with the FDA , comply with local and state laws and even have your wine labels approved by the Alcohol and Tobacco Tax and Trade Bureau.

And if you’re selling across state borders, it gets even stickier, as some states have their own laws about direct shipment. Once you’ve crossed the licensing and permit logistics off your list, you’ll need to stay on top of your state’s excise and sales taxes on wine, too.

If you're uncomfortable with keeping all of this in order, we suggest you consult a lawyer with experience and expertise in the winery field.

How much do you need?

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We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

4. Create a budget

Once you have your business plan and you know what licenses and permits you need — and how much they'll likely cost — you can create your business budget with all of those costs in mind. Being “all in” often comes with a hefty price tag. William Foley, the founder of Foley Wine Group, says it didn’t take long before he ended up spending $15 million after purchasing 460-acres in California’s Santa Barbara County nearly 20 years ago.

Since then, the vineyard prices have only gone up, especially in regions like Napa Valley where land is scarce. Vineyards in Northern California can cost $11,000 to $30,000 per acre , but in the next 30 years, the price tag is predicted to reach $1 million per acre .

Of course, you don’t need to be in California to start a winery. In fact, there are wineries in all 50 states — and land prices are certainly lower beyond the Golden State. If you have the space and the land quality for it, you can even start a (very small) winery in your own backyard, which cuts real estate costs entirely. In that case, installing your vineyard can cost between $35,000 and $45,000 per acre.

After purchasing or developing your plot of land, you also have to think about the annual establishment costs needed to keep those vines alive, which adds around $15,000 to $20,000 per acre in the first three years.

Again, keep in mind that you still don’t have any grapes yet at this point to make your wine. Next, vineyard owners have to invest in machinery and equipment, which doesn’t come cheap. Lastly, most vineyard owners want to build a production facility and tasting room, since 90% of revenue will come through your tasting room.

With all these costs, we recommend opening a business checking account to keep your business finances separate from your personal finances.

Wine business startup costs to consider

In your first year alone, you’ll need to invest some serious capital into your wine business. In this industry, in particular, investing in expensive fixed assets — think land, machinery and equipment—is non-negotiable.

While your expenses will be ongoing, the vast majority of your investment will go toward establishing your vineyard’s infrastructure and operations during your first two years of business. Jerry White of Cornell University lists the following as expenses to consider within your first two years of starting a wine business alone:

Equipment, including refrigeration, cellar equipment, winery buildings, trucks and receiving equipment.

Fermentation and storage.

Bottling line.

Tasting room.

Other startup costs to consider include payroll for your staff, shipping, marketing and business insurance . In all, White estimates that your first five years require a capital investment of over $1.5 million.

LLC Formation

5. Get funding for your wine business

Most aspiring vintners, especially those just learning how to start a winery, can’t cough up $1.5 million all on their own, so they’ll need to turn to some form of outside financing.

Like any startup, the newest vineyards may have trouble securing debt-based small-business loans , so initial funding will likely come largely through a combination of equity financing, friends and family loans and bootstrapping .

Also know that, regardless of which type of loan you apply for, you'll have the best chances of approval with a high personal credit score, profitability, time in business and strong cash flow, so the best time to apply for a loan will most likely be after your busy season.

Securing a bank loan might be tough for vineyards since the wine business is inherently risky (as is any industry subject to the potentially destructive whims of nature). And if they do approve of a vintner’s loan application, banks might require a large down payment — potentially up to 50% of the loan amount — to protect their interests.

If you’re determined to secure a loan from a bank, you might have the best luck at your community bank or credit union, rather than a large, national branch. Even still, be prepared to provide a hefty down payment, and pay a higher interest rate than usual. You can also expect an appraisal of your vineyard.

And because of the industry risk, potential lenders will be militant about ensuring the borrower herself is financially secure enough to repay her loan, even if her wine business fails. So, alongside the business’s financials and projected income, lenders will closely evaluate the borrower’s personal salary and credit score.

According to the Wall Street Journal, due to the increasing popularity of individually owned wineries, some banks have actually established loan programs geared specifically toward vineyards.

Live Oak Bank , for instance, offers financing solutions for wineries and other alcohol manufacturers; funds from these loans can be used toward purchasing equipment, construction, expansion, working capital and more. Exchange Bank also disburses vineyard, winery and agricultural loans; its financing products include business lines of credit for purchasing inventory, equipment loans, real estate loans, and leasing.

Equipment loan

Your major upfront costs are equipment, so looking into an equipment loan is kind of a no-brainer for winemakers. If approved, your lender will front you up to 100% of the cost of your equipment, which you’ll repay, plus interest, over time.

Startups might have an easier time qualifying for equipment loans than other types of loans, too. Because the equipment itself acts as collateral, lenders care equally about the value of the equipment as they do your business’s financial track record.

Business line of credit

Like any other agricultural business, vineyards can expect to experience seasonal peaks and troughs. A business line of credit is ideal for buoying you through those dips, because you can tap into it whenever you need, and you only need to pay interest on the funds you use.

And if like most vineyards, you don’t grow all your own grapes, you can pull down from your line of credit to buy grape inventory to blend or add to what you do harvest.

Business credit card

Like any other small business owner, winemakers pay for a ton of their smaller expenses on business credit cards , and tend to carry a large balance when they’re first starting out. To mitigate your initial interest charges, choose a credit card with a long 0% intro APR period, which lets you carry a balance interest-free for the duration of that introductory period.

Alternative models to start a wine business

If you’re not keen on investing so much capital into a full-blown winery, you can still assume a hands-on role in the wine business. Just consider an alternative business model, instead.

One option is to become a “virtual winemaker,” like Cannonball Wine Company, which started in 2006 in Healdsburg, California. Rather than shelling out millions for a vineyard and processing facility, Cannonball co-founder Yoav Gilat decided to build a brand with much less.

For many years, Gilat worked in hospitality before joining the Israeli army. He then moved to the U.K. for law school, and eventually moved to the Bay Area with his wife to earn his MBA from Berkeley.

In California, he met his Cannonball co-founder, Dennis Hill, who has been in the winemaking business for 35 years and was a top winemaker at Blackstone Winery. His other co-founder, Greg Ahn, is also a veteran winemaker in Sonoma County. Their goal, according to Gilat, “was to create a really great wine under $20,” while having some fun in the process.

The three began Cannonball as a “virtual” company — they don’t own a winery, or a vineyard. They don’t even have a tasting room (although the company can set one up if you ask). Rather, Cannonball has existing family growers harvest their grapes, and then Cannonball’s winemakers make the wine in rented equipment.

“We have our own tanks and barrels, but we use a facility where we pay them per case for the wine that we make,” says Gilat. “We also pay them for storage. And if we crush the grapes and ferment them, then we pay for the equipment.”

Now, the company has four brands under its belt — Cannonball, Angels and Cowboys, High Dive and Astrolabe — and Cannonball alone is sold in 47 U.S. and 30 international markets.

Of course, even starting a virtual wine business requires financing; Gilat and his co-founders financed their venture with friends and family loans, as well as an SBA loan . But if you opt for an alternative business model, you likely won’t need to invest the millions that you would if you’d started your winery from scratch.

Tips for the future

Regardless of your wine business model, know that your business’s success ultimately depends upon catering to your customer — and keeping up with their changing tastes, spending habits and the industry at large. This is one of the keys to how to start a winery that's successful.

In particular, industry predictions presented in Silicon Valley Bank’s “ State of the Wine Industry 2018 ” report provides some valuable information for both newbie and expert vineyard owners.

First off, wineries will need to adapt their marketing and sales strategies to appeal to a shifting demographic. According to the report, the majority of today’s wine consumers are cost-conscious, prioritize experience and value (which, in this instance, can be defined as quality divided by price) over luxury for luxury’s sake, and frequently shop online.

Going forward, all vineyards — especially those that rely largely on tasting rooms to generate revenue — should seriously consider setting up an easily navigable online store and, when possible, pricing their wines in the $12-$25 range sweet spot, which is growing in demand.

Aspiring vintners should be aware of increasing prices in arable land — another reason to consider going the alternative-business-model route. And all domestic winemakers should shore up against the encroaching competition from good-value foreign imports, which are hitting record highs.

In continuation of a decade-long trend, small vineyards are finding it difficult to sell to restaurants. That may make the suggestion to set up an online store, and to improve the onsite tasting experience, even more urgent; this also provides an opportunity for vineyards to get creative in their marketing, and to hone their sales in on local restaurants.

On a similar note...

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Tips for small family-owned vineyard farms to improve business

An important part of growing winegrapes is also making business. While some growers concentrate only on the farming aspect and sell grapes to wineries, others process the grapes into wine or juice and sell it on-site, on the local market, and worldwide. No matter the business model, some vineyard farms generate more income than others, while some struggle for bare survival. Why is that so, and how can small family-owned vineyard farms improve their business?

Growing winegrapes is not just about producing the crop, but it’s also about making business.

Characteristics of small-family owned vineyard farms

About 75% of the world’s agricultural land is operated by family farms, and the grape wine industry is no exception. Families run most of the vineyards all around the world. Many family-owned vineyard farms are small scale farms, which is especially true for the “Old Wine World”. In 2015 the average vineyard area per holding in the EU was 1.3 ha (3.2 acres), with a big difference among member states. While the average vineyard area per holding in France was 10.5 ha (26 acres) in Greece, and Cyprus was only 0.6 ha (1.5 acres). In comparison, looking at the other side of the Atlantic, in California, where most of the US grapes are grown, in 2012, an average size per vineyard farm was 82 acres (33 ha), with variation among regions. In San Joaquin Valley, the average size was more than 140 acres (57 ha) of wine grapes per producer, while in North Coast an average producer was farming 38 acres (15 ha) of wine grapes. As there are big differences in the average size of family-owned vineyard areas, plus several different types of family farms exist – from small subsistence-oriented family farms, small independent or dependent specialized farms, to large commercial family farms – this article focuses on small-family owned vineyard farms with the next characteristics:

• are run by a family
• most of the work is done by family members (with some additional help)
• the family owns most of the farmed property
• they produce for the market
• are highly motivated by survival (existence) and profit

Small family-owned vineyard farms business and ways to improve

Vineyard farm profitability depends on many different factors, weather and prices of agricultural products are certainly two of the critical external factors on which winegrowers have little to no effect. However, with good planning, a good economic result is possible. Although vineyards are associated with a relatively high investment (compared to annual crops), they can be very profitable. Winegrape growers have two options: selling grapes to cellars and brokers, or making their wine and selling it. Many vineyard owners open an onsite winery, despite significantly higher investment and operating costs, as this brings higher profits. Yet many times crop production alone does not guarantee survival, especially with small businesses due to lack of economy of scale. That’s why winegrowers opt for a complementary activity, such as distillation of spirits, juice production, vine grafting (nurseries), and tourism. But for all this, additional knowledge and resources are required. While growers have the technological expertise to produce grapes and make wines, they often lack other knowledge such as finances, planning, and marketing. When it comes to tourism, knowledge of marketing and hospitality can often be overwhelming, especially for small family-owned vineyard farms where just a few people do most of the job.

While some vineyard owners are struggling, others are improving their profit from year to year. There are as many different reasons for that as there are vineyard owners. As each farm is unique, there is no one answer to all – while one business model can bring fortune to one winegrower, it can be devastating for another. Therefore each vineyard owner has to find the right path. However, there is one thing that is often neglected, especially on small family-owned vineyard farms, and that is entrepreneurship. Due to rapidly changing environment and strong competition, small-scale farmes will have to become more entrepreneurial if they want to survive in the long term. This means that vineyard owners have to look for better ways to organize farm, find alternative technologies to increase productivity, diversify production, reduce risk, become more market-oriented and open new markets for their products, and thus increase profits. The key is to be innovative, forward-looking, and managing business as a long-term sustainable venture. Namely, the entrepreneurial families came to quality viticulture earlier and managed to export a significant amount of their products.

Entrepreneur is a person who produces for the market and always looking for opportunities to improve and expand the business. An entrepreneur always calculates risks, and accept responsibility for profits as well as for losses. He/She also has to be an innovator and look for better and more efficient and profitable ways to do things.

5 key points small family-owned vineyard farms should take into consideration to improve their business

Producing for the market.

Since most of the money in farming is made after the product sale, in the case of winegrowing after the sale of either grapes or wines. Winegrowers need to start producing for buyers and final consumers and thus capture value within the value chain to increase profit. Just producing and selling is not enough anymore.

When it comes to small family-owned wineries, they are often very product and sales oriented, meaning they focus mostly on wine quality and assume that customers will come if the wine is good enough. While awards, competitions, and titles are the driving force of sales to whoever will buy the product, the more, the better. However, there are two other approaches to business: advertising orientation, which wineries have adopted in recent years with the boom of social media, and market orientation, which is often neglected. Market-oriented means being customer-centric and produce products that customers want (not the same as what you think your customers want). Customers should be put in the center (i.e., the customer is a king). Namely, winegrowers that are market-oriented can enjoy higher profitability, sales growth, and better customer retention. Thus an understanding of the wine market is the key. How can you achieve this? By analyzing the market in-depth and getting to know your customers. Going into a niche market and differentiated production is where you can capture more value.

The same goes for winegrowers that produce grapes and sell it to wineries, wine companies, or brokers. Get to know your grape buyer to understand what kind of grapes they are seeking. For example, if you know the winemaker wine style you are seeling to, you can adjust the vineyard management to match the winemaker’s requirements. That way, you can open an opportunity to develop a long-term relationship with the winery. Adjust the vineyard management for each vineyard block based on whom you are seeling to. Depending on who you are selling your grapes to, you may want to focus more on quantity or quality. And keep in mind that wineries are always looking for growers who have a reputation for growing good, consistent grapes and are establishing a name for themselves. You can even go niche by producing high-quality grapes for smaller wineries or even go organic if you have the knowledge and manage to find a buyer before conversion. To lower the risk, it’s often better to produce for several different buyers, or at least have a backup plan in case your main buyer goes bankrupt, decides to cancel the contract, or offer a way to low price. The COVID-19 pandemic has shown us how vulnerable the wine business can be.

Acquiring new technologies and innovation

Another way to change the production system is to develop or adopt new technologies and practices in order to cut costs and increase efficiency. New technologies are developing all the time, and although in the past, larger commercial farms were more likely to rely on modern technology to maximize the efficiency of the management process, nowadays, several solutions exist also for smaller winegrowers . From equipment for cultivation, harvesting, and wine processing, to special software programs designed to keep track of grape production, calculate costs, and simplify several management tasks. One such software is also eVineyard Lite, specially designed for small family-owned winegrowers to help with vineyard management – from lowering the number of spraying, optimizing irrigation, and planning work, to creating documentation. You can now try it for free here .

Sustainable winegrowing

Grape growing is associated with long-term land use, and as long the land is productive, the profits will continue. Namely, unsustainable land use has a long-term negative effect on business. With re-investing part of the profit into soil fertility, conservation of natural resources, and the use of sustainable products and technologies will enable you to stay in business for a long time. This does not necessarily mean you need to apply to sustainability scheme or go organic, but take care of the soil – increase soil organic matter, use fewer pesticides and replace them with more sustainable ones – integrated pest management is a good first start, start using fewer natural resources such as water, etc. You know how it goes – what goes around, comes around,- and hardly somewhere is this more true than in farming.

Getting new knowledge

Only with constant learning and acquiring new knowledge, you can be successful in the fast-changing market. Following and making use of the latest technological knowledge to produce agricultural products is important. But as winegrowing is not only about crop production but also about making business, farm management skills such as marketing, risk management, financial management, and labor management are equally important. Knowlege every family-owned vineyard farm must have and should develop over time for successful work is:

• technological knowledge of crop production
• basic management knowledge (economics, farm organization)
• product marketing knowledge and skills
• knowledge of informatics, system analysis, etc.

The latest will be even more crucial in the future with the development of new precision viticulture technologies .

Managing farm according to a long-term plan

If you want to be successful, you need to be strategic in your planning and implementation, namely strategic management is necessary to position business for the future. Look at your winegrape business from a broad and long-term view. Having a strategy will help you make short-term decisions in line with long-term goals, also in uncertain situations.

A strategy is an overall long-term plan for the farm business. It sets out the goals that farmers wants to achive and the main ways to achive those goals.

There are many ways small family-owned vineyard farms can increase profits and create value: from diversifying (increase the source of income and mitigate risks – increasing the number of products, producing for different entities), lowering costs (finding less expensive resources and inputs and using more efficient production system), expanding the business size (if your farm is already profitable and competitive, you may want to have more land under the crop, or modernized production, so that is more efficient), specializing (developing products to meet specific market demands), differentiating the products (production and marketing are different from competitors, so that product matches buyers preferences), etc.

To choose the most appropriate business strategy, you need to:

• first identify the farm’s long-term goals,
• define the limited means of production,
• search for alternatives and analyze them (in terms of inputs, labor costs, and revenue),
• then decide on an individual production,
• implement the decision,
• and evaluate the results.

While some family-owned vineyard business perform very well, others are struggling. There are numerous different reasons why some succeed while others don’t – long-term strategy, commitment, and entrepreneurship are definitely the key to success. Entrepreneurial farmers are focused on their goals and actively looking for solutions, new knowledge, and skills, and are willing to embrace change. Yet, study results suggested that family businesses’ growth tends more towards family reasons than towards business reasons. And that winegrowers are more risk-averse when emotional wealth is threatened. Suggesting that family-owned winegrowers have lots’ of places for improvement when it comes to making business and profit. The Coronavirus pandemic shows how vulnerable the wine industry is, and while winegrowers that have a long-term strategy in place were able to make fast decisions and adapt to the new reality, we see that many were slower and not sharp enough in their response. So if you don’t have a strategy in place, now is the best time to start making a change – one step at a time will do.

Sources: D. Kahan. 2012. Entrepreneurship in farming. FAO, Rome 2012. Why Being Market-Driven Is Good For Business; by Reka Haros on Reframe Wine ( online ) 12 tips for selling to multiple wineries; by Melissa Hansen on Good Fruit Grower ( online ) Family business on a grand scale – Family owned wineries in Italy; by Matthias Stelzig on ProWein ( online ) J. M. Alston, J. T. Lapsley, and O. Sambucci. 2018. Grape and Wine Production in California. In California Agriculture: Dimensions and Issues, University of California, Giannini Foundation of Agricultural Economics. Č. Rozman et. al. 2009. Menedžment v kmetijstvu. Slovenj Gradec: Kmetijska založba, 2009. Featured image: by Bertrand Bouchez on Unsplash

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• Pesticide use, and their impact on fruits
• Downy mildew – a primary infection
• Benefits of sustainable wine growing
• Most common grapevine pests around the world

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On eVineyard blog you can find vineyard management tips, latest precision viticulture technologies, as well as interesting news from the viticulture world.

Recent Posts

How to Start a Wine Business: 10 Plans for Wine Businesses

When it comes to learning how to start a winery business and begin wine sales and selling wine by the glass , there’s a lot of information available. In fact, there’s even a BinWise article on opening a winery . That article is a high-level overview of the process of starting a wine business. If you’re planning to run a winery, you should know how to create a winery business plan. It'll help you get settled before you look into buying a winery.

A winery business plan is similar to other business plans (including a restaurant business plan ) in many ways. That said, there are also steps specific to wineries. We'll walk you through every stage of the process.

Is Winery a Good Business?

Before you jump into a wine business, you’ll want to know what you’re getting into financially. Opening a winery requires significant investments of time and money. It won’t be cheap by any means. 

However, the payoff is worth it. On average, the wine industry has been growing over the last few years (it’s estimated to grow by 4.2% from 2020 to 2027). Next, we’ll take a look at wine industry growth to see what kind of earnings you may anticipate once you (and the vines) are off the ground. 

In 2018, the US wine market value totaled $70.5 billion. Nearly 70% of that came from US wines. That value comes from a steady rise in the wine industry since 1994, as more people consume wine, and more wine is produced.

Before 2020, the wine industry was projected to grow by 4-8% in 2020 and beyond. Of course, things changed in 2020, and for wine businesses, those changes were good. 

The COVID-19 pandemic has given more people a reason to stay home and drink wine. From learning wine terms to taking sommelier classes , more folks have leaned into wine culture the last three years. If you’re looking for the right time to start a wine business, now’s that time.

Winery Business Plan

A winery business plan includes everything in a regular business plan, including:

• An executive summary
• An in-depth business description
• The details of labor and operations
• A market analysis
• An explanation of your product plan
• A marketing plan (you can draw from restaurant marketing ideas and wine marketing)
• An analysis of financial plans
• An investment proposal (depending on financial plans)
• Milestone plans

Of course, all those sections of your business plan will be curated towards a winery. In that sense, this will be a winery business plan. Given that fact, there will be other factors that you’ll need to include. 

10 Winery Business Plan Needs

The traditional business plan involving everything outlined above is for a restaurant or bar. It could be for a store, or a marketing or advertising firm. Those are all examples of relatively straightforward businesses.

A winery business is more nuanced. All the expertise that goes into a successful winery needs to be in the winery business plan. From planning for climate to choosing your vines, your winery business plan has more specific needs than a standard plan.

The following 10 winery business plan needs are a good place to start. Depending on the winery you plan to open, they may be all you need. There may be more required for your vision, though. Let these be a guide and a stepping stone toward your business plan. 

10. Finding a Winery Location

Finding a winery location is–of course–key to opening a winery. When it comes to adding this step to your business plan, the main thing to do is scout out potential locations.

To narrow it down, start by choosing a general area you’d like to set up in. Whether you want a US winery or an international spot, you can’t move on without making this decision.

9. Choosing Bottle Design

This one is lower on the list because it’s less of a strict business plan component. However, choosing your wine bottle sizes and label design does feed into your plan for getting started. This will be a nice distraction from other, intense business decisions you’ll make, and will make each case of wine aesthetically pleasing.

8. Reviewing Climate Needs

Reviewing your climate needs feeds into finding a location and choosing your grapes. Different wine grapes do best in different climates, and you’ll need to do a lot of studying up on climate relations to grapes. 

7. Grape Selection

Choosing your grapes may come after you find a location, or you may choose a location based on the grapes you want to grow. It’ll be good to have some idea of what you want to grow as you’re looking for a location. Remember to remain flexible with these steps, too. 

6. Wine Cellar Needs

Any winery worth its vines has a good wine cellar. Some places have caves, some have built structures in old (or new) buildings. Your wine cellar (with wine storage cabinet options) potential could depend on your location, but you also have the option to build up whatever you like. 

5. Alcohol Laws

From laws about selling alcoholic beverages (including online liquor sales ) to who can work at a winery, there are lots of alcohol-related laws (including how to ship wine ) you'll need to get familiar with. If you’re unsure on where to start, a search through your county, city, or state tax and commerce offices should help. Reaching out to local wineries to glean their expertise is also a good idea. 

4. Selecting Winery Equipment

Selecting winery equipment is something you won’t fully be able to do until you know the size of the winery you’re opening. This is because the amount of equipment you’ll need depends on your winery size. That said, your business plan can include a rough estimate of what you’ll need, and what it will cost. 

3. Estimating Costs 

Of course, estimating costs will go beyond equipment. This is in the financial part of your business plan. It’s noted here because a lot of your costs will be winery specific. From equipment to vines to bottle supplies, there’s a long list of goods to secure. 

2. Distribution Plans

Your distribution plan (perhaps with wholesale alcohol distributors ) will depend on where you want to sell your wine. If you’re looking to mass-produce and get your bottles in large stores, this part of your plan is crucial. If you’re looking to sell locally in small batches (learn more about what is a batch in selling terms), this might be a simpler process. Either way, figuring out the logistics of distributing your wine (and potentially other products) will be essential.

1. Winery-Specific Marketing

Anyone opening a business knows how important a marketing plan (including wholesale marketing ) is. It’s part of every business plan, and the need to keep marketing never ends. Your winery-specific marketing plan will encompass everything from advertising to promoting different bottles to hosting events (like happy hour ). It’s also closely tied to curating your space for tastings and other guest-centric bar event ideas . 

Frequently Asked Questions About Winery Business Plans

Once you have your business plan (maybe even an eCommerce business plan if you’re selling online) written up, you still have a long road ahead of you. There’s a lot that goes into starting a winery business, and even once it’s opened, the work never really ends.

For some inspiration to keep moving forward, we focused on frequently asked questions that center on the profits of a winery. If you’re ever staring at your business plan, thinking “How will I do this?” These questions and answers can help serve as motivation. 

How Much Does It Cost to Start a Winery?

On average, the cost to start a winery generally ranges from $600,000 up to the low millions. You may be thinking that’s an insane amount, and it’s quite substantial, but it doesn’t all need to come from your pockets. This is where investors come in handy. 

How Much Money Can You Make Owning a Winery?

The money you can make owning a winery depends on a lot of factors. From bottle price, to the amount of land you have, to the vine growth year. There are things you can control, and things you can’t. On average, a winery brings in around $88,000 a year (that’s for an average size winery). That’s a good number to start with, but keep in mind, it’s all dependent on your winery.

Is a Wine Business a Good Investment?

Overall, yes, a wine business is a good investment. Wine is a beverage people have always liked and always want more of. Even if there are years when the vine growth isn’t great, vineyards are known to bounce back. Opening a winery takes a lot of work, but the long term investment is worth it. 

How to Start a Wine Business: Get Growing!

The title of this section is a bit of a misnomer. Once you have your business plan written up, you won’t be ready to start growing your vines and bottling your wines. You will be one step closer though!

While the practice of writing a business plan is a lot of work, it’s only the beginning. Now you know what you need to do. You certainly know more than you did before. That said, the business plan is, just that, a plan. Now it’s time for work. As you work, you can always come back to the BinWise blog to learn more. 

• Sample Business Plans
• Food, Beverage & Restaurant

Winery Business Plan

A lot of people like fine and customized wines, but not everyone has the talent to whip up wines that’ll suit the tastes and preferences of different people.

Moreover, with people valuing experiences more than products, the popularity of wine-tasting and making sessions is growing every day.

If you are planning to start a new winery business, the first thing you will need is a business plan. Use our sample winery business plan created using Upmetrics business plan software to start writing your business plan in no time.

Before you start writing your business plan for your new winery business, spend as much time as you can reading through some examples of manufacturing-related business plans.

Industry Overview

The wine industry stood at a market value of 417.85 billion US dollars in 2020 and is expected to grow at a rapid rate going forward.

Also, according to Glassdoor , the average winemaker salary across the nation stands at $84,015 per year, being $43,000 on the lower end and $132,000 on the higher end.

The rising consumption of wine across the globe is one of the major reasons for market growth.

Alongside the growth of wine consumption across different cultures, the way people shop for wines has grown too. Most people prefer to buy wines from retail stores and online.

Also, with increased changes in people’s lifestyles, everyone prefers beverages with lesser or no alcohol content. This has led to an increase in the popularity of wines.

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Things to Consider Before Starting a Winery Business

Decide upon your distribution method.

Although you can always make the switch, it is advisable to study and pick the most profitable distribution channel for your winery business.

A winery has several distribution channels like stores, eCommerce sites, restaurants, hotels, etc., with stores and online sites being the most popular ones nowadays.

Hence, you should conduct a thorough analysis of various factors and pick the channel that fits the best for your business.

Pick a favorable location

A good location is important for a winery business. Not only should the weather and atmosphere be favorable for your winery, but it should be accessible as well.

It helps you make your business more cost-effective in terms of transport costs and also more reachable for your distributors.

Have a list of equipment and machines you’ll need

From farming equipment to tools and machines for extracting and storing wine, a winery needs a bunch of equipment.

Hence, figuring out the functioning of all the systems and tanks before you start is essential for smooth procedures and working of your winery.

Decide on a brand name and message

Though the brand building is an ongoing process, picking a memorable name and brand message is essential. It gives your customer base to remember you something by.

Also, a message that you follow through with can become a strong mark of effort and quality.

Write Your Business Plan

If you can make unique and innovative wines know how to juggle proportions and blend to suit the tastes of different people or would like to have a scenic vineyard that can also become a source of income for you, then a winery business might help you have a fulfilling and profitable profession.

Reading sample business plans will give you a good idea of what you’re aiming for. It will also show you the different sections that different entrepreneurs include and the language they use to write about themselves and their business plans.

We have created this sample Winery Business Plan for you to get a good idea about what a perfect winery business plan should look like and what details you will need to include in your stunning business plan.

Winery Business Plan Outline

This is the standard winery business plan outline, which will cover all important sections that you should include in your business plan.

• Mission Statement
• Vision Statement
• Customer Focus
• 3 Year profit forecast
• Business Structure
• Startup cost
• Products and Services
• Industry Analysis
• Market Trends
• Target Market
• SWOT Analysis
• Sales Forecast
• Direct Mail
• Public Relations
• Advertising
• Ongoing Customer Communications
• Pre-Opening Events
• Pricing Strategy
• Service Functions
• Administrative Functions
• Important Assumptions
• Brake-even Analysis
• Profit Yearly
• Gross Margin Yearly
• Projected Cash Flow
• Projected Balance Sheet
• Business Ratios

After  getting started with upmetrics , you can copy this sample winery business plan template into your business plan and modify the required information and download your winery business plan pdf or doc file.

It’s the fastest and easiest way to start writing your business plan.

The Quickest Way to turn a Business Idea into a Business Plan

Fill-in-the-blanks and automatic financials make it easy.

Download a sample winery business plan

Need help writing your business plan from scratch? Here you go;  download our free winery business plan pdf  to start.

It’s a modern business plan template specifically designed for your winery business. Use the example business plan as a guide for writing your own.

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About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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Can a Small Vineyard Be Profitable? 12 Ways to Boost Revenue

By: Author Tony Martins Ajaero

Home » Business ideas » Food Industry » Wine Business ideas » Winery & Vineyard Business

Do you want to start a small vineyard but you are worried about its profitability? If YES, here are 12 ways to boost vineyard revenue and profit. Just like every other business that can be started on a small scale, a small vineyard business can be profitable as long as factors that will aid the profitability of the business are put in place.

To start with, what is a Vineyard?

A vineyard is a plantation of grapes, grown mainly for winemaking, but also raisins, table grapes and non-alcoholic grape juice. The science, practice and study of vineyard production is known as viticulture.

Suggested for You

• How to Start a Winery Without a Vineyard
• Micro Winery Business Plan [Sample Template]
• Winery Startup Cost Analysis (Monthly Expenses, Sales and Breakeven Point Included)
• How to Start a Wine Production Company
• How Much Do Vineyard Owners Make Yearly? [Profit Margin]

Is a Vineyard Different from Winery?

Yes, a vineyard is different from a winery because a vineyard is a plantation of any size that grows grapes meant to produce wine. A winery is a licensed property that makes wine. So, a vineyard can have a winery that produces wine from the grapes it grows, but it can also sell its grapes to outside wineries and purely act as a grape-grower.

Can You Run a Winery Alongside a Vineyard?

Yes, indeed you can run a small winery alongside a small vineyard and it is economical to do so. This will help you increase the profitability of your small vineyard. Recent research shows that vineyards can make earnings up to $11,000 per acre and if you deduct the expenses, you could get $5,000 per acre.

All over the world wines are always in great demand and studies show that restaurants and bars have around a 70 percent profit margin on wine while retailers are typically between 30 to 50 percent. Distributors and wholesalers tend have a wine profit margin of around 28 to 30 percent, and producers and vineyards will make about 50 percent gross margin.

You can see that a small vineyard can indeed be profitable, but in order to grow your small vineyard to become profitable , here are tips you can follow to achieve it;

12 Ways to Make your Small Vineyard Profitable

1. create and promote special packages on a regular basis.

One of the ways that you can make your small vineyard profitable is to ensure that from time to time you come up with promos that will be too tempting for customers (wineries and other companies that make use of grapes) to resist and at the same time will not deep into your profitability.

For example, if your competitors are offering 10 Kg free vine for every 100 Kg ordered, you can go below the industry average in your price as well.

2. Partner with Key Stakeholders That Will Help You Attract Customers

Another marketing strategy that you need to adopt if you want to run a profitable small vineyard is to ensure that you partner with key stakeholders in and around the location where you have your target market. You can partner with different wine production companies (wineries), grape exporters and wholesalers.

Please note that you can reach an agreement with them on the percentage they stand to get when any customer comes through their referrals.

3. Develop Mailing Lists and Leverage on Email Marketing

Developing mailing lists of your target market is yet another marketing idea that you can leverage on to market your grapes and make the business profitable. Before launching any business, you would have in mind the people and businesses that are likely going to patronize your produce hence you should be able to develop a mailing list and then use the list to market your grapes.

Email marketing is an ideal approach and a means of getting new visitors engaged with your business, as well as maintain relationships with your existing customers .

4. Spend More on Advertising and Promotion of your Vineyard

If indeed you want to make more maximize profit from your small vineyard business, you must be ready to spend money in order to be in the face of your target market. You are expected to advertise your vineyard on local dailies (community newspapers), local TV and radio stations.

You are expected to promote your vineyard business online via blogs and all available social media platforms. Make use of attractive hand bills to create awareness and also to give direction to your vineyard. Position your signage / flexi banners at strategic places in and around the city where you have your vineyard.

5. Leverage on Short Videos on Social Media

You could create a short-but-sweet video that explains what your vineyard is all about, the species of grapes you cultivate, or you could dive deep into a topic that relates to your business.

Your potential customers might be searching for how-to videos, and that gives you an opportunity to catch their attention. And with the ability to shoot videos on any smartphone, this is a free marketing idea that can make a big impact.

Short videos are really valuable when it comes to marketing anything on social media including a small vineyard. All you have to do is ensure that you produce quality and easy to understand videos. Interestingly, you can do the video yourself if you don’t have enough money to hire professionals.

6. Get All Your Employees Involved in Marketing Your Services

As a small vineyard operator, part of what you need to do if you want to continue to welcome clients, generate revenue and maximize profit is to ensure that all your employees (not only marketing and sales executives) are directly or indirectly involved in the sales and marketing of your wine and grapes.

Just ensure that you create provision for your employees to earn a commission when they bring in business for the organization. You can as well create a business model that will enable freelancers to work with your organization especially as it relates to bringing in business.

7. Form Strategic Marketing Alliance with Players in the Wine Production Industry

As a vineyard business owner, if you want to continue to welcome clients, generate revenue and maximize profits , then you should look towards forming strategic marketing alliance with major players in the wine production industry.

Good enough, there are opportunities for small vineyards to form strategic marketing alliance with other players in the industry due to the fact that some wineries who don’t own their own vineyard or need more supplies despite the fact that they own their own vineyard, usually contract the supply of grapes to vineyards.

8. Build Good Business Network

Networking is perhaps one of the most effective and creative marketing ideas needed to build your client base and you have to put plans in place to leverage on all your networks if you truly want to do well with your small vineyard. In view of that, you should look out for gatherings where you can network with wineries, wine exporters and grape wholesalers et al. These are the people that will likely patronize your vineyard.

9. Develop a Customer Referral Program

Another strategic marketing idea that you can deploy for your small vineyard business is to develop a customer referral program that will help you reward customers who refer other customers to you. This is actually encouraging word of mouth promotion of your business .

Interestingly, customers that you get via referral would definitely become another satisfied customer that will help you attract other customers.

10. Engage in Guerrilla Marketing

Applying guerrilla marketing approach is yet another creative marketing idea that you can adopt for your small vineyard business. Guerilla marketing emphasizes creativity over budget, and strategies are often cheap and easy to implement, especially when localized.

Broadcast your Twitter handle with sidewalk chalk, use an abandoned storefront as a canvas for street art, or plaster custom stickers on urban décor that makes those who stroll by look twice. There’s a ton of room for invention here, and you don’t need a big budget to be successful with this idea.

11. Brand Your Official Vehicles

If you run a small vineyard business, you are expected to have a delivery truck at least. If this applies to you, then one of the ways of marketing the business is to brand all your official vehicles in such a way that people would always want to make enquiries on how they can patronize your vineyard.

Aside from branding all your official vehicles, you can as well paste stickers of your company on clients’ and family member’s cars. It will go a long way to communicate your brand and also attract customers.

12. List Your Vineyard on Yellow Pages Ads (Local Directories )

Another sure way to make your vineyard profitable is to ensure that you list your vineyard on yellow paged ads (local directories) in your city or community.

With the advent of the internet, hard copy yellow page ads have been relegated to the background, but it is still one major tool that will help people locate your vineyard. Of course, if people know that your vineyard exists in their location, they will sure purchase grapes and wine from you.

How to Start a Vineyard

Importantly, a critical step in starting a vineyard is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here .

Download our Ultimate Business Plan Template here

14 Steps to Start Your Own Vineyard:

• Choose the Name for Your Vineyard
• Develop Your Vineyard Business Plan
• Choose the Legal Structure for Your Vineyard
• Secure Funding for Your Vineyard (If Needed)
• Secure Property for Your Vineyard
• Register Your Vineyard with the IRS
• Open a Business Bank Account
• Get a Business Credit Card
• Get the Required Business Licenses and Permits
• Get Business Insurance for Your Vineyard
• Buy or Lease the Right Vineyard Equipment
• Develop Your Vineyard Marketing Materials
• Purchase and Setup the Software Needed to Run Your Vineyard
• Open for Business

1. Choose the Name for Your Vineyard

The first step to starting a vineyard is to choose your business’ name.  

This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your vineyard:

• Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
• Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
• Think about marketing. Come up with a name that reflects the desired brand and/or focus of your vineyard.

2. Develop Your Business Plan

One of the most important steps in starting a vineyard is to develop your vineyard business plan . The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.

The following are the components of a business plan :

• Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your vineyard.
• Company Overview – this section tells the reader about the history of your vineyard and what type of vineyard you operate. For example, there are different types of vineyards, which can be based on the climate, the type of grape, the production method, and the vineyard owners. In cool climates, vineyards are typically used for growing grapes for wine production. In warmer climates, vineyards may be used to produce a wider variety of grapes, including both table and wine grapes. There are also organic and biodynamic vineyards that use sustainable practices in their production. 
• Industry Analysis – here you will document key information about the vineyard business. Document how big the wine industry is and what trends are affecting it.
• Customer Analysis – in this section, you will document who your ideal or target customers are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing products and/or services like the ones you will offer?
• Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
• Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
• Product : Determine and document what products/services you will offer 
• Price : Document the prices of your products/services
• Place : Where will your business be located and how will that location help you increase sales?
• Promotions : What promotional methods will you use to attract customers to your vineyard? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
• Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
• Management Team – this section details the background of your company’s management team.
• Financial Plan – finally, the financial plan answers questions including the following:
• What startup costs will you incur?
• How will your vineyard make money?
• What are your projected sales and expenses for the next five years?
• Do you need to raise funding to launch your business

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3. choose the legal structure for your vineyard.

Next you need to choose a legal structure for your vineyard and register it and your business name with the Secretary of State in each state where you operate your business.

Below are the five most common legal structures:

1) Sole proprietorship

A sole proprietorship is a business entity in which the owner of the vineyard and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.

2) Partnerships

A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to start a vineyard together. The partners share in the profits and losses of the business. 

The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.

3) Limited Liability Company (LLC)

A Limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a vineyard include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.

4) C Corporation

A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a vineyard is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.

5) S Corporation

An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.

Once you register your vineyard, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.

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4. Secure Funding for Your Vineyard (If Needed)

In developing your vineyard business plan , you might have determined that you need to raise funding to launch your business. 

If so, the main sources of funding for vineyards to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically invest in vineyards that they believe have high potential for growth.

5. Secure Property Your Vineyard

When looking for a location to start your vineyard, it’s important to find a place with the right climate and soil. The climate should be temperate, with sunny days and cool nights. The soil should be well-drained and have a high level of fertility. You can use an online climate map to find the right growing region for your vineyard.

6. Register Your Vineyard with the IRS

Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).

Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.

Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.

7. Open a Business Bank Account

It is important to establish a bank account in your vineyard’s name. This process is fairly simple and involves the following steps:

• Identify and contact the bank you want to use
• Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
• Complete the bank’s application form and provide all relevant information
• Meet with a banker to discuss your business needs and establish a relationship with them

8. Get a Business Credit Card

You should get a business credit card for your vineyard to help you separate personal and business expenses.

You can either apply for a business credit card through your bank or apply for one through a credit card company.

When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.

Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.

9. Get the Required Business Licenses and Permits

In order to start a vineyard, you will need a business license and a permit from the local government. You will also need to register your business with the state and federal governments.

10. Get Business Insurance for Your Vineyard

Below are the main types of insurance to consider for your business:

• General liability insurance : This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
• Auto insurance : If a vehicle is used in your business, this type of insurance will cover if a vehicle is damaged or stolen.
• Workers’ compensation insurance : If you have employees, it works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
• Commercial property insurance : This covers damage to your property caused by fire, theft, or vandalism.
• Business interruption insurance : This covers lost income and expenses if your business is forced to close due to a covered event.

Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.

11. Buy or Lease the Right Vineyard Equipment

There are a few pieces of equipment you will need in order to run a vineyard. The first is a tractor or other vehicle to help with moving large amounts of earth. You will also need a tiller, mower, and irrigation system. In terms of tools, you will need a pruning saw, loppers, and hedge clippers.

12. Develop Your Vineyard Marketing Materials

Marketing materials will be required to attract and retain customers to your vineyard.

The key marketing materials you will need are as follows:

• Logo : Spend some time developing a good logo for your vineyard. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
• Website : Likewise, a professional vineyard website provides potential customers with information about the products and/or services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
• Social Media Accounts : establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your vineyard.

13. Purchase and Setup the Software Needed to Run Your Vineyard

In order to start a vineyard, you’ll need some specific software. Some of the most important software includes:

• A vineyard management software
• A viticulture software
• An enology software
• A GIS mapping software
• A Winery POS software
• An inventory management system
• An accounting software

14. Open for Business

You are now ready to open your vineyard. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.

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How to Start Your Own Vineyard FAQs

Is it hard to start a vineyard.

No, it's not hard to start a vineyard. However, there are a few things you need to do in order to get started. First, you'll need to find a location for your vineyard. The best locations have a lot of sunlight and good soil. Once you've found a location, you'll need to purchase some vines and plant them in the ground. It usually takes about three years for a vineyard to be fully operational. During that time, you'll need to water and fertilize the vines regularly. Once the vines are mature, you can start harvesting the grapes and making your own wine.

If you're interested in starting a vineyard, know that it takes about three years before a vineyard is ready to harvest grapes. Before that time, you'll need to water and fertilize the vines on a regular basis. Once the vines are mature, you can start harvesting grapes for wine.

How can I start a vineyard with no experience?

Starting a vineyard can be a daunting task, but it can also be an incredibly rewarding one. If you're interested in starting a vineyard but don't know where to start, here are a few tips to help you get started.

The first step is to do extensive research. learn as much as you can about the wine industry and what it takes to start and run a vineyard. This includes studying the different types of grapes grown in your area, learning about the process of winemaking, and understanding the business side of things.

The second step is to find the right property. You'll need at least five acres of land to start a vineyard, so start by browsing through real estate listings and looking for properties that are for sale.

Don't forget about the soil type - it's important to know what kind of soil you have before planting anything. If your soil is not suited to grape growing, you'll need to plant in containers or buy new topsoil to have brought in. You may also want to consider hydroponic growing, which lets you raise plants without soil.

You'll also need to decide on the grape varieties you want to grow, and research which work best in your climate. You may want to start with fewer varieties (three or four) to keep things simple before expanding your vineyard down the road.

If you're interested in making wine, you'll need to obtain the proper state and federal licenses.

The next step is to develop a business plan. A successful vineyard will require funding, so discuss your plans with investors or financial institutions to gain support for your project. You'll also need to create an outline of how you intend on making profits, whether it be through selling grapes, wine, or both.

Last but not least, you'll need to build your vineyard. Hire a winemaker to help with planting and growing the grape vines while you wait for the first harvest . You may also want to hire an irrigation specialist if you have dry weather conditions in your area.

Is a vineyard a good idea and/or a good investment?

The viability of a vineyard will vary depending on a variety of factors, such as climate and location. However, if you are interested in starting a vineyard business, there are a few important things to consider.

The most important factor in determining whether or not a vineyard is a good investment is the climate and location. A vineyard will only be successful if the climate is suitable to grow grapes. In addition, the location of the vineyard will also play a role in its success – it is important to choose a location that is accessible and has a market for your wine.

Another important factor to consider when starting a vineyard business is your own skill set. It is important to have a strong foundation in business, marketing and general farm management. Knowledge of grape growing is also required.

Next, it is important to find land for your vineyard. You will need acres of land that are available for purchase or long-term lease at an affordable rate. If you cannot find land that you can afford, consider starting with a small vineyard. This could mean less land and lower revenue for the first few years. In addition to finding suitable land, it is also important to establish your own wine brand. This includes things such as designing a logo, developing a name and creating a website.

Finally, if you have made all of the necessary preparations and are ready to start a vineyard business, you will need to begin the licensing process. This includes purchasing an alcohol license. You will also be responsible for meeting any local zoning or business laws that may exist in your area.

What type of vineyard is most profitable?

Many vineyard owners find that wine vineyards are more profitable than table grape vineyards.

How much does it cost to start a vineyard?

The cost of starting a vineyard business can vary depending on the size and scope of the vineyard. Most businesses need at least an acre of land to start. There are also ongoing costs associated with running a vineyard business, such as hiring a vineyard manager, purchasing irrigation and farming equipment, and paying for grape production and wine marketing. That being said, the initial costs for starting a vineyard can range from $100,000 to $500,000 or more.

What are the ongoing expenses for a vineyard?

There are several ongoing expenses for a vineyard. The grape vines need to be maintained, and there are costs associated with harvesting and marketing the wine. There will be storage and tax expenses as well. There are also the costs associated with hiring employees for tasks such as taking care of vines and harvesting grapes.

How does a vineyard make money?

A vineyard can make money by selling wine, grape juice, grape concentrate, raisins, and wine-related products. Some vineyards also offer tours , tastings, and may rent out a tasting room for private events. 

How much can you make owning a vineyard?

The amount of money that can be made owning a vineyard varies depending on a number of factors, such as the size of the vineyard, the type of grapes grown, and the location. However, most vineyards can expect to make a healthy profit if they're well-run and marketed correctly.

Is owning a vineyard profitable?

If executed correctly, a vineyard can be a very lucrative venture.

The average price for a bottle of wine is around $10. This means that if you are able to produce just 10,000 bottles of wine per year, you can expect to earn around $100,000 in revenue. 

Why do vineyards fail?

Vineyards fail for any number of reasons. One is that the land can be dry or not suitable for grapes that grow well without irrigation, like Cabernet Sauvignon, Chardonnay, Pinot Noir and Syrah. Another concern is climate change; El Nino sees wine production fall by 40%. Other times may include the price of labor to produce grapes or an economic shift making it cost-prohibitive to plant vineyards.

Other Helpful Business Plan Articles & Templates

THE BASIC ELEMENTS OF SUCCESSFUL VINEYARD MANAGEMENT

JANUARY 26, 2018.  BY STAN GRANT, VITICULTURIST.

A wise grape grower once said, “In farming, you are better off doing an imperfect job on time than a flawless job late”. It is true; that we must be in step with seasonal vine development and other vineyard events, as well as have a sense of urgency about our management actions to achieve the maximum viticultural benefit from them.

For example, shoot thinning when the shoots are four to ten inches long is easier, faster, and less expensive than thinning later when shoots are longer (Figure 1). In addition, early shoot thinning results in an early reduction in competition among shoots for internal vine resources, causing greater shoot growth invigoration, shoot elongation uniformity, and fruit set. Similarly, leaf removal immediately after the bloom has greater disease control and grape quality benefits than later leaf removal, and post-fruit set cluster thinning promotes fruit maturation and grape quality more than later thinning.

Figure 1: The later shoots are thinned the more costly and less efficient the operation. (Photo source: Progressive Viticulture©).

Sometimes lateness is a missed opportunity. For instance, there is no way to compensate for a missed early bloom foliar application of phosphorus, zinc, boron, and molybdenum for promoting maximum fruit set. Likewise, leaves damaged from severe water stress due to missed irrigations cannot be repaired with later irrigations.               

Consistency

It is not only important to do the appropriate things at the proper time, but winegrape’s growing success also requires they be done year after year. Grapevines, being perennial plants , appear to have memories in the form of carryover affects from previous years. Prominent among these are declining growth vigor and crop-carrying capacity due to past episodes of insufficient leaves or excessively large crops (Figure 2). Such effects result from missed opportunities to adequately supply vines with water and mineral nutrients or to regulate crop loads.

Further, vineyards are long-term investments with lengthy return on investment expectations.  Soil erosion, declining soil tilth and fertility, accumulating weed seeds, increasing canker disease, and intensifying vine growth variability diminish vineyard productivity and value. Management consistency is the means for avoiding or minimizing these undesirable outcomes.

Attention to Detail

To consistently implement vineyard practices on time a grape grower must know what is happening in the vineyard. Moreover, he or she must be prepared and know what to do when the time is right. In other words, successful grape growing requires attention to details in vineyard monitoring, production planning, and management execution.

A vineyard management plan provides a framework for documenting grape growing details. It consists of a chronological list of management actions, including regular vineyard monitoring activities. The plan serves as a guide for your vineyard management team, helping them consistently do the appropriate thing at the right time.

On a broader scale, every vineyard endeavor ought to have a comprehensive business plan that includes an assessment of the business environment, objectives for the future, operational plans, and a financial plan (Table 1). Remember the adage: to fail to plan is to plan to fail.

Self-Evaluation

Can we do things better?  This question, which suggests a quest for excellence, underlies all highly successful vineyard enterprises. After harvest, while memories of the growing season are still fresh, is usually the best time to contemplate answers. Read a previous article here about Vineyard Management Self-Evaluation.

As you reflect on the season, ask the question above to all aspects of your vineyard management. As you do, make a list of “yes” answers, which designate areas for improvement. In a column next to this list, add actions for improvement or at least, topics to research. For instance, a positive answer to a question about bunch rot incidence naturally leads to consideration of canopy management , fungicides , and perhaps, cluster elongation with gibb (Figure 3). Should this process result in operational changes, be sure to add them to your vineyard management plan document.

Conclusions

Vineyard management styles may vary widely, but the fundamentals of consistently successful wine grape growing are narrowly focused on at least four elements. They are paying attention to details, applying the appropriate material or practice on time, applying them consistently year after year, and continually striving for excellence.

A version of this article was originally published in the Mid Valley Agricultural Services April, 2016 newsletter, and updated for this blog post.

Further Reading

Grant, S.  Five-step irrigation schedule: promoting fruit quality and vine health.  Practical Winery and Vineyard.  21(1):46-52 and 75. May/June 2000.

Grant, S.  Balanced soil fertility management in wine grape vineyards.  Practical Winery and Vineyard.  24 (1): 7-24.  May/June 2002

Grant, S.  Fertilizer efficiency for wine grape vineyards.  Practical Winery and Vineyard 28.  March/April (2006).

Grant, S. Vineyard self-evaluation .  Lodi Winegrape Commission Coffee Shop Posting ( lodigrowers.com ).  November 18, 2013.

Grant, S. Thoughts on sustainable vineyard management .  Lodi Winegrape Commission Coffee Shop Posting ( lodigrowers. com ).  January 20, 2014.

Grant, S.   Vineyard Longevity .  Lodi Winegrape Commission Coffee Shop Posting ( lodigrowers.com ).  March 26, 2015.

Howell, GS.  Sustainable Grape Productivity and the Growth-Yield Relationship:  A Review.  American Journal of Enology and Viticulture.  52:165-174.  2001.

Keller, M.  The science of grapevines.  Academic Press, Burlington, MA.  2010.

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How To Start a Vineyard

Starting a vineyard is a big decision. Not only do you need to have the financial resources to get started, but you also need to have the passion and commitment to make it succeed. There are many things to consider before starting a vineyard, such as climate, location, and type of grapes you want to grow. This article will outline the basic steps you need to take to start a vineyard.

Here are the 10 steps you can take to get started on building your very own vineyard business.

10 Steps to Launching a New Vineyard Business

1. choose your type of vineyard business.

The first step in launching a vineyard business is to identify the type of vineyard business you want to launch. You might choose from the following types among others:

• Winery : A winery produces wine from grapes.
• Nursery : A nursery grows and sells grape vines.
• Grapevine Broker : A grapevine broker buys and sells grapevines.

2. Name Your Vineyard Business

Give your vineyard business an identity so people will think of it as a well-known and respected brand. You can take the name of your vineyard business from your industry, focus on a geographical location, or use your own name among other options.

The main goal for naming your vineyard business is to make it sound appealing and trustworthy so customers will be more likely to purchase your products or services.

3. Determine Your Vineyard Business Model

There are several possible types of business models for a vineyard business including:

• Grow grapes and sell them to wineries.
• Grow grapes and produce wine on-site.
• Open a tasting room and/or restaurant at your vineyard.
• Launch a home-based online business selling grape products such as juice or jam.

No matter which model you choose, make sure that it aligns with your business goals and the products and services you offer.

4. Choose a Legal Form for Your Business

By incorporating your vineyard business, you will limit your liability. You can incorporate as a Limited Liability Company (LLC), a C Corporation (C-Corp), or an S Corporation (S-Corp). Or you can operate as a sole proprietorship.

The business structure you choose for your vineyard business will determine the amount of taxes you pay and which state or federal tax forms you need to file.

Read our article comparing the most common vineyard business structures .

5. Write a Vineyard Business Plan

All vineyard business owners should develop a business plan. 

A business plan is a document that outlines the goals, strategies, and operations of a business. It can be used to secure funding from investors or lenders, as well as to guide the day-to-day operations of the business. The business plan should include information on the company’s products or services, market analysis, financial projections, and management team among other things.

When developing your vineyard business plan and strategy, you should think about the following questions your customers might have:

• What type of vineyard business do you have?
• What is the name of your vineyard business?
• What are the products and services offered by your vineyard business?
• Are you open to the public for tours and tastings?
• Is wine production done on-site or do you purchase grapes from other growers?
• Have you won any awards for your wines?
• What is the price range of your wines?
• Where can I purchase your wines?
• Do you have a website where I can learn more about your vineyard business?
• What is the address and phone number of your vineyard business?

Answering these questions in your business plan will give you a good foundation for developing marketing materials and strategies later on.

Read our article about how to write a vineyard business plan .

6. Apply for the Necessary Permits and Licenses

There may be required licenses and permits you need to obtain before launching your vineyard business.

For example, if you plan to grow grapes and produce wine on site, you will need to obtain a alcohol production license from the federal government.

You must also register your vineyard business as a legal entity with the state where you plan to do business. You can simply file an online form through your Secretary of State website.

Registering with the federal government is also essential so you can properly pay taxes for your business. You will also need an Employer Identification Number (EIN), which you can apply for at the IRS website, if you plan to hire employees.

7. Determine Your Budget & Apply for Funding as Needed

In developing your vineyard business plan, you will figure out how much funding you need to start and grow your business.

If you have your own funds to invest in your vineyard business, you may consider taking advantage of that. In addition to your personal funds, other forms of potential funding for your vineyard business include traditional bank loans, SBA loans, credit cards, angel investors and family and friends.

Read our article about the costs associated with starting a vineyard business to help you determine if funding is needed. 

Read our article about how to fund your vineyard business . 

8. Get the Technology & Software Needed to Run Your Business Efficiently

When you start your vineyard business, it’s essential to have the right technology in place to maximize efficiency. You definitely need a computer with Internet access, and accounting software for tracking expenses and revenues. 

You may also want to invest in vineyard management software, which can help you with mapping out your vineyard, scheduling workers, and keeping track of inventory.

If you plan to produce wine on site, you’ll need some specialized equipment like grape presses and barrels. 

You can find all of the equipment and software you need for your vineyard business at online retailers like Amazon or through specialty suppliers.

9. Market Your Vineyard Business to Potential Customers

Before you start selling your products and services , you have to let the world know you exist. The first step is to create a website so people can learn more about your products and services and how they benefit them.

After you launch your website, start promoting it through social media channels like Facebook, LinkedIn and Twitter. Also consider networking with other people in the vineyard industry through social media and blogs so they can help share your business. 

You also need to start gathering the materials needed to execute on your promotions strategy, which is your strategy for attracting new customers. Vineyard businesses should consider the following promotional strategies for which you should start getting prepared:

• Sponsorship opportunities . Sponsor a charity event or local sports team.
• VIP customer treatment . Offer exclusive discounts, services or products to your best customers.
• Community involvement . Get involved with your local community by sponsoring events or donating products or services.
• Social media contests . Run contests on social media platforms like Facebook and Twitter.
• Public relations . Issue press releases to local news outlets about your business.

Read our article about how to market your vineyard business for more tips.

10. Get New Customers & Grow Your Business

When you promote your products and services , you’ll start to get interest from potential customers . 

Make sure you’re ready to serve these customers . Also, be sure to establish systems to ensure consistency and reduce costs. And be sure to find and train the right people to help you grow your vineyard business.

Starting a Vineyard Business FAQs

Why start a vineyard business.

Starting a vineyard business can be a very rewarding experience. You get to be your own boss, set your own hours, and make a product that people love. The vineyard industry is also growing, so there’s potential for your business to grow as well.

What is Needed to Start a Successful Vineyard Business?

To start a successful vineyard business, you need to have a passion for the industry, be knowledgeable about grape growing and wine production, and have good business management skills. You also need to have the right technology in place to run your business efficiently, and a good marketing strategy to attract new customers.

How Can I Start a Vineyard Business From Home?

You can start a vineyard business from home by growing grapes on your property and making wine in your kitchen. You will need to invest in some basic equipment like grape presses and barrels, and get a license to sell your products. You can also promote your business online through social media and your own website.

You'll also need to establish a home office where you can conduct business. This should include a desk, computer, and phone. You may also want to consider setting up a separate room or space in your home for wine production.

How Can I Start a Vineyard Business Online?

To start a vineyard business online, you need to create a website where you can sell your products and services. You’ll also need to promote your business through social media and other online channels. You can also sell your products through online retailers like Amazon.

What are Some Tips for Starting a Vineyard Business?

When starting a vineyard business, it’s important to have a passion for the industry, be knowledgeable about grape growing and wine production, and have good business management skills. You also need to have the right technology in place to run your business efficiently, and a good marketing strategy to attract new customers.

Another tip is to sell your products online through your own website or online retailers like Amazon. And finally, be sure to get involved with your local community by sponsoring events or donating products or services.

Where Can I Find a Simple Checklist for Starting a Vineyard Business?

A simple checklist to use when starting a vineyard business is as follows:

• Choose Your Type of Vineyard Firm : This should be based on what you are best at and how much experience you have. Remember to keep your interests, skills, and experience in mind at all times.
• Name Your Vineyard Business : This should be done with care, as your brand is important for attracting the right customers. A simple, memorable name will go a long way.
• Choose a Legal Form for Your Business : Whether you choose to become a sole proprietorship, partnership, LLC, corporation or another option will depend on your business. Ensure that you are aware of all the implications of each type.
• Determine Your Vineyard Business Model : Determine how your business will make money. Will you sell products, services, or a combination of both?
• Write a Vineyard Business Plan : Your business plan will also help you determine what your start-up costs will be and will provide a roadmap with which you can launch and grow .
• Apply for the Necessary Permits and Licenses : In most locations you will be required to apply for a business license and/or permits before you can begin operations.
• Determine Your Budget & Apply for Funding as Needed : You will need to know how much money you have to spend on all of your business-related expenses before opening any doors. If needed, apply for a small business loan or other funding options.
• Get the Technology & Software Needed to Run Your Business Efficiently : You need to have the right tools in place to succeed. Implement software that will help you manage your time, contacts, and business operations in general.
• Market Your Vineyard Business to Potential Customers : A solid marketing plan will be crucial to your success. It should focus on attracting the right customers so that you can provide them with the products and services they truly need. 
• Get Customers & Grow Your Business : Once you have a solid marketing plan, it's time to actively pursue and secure those who could benefit the most from your products and services . 

Starting a vineyard can be a lucrative and enjoyable business venture, but it takes some preparation and planning to get started. We’ve outlined the basic steps you need to take in order to start a vineyard business as well as some tips for success. Be sure to research the market, apply for the necessary permits and licenses, and market your vineyard.

Hollyhock Vineyard

Vineyard, farm house, and cottages, small vineyard business plan.

Thank you everyone for the great reception to our original post:  So you want to buy a vineyard?   We have had over 300 unique visitors within the last 24 hours alone.  Very humbling but also very cool.  As a reminder you can click the link above to comment.  We now have a twitter account at @Hollyhockvines  where we will post pictures and updates when we do a new blog. You can also click on the Follow button to the right to be notified of new posts.

So if a boat can be profitable, why not a vineyard??

Unfortunately there isn’t a whole lot of information related to vineyard business models online or in books.  What is available is focused on wineries and/or Napa whose cost models are way out of whack with the rest of the normal world.  Unfortunately, this paper was authored  after we closed on the property:  Sample Costs to Establish a Vineyard and Produce Wine Grapes – Sierra Foothills (2015 UC Davis)

Fine Print : before Julie (wife & co-owner & boss lady) shoots me for sharing too much personal information, all of the below figures are publicly accessible.  Where data is private/sensitive (grape prices, mortgage rates) I substituted applicable averages or estimates.

What Would Make It Pencil?

While looking for properties  I began to appreciate the difference between a residential real estate professional and a commercial real estate professional like Paul Shannon .  When you house hunt with a residential realtor you hear things like:

• “Can you imagine yourself waking up to this view of the vineyard?”
• “Picture yourself with a coffee sitting out on the patio every morning.”
• “Don’t you love these granite counter tops and stainless steel appliances?”
• “This goes really well with vanilla ice cream when you drizzle it on top.”   (oops… that is what every balsamic vinegar or port wine tasting professional tells me.  Has anyone really ever drizzled something other than caramel or hot fudge on their ice cream? )

When you property hunt with a commercial realtor it is simple:

• “It is nice, but will it pencil?  What is the Cap Rate ?”

When looking at any business it is pretty simple – what are my expenses per month and what can I rent/sell it for each month? Just like fitness –  Calories In vs. Calories Out .  For the rental property it is a simple formula:

• (# of Units * Average Nightly Rent * # of days a year rented)  – ( Mortgage, Taxes, Upkeep, Expenses)

For a Vineyard it is also a simple formula

• ( # of Acres * Yield per Acre (in tons) * Price per Ton ) – ( Mortgage, Taxes, Upkeep, Farming Costs )

Now the trick is to find out what the #’s are so you can “see if it pencils”.  Reach back into your early school days and lets solve the Math Word Problem .

# of Acres: is easy if the property already has a vineyard.  It will be listed in the property description.  It gets much trickier if the property doesn’t have vines planted yet as it gets into all kinds of complications such as how much is viable for planting, soil tests, costs to clear and remediate land, etc.  Lets leave that for the advanced course.

Yield per Acre:  how many tons per acre will you grow?  This is controlled by 2 factors, your location and your winery buyer’s preference.

For Location, look at the map of Paso Robles below.  On the ‘West Side’ you have lots of green mountains and on the ‘East Side’ side you have a flat brown valley.  The west side is similar to Napa with more rain, elevation, limestone, and thinner soils.  The east side is similar to Lodi with large flat plots of good soil and irrigation.  Finally you have the middle with low rolling hills (which we like to think is just right  and where Hollyhock is).  On the West Side it is harder to plant in bulk, soils are thinner, and less yield = more concentrated fruit, so the yields are lower (2.75 tons) than on the East side (8-12 tons).

The second factor is what your winery wants for yield.  A rough estimate of the cost of wine is the cost of fruit per ton * .01 .  Just like car manufacturers, wineries try to make wine for each price point.  So the $4,000 per ton fruit goes into their $40 bottles of wine and the $2,000 fruit goes into their $20 bottle of wine.

Price per Ton : is a critical factor and where every dollar matters.  Luckily there is a ton of public data released via the  Grape Crush Report (United States Department of Agriculture) .  It lists all of the grape lots sold and what the prices were.  The good news is that they break out California into 16 different districts .  The bad news is that District 8 not only lumps together the very different East and West Sides of Paso but also San Luis Obispo and surrounding areas.  So you have to do a little bit of excel work to try and estimate what the price for your specific area would be.  Below are two plots showing how many tons were sold at each price point.  For our purposes we will assume the high tonnage and low priced sales were all for the East Side and the $3750+ was for the West Side.  We should be somewhere in the middle.

To summarize the research, lets chart it.  Ironically, it seems that no matter the yield you end up with a similar Total per Acre.  Welcome to the rather un-romantic reality of grapes as a commodity  ( a raw material or primary agricultural product that can be bought and sold ).

So for Hollyhock Vineyard lets assume we do 4 tons an Acre at a price per ton about 10% above the average ($2,400 for Mourvedre and $2,000 for Grenache).

• ( 4 Acres * 4 tons per Acre * $2,000 + 4 Acres * 4 tons per Acre * $2,400 ) – ( Mortgage, Taxes, Upkeep, Farming Costs )

Now you need the Expense part of the equation.  This was the hardest part for us to figure out.  The mortgage and taxes are straightforward enough, but how much does it cost to upkeep (replace old vines, irrigation repair, well, etc) and farm.  Heck we didn’t even know what went into farming.  I was able to find a UC Davis study on Production and Sample Costs to Establish a Vineyard in Paso Robles  but unfortunately it was from 20 years ago (1996).  Thus the only other semi applicable data sources I found were from a Tablas Creek blog and a student project for a Bachelors Degree from SLO.

• Feasibility And Economic Viability Of Establishing A Wine Grape Vineyard in Moraga
• Tablas Creek Blog – 2009 – “Whither Inexpensive, Artisanal Wine?” 

The most valuable information ended up coming from the property seller’s disclosures.  Below I have created a table showing the vineyard costs from 2012-2015 for Hollyhock. The Tablas Creek example is included for comparison.  The top section summarizes expenses where you can see that Hollyhock comes in around $8k per acre vs $6.5k for Tablas.  This makes sense given their economies of scale.

The second section shows the yields and income using the estimated price per ton from above.  You can see that 2012 to 2014 were very productive years at over 4 tons per acre.  However, in 2015 the harvest was down 20-50% due to shatter, drought, and weather  and yields were down to 12.53 and 13.74 tons vs. goals of 16 tons each.

At the bottom we take into account the costs of financing the property (Farming + Finance) and you can see the net loss on paper of $50k to $70k a year .   What the !#$!?

Good thing that there is more to the story…

Show me the Money!

Going back to the vineyard example, it is obvious an 8 acre vineyard can not pay for the entire property.  But don’t forget the property also has a house and two cottages on it.  When you put those to use as vacation rental units ( 2 cottages at $125 and 1 House at $300 ) and assume that only weekends will be rented (27% of the year) you have the following equation which adds up to the $48,000 of rental income from the table.

• ($550 Average Nightly Rent * 87 days a year)  – ( $0 Mortgage , $0 Taxes, $3k Upkeep, $4k Expenses)

This leads to a break even balance sheet.   In good years you will make $6k in cash flow and in a bad year like 2015 you could lose $15k.

You may think I am crazy since you can make $0 just sitting on your couch doing nothing!  However, we are thinking long term and there are a number of factors that can/will impact the investment returns.

• Principal Reduction : You may be breaking even, but don’t forget that you are paying down a mortgage each year.  For the first 10 years you will be paying down $25k+ a year  
• Rents have historically risen 5% a year in SLO
• Many grape contracts have an annual escalator  clause where the price of grapes increases from 3-5% per year.
• Appreciation : When Jason Haas evaluated a property in his Tablas Blog  he caveated his reason for passing: “a savvy investor in land might take a chance, given that the price of prime vineyard land here is almost certain to appreciate.  Someone who bought it and covered most of their annual costs through selling grapes could come out ahead given that in a dozen years it might sell for double what it’s worth now.”  What this means is that the price of housing increases at the rate of inflation (~2.5%/year) as a minimum and could increase more as Paso Robles Vineyards become more well known.  Heck even Harvard’s endowment is betting on Paso Robles vineyard land . Assuming only a 2.5% appreciation your property value would increase by $28K+ a year
• Taxes : This is a tricky one and I will endeavor to create a standalone post to cover things like depreciation, loss carryovers, etc.  For now, lets keep it simple.  Any money you spend related to the house or vineyard is tax deductible.  This includes portions of your vehicles, supplies, depreciation, and other ‘activities related to the pursuit of furthering your vineyard business’ 😉   In the beginning you will likely show a ‘paper loss’ but have neutral to positive cash flow.  Depending on how you structure things these losses could flow through to your personal W2 and reduce your income tax.  This can amount to 28-39.6% based on your tax bracket . (Caveat, I am not a tax professional and do not take this as advice).

So add up all the variables above and that net neutral investment becomes a positive ~$70k a year .   And…  you own… a freakin…. vineyard! 

Yeah but I don’t want to be a Landlord or a Farmer

No worries, there is an app for that.  It is 2o16 and you can use an app on your iPhone to order 6 cookies from Specialty’s Bakery and have them delivered to your house in under 45 minutes. (Trust me, I just tried it out yesterday via the DoorDash App).  You can do the same thing for your rentals via a service called Guesty .  They will respond and manage all of your reservations for a 3% fee.

As for the vineyard, a vineyard manager is already included in the cost projections and for <10 acres it will usually run you about $5k a year.

Give Me Some Money! …. Please?

I was planning to detail the financing portion which is a better different than a standard mortgage.  Unfortunately this post is already quite lengthy so I will use the topic for my next posting.

Future Topic Ideas

• Next up – Learning How to Not Fail (and ideally how to succeed):  a list of key websites, blogs, books and magazines that we are using to learn fast.
• Your Team:  there are lots of people involved in a vineyard (Realtor, Vineyard Consultant, Vineyard Manager, Laborer, Contract Labor, Spraying, Trucking, Repair, Labs, Farm Insurance, Tax Expert).  Who are they, where do you find them, what do they do?
• The ‘Industry Discount’:  when you are in the industry – it is a synonym for not making much money.  So what is this industry discount thing?
• Going from Conventional to Organic:  if your winery isn’t paying a premium for it, should you do it?  What does it entail?  What are the costs?
• Vineyard Activities:  what does it actually mean to farm a vineyard and grow grapes?  What do you do?  Explain the activities such as Pruning, Dropping Wires, Canopy Management, Spraying, Mowing, etc.
• Technology for Small Vineyard:  the big boys have their toys (sap sensors, wireless meshes, cloud monitoring) but what can the little guy do?  A look at automation technologies, sensors, weather stations, etc.
• Equipment in Vineyard:  it isn’t all about technology, sometimes you just got to jump on the John Deere and go for a ride
• Taxation:   if they best way to make a small fortune in the vineyard business is to start with a large one, why do so many people do it?  You usually hear ‘they need a tax write off for their XYZ uber successful business’. Lessons learned on how to account for vineyard expenses and strategies for depreciation, material participation vs. passive activity, etc.
• New Plantings – Portuguese Field Blend and Syrah : while the majority of our acreage is under contract we are able to hold back a ton or so of Grenache and Mourvedre for making a couple of barrels for ourselves.  However, for a true GSM you need the S… Syrah! We are planning to interplant 2 rows of Syrah in 2017 (400 vines).  We are also planning to plant about 100 vines of Portuguese varietals in a field blend.  Where do you source vines, how do you plan the blocks, how do you decide on the clones?
• Contracts and the Winery – Grower Relationship:  the fine balance of making this a win-win

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