Buying a winery is a wise business investment for many people that may provide a steady income and many other benefits. Before buying one, though, it is essential to understand various factors that influence your potential purchase. Here are several things you need to understand before you make a winery purchase and how they might affect your overall winemaking success.
Start With a Financial Adviser
Before you buy a winery, it is wise to talk with a broker or lawyer who can help you understand where to buy a winery and what prices are available. They can also help with transitioning to operating a winery easier from a financial perspective.
For example, do you know how many grapes you’ll need to produce a steady supply of wine? Or how much to pay your winemakers? Probably not, which can be a problem if you don’t get help from a financial expert. Doing so can make this transition easier and minimize any complications.
Research Winemaking Processes
Even if you’re buying a winery as an investment, you need to know how to make wine. Knowing how grapes are fermented and various wines are produced can help you plan different vintages and create a diverse array of wine options for your potential buyers.
While you can always hire a winemaker to handle the day-to-day fermentation steps, you need to know the basics. Thankfully, there are plenty of classes or tutorials online that you can use to help you better understand what you’re getting into before you spend too much money.
Know What Amenities You Want to Add
Running a winery business is about more than just wine. You also need to add things like food options and even entertainment types. After all, bringing in more people via live music can help your winery make more sales and ensure that you reach a higher level of success.
Live music is trendy in wineries, with the total revenue hitting $31 billion by 2022. You can vastly increase the number of people at your winery by bringing in a band and paying them good money to play exciting music for your customers.
Decide on Your Winery’s Look and Setting
Branding is essential for wineries, as it can help them stand out against other options in their area. For example, many wineries go for a more casual look, with a hipper style and more modern looks. Others go for a more old-fashioned style that mirrors European winemaking countries.
Pick an option that suits your winery and which helps you stand out. For example, you may go for a country style if your winery is on an old farm. Many wineries even build their fermenting centers in old barns and restore them to look beautiful again.
Study the Proper Tax Code for Wineries
Starting a new winery (or buying an existing one) will require a significant crash course in tax law. For example, did you know the IRS can audit any tax return within three filing years and may collect owed back taxes for up to 10 years? Simple rules like these need investigating.
You also need to pay attention to any laws that may affect your winery, such as import or shipping taxes, that could affect where you get your grapes and how you process your wine. Even a winery that grows its grapes may need to pay specialized taxes to ensure proper financial strength.
As you can see, investing in a wine business can take a few steps that require careful planning and understanding. While it isn’t a significant challenge or anything that you can’t handle with a bit of work, make sure that you pay attention to these factors when applying for loans or any financial help. Doing so should help to ensure that you get the best experience possible while minimizing your cash loss potential.