The first step to learning how to start a winery is determining what kind of winery you’d like to run. There are three primary stages of production involved in winery operations: growing grapes, producing wine, and selling wine. Some wineries focus on one to two pieces of the production process, while other venues oversee all three. Whether you’re growing, producing, and selling your product or learning how to start a winery that operates as an event venue, this step-by-step guide will take you through the process.
In this guide, we teach you how to start a winery that appeals to your target audience. From start to finish, we take you through the stages of starting a winery. We discuss the value of researching your market, preparing a business plan, writing an investment proposal, how to market your business, and so much more. Learn how to start a winery that fits your market, budget, and business goals.
How to start a winery that thrives
1. Research the market.
Before opening a winery anywhere, complete comprehensive market research to determine whether or not the business decision would be financially responsible. If you want to open a successful event venue that appeals to consumers in the area, there should be a need for your winery in the market: a demand for your product. Research the climate, competition, and clientele in your market to get a clear picture of new business potential.
The climate
If you’re growing grapes, the climate, environment, and weather will impact your success. Typically, grapes prefer warmer climates, making Spain, Southern France, and California ideal growing locations. Do you live in an area where grapes will grow readily? Research the type of grapes required for the wine you will be producing, and identify the appropriate climate, terrain, and soil mix required to grow successfully.
The competition
Visit competing wineries nearby. Read visitor reviews and research their online presence. Get a feel for each winery, and take note of what they have to offer consumers by answering questions like:
• Where are they located?
• What is their style?
• What is their demographic?
• What types of wines do they produce?
• Which wineries serve food?
• Which wineries grow grapes?
• Which wineries operate a tasting room?
• Which wineries host special events? Weddings?
Determine what wineries are operating nearby and what they have to offer. Determine what’s missing. Discuss where wine-lovers flock to and which establishments they avoid.
The customers
Are there large numbers of wine connoisseurs in the area? Is there a demand for more wine production? Ask community members what they love about the wineries in your area and what’s missing. Identify a need in the market, and define how your winery fills in the gaps.
2. Scout potential locations.
When scouting potential locations for your future business, focus on three primary objectives: identifying land for sale, surveying the soil, and assessing the quality of any venues or buildings on the property.
Find your land
If possible, find land that has a south-facing slope. Not only do grapes grow well on sloped terrain, but southern slopes also provide the vines with ample sunlight.
Survey the soil
Grapes prefer acidic, well-drained soil. They tend to thrive in rough terrain and benefit from growing in soil that does not offer abundant nutrients. Look for loose, well-drained, loamy soil offering a crumbly blend of clay, sand, silt, and rocks. If grape-producing soil is not a common natural occurrence in your area, you will need to prepare the soil yourself.
Assess the venue
Does an event venue or property already exist on the land, or will you need to build a winery? If there is an existing property, will it require renovations or expansion before opening? Did it operate as a winery in the past, or will you need to turn it into one? What is the property’s value? How much of an investment would you need to turn the property into a functioning winery?
In addition to finding a winery location that will be profitable in the market, the land you purchase will be significant, especially if you plan to operate a vineyard on the winery property. Producing a specific type of wine will require the ability to grow specific types of grapes on the property. If you do not have a specific type of wine in mind, or do not intend to grow grapes at the winery at all, the location and soil style will not be as important as the accessibility of the winery.
3. Develop your winery’s brand.
What is your demographic? Will you market to savvy millennials with digital tasting tools or appeal to corporate clients by offering affordable instant book meeting services? Will your winery present natural energy with organic décor and natural elements, a rustic design, or an elevated farm-to-table style? Determine who your target audience is, what design style most appeals to them, and what services you will offer to capture their business.
Choose a color scheme, font, logo, and other visual design elements that will come together to create your brand image. Design an eye-popping logo. Use the logo on all of your winery marketing ideas, including merchandise, promotional materials, website, social media pages, venue listings, and video advertisements.
4. Assess your finances.
Starting a winery can be expensive, especially for entrepreneurs starting from scratch. Equipment costs alone can quickly grow, as new winery operators may need to purchase cellar equipment, refrigeration equipment, distribution trucks, or receiving equipment. Startups may need to secure enough financing to cover a wide variety of costs, including:
• Purchasing or building a venue
• Purchasing acreage for growing
• Preparing and maintaining acreage
• Vines and gardening materials
• Fermentation, storage, and bottling
• Operating offices
• Venue renovations
• Permits, licensing fees, etc.
• Opening a tasting room
• Staff payroll
• Business Insurance
• Marketing and advertising
Determine how much of an investment you can comfortably put into the business and whether any partners will invest in the winery. If so, will you work with a single partner or multiple partners? Will the partners make business decisions and participate in day-to-day operations, or are they partners in finance only?
As a new business owner, you should avoid putting all your assets into startup costs. If the winery is not successful and all of your savings are on the line, losing the business could mean losing everything. Starting a new business is risky, and opening a winery is no different.
Have a tough and honest conversation with yourself. Are you ready to do this: personally, mentally, professionally, and financially? If you cannot answer yes to all of these questions, then it may be a better idea to learn more about how to start a winery before diving in headfirst.
5. Draft a business plan.
Write a business plan for your future winery. A business plan is a comprehensive outline detailing how your business will operate. The more comprehensive and researched your business plan is, the higher your chances of securing financing. Include the following details in your winery’s business plan:
• Executive summary: An “About Me” section for your business. What is the name of your winery? Is the name catchy and memorable? Does it capture your values? What is the mission statement? If you had a website for the winery, what would the “About” section say?
• Detailed business description: Where is your business located? How large is the venue? Which stages of the wine business will the winery tackle: growing, production, service, or all three? Will you have an operational kitchen onsite? Will you host tastings, dinners, weddings, and other events onsite?
• Product description: Describe the products your winery will be producing. Outline grape production, the types of wine you will make, forecasted production, merchandise sales, and any eCommerce or distribution potential.
• Market research: Outline the results of your market analysis. Who are your primary competitors? How close are they? What services do they offer? What will you offer that your competitors don’t? Discuss the need in your market and how your winery business will fill that need.
• Business structure: Will the winery operate as an LLC or an S-Corp? What is the management structure of the business? Will you run the business or hire onsite managers for day-to-day operations? What are your distribution plans?
• Financial plan: Write a summary of your current financial situation and available capital. Will you be funding this venture alone or investing with partners? How much money are you putting in? How much is each partner? How much will you need after the initial round of investments?
• Marketing plan: Create a plan for marketing your winery. What is your target demographic? Who is your target audience? How will you reach them? What will your online, social media, and business-to-business marketing campaigns look like? What venue marketing solutions will you utilize?
• Investment proposal: If you need additional financing to start your winery, draft a proposal explaining why your business is a great investment opportunity. Include market research, forecasting reports, and other valuable financial reporting.
• Business timeline: Outline major winery milestones, such as a prospective property purchase date, renovation completion date, staffing deadlines, soft opening (if applicable), and opening day. Do you plan on expanding the production process or opening additional venues? What are your five-year, 10-year, and 15-year business goals?
Meet with your partners, lawyers, and financial advisor to review your business plan to ensure it’s in tip-top shape for presenting to lenders.
Learn more about what 2023 has coming for wineries
6. Secure financing.
The wine business is, in many ways, dependent on the whims of nature. A bad growing season or natural disaster can severely damage the business. Even in the best weather conditions, competition in the wine industry is fierce. As a result, wineries are often viewed as a high-risk investment opportunity for lenders, but there are a variety of financing options vintners can look into, including:
Credit cards
Open a new credit card specifically for use in your business. Look for a credit card that offers a long 0% APR period for new customers. During the 0% APR period, your purchases will not accrue interest, allowing you to carry large balances interest-free as you make the purchases needed to jumpstart your business.
Credit lines
A line of business credit works very similarly to a credit card. Business owners can borrow up to a specified amount, repay the borrowed total, and continue drawing on the credit line. As borrowers repay the borrowed amount, they only pay interest on the amount borrowed. Given by a bank or lending institution, credit lines are more flexible than traditional bank loans, covering a wide range of short-term winery expenses, such as purchasing inventory or covering payroll.
Bank loans
A high-cost lending option for vintners, bank loans are a potential line of financial assistance but not the first choice for many new business owners, as banking institutions consider wine businesses high-risk. When large banks approve a winery owner’s loan application, they may require a steep down payment, potentially as high as 50% of the total loan amount. Smaller banks and community credit unions may be more willing to extend loans for new local businesses, but the total amount offered is typically lower and still comes with high-interest rates attached.
Equipment loans
A type of small-business loan, an equipment loan is used to cover the costs of equipment that small businesses require to open or operate. Equipment loans are common sources of aid for winery operators, as winemaking typically requires a significant amount of equipment. Vintners and other entrepreneurs who experience difficulty obtaining approval for traditional loans may have a better chance of getting an equipment loan, as the equipment functions as loan collateral.
Determine which financing options best fit your financial situation and business plan. Work with a financial advisor to prepare, execute, and manage the winery’s finances, ensuring that you stay on top of all lending obligations and payments.
7. Confirm alcohol laws and regulations.
Obtain local and state permits required to operate a business in your area, as well as any permits required to produce and sell alcohol. Each winemaker must follow various local, state, and federal wine regulations depending on where they operate. In addition, wineries must register their business with the FDA and submit wine labels to the Alcohol and Tobacco Tax and Trade Bureau for approval.
Additional rules and regulations also apply to wineries that distribute products, ship products, or participate in eCommerce. Direct shipping regulations vary from state to state, so many wineries choose their distribution region strategically. Additionally, winery owners must monitor, apply, and track excise and sales taxes.
Find and hire a lawyer with expertise in winery operations and new businesses. Having a legal representative on your winery team can help ensure that you meet all legal requirements, that you’re operating within winery regulations, and that your business complies with local and federal policies.
8. Launch winery marketing campaigns.
After purchasing the winery, renovating, decorating, licensing, and purchasing equipment, it’s time to start marketing the venue. Get the word out about the winery and your products via social media marketing, online advertising, and local marketing campaigns.
• Create a Google Business Listing for your website to increase your ranking in local search results.
• Create a website for the winery that features a photorealistic 3D tour of the property, allowing online visitors to take a remote tour of the venue.
• Build a strong online presence for your brand through social media marketing and video advertising.
• Create a catchy hashtag and include it in behind-the-scenes content, offering your audience a sneak peek.
• List your venue on Cvent’s Supplier Network to market your event venue to active planners and connect with event professionals sourcing in your area.
• Advertise the grand opening of your venue on local billboards or heavily trafficked highways leading into your region.
• Distribute marketing materials to local businesses and community organizations to increase visibility.
• Partner with social media influencers and experts that appeal to your target audience for cross-promotional opportunities.
• Drive wedding business to your venue by advertising the winery to engaged couples and wedding planners.
All the marketing for your winery should prominently display the name of the business and promote your brand identity. Include your winery’s logo on wine bottles, online ads, social media posts, and more. Hire a professional photographer to capture high-quality images, and use the same font consistently across various marketing channels.
Bring in beautiful weddings to your winery
9. Hire and train winery staff.
Winery staffing needs can vary from venue to venue, depending on the size and structure of the business, as well as the services the winery offers. A large winery may require a viticulturist to choose the right grapes and oversee harvesting or an enologist to manage the wine fermentation and production process. Smaller wineries, on the other hand, may hire primarily for customer service, sales, or event staffing positions.
Will you oversee day-to-day operations and manage revenue, or will you need to hire management staff? Will you have a vineyard that requires maintenance, or are you primarily offering tasting room services?
Write detailed job listings for all of the open positions at your winery. Outline the expected schedule, duties, salary, and any benefits related to the position. Include information about the winery’s mission and values so applicants know what you care about most, helping you match up with employees who share the same values you do. Give the staff plenty of time to train, learn POS systems, and get to know the venue before the winery opens.
10. Open the winery.
Your design has come to life, and it’s time to open your winery. Decide if you want to host a soft open before the business opens all the way. Hosting a soft opening is a terrific way for new businesses to assess their technical processes, operating procedures, and service style; it’s an opportunity to work out all the kinks before a widely marketed grand opening. Invite community leaders, event planners, organizers, company activity directors, and wine fans from near and far to join in a festive celebration of your new winery!
Frequently asked questions about how to start a winery
1. How much does it cost to start a winery?
The size and scale of a winery will have a major impact on how much it costs to start the business. According to research and reporting by ProfitableVenture.com, setting up a medium-scale standard winery in the U.S. can require an investment of up to $750,000. The quoted cost covers licensing expenses, the cost of hiring a business consultant, purchasing land, obtaining insurance, gathering equipment, and other startup costs. Starting a winery in your backyard, however, is significantly less expensive, with installation costs ranging from $35,000-$45,000 per acre.
2. How much land do you need to start a winery?
At a minimum, vintners require five acres to start a small winery business that grows grapes, produces wine, and sells the wine directly to customers. Five acres will provide enough space to grow approximately 5,500 vines, producing around 55,000 bottles. Wholesale winery operations need at least ten acres, ideally more, to produce their product at scale.
3. What is a micro-winery?
A micro-winery is simply a winery without a vineyard. Instead of growing their grapes, micro-winery owners purchase their grapes from farmers. These small-scale wineries can operate on smaller parcels of land and use smaller equipment than those with vineyards.
Now you know how to start a winery!
With this step-by-step guide explaining how to start a winery, you have the information you need to start your own business. In addition to generating buzz for the winery before it opens, operating a successful winery will require regularly attracting new customers to your business.
Up next, we discuss seven winery event ideas you can use to boost business and attract new customers to your venue. Keep reading to explore different tasting styles, food-focused events, and so more much.
