Winery Wisdom – 6 Things You Need To Know Before Investing In A Winery

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Winery Wisdom - 6 Things You Need To Know Before Investing In A Winery

ExecutiveChronicles.com | Winery Wisdom – 6 Things You Need To Know Before Investing In A Winery | Investing is a great way to get ahead. You’ll generate a mostly passive income, and as long as your investments align with your values, you’ll score bonus feel-good points. Wineries, in particular, can make a great investment because each time you open a bottle, you’ll be supporting a business that you own a tiny part of. There are, however, some things you need to know before investing in a winery. The first three options focus on investing in a pre-existing winery. The bottom three reflect things you need to know if you’re establishing your own.

The Standard Of Their Equipment 

Large wineries hardly ever do things by hand – there are simply too many grapes to pick. Because of this, you need to look carefully at the standard of their equipment. Unreliable machines lead to losses, so it’s important to ensure that your chosen winery uses quality equipment and only buys reputable grape harvester parts when something needs repairing or replacing. 

Their Bookkeeping 

This won’t always be possible, but if you’re able to check out the books before investing, it’s a good idea to do so. Not only will this help you understand the progress of the winery over the years, but it’ll also give you an understanding of how they manage everything, which is vital if you’re going to be funding their operations. If you can’t get a detailed look at the books, at least request a detailed report outlining earnings, standard stock levels, harvesting and sales procedures, and other key elements of the business.

The Financial Structure

Will you get regular dividends? Do you make a percentage of each sale? What happens if revenue falls? Will you be expected to cover any expenses? Will you receive free products? Are you expected to take a hands-on role in managing things? And if so, will you receive a salary? Are they looking for a one-off investment or are you expected to make regular contributions? Essentially, you need to work out whether you’ll be acting as a silent investor or a business partner and what the cost vs profit analysis looks like.

What Wine Is Suited To The Area?

While many vineyards sell with their crops intact, just as many wind up on the market with empty fields. Before investing, you need to look into what kind of grapes (and therefore what kind of wine) will be produced by the property. You’ll want to look into things such as the resilience of the crop, the popularity of the wine, and projections for that segment of the industry.

The Availability Of Workers

You’re probably not going to have a full-time crew initially, so it’s important to look into whether it’s going to be a hassle to get seasonal employees. This mostly depends on your location, but other factors will also come into play, so speak to other winery owners in the area to get an idea. 

What Running A Winery Actually Entails

It’s also important that you look into what running a winery actually entails. It isn’t all crushing grapes and eating cheese. You need to have realistic expectations if you want to make this a long term investment. Growing and picking are fairly standard, as is maintaining your grape harvester, but they aren’t the only things you need to consider, so do your research. 

There you have it – three things you need to know before investing in a winery on a smaller scale, and three you should know before going all-in and investing in a larger one. Happy harvesting!