How to start a whiskey business
Well, how to get into a whiskey business is actually a much-asked question. Many entrepreneurs want to have their own liquor brand. Maybe you want to come up with the idea of starting a business of tequila or vodka or your passion might be in the brown stuff, whiskey! If you really want how to get into the whiskey business here are some pro tips advice for where to start and how efficiently to manage your budgets which has been implemented by many successful ventures before.
Step 1: Determine your business model
For launching a whiskey business, you don’t have to necessarily own a distillery. As production facilities are expensive like other industries, you can depend on suppliers for getting the materials. Instead, you can spend your money on marketing, sale, and R&D. You know there is always room for uniqueness and creativity. So, if you can come up with a new idea definitely it will flourish your business. Hundreds of brands are produced by few distilleries.
To build your own empire in this business, it costs you a minimum of $1 million. Other entrepreneurs who are running their business in bar, lounge, or in-house restaurant are spending nearly $10million.
Step 2: Creative Approach
For standing out in any business, creativity, and uniqueness is the much-needed approach. Here, leaving the production for local distilleries will give you ample opportunities to bring out unique ideas in this industry. Like any other industry, in the liquor industry to you have scope for bringing distinctiveness. You can bring uniqueness in barrel finishes, blending, grain selection, and most importantly the quality of the liquid inside.
In case of mixing up the liquid, you need to know which spirits are essential. An easy step is to check out the trend of the use of different categories of spirits on Distilled Spirits Council website. Additionally, you must focus on the packaging of the product to give it a classy and elegant look.
Step 3: Understanding the budget and pricing strategy
It is an on-going and revised process. You must have to ensure that your sales and marketing cost meets up your budget. And you also have to back up adequate money to support your marketing expense. Most people who newly enter the market don’t consider all aspects of costs which makes it important to know how to get into the whiskey business.
In the case of pricing strategy, you first determine where to sell whiskey. The most business owner makes the mistake of considering the cost of the product. Rather you have to think about what the market can accept. Additionally, you have to analyze the market and your competitors before setting up the price.
Step 4: Creating a brand name and title
This is the most creative and fun part of this whiskey game! This is where you have the chance to stand out from your competitors by drawing the attention of your potential customers. Here, after setting up a list of likable names, you can ask a trademark attorney to check out whether it is available or no at minimum price.
Trademarks are not common for all products. You can use a class system instead. Each class includes a specific product for example whiskey is under class 033. You can visit USPTO for more information on the class system.
Logo and Brand Appearance
The next important part is to design a logo and the overall appearance of the brand. Though many marketing agencies are working for doing all this stuff. But if your budget is minimum, you can rather visit a website like 99designs which might help you to create all this stuff.
Step 5: Finding and selecting your supplier
Source of finding a supplier
Suppliers will help you with grain, liquid, barrels, and packaging and logistics companies. You can get ideas about suppliers from industry magazines, articles, online lists, and trade organizations. Considering the opportunity cost, you just need a way to convince a supplier to work with a start-up like you. There, you need the help of an advisor or your right partners.
For selecting suppliers, you must consider the right size of your business. a start-up, definitely work up with another start-up supplier might be fun and exciting for you but it comes up with risk. As not every supplier can able to sustain itself in this industry. Again, you must try to maintain a long-term relationship with your supplier. Because it costs you high to change frequently the supplier. Furthermore, they can help you in distressing times as due to tariffs, prices might fluctuate a lot. Finally, after selecting the supplier ask for the price and samples.
Step 6: Build a solid marketing plan
Normally, In the US whiskey business runs into 3 tire cycles- Producer to distributor to retailer. After you achieve much retail success your next strategy would be to advertise your brand and to reach more and more customers. There is an old adage in marketing that customers will touch your brand at least 7 times before buying your brands. There are many approaches to perform it-
- Traditional Advertising methods
- Partnering with celebrities
- Providing samples to customers in bars or lounges
- Advertising in billboards or banners
- Advertising in social media
Finally, you can also consult with experts or agencies to know more about customer engagements. As they have more insights about it, it might also help you to reach your goal by implementing proper tactics.
Providing attractive package to distributor
You should reserve a fund for giving attractive incentives and bonuses to your distributors. By providing those incentives for meeting up their determined targets will encourage them to sell more. In turn, this will boost your sale.
Step 7: Make your product visible
Key points: Selecting proper distributor, Own sales team
Now it’s time to make your product public and time to boom! Before starting all these, you just need to select a proper distributor. It is one of the most key aspects to find a potential distributor. Before starting off your launching program it is good to ask your attorney about ins and outs of laws. As each state has different laws. There are several distributors who supply both locally and internationally. According to the budget, you have to select top distributors.
As it is one of the challenging and important steps to find out a potential distributor to reach your maximum number of customers. So, you can own a sales team in your budget to reach your goal.
Frequently Asked Question
This FAQ is prepared after interviewing some of the successful entrepreneurs and analyzing the market condition.
1. How to get the specific type of license to start a whiskey brand?
Ans: As mentioned above, laws vary from state to state. So, it’s better to ask your attorney to know the answer in detail and accurately.
2. What’s the myth of most of the new distillery owners?
Ans: Many might think in the beginning that, it’s all about making money, chilling with friends, and other fancy thinking. In reality, the entrance to enter the market is too high. Even a few years back, there were only 500 distilleries but now the numbers reach up to 2000 in the US.
3. How to get investors in this industry?
Ans: If you already have enough money to support you then you are on the safe side. Finding investors for running a distillery shop is actually a challenge. Moreover, banks are also reluctant to lend you money. Some might raise money from friends or family or angel investors. But if you become top-notch in this industry then you won’t be behind from getting venture capitalist.
4. How important is it to create and maintain a relationship with a distributor in this industry?
Ans: It is one of the major aspects to consider. They can influence a lot in your turnover.
5. How many times to wait for generating profit in this business?
Ans: Well, your marketing team can help you a lot to show you the face of profits earlier by standing you out in the market. But it is safe to consider 8-10 years to generate profit.
6. Among marketing and good product which is more important?
Ans: Marketing might help you to reach maximum customer but good product helps to for repeated customers.