Starting a (nano) distillery

[MoonBreath]

What's your spirit line consist of ?
Y'all don't have much ifn any bond to pay up there outa the U.S..
Yes, half mil is serious business, without a proven track record or product line, prolly never get that back..
How many stores you in?
Better be ready to not retire.
Partners and management unfamiliarities, combined with overspending doin em in all over.
Wishin y'all well, gonna need it..And reviews.
But I'm sure you got all the right answers for folks don't know any better..
Show some pics of your equipment, product line, and facility..Dont just start a blank webpage and give an indefinite startup.
Till you got shelf space, its a failure..
Yes there are plenty folks run in the red till the end, basically just for kicks, thinkn they're going to pull it off, only to quietly fail and sell off.
Don't just drop nuggets and bits of inexperienced experience.
It shows..Bein a great public communicater is fine, bein a great distiller is better..The public will do the communicating.
Heck I have a nano distillery, a following, signatures and uniques without any help, partners, worries, and my 500k still in the bank.
Sleepn sound.

[MechEngineer_81]

As for using your homemade equipment in a licensed distillery I would make sure you look into any control or electrical you have put together and make sure it meets the local code and NFPA code for the area designation for the area you are working in. I know a couple distilleries we have worked in all had the still areas designated as a class 1 division 1 or class 1 division 2 area per NFPA code. usually this requires electronics to be rated and explosion proof or intrinsically safe to not cause an explosion if exposed to vapors.

another road block I have seen with overseas equipment are control panels not UL listed. Many jurisdictions have required this and we have had customers shell out money to have panels UL listed that usually requires some rework of the panel. I would assume having any home built electronics UL rated would be costly as well.

[LWTCS]

Having just gone through the development and opening of a micro distillery - allow me to offer a few words of advice...

Evey thing in the distillation business costs $5k - which in English means - even a small distillery will cost a shitload of money to get off the ground. No matter what anyone says - expect at least $500K. Mine cost $650k. Up, ever so slightly up from the cost of a used pick-up truck, I thought I could get away with in my early projections.

A small still sounds very attractive in the planning stages, but is as useless as tits on a bull in the heat of battle. That means, if your not processing at least a 1000 liters of pay dirt a week, you are falling behind.

Making booze at home is dead easy. Making booze for a demanding audience of a quality to bring them back? Really fucking hard.

Get thee to the cleanery! I've spent hours and hours cleaning. Not in the original fantasy at all! Do not under estimate the time you'll need to spend cleaning.

Grains of all kinds is wonderful stuff - but, it quickly becomes a hot sticky mess - please refer to the previous note.

Make sure you know where you are going to get rid of your spent grains. They pile up really fast and they quickly start to stink. The idea of a happy farmer feeding the spent to his pigs is great - but very hard to actually pull off with any consistency. I've found chickens to be better than pigs as efficient spent grain consumers.

Don't bother with partners. You will soon tire of them and they won't be nearly as helpful as they are helping you drink your shine.

Don't borrow money to build your distillery. Only borrow money for working capital and only if you know you have the sales. Otherwise, allow me to repeat. Don't borrow money - or - take money from investors. Unhappiness will ensue.

The paper work to get the licenses for a distillery is tough, but it's easy when compared to the ongoing day to day paperwork. Fall behind on that and you're dead.

All that being said, I am glad I took the risk and I expect in time I'll probably do alright.

Pretty accurate here on all counts. I'd also add to be prepared to not make a single dime for no less than 3 years.

[EagleCliffs]

Sorry, late to this discussion.

First, I highly recommend your approach. The first two requirements of starting a distillery (or any business) is learning how to do everything and figuring out how to afford the lessons. Turns out you can learn on a tiny still for 10% or even 1% of the cost of a larger still. You can't make money on a tiny still, but once you know how to make and sell your product, you can expand using cash flow. Typically craft distillers do spend between $500K and $1 million to start up successfully, but by starting super tiny and learning first, you can start up for well under $100K. The trick isn't just to start small. Keep your OE, operating expenses, tiny. Setting up on property you already own is much preferred over renting space.

Secondly, a tasting room can generate thousands in sales every month, if you are well located, but a poor startup plan can run you ten or twenty thousand per month in OE. I highly recommend a monthly operating budget well below $1K over a tasting room if that is the tradeoff you have to make.

Also, a handy rule of thumb. Calculate your startup costs to the best of your ability then triple that sum to arrive at an expected cost of startup. There are always unanticipated expenses in any new venture. Don't consider this an insurance policy, but rather an expected expense. What a great surprise if you don't spend that money. I bet you can figure out something to spend it on anyway.

[GreenAstro]

I think small distilleries are a lot like farming...it's an opportunity to make a small fortune.

Unfortunately you have to start with a large fortune.
The best advice i've heard is to triple check your math and cut your expectations in a half...then maybe half again.

Like most farmers too, best not to give up your day job.

we have a saying here in ireland, if you want to be a millionaire farmer, start as a billionaire.

[BaxtersDad]

I think small distilleries are a lot like farming...it's an opportunity to make a small fortune.

Unfortunately you have to start with a large fortune.
The best advice i've heard is to triple check your math and cut your expectations in a half...then maybe half again.

Like most farmers too, best not to give up your day job.

+1 on the business advice! I started a microbrewery in 1997 after a year or two of planning. I looked at a lot of alternatives (read "small and cheap"), none of them would have worked. You HAVE to do the pro formas, how much can you produce, and how much will you make from the amount you can produce, assuming you can sell it all? What will your costs be realistically, including EVERYTHING? What is the bottom line? Will you be working at something you love for free or even paying to do it? ALL the nano options were losers. I brought in some partners, and we stayed in business 21 years, just sold it this year but again, the way to make a small fortune in the brewery (distillery, whatever) business is to start with a large fortune. If you start out under-capitalized, you will be playing catch up no matter how long you stay in business. I am lucky I have an understanding wife and had a good day job! If we had all the money back that went into the brewery, we would be in fat city today!

[Flatlandhillbilly]

One further bit of info, we want to use pot stills (as that's what I know).

Surfing the internet shows some legit small distilleries using setups that look like mine, and I have yet to find a regulation that says I can't build my own still (metalworking is a more-than-hobby of mine). Is that allowed? Can I build my own still? Labyrinthine federal regs don't seem to speak on that.

FortBuilder

You can, technically. But you will have to create a serial number for your boiler/cap/thumper/coil bucket. These, if memory serves correctly need to be matching, or at the very least all recorded with the TDD. If not, can be huge fine and possibly criminal charges.

[bluefish_dist]

For the TTB you can make your own equipment, it just have to have a serial number and be registered/listed on your permit. You may have an issue with your local fire martial if it’s not ul listed. We didn’t have any issue with ours.

[The Baker]

Two of my cousins married farmer twins a bit older than them.
Okay, wait for it...
A bit after the war they built themselves a big tractor (which is still in use) using the transmission from a surplus army tank.
Saved a fortune.
So they had to provide a serial number to get it registered for road use, and I think they used their initials and their date of birth. No problem.

Geoff

[J0hnni3]

These types of comment threads make me nervous... I have just recently gotten my license/approvals. Total cost thus far is in the low 5 digits rather than the high 6 digits. Still is also much smaller than has been advised. Haven’t gotten to the point of selling anything yet, but have made it pretty far along the process with elbow equity rather than cash.

Question... when you guys are estimating costs, does that include literally everything? Building rents/ storage times, etc? Just trying to compare apples to apples with my expectations.

It’s been a while since I logged in... I’m doing my first cleaning run on new equipment, and I was getting fog from the cooler even with the heat dialed way back, even though the cooler is 4 feet long with good cooling flow so I was looking for advice. (Did find some help... ty forums!). I’m still a little weirded out though... I’ve never gotten 170 proof from a pot still before. I’m guessing it’s because of having dialed the heat back so much that it’s getting some condensation on the inside of the vertical run. It’ll take a few runs to get comfortable with this thing i’m thinking...

[HDNB]

it ain't fog. it's smoke. look up "scorch"

[J0hnni3]

Thx for the suggestion to watch for. In my case, a combination of turning up the heat and reducing the coolant flow sorted it out.

[HDNB]

Thx for the suggestion to watch for. In my case, a combination of turning up the heat and reducing the coolant flow sorted it out.

not sure if this is the right thread, being off the OP topic but if you want to make your own thread on the subject, i'm sure it would be well read. I'm not getting my head around it. it seems somewhere between counter-intuitive and physically impossible. tell us more.

[BoomTown]

These types of comment threads make me nervous... I have just recently gotten my license/approvals. Total cost thus far is in the low 5 digits rather than the high 6 digits. Still is also much smaller than has been advised. Haven’t gotten to the point of selling anything yet, but have made it pretty far along the process with elbow equity rather than cash.

Question... when you guys are estimating costs, does that include literally everything? Building rents/ storage times, etc? Just trying to compare apples to apples with my expectations.

It’s been a while since I logged in... I’m doing my first cleaning run on new equipment, and I was getting fog from the cooler even with the heat dialed way back, even though the cooler is 4 feet long with good cooling flow so I was looking for advice. (Did find some help... ty forums!). I’m still a little weirded out though... I’ve never gotten 170 proof from a pot still before. I’m guessing it’s because of having dialed the heat back so much that it’s getting some condensation on the inside of the vertical run. It’ll take a few runs to get comfortable with this thing i’m thinking...

Maybe late to the party but, yes, I developed a pretty good forecaster spread sheet using some fundamental formulas for just that, comparing all considered cost broken down per bottle (by size), tax liabilities, SRP, profit; etc.

Not simple, but necessary for anyone venturing into the craft distilling world.