Get use to changes!

Throughout this entire process, the only thing that has remained constant has been change!!! We started out with the idea of growing our own fruit, honey, etc and having our own building. It has morphed into leasing a production area (winery) and a retail space (tasting room). At one point, we were going to serve and sell other meads (other than the ones we make), but the licensing restrictions to do this killed this idea. We were going to start with 3 recipes, but added a 4th.

Each of these changes were due to circumstances, newly acquired knowlege, and financial considerations. Don't get me wrong, Becky and I are very happy with our current plan. It was not as we envisioned it at first, but it is a wonderful site and an ambitious dream! We also realize that we these current plans may morph into something new in the near future as we discover more challenges or opportunities.

When we first started talking with the developer about Rivermill, we were going to be on the bottom floor (mostly underground, actually) with a cafe and coffee house above us on the second floor. Part of the plan was to install a "glass floor/ceiling" in the area above the production area to give customers of the cafe and coffee shop a view into the winery. To get more people into the winery, this was a great idea! The only issue (that we recongnized at the time) with this plan was that we needed to have the fermenters in the middle of the room, in order for people to have something interesting to see. Well, this meant that we were losing valuable floor space.

By having the fermenters in the middle of the room, we could not store pallets on either side of them. If we did, we would block ourselves in and not be able to move bottles and such around. We determined that having more potential customers come down to see what we were doing made the hassel worthwhile. Then we reality sunk in. Code requires that we have 2 hour fire rated walls, doors and windows. If the production area were to catch fire, it would have to take at least 2 hours for the fire to burn thru. This requirement would add very high costs to this "window" in the ceiling! Now, this is out of the plan and my fermenters can go back up against the wall!

The lower windows in this picture will be our windows at the Rivermill Market in Saxapahaw!!!!!! The renovations should be starting any day now!

We are VERY excited!!!

Comfort zone

posted by Ben
One thing Becky and I have learned in all of this is that we have to get out of our comfort zones! When we have gone to events in the past, we tend to stay around each other and do very little mingling. Now, when we go to events, it is usually as much to become known as it is to learn something. We recently attended the NC Winegrowers Association meeting. We did a very good job of mingling and made some good contacts there.

Another scary experience was when we decided we needed to get a feasibility idea from some bankers. We had written up a business plan, had the numbers put together, met with people from SCORE, taken several Small Business seminars, but when it came time to sign a lease or buy equipment, we needed to know that the banks thought we had done our homework too! We stressed and fretted about getting everything just right. We researched which banks we would approach. We armed ourselves with our accountant, but we were still petrified! As long as we didn't ask, no one would say "no way". Well, as long as we didn't ask, they weren't going to say "ok" either, but we didn't really think about that.

We kept procrastinating setting a date to meet with the bankers, because each time we looked at the spreadsheets or the business plan, we found something else to tweak. Finally, we bit the bullet and made appointments. We gave ourselves a week to prepare and figured we would just have to go with what we had. Well, we were very prepared. For a feasibility questions, I'm sure we had more information than these guys were used to. Neither of them would say "yeah, we'll fund you", unless we wanted to fill out an application. What we got was very positive feedback that let us know where our weaknesses were.

Our biggest weaknesses were in collateral and experience. Since neither of us had worked in a related industry, our experience was pretty much non-existent in their mind. Since we were going to lease the building and the equipment was not worth much, we didn't have much collateral. There isn't much we can do about collateral, but we decided to do something about the experience issue. Becky got a job at a local winery. She started in their tasting room and is now the wine club manager. She has learned so much from seeing first hand what goes on in a winery. The winery owners have been great too. They know of our plans to open a winery and encourage us every step of the way!

It is still tough for me to break thru my comfort zone, but with each step we make, it gets a little easier. Especially, when we keep getting such great results!

Real experts

posted by Ben
The deeper Becky and I got into this, the more we realized that we needed to rely on some real experts. We are friends with an accountant, who offered to help us put our numbers into something financial people would understand. We consulted with a marketing person, who is very involved with Mead and got some more great info. We took a seminar about starting a winery/vineyard at Surrey Community College and met a lawyer, who specializes in wine law (and is opening her own winery with her hubby). We hired a graphic artists we know to help design our logo. Of course, we are also relying on information from other meadery owners and local winery owners, all of whom have been very helpful!

I have to say, the winery owners have been wonderful. They do not treat each other as the competitors that I thought they might. In fact, when one of these owners heard about what we were doing, they suggested we check with a building near them that was for lease. They are on on the Haw River Wine Trail and feel like the more wineries in the area, the more people will come to visit them. Personally, I love that philosophy!

When we found out how much it would be to build our own place, began considering leasing a place! We emailed the people, who were mentioned by the neighboring winery owners. It turns out they were taking an old cotton mill and refurbishing it. They were turning it into apartments, shopping area, and so forth. They had already completed a few of the buildings and were getting ready for the next phase. They wanted to include an indoor farmer's market, cafe, coffee shop and micro-brewery. The micro-brewery that they were speaking with fell thru, so they were receptive to the idea of a winery, especially a quirky little honey-winery!

The two spaces available to us were just a little bit larger than what we were thinking of building, so we knew it would work. We reworked the numbers with the lease amounts and found that we could make it work. In fact, in December of 2007, we signed a contingency lease and are planning on opening in Fall of 2008!!!

Experts in how many fields???

posted by Ben
At first we were looking at feasibility. How much did we think it would cost? How much could we make off a bottle of mead and how many could we sell? We started doing research. We put together several spreadsheets with every possible cost we could think of. At first, we just listed items, then started putting actual dollar amounts to them based on prices we found online.

We went to other wineries for "market research". As we talked with some of the owners, we found other costs that we had not thought about, i.e. insurance, cost of wine poured for tastings, cards to leave at other wineries, etc. We started figuring out how much it would cost us to buy some land, build a building, plant some trees, get some bees...

Soon, we discovered that we were going to have to become expert mead makers, arborists, and beekeepers. Along with those, we would have to become the accountant, marketing, salesperson, etc. that every small business owner becomes. We decided that we needed to focus on one area, so we chose mead making. We loved the idea of having our own peaches, from which to make peach mead. And our own bees to pollinate the peaches and produce our own honey, but numbers got in the way. To have enough honey, we would need about 13 hives per batch. The first year, we were planning on 4 batches, so 52 hives. The numbers went up from there. We thought the best chance of success was to let the beekeepers do what they do best and use their product!

We drew up plans for our place. It had to large rooms. The front room was the tasting room and the back was for production. We had seen this same type of setup at most of the wineries we had visited. We started going out with a real estate agent and let her know what we were looking for. We figured we needed a plot of land and to build our place. Most of the existing buildings we were looking at just would not work for one reason or another. One we really liked would have cost more to renovate and make it safe for the public, than building a new one. So, we focused on land.

We started looking at different types of buildings. A "stick built" building was very pricey!!! We looked into steal buildings, but they were still not in our price range. We went to U-build it, which was closer to what we could afford. Part of what we were looking at was what kind of loan we could get. Almost everyplace we went, we heard the same thing "at least 20% down". This included the building, land, equipment and first years operation loan. We knew how much we had, so it was easy math to figure out the max we could afford. The land and building in most cases were close to our maximum. Of course, if you get the land and building, but have no money for honey, equipment, etc., it is tough to start a honey-winery.

Startup

posted by Ben

Well, Becky and I have been working on starting up our meadery (honey-winery) for over a year now. We've been told and have been telling each other that we need to start documenting everything that is happening, because we wished we could have seen that from someone else. I am finally getting around to starting that here!!

Over the next few posts, I'll catch up with where we are at. At this point, we are opening our meadery in November of 2008 in Saxapahaw, NC. It is the most exciting and scariest thing we've ever done (or maybe tied with childbirth)!

Becky and I have been making mead for a few years now. We like what we make and our friends like free booze, but we weren't sure if our meads were really that good. We ended up entering some of our meads in a few competitions. We ended up winning several medals, including a best in show out of over 200 meads. At that point, we determined a few things. We liked making mead and others liked drinking our mead!

We started looking into what it would take to go commercial. As we studied more and more about it and talked with some meadery owners, we determined that this was something that we wanted to do. I work for Kodak, so everyone knows that the film giant has fallen on tough times. For the past few years, I have wondered not if, but when my lay-off would come. We decided that I when that happened, I would work full time on getting our meadery going and Becky would continue working as a National Training Manager. Well, as fate would have it, I am still employed and Becky got laid off a little over a year ago.

Becky has been working on the meadery ever since.