Why contract distilling did not work for me
As I blogged earlier on the startup distillery adventure that I have taken one the road blocks I have encountered was finding a location.
Location for this type of business is crucial. Some of the things that we need to take in consideration are:
- Lease term and conditions. How many years, NNN cost and more important is your landlord OK?
- Zoning. Is it within the appropriate city zone?
- Within budget? This will be one of the biggest expenses month in month out.
- Local authority approvals.
And the list goes on.
With that in mind I decided in order for me to “catch” the grape season and not miss on an opportunity to produce a product I made the decision to reach out to a fellow distillery for the option to make my product on their premises, aka contract distilling.
Well this sounds easy, but it’s a very complex and long process and although this did not work in my situation for multiple reasons the one lesson I got out of it was:
Put everything on paper
In other words after your second meeting and both parties agree on this, it is very important to get a detailed contract in place with all the requirements both parties are responsible for. This includes purchase orders, equipment, equipment malfunction, bottles, corks, marketing, labels etc…
This will eliminate things that can be taken for granted and ensure that everybody has skin on the game.
There are numerous sites where you can download a business agreement template. Even though the temptation to move in and start business right away is on full swing, it’s important to take a step back. Think and put a contract together before anything else.
It will save you not only money and energy put your sanity as well.