Page 30 - Grapevine NovDec 2021

In The Winery

plan regarding capital
management, or the
funding of their busi-
ness initiatives as they
pertain to the needs of
a business’s financing
or cash flow.

“Most business own-
ers and professionals in
the industry want their
business to grow,” Jay
adds, “but don’t real-
ize how much money
they need, especially
regarding the lead time
required for fine wines
and of many products
in the industry as a
whole, especially aged
beverage products.”

Indeed, as Jay
explains, it can often
take one year for most
sures in planning their business strategy,” Jay says. white wines and Pinots to be made and bottled,
“Start by taking a look at what types and quantities as well as 2-3 years on average for wines like high-
of grapes you have coming in, what bulk wine you end cabernets. Most red wines can take anywhere
have in the tank, your total count of bottled fin- between 12-30 months to properly process in-bar-
ished goods, and become intimately familiar with rel and add to their in-bottle age time from Grape
your sales run rate: if you know those 4 things, you to Bottle. This, of course, takes cash, which is why
can plan out your business very well and forecast planning your capital budget is just as important as
what your business should be focusing on acquiring your sales plan.
in order to avoid jamming up your supply chain.”
By carefully considering these crucial factors to
For example, if your winery business finds that its any business in the industry, Jay explains that they
sale run rate has slowed down, perhaps the win- can be better positioned to survive in the face of
ery needs to look at selling its bulk wine (wine in the next inevitable threat the industry will face in
barrel or tank), or perhaps can temporarily focus the years to come.
on committing fewer grapes for an upcoming vin-
tage. However, once any particular wine has been
bottled, that’s it, which is why Jay says to avoid
bottling your inventory until you know what your
sales run rate is and how it directly impacts your
business. While selling out of a certain inventory
item can sometimes be a boon for your business,
not selling enough can cause inventories to back
up, alerting you that your business will need to
discount other items and sell that portion of your
inventory faster in order to get back into balance.

A second method WS businesses should consider,
according to Jay, is to revisit and revitalize their

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