Your tourism business offer will operate in the Wine Industry. Some info on the industry:
- Total size of the industry is about $9 billion in Canada.
- Average winery generates about $600,000-$700,000 in revenue annually.
Ownership structure of the new business: Canadian Controlled Private Corporation (CCPC). Your team members are the owner/operators of this business.
The charts on the next page list the start-up costs for a typical winery that produces 5,000 to 15,000 cases annually:
Capital assets
| Description | Low range | High range |
| Land, Plant, & Office | $400,000 | $1,200,000 |
| Other Equipment (receiving equipment, cellar equipment, material handling, refrigeration system, fermentation & storage, cooperage [first 3 years], tasting room) | $400,000 | $800,000 |
Pre-opening soft costs (costs incurred prior to any revenue earned)
| Description | Low range | High range |
| Full Time Salaries | $100,000 | $300,000 |
| Part Time Salaries | $5,000 | $20,000 |
| Pre-opening marketing, website, public relations | $15,000 | $25,000 |
| Professional fees (lawyer, accountant, etc.) | $5,000 | $10,000 |
| Utilities | $10,000 | $15,000 |
| Insurance | $5,000 | $15,000 |
| Other (Point of sale technology, other software, etc.) | $5,000 | $10,000 |
Working capital
| Description | Low range | High range |
| Cash reserve | $0 | $50,000 |
| Grapes (Inventory) | $85,000 | $250,000 |
| Packaging (Inventory) | $125,000 | $370,000 |
| Other current assets (supplies, prepaid expenses, tech purchased, etc.) | $5,000 | $10,000 |
Financing Options Available
- Equity Investment (a potential partner wants 49% of business with max investment of $1,500,000, but will take lower % for less investment)
- Short-term loan (up to $250,000 @ 8.25% interest)
- Long-term loan (up to $1,500,000 @ 5.5% interest)
Final Question: Which financing source(s) will go towards which start-up cost categories (capital assets, expenses, current assets) above?
