Free Startup Winery Cash Flow Spreadsheet

March 21st, 2007 → 2:35 am @ Josh Hermsmeyer


Allan London, a CPA out of San Francisco and a board member of Goosecross Cellars in Napa, sent me a fantastic financial spreadsheet last week and asked me to share it with everyone. If you’ve ever dreamed about starting up your own winery, you owe it to yourself to play around with this spreadsheet. It will sober you up but good.

Below I’ll walk quickly through the scenario he’s presented, and give you some tips on setting it up for your own analysis. It’s a tremendously useful calculator that takes your back of the envelope assumptions and uses them to spell out in gory detail just how long you’ll need for your startup winery to actually generate a positive cash flow. It also highlights the importance of product mix in determining the amount of up-front investment required (i.e. making a Cab = more investment up-front).

Allan has also developed a full-fledged accounting system for established wineries called Virtual Winery. You can download the free demo (Excel based) at his website and get a feel for just how sophisticated good winery accounting can be. Highly reccommened.

A Quick Tour

Download the spreadsheet: StartUpWinery.xls. Then fire it up in Excel or Open Office.

Ater opening the file, the first column is the typical back of the envelope data that you’ll need to collect to have even a vague idea of what your financial situation will be. Most of it is pretty straightforward but will depend largely upon what varieties you’ll be producing, and at what price point you think you’ll be able to sell your wine.

To figure out your per case price, take a good look around at what other folks are selling their wines for (your competitive set) and, if you think you can match or exceed them in quality, price your wine accordingly. You’ll also want to consider what percentage of your wine you’ll sell direct and what percentage you’ll dump straight down the drain sell to a distributor. A good rule of thumb is to take your direct price and halve it to find your Free on Board (FOB) price to a distributor. You could also just set fire to stacks of $20s in your office. Either way.

The next column is where you determine your product mix. It’s also where the pills start to wear off and Allan’s spreadsheet really starts to harsh your mellow. Based on what varieties you decide to produce, the spreadsheet will calculate the amount of investment that will be necessary and then gives you an operating cash flow estimate going out 5 years (it assumes you move your entire inventory 12 months after release).

Bottom line: It’s not pretty.



Sadly, while year five looks like the promised land, the cumulative cash deficit created by the huge early investment tells a diferent, much more depressing story.

According to Allan, the red line doesn’t cross the X axis on the graph above until year 8. Year 8. That’s enough to make you want to take your toaster in the bath.

Still, there are a couple things you can do to try and tame the red line.

  • One is to begin building your brand, and thus your revenue, in advance of actually building a winery. In other words, start virtual. Oh, and sell direct.
  • Another is to produce wines that don’t need to age for 36 months so that your cash isn’t locked up for large periods of time. Obviously most whiltes will fit the bill, but personally I like the balance pinot strikes between time in barrel and the price it commands. That’s why they call me the pinotblogger.
  • You can also play with the barrel mix to cut costs. If your style is one that is more reserved in terms of oak usage, or if you decide to tea bag your wine with staves or what have you, you can certainly save some cash on the front end.

Hope you find this useful. If you do, or if you have any questions or corrections, please do leave a comment. And another big thanks to Allan for providing this unique, depressingly helpful tool.