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Craft Financing

12/24/2018 • Shawn Patrick

Starting any new business is a daunting task, and hats off to the brave souls that do. Every industry or business has its own set of challenges to overcome when starting up, but craft distilleries have a few unique hurdles all their own. Most of these come down to one thing - money.

Distilleries take a ton of capital, and can’t truly be shoe stringed. Sure, a new distillery can be frugal as all get out, but they can’t pull a Bezos and run things out of their garage for a couple of years.

Opening a distillery takes money and a lot of it. The trick is in getting it. Even though the economy is booming and rising interest rates are making lenders more likely to lend, it can be a challenge.

Acquiring Funding

Acquiring funding for a distillery is, on its surface, the same as getting the cash to start any business. Either the person with the idea has enough money to do it themselves, they line up investors (friends, family, acquaintances), or they get a loan.

Sometimes it’s a combination of all three. No matter what option is best for a person, no sane individual or institution is going to give someone that kind of money unless they are sure what that money will be used for.

Write a Business Plan

A distillery’s business plan should be comprehensive and concise. It won’t be able to fully answer every question a potential investor might have, but it should get them to ask the right questions and leave them feeling like they understand your purpose, mission, and goals.

There are great resources online that will help hammer out a great business plan. A well-done business plan will also help explain one of the biggest hurdles craft distilleries have getting investors on board – the years between starting up and seeing the first profits roll in.

Explain the Fees

What and why something will be specifically needed is also important. No business is without their often arcane rules and regulations. But there aren't many industries with as much red tape and legal hoops just to open the doors as the liquor industry. There's no getting around it - you will need a lawyer.

Even if you do everything right, that doesn’t mean that every city, state, or federal bureaucrat will know what they’re doing. The money needed for lawyers will be more than other businesses because they will do more than drafting contracts and reviewing documents.

Getting investors to understand why X amount of money needs to be set aside for legal fees or other important core elements like distillery manufacturing software, is crucial.

Hiring Control

Big dreams and a well thought out plan is good, but how will it be executed?

A new craft distillery will need to get some experienced and skilled professionals onboard. But some investors insist on a professional staff before putting up the cash. Isn't that a catch-22 though. What professional would take a job without there being a job? This bunch of potential investors can always be called later on, once the other investors are onboard and the ball is rolling.


Opening a distillery requires a huge investment from yourself, gaining investor buy-in, or bank loans. Having a solid business plan and an explanation of the process, amounts, and fees will give you a leg up on all the hurdles you're jumping.