If you are a wine producer and you do not know how to answer the question “How much does it cost me to produce a bottle of wine?” Don’t worry, you are in good company.
Before we start answering this question we should, in my opinion, put our business ideas in order and ask ourselves some questions. Some of them could be these:
- Which is the current stage of my company: Birth? Development? Maturity? Decline?
- Am I going through the famous “generational transition”?
- How are my vineyards: Old? Young? To uproot?
- How are my financials: Do I need funding? Am I using personal resources? Is it time to invest?
These are some of the questions that a wine entrepreneur, novice or experienced, can ask himself to frame and focus on the situation of the Company.
And once I have given myself these answers? What happens?
Let’s come to the point: the framework of the economic and financial situation of the winery is fundamental to outline a starting point in the “guiding path” that can help the entrepreneur to understand in which direction his investments, his money and his hopes are going.
Outlining a guiding path with the assistance of a professional in the field means:
- implement a cost control of the vineyard, to be planted or already existing, to get as close as possible to calculate its profitability;
- rely on a trustworthy agronomist for the evaluation of costs, consideration of working hours, the capacity of the vineyard and the estimated yield;
- plan in time and estimate the production/yield of the vineyard and consequently the profitability of the entire company;
- if necessary, extend cost control to the winemaking activity;
- obtain a document (Business Plan) that illustrates the economic evolution of the company for a period of time ranging from a minimum of 3 to a maximum of 10 years.
Don’t you know how much it costs to produce a bottle of your wine?
Once you have done the steps listed above you will not only have had an answer: I’m sure you will also have known much more about your own company!!
Dr Federica Milani
Accountant in Agriculture