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?

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