Costs and Equipment for Starting a Small Distillery
It is possible to start a small distillery for around $30,000. This includes spending about $5,000 on the initial lease and relevant licensing and $5,000 on equipment such as stills and fermenters.
To legally distill at home, you must first apply for a Federal Distilled Spirits Permit. The permit requires a fee, in addition to regulated inspections of your distillation equipment and facility.
You’ll need items like stills, fermenters, a boiler, cooling system, pumps, and tanks. Equipment and machinery can cost $50,000 to $200,000 or more.
Costs and Profitability of Distilleries
Estimating $1 million for opening does not make profit easy. Spending $6,000 monthly and losing money for two years requires planning. Just ordering a still takes one year.
There’s potential for profit. Distilleries make money selling liquor to distributors who sell to retailers. You may receive 40-50% of the eventual retail price.
Funding and Business Plan for Distillery
The process of creating a business plan is vital. It provides a roadmap and can help raise capital. Virtual distilleries contract distillation and sell spirits without production.