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A barrel making business, or cooperage, as traditionally named, is a business which specializes in the crafting and construction of wooden barrels and casks.
Who is this business right for?
Experienced or knowledgeable woodworkers and carpenters are excellent fits for a barrel making business. Since most barrels are used in the packaging of different beers, wines and liquors, beverage industry experience would also be a bonus for a barrel making business.
What happens during a typical day at a barrel making business?
Since the focus of a cooperage is to make barrels, much of the day to day business will consist of the forming and carpentry of barrels, as well as the finishing and aging processes. The bending of the wood slats, in addition to the gathering of materials for barrel construction, will also occupy a good amount of the daily schedule.
What is the target market?
Your target market will mainly consist of breweries, wineries and distilleries. By creating products these companies are looking for, you wildest likely fill a niche, which has little competition.
How does a barrel making business make money?
The wholesale and retail sales of barrels and casks generates the revenue for a barrel making business.
What is the growth potential for a barrel making business?
The demand for barrels for craft beer and wine, as well as liquors, is on the rise. More and more spirits companies are returning to wooden barrels for storage and aging of their products. Fortunately for barrel makers, the demand is growing, but the field of cooperage companies is small, which means a barrel company may be able to position itself as the barrel supplier for quite a few businesses. And, since demand is growing, so should the potential for growth in this field.
What are some skills and experiences that will help you build a successful barrel making business?
As barrel making is hands-on wood crafting, carpentry skills are necessary. Experience in steaming or soaking and bending wood is also necessary to help successfully get started with minimal training. Banding and finishing the barrels also takes a careful touch and should be performed by someone with an eye for detail and meticulous craftsmanship. It is also advisable to be knowledgeable in small business management, as you will more than likely be creating and steering this ship with only a few resources to guide you. You will need to be well-spoken and able to address potential clients with a clear and concise message about the virtues of your products and company.
What are the costs involved in opening a barrel making business?
Initial costs for opening a barrel making business will mainly reflect tools, materials and, potentially, a rental space as a workshop and storage facility. Wood and metal banding can be relatively inexpensive, with pricing depending on the type of wood used and availability in your region. The tools needed will be a mix of hand and power tools with circular and mitre saws, jigsaws, planers, and sanders representing many of the power tools and hammers, chisels, and other woodworking and finishing hand tools comprising the hand tools. You will also need a fire source, such as a propane cooker or small flamethrower, for the “toasting” process of the barrels, in which the inside is fired to help seal and flavor the barrels. Additionally, you will need insurance for the business and yourself or workers, a business license, rent, and utilities for your workshop and a few delivery and work vehicles for hauling raw materials, as well as finished products.
What are the steps to start a barrel making business?
Once you're ready to start your barrel making business, follow these steps to ensure that your business is legally compliant and avoid wasting time and money as your business grows:
- Plan your business. A clear plan is essential for success as an entrepreneur. A few important topics to consider are your initial costs, your target market, and how long it will take you to break even.
- Form a legal entity. Establishing a legal business entity prevents you from being personally liable if your barrel making business is sued.
- Register for taxes. You will need to register for a variety of state and federal taxes before you can open for business.
- Open a business bank account. A dedicated checking account for your barrel making business keeps your finances organized and makes your business appear more professional to your customers.
- Set up business accounting. Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
- Obtain necessary permits and licenses. Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
- Get business insurance. Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
- Define your brand. Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
- Establish a web presence. A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers. Save 15% when you create a business website with Weebly.
Select your state below for an in-depth guide on completing each of these steps in your home state.
Where can I find a business mentor?
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
What are some insider tips for jump starting a barrel making business?
A majority of your revenue will stem from sales to beer, wine, and liquor companies. You should familiarize yourself with the various breweries, wineries, and distilleries in your area. Set up meetings with owners or representatives and take some samples of your work. Your initial push will be to create outlets for your creations. Without buyers, your barrels will simply gather dust. Research local and regional beer, wine, and spirits organizations and industry trade shows. Find out who your high end craft spirits companies are, as many of these companies will often be looking to add a more traditional flare and flavor to their products. Finally, create an online presence for yourself and constantly push content to keep your name and reputation known and relevant.
How to promote & market a barrel making business
Online blogs, a website, and social media outlets are some of your best initial marketing steps. Then, beat the street and make personal connections with the alcohol companies. Once you establish yourself, consider local billboards or a sign outside your warehouse. Your products will draw customers, once you become more well known but, remember that your business will always rely on the reputation you cultivate, which is why every customer, either long term or potential, needs to receive your best, most professional attitude and outward appearance.
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How to keep customers coming back
Professionalism, courteous interactions, and quality products, delivered on time and as requested will usually keep most customers loyal to your business. Especially considering the demand often exceeds the supply options, you simply need to maintain a reasonable production number and never over-promise what you can’t deliver.
How and when to build a team
As you begin your new barrel making venture, you will more than likely want at least a few other assistants or partners to help shoulder the burden of production. Barrel making is a craft, so you will need individuals who equally possess woodworking experience and related skills. The quality of your work needs to be consistent, so set up a training regiment and production quality standards for all employees to adhere to. As you grow in size, bring on more barrel constructors, which will allow you more time to market and promote and focus on the financial aspects of a growing business.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a barrel making business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Maintain Personal Asset Protection
Don’t think that just forming an LLC, or any other type of business, will save your personal assets in case of a lawsuit or other matter by itself.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your LLC is sued. In business law, this is referred to as piercing your corporate veil.
Two of the simplest steps that will protect your business, and yourself, are to:
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
Certificate of Occupancy
A barrel making business is generally run out of a workshop or factory. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a barrel making business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your barrel making business will be in compliance and able to obtain a CO.
Labor Safety Requirements
Because barrel making involves the use of potentially dangerous tools, it is important that you and your business follow all labor safety requirements which can be found here.
How much can you charge customers?
Individual barrels will often run between $350-450, with more specialized wood, such as French oak fetching upwards of $1500 per barrel.
What are the ongoing expenses for a barrel making business?
Material and shipping costs will comprise a majority of your overhead, as well as rent and utilities, as needed.
How much profit can a barrel making business make?
With the demand for quality wood barrels on the rise, the potential for earnings can be quite high. If a barrel business averages $400 per barrel and sells 400 barrels per year, their gross returns will be $160,000.
How can you make your business more profitable?
Although a majority of your barrels will go to liquor manufacturers, there is also a residential and commercial application for barrels as furniture and themed installs, such as table bases, chairs and coffee tables. Some older or damaged barrels may also be resold as planters for flowers and gardens. Finally, there is also an industry in refurbishing or reselling used barrels. If a barrel is of a certain wood, it may be more profitable or cost-effective to repair or refurbish for resale. Many craft beer companies are also using bourbon, scotch, and cognac barrels to flavor and infuse their brews. This trend is starting to cross-pollinate to numerous types of spirits.