How to Start a Vineyard Business

Start a vineyard business by following these 10 steps:

1. Plan your Vineyard Business
2. Form your Vineyard Business into a Legal Entity
3. Register your Vineyard Business for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Vineyard Business
6. Get the Necessary Permits & Licenses for your Vineyard Business
7. Get Vineyard Business Insurance
8. Define your Vineyard Business Brand
9. Create your Vineyard Business Website
10. Set up your Business Phone System

We have put together this simple guide to starting your vineyard business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas.

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

• What will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

Luckily we have done a lot of this research for you.

What will you name your business?

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Vineyard Business Name Generator

If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name, we recommend researching your business name by checking:

• Your state's business records
• Federal and state trademark records
• Social media platforms
• Web domain availability.

It's very important to secure your domain name before someone else does.

What are the costs involved in opening a vineyard business?

Because a significant amount of land is required to grow your grape crops, it is important that you do extensive research regarding required start-up capital. Most vintners do not realize a profit for the first three years. Your first year’s budget will be approximately $12,000 an acre. The plants, equipment, tools, pesticides, and trellising are included in this estimate. Second year costs decrease to $1,200 to $1,500 per acre and third year costs will be approximately $1,000 an acre. These figures do not include the cost to purchase or lease land. As a vineyard owner, it is critical that you invest in land that has soil with the right PH balance, proper sunlight, and irrigation. Your land will be one of your highest expenses, so thorough research prior to making any decisions is critical. Purchasing a plot of land in prime vineyard country can set you back anywhere from $100,000 to over $350,000 per acre.

What are the ongoing expenses for a vineyard business?

Managing a vineyard is complicated, with a number of ongoing expenses. In addition to land lease/ownership expenses, your budget should include approximately $8,000 per acre over a three-year period. After the first three years, the crops should be producing grapes, reducing your annual costs to $1,500-$2,000 per acre. Costs include labor, insurance, irrigation, vine cuttings, and machine repair and maintenance.

Who is the target market?

As mentioned, target markets for grape vineyards are not limited to wineries. Since wine grapes are the most profitable, this is the niche that many vineyard owners choose to target. Regardless of which option you choose, be sure to thoroughly research market saturation in your area. Aligning market needs with your passions will make your business venture much more enjoyable and, in turn, profitable.

How does a vineyard business make money?

Vineyards can be set up to process the grapes in-house or to distribute harvested grapes to other local businesses. Before making an initial investment, carefully consider your options. Market needs, coupled with your personal knowledge and experience will assist you in identifying which path will yield the highest profit.

How much can you charge customers?

For a vineyard in full production, recent studies indicate an annual return of $2,500 to $5,000 per acre. These numbers vary depending upon quality and demand.

How much profit can a vineyard business make?

Profits vary depending upon a number of factors. A 35-acre vineyard earning an annual return of $2,500 per acre will see a profit of approximately $88,000.

How can you make your business more profitable?

While the investment and operating costs will be significantly higher, many vineyard owners open their own winery onsite. The increase in annual profits make this a worthy investment. If you own more land than you wish to cultivate, consider leasing acres out to other aspiring vineyard owners in the area. Entrepreneurs with extensive knowledge could educate others on the subject in exchange for education and/or consulting fees.

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your vineyard business is sued.

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history, which can be useful to raise money later on.

STEP 5: 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.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: 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.

Federal Business Licensing Requirements

There are federal regulations regarding what can and cannot be added to, sold as, and processed with food. Attached is a resource from the Food and Drug Administration detailing the process of starting a food business: How to Start a Food Business

In addition, it is important to abide by all federal and state laws regarding the sale of alcohol. More information can be found in the section labeled Liquor Licensing & Food Regulations. 

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a vineyard business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.

Certificate of Occupancy

A vineyard business is generally run out of a large piece of land. 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 vineyard 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 vineyard business will be in compliance and able to obtain a CO.

Liquor Licensing & Food Regulations

Businesses involved in the sale of alcoholic beverages are required to obtain a liquor license from the appropriate state or local agency. A comprehensive list of laws by state (including necessary licenses, zoning laws, etc), curated by the Alcohol and Tobacco Tax and Trade Bureau, is included here.

When selling food, you will need licensing from a local health department; all establishments serving food are required to pass a health inspection. Tips for faring well on a health inspections

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

Is this Business Right For You?

Owning a vineyard is a lifelong dream for many people. Entrepreneurs with a significant amount of capital and a passion for horticulture are best suited for this business venture. Managing a business of this magnitude requires dedication and a love for working outdoors with plants.

What happens during a typical day at a vineyard business?

Managing an operation of this magnitude requires consistent, hands-on care of your crops. Your vineyard’s success is dependent on placement of crops, lighting, water quality, and health of the soil. Since this type of crop can be very sensitive to these outside elements, testing and supervision should remain consistent year round. Management of your vineyard’s crop, however, is just one component. You must also cultivate and nurture relationships with current and prospective customers. This ensures your crop has a final destination once harvesting is complete.

What are some skills and experiences that will help you build a successful vineyard business?

There is a great deal that goes into managing a healthy and profitable grape vineyard. Substantial knowledge in plant production, pest control, harvesting, and post-harvest handling is a must. This, however, is just one ingredient. Your vineyard will require the hard work of multiple staff members. Therefore, your skill set must include employee management, attention to detail, financial management, marketing, and the ability to delegate. In this industry, it is important that you recognize your strengths and weaknesses, building a team of professionals that complement your abilities. Hands-on experience would prove invaluable to your vineyard’s long-term success.

If selling your grapes to wineries is part of your business plan, knowledge of what grapes are best for each type of wine is important. Developing a close relationship with the winemakers you plan to sell to will ensure the right decisions regarding crop maintenance are made. There are a number of educational resources available to aid you in your in your quest for a successful vineyard. Purdue University Extension and the Indiana Wine Grape Council have quality educational programs. Attending conferences and workshops, reading printed publications on the subject, and one-on-one consultations would all prove helpful as you get started on this business venture.

What is the growth potential for a vineyard business?

The wine industry, particularly in the Midwest, has grown exponentially over the last decade. While new wineries continue to open, vineyards have not expanded at the same pace. As a result, demand for quality grapes is high. This has led to significant business opportunities for entrepreneurs with dreams of running a grape vineyard. While grapes grown for wine typically yield more growth and profit, there is still great opportunity in the juice and table fruit facets of the industry.