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How To Start A Wine Tour Business

How To Start A Wine Tour Business

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How To Start A Wine Tour Business

How To Start A Wine Tour Business

So, you love wine and are interested in starting your own wine tour company? Guiding groups to beautiful vineyards and witnessing their delight in wines you’re passionate about sounds like a dream job.

Starting a wine tour business is more than just knowing your Cabernet from your Chardonnay. Careful planning and insight into the industry are needed to become a successful wine-trepreneur, and our guide provides an overview of the wine tourism industry, the basics of planning a wine tour operation, and answers to common questions to set you on the path to making your wine tour business a reality.

Business Overview

Wine tours are so much more than catering to the social drinking tourist and emphasize a healthy balance of education and fun for the guests onboard. A wine tour business involves taking groups of people to visit vineyards and wineries and providing them with an opportunity to taste various types of wines. The goal is to provide an experience that allows customers to learn more about wine, taste different varieties, learn about the winemaking process, and enjoy the setting of wineries.

Wine tour businesses can offer several types of tours, such as private tours, group tours, and specialty tours, and as the business owner, you act as a guide, educator, and logistics coordinator all in one. Deep knowledge of wines, the regions and vineyards visited, and the ability to create an educational yet fun experience are key. Most tours range from full-day excursions to multi-day itineraries showcasing premier regional wineries.

Industry Summary

The wine tour industry is part of the broader travel and tourism sector. It’s a specialized niche targeting wine enthusiasts and tourists looking for unique local experiences.

Wine tourism has boomed in recent decades. According to a 2022 study, over 49 million travelers visited American wine regions, spending $95.5 billion.1 As consumer interest in wine and unique travel experiences such as agritourism grows, wine tours provide the perfect blend.

Steps To Start A Wine Tour Business

Step 1: Create a Business Plan

Starting a wine tour business is an exciting business idea, but before pouring your resources into it, start with a business plan. Here’s just a few reasons why I think it’s so important for a wine tour business:

First off, your business plan is where you outline the strategic direction for your business. It helps you hone in on what you want to achieve and how you’re going to do it. Like drawing a map before you set off on a road trip, a business plan guides your business step by step. With it, you can shape your idea into a finely tuned vision on paper before jumping in and maybe making expensive mistakes.

Next, knowing your market is key, and a business plan helps you get there. Here, you will gather information on wine tourism, local wine preferences, and what customers want from a wine tour. You’ll discuss the kinds of wines they prefer and who else is providing similar tours in your area. With this kind of detail, you can create a wine tour that meets and even exceeds your customers’ needs.

Last, a business plan includes detailed financial projections, which are used to estimate the startup costs, consider various pricing strategies, and forecast revenue and expenses, to calculate whether your wine tour business will be a sustainable and profitable business.

Related: How to write a business plan

Step 2: Source Funding

Earlier in the business plan, you should have calculated how much money is needed to start your wine tour business. The next step is to make sure you have the funds to get your idea off the ground.

Depending on the scale of your business, personal savings will be the first source of funding. Wine tour companies can be a low-cost business to start, but even so, be aware that starting any business can come with unexpected expenses, so ensure you have some savings left over to cover any unforeseen costs.

Banks are a common source of small business funding, but they usually have strict requirements. They often want you to have invested at least 15% of your funds into the project. A good credit score and sufficient collateral are also typically necessary. If a bank deems your loan too risky, they might suggest using a Small Business Administration (SBA) loan guarantee. Additionally, if the money is needed to purchase a vehicle for your tours, you could instead consider a vehicle loan or lease, as it’s often less expensive and complicated than a business loan.

When personal savings don’t fully cover your needs, you might consider getting help from friends and family. Borrowing from your social circle provides an opportunity to secure funds, often on friendlier terms than what banks or other lenders offer.

For smaller funding needs, especially when traditional loans are out of reach, microloans are an alternative. Local economic development organizations often provide these, and some offer business training, which can be invaluable for a new entrepreneur.

In regions with wineries but no tour operators, winegrower associations or tourism agencies might offer grants to promote tourism. You can also approach wineries directly about sponsoring a part of your startup costs in exchange for featured placements in your tours. This not only helps with funding but also builds partnerships within the industry.

For short-term needs or smaller purchases, business credit cards can be handy. They offer the flexibility of immediate funding. However, it’s important to be aware of high interest rates and manage this option carefully.

Related: Finding the money to start a business

Step 3: Register the Business

Before you can start sharing the wonderful world of wine with others, there’s some groundwork to do: registering your business and making it legal. Requirements will be different in every location, but here’s an overview:

Choose a business structure: The first thing to do is choose how the business will be organized. The structure of your business will influence many things, from how much you pay in taxes to your personal liability. There are four main types of business structures:

  • Sole proprietorship: This structure is the simplest and most inexpensive to set up. However, it leaves you personally responsible for any business liabilities.
  • General partnership: A partnership involves two or more people who agree to share in the profits or losses of a business.
  • Corporation: This structure separates your personal assets from your business assets, protecting you from being personally liable for business debts.
  • Limited Liability Company (LLC): It combines the benefits of both the corporation and partnership business structures.

Related: Comparison of business structures

Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.

Some popular LLC formation services include:

IncFile - $0 plus state fees & free registered agent for 1 year!

ZenBusiness - Best for beginners. $0 plus state fees & free registered agent for 1 year!

Northwest - Best privacy protection. $39 plus state fees & free registered agent for 1 year!

Business name registration: After registering the business structure, you may need to register your business name. This process will vary depending on what business structure you pick. Sole proprietors and partnerships will often be required to register a “Doing Business As” (DBA), while corporations and LLCs register with the state during the formation process.

During this time, it’s also a good idea to check if the name you want is available as a web domain, even if you’re not ready to set up a website yet.

Related: Finding a domain name for your business

Obtain business licenses and permits: Licensing requirements will vary by state, if you are not outsourcing transportation, you’ll likely need a state chauffeur’s license and possibly a Class B CDL license, depending on the size of the vehicle. And if you’re planning to serve alcohol during the trip, a liquor license may be necessary.

On top of these, you may also need a local business license and a state sales tax permit.

Related: State guides for general business licensing

Step 4: Set Up Operations

Now that you’ve got your business plan, funding, and legalities sorted, it’s time to take all these ideas and start putting them into action. This is where the rubber meets the road, where your dream of a wine tour business starts to take on a real shape.

Let’s talk about location first. Many people run their wine tour businesses from home, which can keep overhead costs low. But if you prefer a more professional or dedicated space, you could lease a small retail location.

Next, you will need to figure out how to get clients to the wineries. Some factors to consider when making this decision include the vehicle size, budget restrictions, and the experience you want to provide your customers. For instance, a smaller, more boutique wine tour might opt for a luxury van or SUV, while larger-scale operations might require buses or coaches.

Once you have what vehicle to use, the next decision is whether to purchase or outsource transportation services. Both choices come with their pros and cons. Purchasing a vehicle means you have complete control over its availability and maintenance, but this requires a significant upfront investment. On the other hand, outsourcing transportation can be more cost-effective and offers more flexibility, especially in the early stages of your business or if you plan to offer tours sporadically. The key is to ensure that whichever option you choose, the vehicle must be reliable, comfortable, and safe, reflecting the quality and style of your wine tour experience.

Don’t forget to find a convenient spot for customers to gather and board your tour vehicle. This could be a designated meeting point or direct hospitality pickups, such as a tourism center, hotel, or guest house. In case a central pickup point is favorable, a mutual arrangement might need to be worked out to share their lot.

You will also need to consider how potential customers will book their service. Customers can generally have two options to book a tour: by phone or online. Offering phone bookings lets you maintain a personal touch, as friendly and knowledgeable staff can directly address customer inquiries and provide information, though this requires paying someone to answer the phone. For those who prefer online interactions, a website can be a simple informational site with a contact form or have online booking capabilities.

Last, begin building relationships with local wineries. These connections are more than just business transactions; they are partnerships that can greatly enhance the quality of your tours. Good rapport with wineries can lead to unique experiences for your guests, like exclusive tours or tastings. These relationships are also valuable for keeping abreast of events and special offerings that you can incorporate into your tours, adding value and diversity to your client’s experience.

Step 5: Prepare to Launch!

Starting a wine tour business involves a series of intricate steps, which are necessary for starting a wine tour business. After covering the core steps like securing funding, registering the business, and setting up operations, several important aspects still need attention. The needs will be different for every small business owner, but here are some common things to consider:

Business insurance: Protect yourself and your company with the necessary insurance policies like general liability to cover incidents on tours, such as accidents or property damage.

Staffing: Even if you plan to conduct all tours yourself, having backup tour guides is a good idea in case you’re unable to run a tour. You can also hire staff or independent contractors as guides to grow the business and operate multiple tours.

Setting up bookkeeping: Effective bookkeeping is essential for tracking income, expenses, and taxes. You can opt for a professional bookkeeper or utilize software solutions like Wave Accounting (FREE) or Quickbooks.

Opening a business bank account: A separate business bank account helps in tracking business expenses, income, and transactions, for financial reporting and tax purposes.

Accepting credit cards: Setting up a system to accept credit cards is important for customer convenience. This involves choosing a reliable payment processor and ensuring secure transactions.

Creating a marketing strategy: Develop a marketing strategy to promote your new wine tour business. This includes creating a memorable logo, building an engaging website, and utilizing social media platforms. Other strategies might involve email marketing, local advertising, partnerships with local businesses, and attending wine events to gain visibility.

Preparing for the grand opening: Plan a grand opening event to create buzz around your new business. This could include special inaugural tours, partnerships with local businesses for cross-promotion, or hosting a launch event at a local winery.

This material is property of StartingYourBusiness.com

Common Questions When Starting a Wine Tour Business

How much does it cost to start a wine tour business?

Starting a wine tour business can require a substantial initial investment, though with some creativity, it can be very affordable. If you start by outsourcing transportation, you could start with as little as $2,000, but if you purchase a vehicle, expect a starting cost of around $50,000 or so. Let’s break down the costs:

Vehicle purchase: The most significant expense is likely to be your fleet. Depending on the size and style, a new vehicle suitable for wine tours could cost anywhere between $30,000 and $60,000.

Business registration: Registering your business is a necessary step in starting your wine tour company. This cost can vary depending on the state and the type of business entity you decide to form but generally ranges from $100 to $500.

Business insurance: Purchasing business insurance to cover any potential accidents or setbacks could range anywhere from $500 to $3,000.

Marketing: Getting the word out about your business can be accomplished through various marketing activities. You might consider having a professional logo designed, setting up a website, using social media, or even running ads in local newspapers or radio. Initial marketing expenses can be about $1,000 to $2,000.

How profitable is a wine tour business?

Estimating the potential profitability of a wine tour business requires considering various factors, including revenue sources, operating expenses, and the scale of the business. Let’s break down a hypothetical scenario to understand the potential earnings.

Revenue sources: The primary revenue for a wine tour business comes from selling tour packages. Suppose your package breaks out to $100 per person, and conduct tours twice a week, each accommodating 10 guests. This scenario would yield $2,000 per week, amounting to approximately $8,000 per month in revenue.

Operating expenses: Key expenses include vehicle maintenance, fuel, insurance, marketing, and possibly payments to wineries for tasting sessions. Assuming monthly expenses break down as follows:
– Vehicle related costs (maintenance, fuel): $1,000
– Insurance: $500
– Marketing: $300
– Winery tasting fees: $400 (assuming $10 per guest)
– Miscellaneous and administrative expenses: $300

Total monthly expenses would then be $2,500.

Profit calculation: To calculate profit, subtract the total expenses from the revenue:
Monthly revenue: $8,000
Monthly expenses: $2,500
Monthly profit = Revenue – Expenses = $8,000 – $2,500 = $5,500

Thus, in this scenario, the wine tour business could potentially make a monthly profit of $5,500.

This is a simplified example, and actual profitability can vary greatly based on factors like location, the exclusivity of the tours, operational efficiency, and the number of tours conducted. Additionally, seasonal fluctuations in the tourism industry can significantly impact revenue.

What is the NAICS code for a wine tour business?

The NAICS code for a wine tour bus business is 487110 – Scenic and Sightseeing Transportation, Land. Other similar types of business under this NAICS code include cable cars, horse-drawn carriages, railway transportation, trolleys, and more.

The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.

Related: What is a NAICS code and how to find yours

  1. National Association of American Wineries ↩︎

How To Start A Wine Tour Business

How To Start A Wine Tour Business

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