Happy New Year to all. I can’t believe another year has come and gone already. For myself, as the new year turns I’m taking a moment to reflect back on how well I achieved the goals I set for myself last year and to create new ones. Hence, it’s been a good time to dust off the old business plan to reflect on progress made or the lack thereof. In other words, I’m holding myself accountable for doing what I told myself I was going to do. So far, my persistence and diligence is bearing fruit for those new goals I’ve taken on. I’m also looking to scrap those goals that aren’t working.
I know some of you are contemplating taking the plunge this year to establish your own winery or wine based business. If so, this is a great time to lay your foundation towards developing a successful winery or wine and hospitality based business by creating your business plan.
Creating a business plan forces you to focus on identifying your goals and objectives as well as how to set plans on how to reach them. In other words, where do you see your business 1 year from now, 3 years from now, or even 5 years from now? Who are your customers? What specific products will you offer? Have you identified your competition? What are your start up costs and sources of funds? What is your mission? Who is your target market? How will you manage the local, state, and federal regulations governing the business of alcohol? Exactly how will your business take shape in 2016?
These are just a few questions to think about when starting your own winery, wine or hospitality based business. As the beginning of the year unfolds, use this time to build your business plan and set achievable goals. Your business plan will keep you on the right track in 2016 and the years to follow.
Happy holidays and best wishes from the Law Offices of Judy M. Young, LLC. Its hard to believe its been almost eight years since the launch of Pennsylvania Winery and Hospitality Lawyer. Its been a real joy and a blessing to serve the needs of the Pennsylvania wine and hospitality community. As 2015 approaches, we look forward to serving your future legal needs. We hope your new year is filled with good health, happiness, and cheer.
Effective March 1, 2014, the Pennslyvania Liquor Control Board announced regulatory changes that affect Limited Winery Licensees around the state. The PLCB has eliminated the requirement that prohibited in state wineries from selling bottles for less than the same wine sells for at the state operated Wine and Spirit Stores. The recent change is designed to promote in-state wineries. For more read: PLCB Changes Allow Wineries To Sell Products Below The State Sell Price.
For those of us in the wine industry, the government shutdown has brought the wine approval business to a halt. Federal approval for new wineries and/or wine labels is handled by the Federal Tobacco Tax and Trade Bureau (TTB). For purposes of the government shutdown, the TTB has been deemed non-essential. The Federal Tobacco Tax and Trade Bureau is not processing COLAs, new wine application permits, label approvals, or importation of wine in bond. Approximately 800,000 of the two million U.S. federal employees have been furloughed.
The suspension of the TTB’s regulatory functions means all reviews of alcohol beverage label permits, formulas are suspended until such time funding is reinstated. This means that many Pennsylvania wineries will not be able to sell their wines until the shutdown ends and their applications can be processed. The legal documents required to bottle and sell the wine has come to a halt, hence having severe financial impact to many of the State’s wineries.
The TTB has posted an Appropriations Lapse Notice. Once government services resume, a horrendous backlog for application processing is anticipated as we are now approaching Day 14 of the shutdown.
One of the most difficult factors to comply with when forming a Limited Liability Corporations (LLC) is to remember that you and your business are not the same. This is especially significant for LLC’s that have a single member or handful of members.
As the LLC owner, you are distinguishable now as the Agent of the LLC. Thus, when signing contracts and other business documents, you should do so on behalf of the LLC and not as an individual. This can sometimes be difficult to remember if you have grown out of your role as Sole Proprietor or Partnership, and have transitioned into a LLC.
In order to maintain the maximum protection of personal liability that your LLC provides, you will want to maintain this important legal distinction. Failure to do so may put you into a position where a judge may determine that you are personally liable for the debts of your restaurant, winery, or wine based based hospitality business. Adherence to this best practice will help to shield the members of the LLC.
Forming the habit of maintaining best business practices will ensure the success your hospitality business.
Now that summertime is here, your Winery, Restaurant, Wine Business or Bed and Breakfast may permit using your facility for events such as festivals, weddings, outdoor jazz concerts and other events that attract customers to your venue and promote goodwill in your community.
When working with event planners you’ll need to remember to have a carefully prepared Agreement that will protect your risks and liabilities for the event.
A brief look at things you’ll want to consider:
**Outline the premises and facilities that the other party participating with you will be authorize to use. You may desire to restrict certain areas of your property.
**Identify the purpose of your agreement, the parties involved, and the duration of the agreement. Allow yourself a provision that gives you the power to terminate the agreement if necessary.
**Detail the necessary payments, deposits and schedule for which they are to be paid.
**Be clear about which party is responsible for particular services and amenities (food, beverages, security, entertainment, lighting, janitorial clean-up.)
**State which party will be responsible for event permits and licensing.
**Identify who will be responsible for monitoring alchohol consumption of the guests. Make sure the alcohol servers are RAMP trained so they may prevent underage service, excessive consumption and intoxicated guests from driving.
**Allow yourself a provision to be compensated for premise damages that may be incurred during such events.
**Have your legal counsel prepare and/or review your written Agreement prior to the execution by each party.
And by all means enjoy your summertime events!
Every year when the New Year rolls around I’m reminded of the folks that have approached my practice at the beginning of every year to discuss their desire to open their own winery, restaurant, or other wine based business. We typically discuss how to best proceed in their mission. I listen respectfully as they share their dreams and passions. We talk about the hard work, the diligence and the finanacial committment that will be necessary to fulfill their dreams. Some of these entrepreneurs to be, discover that they more romantic hobbyists than entrepreneur, abandoning the dream along the way. Others non-committers speak their dreams out loud, failing to act, while watching at a distance as others take their dreams and implement the very dream they thought they once had but for their own failure to act.
When the dust settles and clears, what I’ve learned is that the difference between those that “talk the talk” and those that “walk the walk “ comes right down to the “doers”.
The “doers have a dream that they hold on to very tightly. “Doers keep their visions and plans to themselves so as to limit the negative feedback from those who would discourage them, identifying barriers or reinforcing negative thoughts their dreams can’t be accomplished. The “doer’s work diligently when no one is looking, often without pats on the backs, or ego’s stroked, perservering with their vision and goals. The “doer’s stay committed to their fulfilling their dreams of opening that new tasting room, restaurant, bed and breakfast or wine based business.
As the new year of 2013 unfolds, who will you be? Will you stay true to your dream of beginning the new path towards entrepreneurship. Perhaps your dream is to finally act on that expansion that you’ve been planning for years. Or maybe, this is the time to pursue that new acquisition. Might this be your year to build a new business? Whatever the case, if it is your dream, now is the time to act. Now is the time to do. Don’t let others derail what you know in your heart and mind is your dream path to follow.
Be a “Doer” in 2013. This is your time. This is your moment. Live your dream.
I am routinely approached by people who have an idea to open a new winery, restaurant, catering business or other wine and hospitality business. Many of these persons often consider entering their new business venture with a family member or friend.
Typically I recommend that before they say “I do” to forming a Company or Partnership, that they first ask themselves if they are choosing the right person for the business. In other words, who is standing next to you?
Saying “I do” or choosing the wrong business mate can have dreadful consequences with disastrous long term effects.
Its not personal. Its business.
Picking a business mate because they are your “friend” is rarely ever a good idea. Business decisions can strain personal relationships that can lead to having a negative effect on your buisness.
When picking the right partner for your new business, focus on individual (s) that have a complementary skill set to your own. Pick someone who is best suited to building a practice together. Pay less attention to where your partner went to school, more attention to he or she has achieved or accomplished.
Perhaps you are good at organizing the financial side of the business while your business mate may be customer service oriented. Maybe your partner excels at being the “face” of the business, while you on the other-hand may be solution oriented. You may be a good problem solver whereas you partner may be great at networking and fundraising. Is your partner a visionary or an executor? These are factors to consider whether you bring or have something each uniquely offers to the business. In other words, your best partner/businessmate is one that is the Yin to your Yang.
Before you say “I Do” and walk down the aisle of entering a new business venture with a new partner at your side, make sure the right person is standing next to you.
Planning your business well with the right partner or founder will lead to a long term prosperous business relationship.
Now you can say it. “I Do”.
Forming a separate business entity for your new or existing winery, restaurant, catering, or wine based hospitality business is a critical step. Your corporation is responsible for the debts and liabilities of your wine or hospitality business shielding your personal assets separate from those of your business. But once the business formation process is complete, your job isn’t finished. You must ensure that your Corporation or LLC entity remains in compliance so that your “corporate veil” is not pierced, making you personally liable for the debts of your wine or hospitality business.
Here are eight ways to ensure that your Pennsylvania winery or hospitality business remains in compliance.
1.) Do not co-mingle your personal and business finances.
2.) Maintain your regular and annual corporate minutes and resolutions.
3.) Be sure to file your annual reporting requirements with the Secretary of State.
4.) Record any changes and amendments to your Articles of Incorporation and file
those timely with State and Federal Regulatory bodies, i.e Municipal Reporting and Zoning Requirements, Liquor Control Boards and the Federal TTB as applicable.
5.) If you operate out of state, make sure your business is legal out of state in the event you need to qualify as a “Foreign Corporation of LLC” within the state that you are doing business.
6.) Take time out of your busy schedule to address your administrative legal requirements.
7.) Maintain your corporate tax filings just as you would with your individual taxes.
8 ) Contact your Accountant or Legal Counsel should you run into any compliance issues.
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668 Stony Hill Road Suite 339
Yardley, Pennsylvania 19067
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