This is perhaps where forecasting matters most.
There is a substantial gap between deciding to plant vines and selling the resulting wine.
During that period the bills don’t stop.
- Land preparation.
- Vines.
- Trellising.
- Labour.
- Machinery.
- Vineyard management.
- Harvesting.
- Winemaking.
- Bottling.
- Marketing.
- And eventually, hopefully, sales.
We’ll build a financial model around the proposed vineyard and ask some deliberately uncomfortable questions.
- When does it become cash positive?
- How much capital will it consume before then?
- What happens if yields are lower than expected?
- What selling price is required?
- How much needs to be sold direct to consumer?
- What happens if establishment costs are 20% higher?
- What if it takes two years longer than expected?
And ultimately:
Does this vineyard still make financial sense if things don’t go exactly according to plan?
That’s a much more useful question than whether the spreadsheet works under perfect conditions.
We’ll help you raise the money too
A lender considering a vineyard isn’t simply interested in last year’s accounts.
They want to understand the proposition.
- What is the money for?
- How much is required?
- What is the owner putting in?
- What assets support the borrowing?
- When will the investment start generating a return?
- And, most importantly, how will the money be repaid?
We can help prepare the forecasts, financial information and supporting narrative needed to answer those questions.
And where appropriate, we’ll work with specialist agricultural lenders, asset-finance providers, wine-industry financiers and commercial banks to find a suitable funding solution.
Because producing a forecast that says you need another £300,000 isn’t terribly helpful if your accountant then leaves you to find it yourself.
Know about the problem before it becomes one
This is really what cash-flow forecasting is about.
Not producing another spreadsheet.
Time.
If we know today that the business is likely to have a £150,000 cash shortfall in eighteen months, we have options.
- We can reconsider the investment.
- Change its timing.
- Reduce expenditure.
- Change the production mix.
- Look for grants.
- Arrange finance.
- Raise capital.
- Or decide that we’re comfortable with the shortfall and plan for it.
Discover the same £150,000 problem three weeks before payroll and the range of options becomes considerably smaller.
That’s the difference between forecasting cash and managing cash.
Part of your annual plan
We don’t see forecasting as something that gets prepared for the bank and then forgotten.
For clients where cash flow matters, it becomes part of the financial planning process.
We’ll agree what needs monitoring, how frequently the forecast should be revisited and what future investments need to be built into it.
And when something changes – a poor harvest, a large equipment purchase, new planting or an unexpected opportunity – we can change the assumptions and see what it does to the plan.
That’s what we mean at Ascentis when we say:
Before your next big investment, talk to us
If you’re considering planting, expanding, building a winery, buying equipment or developing the visitor side of your vineyard, speak to us before you commit.
We’ll look at:
- what it costs
- what it does to cash
- what tax relief may be available
- whether grant funding exists
- how much finance you actually need
- and whether the numbers still work when things don’t go perfectly.
Then you can make the investment knowing what it means for the business.