Department - Author 1
Degree Name - Author 1
BS in Wine and Viticulture
San Vicente Cellars is a small tasting room and production facility in Ventura County. As of now, the winery’s revenue just barely covers the cost of production and other expenses. It is believed that due to their poor location the tasting room is not receiving maximum customers in reflection to the quality of the wines. San Vicente’s owner has a vision of opening an additional tasting room in a higher trafficking location. This project is based on this vision and tests whether or not this new location is financially feasible. After all costs are factored in, the breakeven point of the addition will then be calculated. The project will be determined feasible if the tasting room will breakeven and begin turning a profit after five years of operations.
A SWOT analysis was performed based on the new location to determine the possibilities of entering the market. Following the SWOT analysis a profit loss statement was put together to organize all debt and desired equity of the project. A budget forecast was then based on the statement and was used to determine the breakeven year.
After all tests were done it was concluded that the project was not financially feasible in that the new location’s costs did not breakeven before the five year mark but in fact would take an estimated seven years to begin turning a profit.