THE INS AND OUTS OF OPENING A WINE SHOP
by Annette Alvarez-Peters
There’s a downside to the excitement of opening your own wine shop: sleepless nights. “You never really understand how crazy it can be until you are in it,” says Paula de Pano, owner of Rocks + Acid Wine Shop in Chapel Hill, North Carolina. “Then you just have to have the stamina to push through and believe it will all work out.” Via Zoom, I recently sat down with the sommelier and beverage director–turned–retailer to ask her about her experience in starting a new business.
Once the decision is made to open a wine shop, having a “business plan and understanding the numbers” are essential, said de Pano, adding that that plan “may evolve as you research various cost implications and learn from those who have firsthand experience.” There are not a lot of wine shops in her area, so de Pano used her vast network to connect with other retailers and restaurateurs from several different states. Rent, business insurance, taxes, best practices for operations, POS systems, and state laws were only a few of the subjects she researched. She noted that “it is imperative to determine whether you are in the ballpark or overpaying for a service” such as accounting.
De Pano believes that location is the most important factor to consider when opening a shop. It is crucial to understand the market you are entering, she pointed out: “Reach out to your local chamber of commerce. They can give insight as to what the community needs.” In putting together her own business plan, she had a short list of four potential locations: For each, she considered the cost of rent, utilities, and fees for the space; customer traffic; nearby competition; and proximity to surrounding neighborhoods and businesses.
Of course, funding is also important. Startup costs can run you “up to $200,000 or higher, depending on your location, custom design, and the amount of inventory carried,” said de Pano. Amid long delays due to permitting and sourcing building materials—it took Rocks + Acid nearly two years to begin operating—renovation and construction represented her largest expense, followed by her inventory of 400 different wines. Other expenses included fees for professionals such as lawyers, engineers, architects, accountants, and marketing and PR firms. There are many options for funding, including SBA (small business administration) loans, angel investments, and financial backing from family. De Pano needed to consider the following questions: How will I pay back the loan? What are the terms and conditions? When will the first payment begin? Will this be a balloon payment, or will it take three to four years to pay back? “It is so important to figure out the revenue and ensure your numbers work,” she said.
De Pano’s business philosophy is built on values of diversity and inclusion. She is mindful of selecting wines made by women, people of color, people in the LGBTQIA2S+ community, and immigrants as well as by family producers. Knowing hospitality is one of her biggest assets, she hosts educational tastings and classes such as “Let’s Talk About Croatian Wines” and “Peppery Wines: Grüner Veltliner and Syrah.” Rocks + Acid isn’t about “just selling a product, it’s about selling a service and an experience,” in her words.
It was a long road to the shop’s grand opening, but de Pano had been assured that “once you’re open, it will be worth it.” Now that Rocks + Acid is in business, she’s emphatic that it has indeed “been worth it!”
Rocks + Acid Wine Shop in Chapel Hill, NC.
