![How to plan and track the budget of your mezcal brand [template]](http://onlineyougrow.com/cdn/shop/articles/cov-budget-7_aa0af17b-25a3-4e8d-9291-96ed7c2fb1a8.png?v=1715856563&width=1100)
If you don’t plan and track your mezcal brand's budget properly, you're setting yourself up for failure.
When we developed our strategy pack for mezcal brand owners, we saw a lot of entrepreneurs struggling with finances and planning.
They were disorganized, had no grasp of cash flow, and were drowning in financial troubles despite having substantial revenue.
Don’t let this be you—stand out and succeed.
We’ve created a small, free tool to help you get started: our Budget Tracker and Planner. Let’s turn your mezcal brand's finances around and set you on the path to success!
Get the budget tracker tailored for mezcal brands
Most mezcal brand founders don't know how to plan and track their budget. This spreadsheet will help you.
Example of a full budget for mezcal brands
Here is an example of a (very) detailed budget for a mezcal brand, to give you some inspiration
1. Rent and Utilities
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Rent | Lease for distillery and office space | $4,000 | $48,000 |
| Electricity | Power consumption for distillation and office | $1,000 | $12,000 |
| Water | Water usage for production | $300 | $3,600 |
| Gas | Gas for distillation process | $400 | $4,800 |
| Internet & Phone | Internet service and business phone | $150 | $1,800 |
| Waste Removal | Garbage and recycling services | $100 | $1,200 |
| Pest Control | Monthly pest control services | $50 | $600 |
| Insurance | Property and liability insurance | $500 | $6,000 |
2. Salaries & Wages
| Position | Number of Employees | Monthly Cost per Employee | Total Monthly Cost | Annual Cost |
|---|---|---|---|---|
| Master Distiller | 1 | $5,000 | $5,000 | $60,000 |
| Assistant Distiller | 2 | $3,000 | $6,000 | $72,000 |
| Production Workers | 3 | $2,500 | $7,500 | $90,000 |
| Sales Representatives | 2 | $3,500 | $7,000 | $84,000 |
| Marketing Manager | 1 | $4,000 | $4,000 | $48,000 |
| Office Manager | 1 | $3,000 | $3,000 | $36,000 |
3. Production Costs
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Agave | Raw material for mezcal production | $8,000 | $96,000 |
| Yeast & Fermentation Agents | Ingredients for fermentation | $1,000 | $12,000 |
| Bottles & Packaging | Bottles, labels, and packaging materials | $3,000 | $36,000 |
| Cleaning Supplies | Detergents, sanitizers, etc. | $200 | $2,400 |
| Distillation Equipment | Maintenance and replacement of equipment | $500 | $6,000 |
4. Marketing & Advertising
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Online Advertising | Google Ads, Facebook Ads, etc. | $500 | $6,000 |
| Social Media Management | Managing social media accounts | $700 | $8,400 |
| Print Advertising | Flyers, posters, magazine ads | $300 | $3,600 |
| Website Maintenance | Hosting, domain, updates | $150 | $1,800 |
| Email Marketing | Email campaigns and newsletters | $200 | $2,400 |
| Promotional Events | Special events and tastings | $400 | $4,800 |
5. Miscellaneous Expenses
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Equipment Maintenance | Regular maintenance of distillation equipment | $500 | $6,000 |
| Uniforms | Staff uniforms and safety gear | $200 | $2,400 |
| Licenses & Permits | Production permits, liquor licenses, etc. | $150 | $1,800 |
| POS System | Point of Sale software and hardware | $150 | $1,800 |
| Contingency Fund | Emergency repairs and unexpected costs | $500 | $6,000 |
| Office Supplies | Stationery, pens, printer ink, etc. | $100 | $1,200 |
| Staff Training | Training programs and materials | $300 | $3,600 |
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What are the biggest expenses for a mezcal brand?
Be mindful of these critical expenses. Here are five major costs every mezcal brand owner needs to consider, along with some tips on how to manage them effectively.
- Raw material costsAgave, the primary ingredient in mezcal, can be costly and its price can fluctuate based on factors like harvest yields, quality, and market demand. To keep these costs under control, focus on building strong relationships with agave farmers, negotiate favorable prices, and plan your purchases based on market trends. Avoid overspending by not overstocking or opting for premium agave that doesn’t significantly enhance your product.
- Labor costsYour team is essential, from the jimadores who harvest the agave to the distillers who craft the mezcal. Paying for their wages, benefits, and training can be substantial. Optimize labor costs by scheduling efficiently, cross-training employees, and monitoring productivity. However, ensure fair compensation and reasonable workloads to prevent high turnover and maintain quality production.
- Facility and utility costsRunning a distillery requires significant space and utilities like electricity, water, and gas. These costs can add up quickly. To manage these expenses, negotiate favorable lease terms for your facility and invest in energy-efficient equipment and practices. Overspending often occurs when you choose a facility that’s too large or too elaborate for your needs.
- Marketing and brandingGetting your mezcal noticed in a competitive market can be expensive, whether through online ads, social media campaigns, or traditional media. Optimize this expense by focusing on cost-effective marketing strategies that offer a clear return on investment. Avoid overspending on flashy campaigns that don’t effectively reach your target audience.
- Equipment and maintenance costsThis includes everything from distillation equipment to bottling machinery. These are significant investments because high-quality equipment and regular maintenance are crucial for consistent production and product quality. Optimize by investing in durable, energy-efficient equipment and maintaining it regularly to avoid costly breakdowns. Avoid overspending on the latest high-tech gadgets that don’t add substantial value to your production process.
How to spend less with your mezcal brand?
Here are practical tips to help you, as a mezcal brand owner, optimize your budget and manage expenses more effectively.
| Expense | Tips to Optimize |
|---|---|
| Raw Materials | Source agave from local farmers to ensure quality and negotiate bulk purchase discounts. |
| Labor Costs | Implement a scheduling software to optimize staff hours and reduce overtime. |
| Utilities | Install energy-efficient distillation equipment and LED lighting in your facilities. |
| Marketing | Run social media contests for your mezcal brand and collaborate with local influencers for free exposure. |
| Bottling Supplies | Train staff on efficient use of bottling supplies to reduce waste and consider eco-friendly options. |
| Equipment Maintenance | Set up a maintenance log for regular equipment checks and servicing to avoid costly repairs. |
| Rent/Mortgage | Negotiate lease terms during renewal or consider moving to a less expensive location. |
| Insurance | Regularly review insurance policies to ensure they meet current needs and compare rates annually. |
| Packaging | Use cost-effective, eco-friendly packaging and offer discounts for customers bringing their own containers. |
| Labeling | Purchase high-quality, durable labeling materials that can withstand handling and storage conditions. |
| POS System | Choose a POS system that offers essential features with low transaction fees and integrates with other systems. |
| Staff Training | Conduct regular in-house training sessions and use free online resources to keep staff knowledgeable about mezcal production and sales. |
| Waste Management | Implement a waste tracking system to minimize waste and explore options for recycling or repurposing by-products. |
| Technology | Invest in multi-functional distillation equipment and utilize management software for inventory and sales tracking. |
| Office Supplies | Purchase supplies in bulk and go paperless where possible with digital order systems. |
| Inventory Management | Use inventory management software to track stock levels and reduce spoilage. |
| Transportation | Plan delivery routes to maximize efficiency and reduce fuel costs. |
| Licensing and Permits | Stay up-to-date with local regulations to avoid fines and costly renewals. |
| Events and Tastings | Host events and tastings during off-peak times to attract new customers without incurring high costs. |
| Uniforms | Choose durable, easy-to-clean uniforms and offer staff a stipend for maintenance instead of using an external service. |
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Expenses that are just useless for a mezcal brand
Yes, some expenses for your mezcal brand are just unnecessary. They don't contribute to increasing revenue or enhancing the customer experience.
| Mezcal Brand Expense | Reason It's Useless |
|---|---|
| Luxurious Packaging | Overly extravagant packaging doesn't necessarily attract more customers and can be a drain on the budget. |
| Premium Celebrity Endorsements | Unless you are targeting a very high-end market, most customers are satisfied with authentic, grassroots marketing. |
| Excessive Product Variants | A large variety of mezcal options increases inventory costs and can confuse customers. |
| High-End Distillation Equipment | Top-of-the-line distillation equipment is not always necessary and can be cost-prohibitive. |
| Traditional Print Advertising | Traditional print ads often have a lower return on investment. Don’t include them in the marketing strategy of your mezcal brand. |
| Multiple Bottle Designs | Having various bottle designs increases costs without adding significant value to the customer experience. |
| Excessive Staffing | Overstaffing leads to higher labor costs without necessarily improving production quality. |
| Premium Subscription Services | Expensive subscriptions for industry magazines or services often go unnoticed by customers. |
| Exclusive Ingredients | Using rare ingredients can inflate costs and complicate supply chains. |
| Costly Promotional Events | High-end promotional events are not always appreciated by customers and can be a significant expense. |
| Custom Printed Labels | Personalized labels are a minor detail that most customers overlook, and they can be expensive. |
| Unnecessary Software | Paying for software with features you don’t use is a waste of resources. |
| Premium Water Brands for Dilution | Most customers are content with filtered water, making expensive bottled water unnecessary for dilution. |
| Extra Delivery Vehicles | Maintaining a larger fleet than needed increases operational costs. |
| Excessive Membership Fees | Paying for multiple industry memberships often yields little benefit. |
| Overly Frequent Rebranding | Constantly updating branding and packaging can be costly and disrupt operations. |
| Expensive Promotional Merchandise | Elaborate promotional items are often ignored by customers and add to the cost. |
| High-End Tasting Glassware | Luxury glassware is prone to damage and expensive to replace, often going unnoticed by customers. |
| Excessive Staff Meetings | Too many meetings can reduce productivity and increase labor costs. |
| Expensive Label Designs | Frequently redesigning labels is costly and often unnecessary. |
| Unused Promotional Materials | Ordering more promotional items than needed leads to waste and unnecessary expense. Get our marketing budget planner template. |
| Paid Directory Listings | Many free listing options are available, making paid listings often redundant. |
| High-End Tasting Room Equipment | Specialized tasting room equipment is often unnecessary and adds to costs without a proportional benefit. |
Stop working with a tight budget for your mezcal brand!
Managing a budget for a mezcal brand when funds are tight can feel like a nightmare. It's like being in a jail where any unexpected expense can drown you.
This constant pressure makes it nearly impossible to invest in growth projects, leaving you always chasing after expenses. It's a life filled with stress and sleepless nights.
Yes, you can continue down this path, scraping together pennies and barely making ends meet. But there's another part of the equation you might be overlooking. Instead of just trying to cut costs, you can focus on growing your revenue. More income means more breathing room and more money to spend.
And no, you don't necessarily have to spend money to grow. There are plenty of zero-cost initiatives and strategies that can help you increase your revenue by 10%, 20%, or more. We've detailed all of these strategies in our guides, after studying dozens of mezcal brands just like yours. Get them now!
Make your mezcal brand more profitable
We have studied the strategies of the best mezcal brands in the world. All their tactics are explained in our pack!
