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to distribution to depletions and future growth potential. If a sale is imminent, Nicholson also advises recasting financial statements. As most businesses report financials to minimize income, they may need to provide additional details to prospective buyers. "You need to show profits in such a way that a new buyer can see them in the cold light of day," he said. New owners may not be FOSTERING GOOD WILL "When you talk about brand value, you're talking about good will, the value of the assets in excess of the hard assets," explained Gordon Axton, principal and founder of Axton Wine Group in Napa. Companies including Apple, for example, have good will to spare. While they're technically different things, Axton notes that in the wine industry, "brand value and good will are interchangeable." How can wineries foster good will beyond running a sound and profitable business? Axton offered five areas to explore: 1. Engage your audience. "Be able to tell an interesting and credible story about your wine, terroir or why you got into the business," Axton said, adding that the way in which a winery communicates its story will be different depending on price-point. Value-priced wines may look more to social media as an outlet for expression, while a high-end Napa cabernet may take a more intimate approach. 2. Cultivate a strong mailing list and establish your tasting room as a destination. "That's part of making a connection to your audience," he said. Building a 40 V I N E YARD & WINERY MANAGEMENT | healthy wine club membership through that tasting room can also add value to a brand. 3. Retain good management. "Say you're a smaller winery who's been around for 10 years, but you're in a slump and you need a hotshot GM to turn things around," Axton said. One way for a winery with limited resources to attract a highly qualified candidate is to offer that person a percent of the increased value of the brand after a period of, say, five years, he noted. Have your brand valued now, agree on the methodology and come up with a calculation for assessing brand value in five years' time. 4. Gain exposure through a by-the-glass program. You know how this works: Sell your wine to a restaurant or restaurant chain at a case discount and get your wine on the by-the-glass list. "It's one way to make your wine a household name," Axton said. 5. Focus. Focus. Focus. "The best thing you can do is to focus on your portfolio and on your consumer. There's a band of consumers out there that are your customers, so make sure everything you do speaks to them," Axton advised. – J.S Sept - Oct 2013 entitled to the same write-offs as the current owners, for example. Depleting inventory, other than library wines, is also critical, noted Nicholson, who recommends that cases be sold off one year prior to selling a brand. And while the wine industry has long been a handshake business, Nicholson said it's imperative to get key agreements in writing before pondering a sale. "Formalize those agreements with family members and growers, and get them in writing," he said. Making sure all trademarks are registered, current and valid is another important, yet often overlooked, step, he added. Finally, Nicholson advised, "Keep prices high, keep costs low, and always grow the business judiciously and not overly aggressively." Jennif er Strailey has written about food, wine and housewares for retail-focused business-to-business publications for more than 15 years. She is the Spotlight editor for Vineyard & Winery Management, a past editor with The Gourmet Retailer magazine, and a contributing editor with Progressive Grocer. Comments? Please e-mail us at feedback@vwmmedia.com. visit us online vwmmedia.com w w w. v w m m e d i a . c o m