Beverage Dynamics

Beverage Dynamics Jan-Feb 2015

Beverage Dynamics is the largest national business magazine devoted exclusively to the needs of off-premise beverage alcohol retailers, from single liquor stores to big box chains, through coverage of the latest trends in wine, beer and spirits.

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Trend- SPOTTING 6 Beverage Dynamics • January/February 2015 www.beveragedynamics.com BY CRIS ZUKOWSKI WITH MORE THAN 1,300 WINE AND LIQUOR STORES doing busi- ness in New York these days, standing out from the crowd in the city that never sleeps can be pretty tough. In the past few years, demand for wine has been booming in Manhattan as locals develop their pal- ettes and explore new grapes, whether it's a spicy zinfandel from the Napa Valley or a crisp sauvignon blanc from New Zealand. I opened Renaissance Fine Wines & Spirits with my business partner in 2002 on the Upper West Side, and for more than a decade business fl ourished in our grow- ing neighborhood. But as the popularity of wine increased, so too did the wine stores opening for business in neighborhoods across the city — including our own. Once three new wine and liquor stores opened nearby, my business partner and I realized we needed to innovate to stand out from the pack, enhance consumer loyalty and grow our customer base. As graduates of the Wine & Spirit Edu- cation Trust, we decided there was a huge opportunity to harness our passion and do something truly unique in the wine educa- tion space. As the industry grew, we wanted to give our customers the skills to recognize great values and perfect food pairings. With that came the concept of the Vino Maestro Wine School — an online wine education and tasting program. Tasting wine is an integral component of the learning process, but instead of having students travel to the classroom, we wanted our customers to experience the program and wines from the comfort of their own homes. Collaborating with a professional wine instructor, we began creating video les- sons with a handpicked selection of wines. Building out this kind of concept was going to require a strong injection of capi- tal, so early on in the process we visited our local bank branch armed with a detailed business plan and strong fi nancial projec- tions. Unfortunately, due to tougher reg- ulations since the 2008 fi nancial crisis, we learned that the process to get a traditional bank loan had become extremely cumber- some and we needed a more effi cient way to receive the capital needed to launch our new product in time. We decided to investigate nonbank sources of fi nancing like peer-to-peer (P2P) lenders. P2P lenders function essentially as matchmakers for businesses looking to borrow with investors who want to lend — at a price everyone is happy with. The transactions take place online, which cuts out the long wait times and complexity of dealing with a fi nancial intermediary like a bank and the high cost of dealing with a merchant cash advance. Funding Circle, a San Francisco-based online marketplace lender, was one of the non-bank lenders that caught our eye. The online application process was simple and quick, and we were able to see if we qual- ifi ed for a loan within minutes. Shortly af- ter, I was on the phone with an account manager from Funding Circle talking about their term loan product, my business plan and how a loan would make a positive im- pact on our bottom line. Banks may offer slightly more attrac- tive rates, but Funding Circle's process was quick and easy and their terms were much more reasonable than credit cards or other cash advance fi nancing options. Besides the speed and transparency, what makes non- bank lenders like Funding Circle particu- larly interesting is that they use big data and technology to evaluate a business' ability to repay a loan. So, while our credit history was still an important gauge of our fi nancial and operational stability, so too were met- rics like real-time cash fl ow and our passion for the market opportunity. As a small business owner, I know fi rst- hand that building a successful business requires a lot of work, perseverance and ac- cess to capital to invest in growth. Money can sometimes be tight for entrepreneurs, which is why it's so important to under- stand all of the fi nancing options available — including opportunities from the new, non-bank lenders. BD HOW I GREW MY WINE BUSINESS USING A P2P LOAN CRIS ZUKOWSKI is the founder of Renaissance Fine Wines & Spirits, a retail wine and liquor store in New York City. Visit www.Beverage- Dynamics.com for a video where you can meet Cris and the rest of his team and learn more about how a P2P loan helped them bring their passion for wine to more New Yorkers.

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