While studying wine and viticulture at California Polytechnic State University, Chip Forsythe started making wine in trashcans in his backyard. He then generated his first wine sales by hocking the wine throughout San Luis Obispo, CA. Now, as one of the founders of Rebel Coast Winery, he co-owns a successful wine brand that won more than 10 competition medals last year.
According to Forsythe, Rebel Coast now sells more product in one day than their entire first year of business. But, like many small business owners trying to get a new brand off the ground, it wasn’t always that way.
Rebel Coast stands out in wine stores due to their unique brand voice, geared toward 20- and 30-something wine drinkers.
“If you take away the romance of owning a winery, you are selling a commodity in a very competitive market, so standing out on the shelf is very important,” Forsythe says. “Our wines look like no other wines out there, and that differentiates us right away.”The labels stand out against more traditional wine brands, with unique names like “Reckless Love” (named after a response to a text Forsythe sent to former girlfriends, asking for a couple words that would describe him) and Cloud Colony (a marijuana-infused Sauvignon Blanc). Additionally, Rebel Coast appeals to the crowd by highlighting their brand personality on Instagram. They include raucous wine parties, silly printed suits, road trips via a bright yellow, custom-printed VW van and shenanigans.
Bootstrapping and cash flow
“When we first started I was stressing out hard about cash flow,” says Forsythe. “Bills were piling up and I was venting about it to my dad. I will never forget what he said: ‘Chip, revenue will solve all your problems.’ That stuck with me, and every hire we made from then on had to bring in revenue somehow, someway.”
Unlike many young wine owners, Forsythe’s parents didn’t already own a winery or a bank account that could help him get his winery started. So, he started small, which allowed him to focus on staying out of debt and quickly testing products and adapting to the market. To get through the tough start-up phase, Forsythe learned how to cut corners, so he could keep his small business in the green and avoid failing.
“We — no joke — started living in my brother’s garage to save on rent; and kept the team living together from then on,” says Forsythe. “We have run out of money tons of times, but money has never been the motivator. So when the bank account is dry we all just get bunk beds, figure out what everyone’s rent is and get skinnier.”
Forsyth focused on efficient hires when bootstrapping his business. One way was to hire a commission-only sales team since he couldn’t afford to pay full-time salaries to 17 salespeople. Instead, he promised double the industry standard in commission, but no salary. That way as the wine sales grew, he could pay his sales team.
Managing cash flow for growth
Today, Forsythe is more experienced handling cash flow gaps, but bringing on the right support team and learning better to manage finances has paid off.
“Transparency with the team is how I manage cash gaps,” says Forsythe. “Every week at our all hands meeting, I go over what is in the bank, and where it is going. Predicting gaps is essential. At first, when gaps would hit, we would stress out and see who was able to miss payroll that week. It’s not ideal, but that is where a solid team comes in. We all had to pull together to keep the company up.”
Since being founded in 2013, Rebel Coast has doubled revenue each year, and according to the Huffington Post, Rebel Coast Winery is now, “Valued at over $5M and distributed in 36 states.”