Michael Hasler | Crain's Denver

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Michael Hasler

Background:  

Decadent Saint is a Boulder, Colorado-based craft winery and producer of “ultimate mixers,” which are high-proof, shelf-stable cocktail mixers. The company was founded in 2013 and employs 27 people.

The Mistake:

I let a simple accident put my fledgling business on the brink.

Back in 2013, I threw about $500,000 into this company. We bought all the equipment we needed, crushed tons of grapes and made a lot of wine that year.

In doing all that, we blew through our initial cash very quickly. Around October, when we were still pressing grapes, we realized we really needed to start generating revenue. We were in a pinch, but we thought it would be OK in the end because the harvest was looking so good.

We had our reserve merlot in one tank and our reserve sauvignon blanc in another. Both were sourced from pristine, beautiful Sonoma grapes, and we had made really delicious wine.

One day around this time, I’d been working at the winery like a dog, and I took a break to have a coffee with my wife. I got a frantic call from my assistant winemaker, David. He said, "Michael, you’ve got to come quickly, I’ve [messed] everything up.” He’s a pretty level-headed guy, and he doesn’t normally swear like that, so we jumped in the car.

As we drove up to the winery, there was a literal river of wine coming down the way. We found David out front crying. He had clipped the door of the merlot tank with a bin and it just completely flooded out. We lost the whole tank.

While they were panicking and trying to fix it, they got the forklift and ended up clipping the sauvignon blanc tank. We lost about 1,000 gallons of each product.

I was stunned. It wasn’t a panic; it was more of a shock. I could see David was trying to handle it, and he just didn’t know what to do.

In that moment, I thought back to a news report I had seen that morning about a triple fatality in Denver. It made me think, “This is just not the most important thing.” I went over to David and said, “Look, there are worse things that could happen. Let’s get past this.”

It was important to be calm in that situation and to keep things in perspective, but we were almost bankrupted. The sauvignon blanc was the first release we could have made to get some cash flow going, and we were skating close to zero.

Fortunately, we got our insurance payout of $68,000 in February. That carried us through to the summer.

I let a simple accident put my fledgling business on the brink.

The Lesson:

In hindsight, it would have been wiser to seek more cash to support what we were doing. We probably oversubscribed in buying fruit because it was such a great vintage of grapes that year in California. We got incredible grapes at a discount price; but still, we should have had a clearer look at what our spending limits should have been for all areas of production.

We went through a lot of hard times with this business due to a lack of cash.

For anyone starting a business, I implore you to shore up your numbers. Do your projections with a respected person in the industry who can make sure you know what you’re doing. Hire someone to ensure that every dollar is accounted for, where every dollar is going when it slips out the door.

The wine business is particularly difficult for these problems because of the harvest cycle, but it applies to every business.

We’ve managed to scrape through. We were at $1.1 million in sales last year, and we’re looking at $2 million this year. We’ve come through it with a lot of grace and luck.

Things happen. You’ve just got to keep moving and never give up.

Decadent Saint is on Twitter at @DecadentSaint.

Photo courtesy of Decadent Saint.

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