In short: Starting a distillery means, in order: form a business entity and secure your premises, obtain a federal Distilled Spirits Plant (DSP) permit from the TTB, satisfy any bond requirement, get state and local licensing, install and bond your equipment, then begin production and file your monthly TTB operational reports and excise return. Plan 6 to 12 months and significant capital before the first sale.
What are the steps to open a distillery?
The path is sequential because each step gates the next: (1) form a legal entity and lock down a compliant premises and lease; (2) apply for the federal DSP permit through the TTB; (3) meet bond requirements if your tax liability requires it; (4) obtain state distillery licensing and any local permits; (5) install equipment and have your premises and stills approved; (6) start production; and (7) keep records and file the TTB operational reports and excise return. Skipping ahead, for example buying a still before the premises is approved, usually creates rework.
Do you need a DSP permit to distill?
Yes. Every legal U.S. distillery operates as a federally permitted Distilled Spirits Plant. You cannot legally operate a still to produce beverage alcohol without an approved DSP permit from the TTB, and there is no federal hobby exemption for distilling (unlike home brewing or winemaking). See our guide on how to get a DSP permit for the application detail.
How much does it cost to start a distillery?
Costs vary widely by scale, but the major buckets are equipment (still, fermenters, tanks, barrels, bottling), real estate and build-out, and the soft costs of licensing, legal, bond, and insurance, plus working capital to carry aging inventory that will not sell for years. A small craft operation commonly runs into the hundreds of thousands of dollars; aged-whiskey models need far more runway because cash goes out long before product comes back. See distillery startup costs for a breakdown.
How long does it take?
The federal DSP application alone often takes a few months for the TTB to process after a complete submission, and state licensing runs in parallel or after. Between entity formation, premises, federal and state approvals, and equipment install, six to twelve months to first production is a realistic plan, longer if construction is involved.
What about aging and cash flow?
If you are making aged whiskey, the spirit you distill on day one cannot be sold for years, while the grain, barrels, labor, and the angel's share are paid for up front. Many distilleries bridge this with an unaged product (gin, vodka, white whiskey) or contract work. Modeling the carrying cost and true cost per barrel early keeps pricing and cash flow honest.
Setting up records from day one
The TTB expects operational reports and an excise return tied to physical inventory from your first production. Starting with a system that records production, inventory, and compliance together, rather than reconstructing it later from spreadsheets, is far easier than retrofitting once you are filing. That is what Spirit Sight is built to do.
General information, not legal or tax advice. Confirm current requirements with the TTB and your state authority. Last updated June 20, 2026.