Starting a winery is a common dream among wine aficionados, so if you've got the time, space and drive, why not turn your love of wine into a profitable business? Producing quality wine is no easy undertaking, but with a little know-how and a lot of passion, you may be able to make that long-held dream a reality.

Licensing
First and foremost, you must ensure that you gain the appropriate permits and licenses to produce wine. Laws and restrictions will vary depending on your county or state, so be sure to consult with the relevant local authorities before producing any wine. Virtually all wineries will require three basic licenses to operate: a food production license, a liquor license to sell alcoholic beverages and general business license. In addition, you'll need to consult an insurance broker about getting the appropriate coverage for your winery.

Location
You don't need to move to the Napa Valley to produce high-quality, delicious wine. In fact, virtually every state in the country has its own wine production industry, according to the U.S. Department of Treasury. Nevertheless, Jacque Wilson, co-owner and founder of Pilot Peak Vineyard & Winery in northern California, says location is of critical importance when producing your own wine.

Many wineries rely on visitors to generate business, and location plays a critical role in attracting these customers, she explains.

"People go wine tasting where there are more than one or two wineries," she explains. "You need some sort of critical mass in numbers to become a true destination."

Sourcing raw materials
When producing your own wine, you have two main options for sourcing raw ingredients. You could purchase grapes from a local vineyard, or you might consider cultivating and harvesting your own homegrown grapes. If you choose to team up with a local vineyard, you should sample their grapes first to ensure that they contain the right attributes for the type of wine you wish to make.

If you do decide to grow your own produce, your location should play an important role in type of grapes you harvest, Wilson says.

"If you are going to grow your own grapes," she explains, "soil, water, county ordinances and, therefore, location is extremely important. Soil sampling is a must to determine what root stocks will work best for your selected varietals."

If you plan on cultivating a large, multi-acre vineyard, you can hire a contractor to perform irrigation instillation, ground preparation, trellis system installation and planting for a cost  between $20,000 and $25,000 per acre.

Distribution
Once you've grown your grapes and completed the finished product, you need to decide on the best way of distributing it to consumers. Many smaller wineries sell their products online, as it's often cheaper than selling through liquor stores. You could also consider establishing up your own store, or welcoming guests and groups to tour the vineyard and sample your products.

Effective marketing is imperative to generating extra customers, according to Wilson. These marketing strategies often produce return visits and help increase brand awareness through word-of-mouth.

"We try to differentiate our tasting experience from the thousands of California wineries by offering a seated, complimentary wine tasting with appetizers served in flights," she says.