Buying a Business in the Northwoods: What Comes With It and What to Ask First

Every so often someone who loves the Northwoods starts thinking about owning a piece of it in a different way. A restaurant. A tavern. A place that already has its regulars and its place in town.

I work with buyers and sellers across the Northwoods at Venture North Real Estate Co, and I can tell you a business purchase has more moving parts than a house. The building is only one of them. Here is what I walk buyers through first.

In a business sale, the listing usually spells out what comes with the property. It might be the business name, the equipment and the real estate. That is a very different list from a house, where the fixtures are the main question.

Ask for that list in writing, and ask for the other list too: what is not included. Seller personal property, food and liquor inventory, and items on the seller's own list are common exclusions. Some items on a bar or restaurant floor may be leased or owned by a vendor, such as a point-of-sale system, a router or beer signs. Do not assume it all stays. Ask which items are owned and which are not.

This one surprises buyers. Liquor and food licenses do not transfer with a sale. A new owner applies for their own. That means you should find out early what the application involves, who you apply with and how long it takes, so your closing plans fit the real timeline.

I am not a licensing authority, so I will point you to the right office. What I can tell you is to ask before you write an offer, not after.

A house has comparable sales. A business has financial records. Ask the seller for them, and have your own accountant read them with you. I am not an accountant, and I will not tell you what a business is worth from a photo of the dining room.

Ask how long the current owner has run it, what a normal week looks like, and what the seller does that a new owner would have to do. It is an honest conversation, and a good seller will expect it.

Many properties up here have a private well and a septic system, and on a business that serves the public those matter even more. Have both looked at. Ask about the heating, the kitchen equipment and the roof, and confirm the zoning fits the way you plan to use the property.

If there is an upper level, ask what it is used for today and what it could be. A space that was once an apartment may be storage now, and what it can become again is worth a conversation with the town and your lender before you count on it.

If you are new to buying rural property in general, start with my post on questions to ask before you fall in love with a Northwoods cabin. Much of it applies here too.

Financing a business and its building is not the same as financing a home. Terms, down payments and what a lender wants to see all differ, and they differ by lender. Talk to one before you go looking, so you know what you can do. I would rather you hear a lender's real numbers than an estimate from me.

Seeing a business when it is closed lets you look at the rooms without staff and customers in the way. Showings are often easiest on a day the business is closed. But stop in as a customer too, when it is open, so you see the place the way the regulars do.

Take a look at the current commercial listings, or read about buying in the Northwoods. If you are looking around Crivitz and Surrounding Areas and want to talk through a business purchase, get in touch.

This is general information, not legal, tax or lending advice. Your attorney, accountant and lender should look at any business purchase with you.

Kathryn Conard
Broker/Owner | Venture North Real Estate Co.