Business for Sale: Little Napa on the Prairie
Business for Sale
The business: Perhaps you're outdoorsy and love the idea of a bucolic agrarian business. Perhaps you want to get out of the city. Or maybe you think you're the next Robert Mondavi. For whatever reason, owning a vineyard and a winery is a dream for many an oenophile. This 40-acre property, adjacent to a national forest in rural southern Illinois, could be your own private Sonoma.
The married couple who own the business started planting vines in 1991. The 6.25-acre vineyard is now entering peak production mode as most of the 2,400 vines under cultivation have borne fruit for several years. While waiting for the vines to mature, the owners built a 4,000-square-foot winery featuring top-notch steel tanks and fermentation vats from Italy. Several of the 10 wines they have produced have won silver and bronze medals at the state fair.
Southern Illinois is actually home to several wineries that have worked together to promote themselves as a "wine trail," a mini version of Napa's famous Route 29. Visitors to the winery account for the overwhelming majority of the company's sales; to attract them, the owners have set up a tasting room and an art gallery, and they host dances and picnics every month. The state tourist board has supported them and their peers through print advertising and Web-site development, which encourages Chicagoans to visit.
Though the business is certainly complex from an operations perspective, neophytes can take heart: the sellers planted the vineyards and started the winery without any experience in either discipline, learning the craft by taking classes and conferring with vintners at nearby wineries. They're selling the business because they'd like to retire.
Price: $1 million
Outlook: Prospects for the company's financial success are only fair. The region is not well known for its wine. And since grape growing is an agricultural endeavor, one must consider the sobering risks of weather, pests, and disease. On the plus side, the current owners have done a lot of the difficult and expensive work of planting the vineyard and nurturing the vines to fruition. A new owner should be able to extend regional distribution by adding more liquor stores and restaurants to the list of customers. And with 20 acres of undeveloped land, a buyer could build a bed-and-breakfast or sell off individual lots.
Price rationale: The sale price includes equipment, fixtures, furnishings, vehicles, and $100,000 in wine inventory, but this deal is mostly about the real estate: 40 acres of land, the business facilities, two ponds, and a 2,400-square-foot renovated 1920s-style farmhouse.
Pros: All the wine you can drink and a pastoral backdrop against which to drink it.
Cons: Underneath the heady bouquet is a lot of manual labor. One of the current owners works more than 60 hours a week -- and the business has yet to make a substantial profit.
Comparison shopping: A 15-acre Napa Valley property sold for $3.5 million in July 2002; a 74-acre Italian property sold for $1.5 million in September 2002; and a 79-acre New Zealand property sold for $5.5 million in June 2002.
|EBITDA*|| Owner's |
*Earnings before interest, taxes, depreciation, and amortization.
Inc has no stake in the sale of the business featured. The magazine cannot confirm the accuracy of financial or other information offered by the seller. Inquiries should be directed to Bill Bremer at Affiliated Business Consultants Inc., at 719-540-2200 or firstname.lastname@example.org.
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