Buying a bar...

Anyone done it? Thought about it? Thought better of it? I'm considering in it, but I was hoping maybe someone could give me a little rundown of the pitfalls and such.

Find more posts tagged with

Comments

Rail Jockey

My goal one day is to build a golf driving range, and have a bar and small grill in there with a cigar bar in one end of the building. I think that would be a great place to hang out and have a good time.

bandyt09

Ken Light:
Anyone done it? Thought about it? Thought better of it? I'm considering in it, but I was hoping maybe someone could give me a little rundown of the pitfalls and such.

Ken, I haven't "bought" one but I feel like I have damn near "paid" for one.........LOL

Krieg

bandyt09:
Ken Light:
Anyone done it? Thought about it? Thought better of it? I'm considering in it, but I was hoping maybe someone could give me a little rundown of the pitfalls and such.
Ken, I haven't "bought" one but I feel like I have damn near "paid" for one.........LOL

Same here! Whatever bar u decide on getting, make sure I post pics! I am thinking about getting a corner bar. Something to hold my liquor but not take up too much room in my cigar area.

JDH

Ken Light:
Anyone done it? Thought about it? Thought better of it? I'm considering in it, but I was hoping maybe someone could give me a little rundown of the pitfalls and such.

Don't know how much experience you have in that area, but I would advise that you approach the owners of your vavorite bar and work there for at least 6 months, and try to learn as much as you can about the operation, especially overhead expenses, labor costs, insurance, and regulatory concerns. Then you'll know if you really want to actually do it. Expect hard work and long hours, but good rewards if you're successful. Remember one thing: everyone who walks in is a customer, and no customer wants to go in to be offended, so politics should be avoided. Your customers will go to your establishment because they like you, and because they are comfortable in you bar. That's why they will come back.

Rob1110

I've considered it as well and looked into it quite a bit. Be prepared to be married to your business. For the first few years, do not expect to turn much profit. It's about paying for the loan and re-investing in the business. Hire a good lawyer, you'll need one. There are a lot of legal issues to worry about as well (underage drinking, drinking and driving, bar fights), so insurance is a must.

With determination and a good business plan (yeah, that's another must if you want to be approved for a small business loan), you could do really well. And remember: Location, location, location.

jlmarta

JDH:
Ken Light:
Anyone done it? Thought about it? Thought better of it? I'm considering in it, but I was hoping maybe someone could give me a little rundown of the pitfalls and such.
Don't know how much experience you have in that area, but I would advise that you approach the owners of your vavorite bar and work there for at least 6 months, and try to learn as much as you can about the operation, especially overhead expenses, labor costs, insurance, and regulatory concerns. Then you'll know if you really want to actually do it. Expect hard work and long hours, but good rewards if you're successful. Remember one thing: everyone who walks in is a customer, and no customer wants to go in to be offended, so politics should be avoided. Your customers will go to your establishment because they like you, and because they are comfortable in you bar. That's why they will come back.

Another reason they'll come back is if they perceive 'the pour' as a generous one... Even if it's totally accurate. Once you break out a shot glass or a jigger to measure their drink, you've established yourself as a stingy bartender. A good bartender can pour a shot or a jigger blindfolded. It's a matter of timing - or call it rhythm. Only so much liquid can come out of a pour spout in a given amount of time. Master the timing and you'll be seen as a generous bartender. It's been years since I was a bartender but I'd bet I can still do it. You can, too, with practice.

Rob1110

I agree with JL, unless you're mixing a specific drink. A shot is a shot. A rum and coke needs no measuring. A hearty pour of a sipper is much appreciated. Don't pick up a jigger when pouring my Manhattan or Sazerac and I won't be ordering another one or returning to the bar. It's all in the application. Be generous where that will be seen as a positive thing but be accurate and consistent when that counts.

xmacro

Make sure you talk to an attorney about liability - you need the right insurance, and you need to structure the bar so that if something goes wrong, only the bar can be sued and not you. Even then, you may wanna look into having a contingency plan in case the corporate veil is pierced

bandyt09

Don't know much about the "bar business" but drinking is not a problem with me. You may want to check out Jon Taffer and/or the show called Bar Rescue. Maybe gleam a little bit of info from there. Also check out www.drinkingmadeeasy.com, love the website and the TV show.

Ken Light

Drinking made easy rules! It's half my DVR. And I have a Pleepleus on the TV, lol.

Also I definitely know how to pour a 4-count, I'm a trained bartender.

Great advice on covering my ***, it's stuff I'll definitely have to go over with the right lawyer.

I was really hoping for someone who can tell me whether I want to buy a liquor license and lease a place vs. buy an existing bar...or just not bother at all. I'm getting a half decent inheritance from my mom and am currently unemployed, so starting a business seems like it could be a prudent move, and I figure everyone will always drink...

JDH

Ken Light:
Drinking made easy rules! It's half my DVR. And I have a Pleepleus on the TV, lol.

Also I definitely know how to pour a 4-count, I'm a trained bartender.

Great advice on covering my ***, it's stuff I'll definitely have to go over with the right lawyer.

I was really hoping for someone who can tell me whether I want to buy a liquor license and lease a place vs. buy an existing bar...or just not bother at all. I'm getting a half decent inheritance from my mom and am currently unemployed, so starting a business seems like it could be a prudent move, and I figure everyone will always drink...

If you're starting a business, go with what you know and what you have a passion for. If you love your work, it isn't really work

xmacro

Well, if you buy a bar, you'll probably inherit some of its old customers, which could be a good or bad thing since some customers may want things changed while others want everything to stay the same, not to mention some of the staff may be the reason some customers keep returning due to friendships and whatnot. If you piss people off, you'll have to twice as hard to win them back than if you started your own place.

On the other hand, if you start your own place, you'll avoid those messy problems, but you'll have to shell out for advertising to get your name out there, and worry about making a good first impression with everyone who walks through your doors.

With an old place, you've got a guaranteed customer base, but it could be that you can easily piss off this base and wind up ruining your business; with a new place, you've got a fresh image and can do things your way without worrying about pissing off existing customers - but then again, as a new place, you may never get any customers and fail quickly.

Rob1110

Good point by xmarco. I also wanted to add the cost difference. Depending on where you are, the cost of a liquor license can be astronomical, depending on availability. I know that here in MA, they can go for up to $250,000 for what, legally is a $1,500 license. It's the fact that there are none available, so you have to buy an existing one off of a current or previous bar owner.

Again, location is everything. Buying an existing bar can be good or bad depending on the location, clientele and set up. If licenses are available, you can lease a building wherever you want (granted, property is actually available). Do you want to be the local watering hole or are you looking to open an upscale establishment? Where you set up shop is going to have great bearing on this. Look at other bars around different towns. Start to notice things that you like about them and things you'd change. Do your research.

Good luck with whatever you choose.

Ken Light

Great points, guys, and especially on the liquor license which is a HUGE problem in NJ, so I'm leaning towards buying an existing bar for that reason alone, but there are two further complications to consider.

First, xmacro mentioned customers, but what about staff? They're currently managed by failing managers in a failing business and might have some terrible habits. I'd like to clean house but they're probably locals and will badmouth the business to everyone who'd be a customer. I'd like to interview them for their own jobs, but that only breeds resentment. That's a really sticky situation from a mangerial standpoint.

Second, and this is probably more a result of the cursory level of my research than anything, but it seems like the preponderance of existing businesses want to sell just the business at their asking price (which is higher than license + inventory + equipment) and then rent the property, or work out a second deal for the property. Then when they list rent it tends to be 50% + of their net from last year, so that seems like a losing proposition. Maybe I'm just looking at all bad deals and I need to keep looking...

Rob1110

You'll find that's the case with a lot of businesses. Kind of like people selling stuff on Craigslist: I have this 1982 Harley with 75K miles and it doesn't run but I put these really cool tassels and straight pipes on, so I want to get at least $9K for it.

You're going to find issues either way you go and the expense is probably going to seem like more than you wanted to take on but that's also where a business plan will be helpful. As far as staff, too bad if you want to interview them for their own jobs. They work for you if you buy the business and they have to follow your rules. If they want their jobs, they have to trust you and you have to trust them. Unless you walk into a completely successful business (then they wouldn't be selling), there are some changes that will have to be made.

JDH

Ken Light:
Great points, guys, and especially on the liquor license which is a HUGE problem in NJ, so I'm leaning towards buying an existing bar for that reason alone, but there are two further complications to consider.

First, xmacro mentioned customers, but what about staff? They're currently managed by failing managers in a failing business and might have some terrible habits. I'd like to clean house but they're probably locals and will badmouth the business to everyone who'd be a customer. I'd like to interview them for their own jobs, but that only breeds resentment. That's a really sticky situation from a mangerial standpoint.

Second, and this is probably more a result of the cursory level of my research than anything, but it seems like the preponderance of existing businesses want to sell just the business at their asking price (which is higher than license + inventory + equipment) and then rent the property, or work out a second deal for the property. Then when they list rent it tends to be 50% + of their net from last year, so that seems like a losing proposition. Maybe I'm just looking at all bad deals and I need to keep looking...

RE the staff. Unless there are flagrant reasons at the onset to let some, or all of them go, I would retain them, with the understanding that things will be changing to suit your business model. If nothing else, that will give you time to find the right replacements for those who eventually leave. Those who enjoy working there, and who like the customers will probably be able to adapt to your way of doing things, and they will be a great asset for you. Those who can't make the change will probably solve the problem for you by leaving on their own. You may have to let some go yourself, but you may find that you can learn a lot about your customers from the ones who do stay .

MVW67

JDH:
Ken Light:
Great points, guys, and especially on the liquor license which is a HUGE problem in NJ, so I'm leaning towards buying an existing bar for that reason alone, but there are two further complications to consider.

First, xmacro mentioned customers, but what about staff? They're currently managed by failing managers in a failing business and might have some terrible habits. I'd like to clean house but they're probably locals and will badmouth the business to everyone who'd be a customer. I'd like to interview them for their own jobs, but that only breeds resentment. That's a really sticky situation from a mangerial standpoint.

Second, and this is probably more a result of the cursory level of my research than anything, but it seems like the preponderance of existing businesses want to sell just the business at their asking price (which is higher than license + inventory + equipment) and then rent the property, or work out a second deal for the property. Then when they list rent it tends to be 50% + of their net from last year, so that seems like a losing proposition. Maybe I'm just looking at all bad deals and I need to keep looking...
RE the staff. Unless there are flagrant reasons at the onset to let some, or all of them go, I would retain them, with the understanding that things will be changing to suit your business model. If nothing else, that will give you time to find the right replacements for those who eventually leave. Those who enjoy working there, and who like the customers will probably be able to adapt to your way of doing things, and they will be a great asset for you. Those who can't make the change will probably solve the problem for you by leaving on their own. You may have to let some go yourself, but you may find that you can learn a lot about your customers from the ones who do stay .

First thing Ken, been there, done that! Owned bar when young! And have had others dealings, seen owners come and go! Staff, maybe go in to place an sit and watch, Usually I can go into a bar and watch to see bartenders sometimes skimming and giving excessive amounts of booze away, for more tips which in turn is stealing from owners, taking care of good patrons is one thing, but abusing it is another. When I used to go into my own bar and drink I would always pay for drinks, trying to set an example. Like JDH lays the rules out right away, it your money not theirs until they earn it. Location and the type of customers is very important! Buying previously older businesses could also have been grandfathered in on building codes also, could be hidden money pits. First impression is ohh so important to the customers as well! Leasing instead of renting might be a better option if that route is used. I would do the research, look at their books, building soundness, staff, customers. Single? great, married? Great, but have seen lots of complications in relationships with bars. Good accounting skills for monitoring, cash and stock. kinda jumping all over, will sit down and put a list together for ya!

kuzi16

JDH:
Ken Light:
Great points, guys, and especially on the liquor license which is a HUGE problem in NJ, so I'm leaning towards buying an existing bar for that reason alone, but there are two further complications to consider.

First, xmacro mentioned customers, but what about staff? They're currently managed by failing managers in a failing business and might have some terrible habits. I'd like to clean house but they're probably locals and will badmouth the business to everyone who'd be a customer. I'd like to interview them for their own jobs, but that only breeds resentment. That's a really sticky situation from a mangerial standpoint.

Second, and this is probably more a result of the cursory level of my research than anything, but it seems like the preponderance of existing businesses want to sell just the business at their asking price (which is higher than license + inventory + equipment) and then rent the property, or work out a second deal for the property. Then when they list rent it tends to be 50% + of their net from last year, so that seems like a losing proposition. Maybe I'm just looking at all bad deals and I need to keep looking...
RE the staff. Unless there are flagrant reasons at the onset to let some, or all of them go, I would retain them, with the understanding that things will be changing to suit your business model. If nothing else, that will give you time to find the right replacements for those who eventually leave. Those who enjoy working there, and who like the customers will probably be able to adapt to your way of doing things, and they will be a great asset for you. Those who can't make the change will probably solve the problem for you by leaving on their own. You may have to let some go yourself, but you may find that you can learn a lot about your customers from the ones who do stay .

just remember to set the rules and live by them. employees will seek out soft spots and exploit them.

in theory, the bar is already up and running. i wouldnt go out of the way to change too much right off the bat. change only what NEEDS to be changed. get the staff to buy in to the fact that you know what you are doing. only change the optional things once a trust relationship has been established.

a short list of things that may NEED to change right off the bat:
Food safety issues (if you serve food)
Theft/criminal issues
Maintenance issues

Cosmetic changes can be on the "soon" list but not on the "immediate" list.

most of everything else can be coached out of the staff over time. make sure they know that you want them to be successful (read: to make money)
i would tell the staff when you have the introductory meeting that you wont make major changes right away. i would also make it clear that you have expectations that WILL be met one way or another.

Ken Light

MVW67:
JDH:
Ken Light:
Great points, guys, and especially on the liquor license which is a HUGE problem in NJ, so I'm leaning towards buying an existing bar for that reason alone, but there are two further complications to consider.

First, xmacro mentioned customers, but what about staff? They're currently managed by failing managers in a failing business and might have some terrible habits. I'd like to clean house but they're probably locals and will badmouth the business to everyone who'd be a customer. I'd like to interview them for their own jobs, but that only breeds resentment. That's a really sticky situation from a mangerial standpoint.

Second, and this is probably more a result of the cursory level of my research than anything, but it seems like the preponderance of existing businesses want to sell just the business at their asking price (which is higher than license + inventory + equipment) and then rent the property, or work out a second deal for the property. Then when they list rent it tends to be 50% + of their net from last year, so that seems like a losing proposition. Maybe I'm just looking at all bad deals and I need to keep looking...
RE the staff. Unless there are flagrant reasons at the onset to let some, or all of them go, I would retain them, with the understanding that things will be changing to suit your business model. If nothing else, that will give you time to find the right replacements for those who eventually leave. Those who enjoy working there, and who like the customers will probably be able to adapt to your way of doing things, and they will be a great asset for you. Those who can't make the change will probably solve the problem for you by leaving on their own. You may have to let some go yourself, but you may find that you can learn a lot about your customers from the ones who do stay .
First thing Ken, been there, done that! Owned bar when young! And have had others dealings, seen owners come and go! Staff, maybe go in to place an sit and watch, Usually I can go into a bar and watch to see bartenders sometimes skimming and giving excessive amounts of booze away, for more tips which in turn is stealing from owners, taking care of good patrons is one thing, but abusing it is another. When I used to go into my own bar and drink I would always pay for drinks, trying to set an example. Like JDH lays the rules out right away, it your money not theirs until they earn it. Location and the type of customers is very important! Buying previously older businesses could also have been grandfathered in on building codes also, could be hidden money pits. First impression is ohh so important to the customers as well! Leasing instead of renting might be a better option if that route is used. I would do the research, look at their books, building soundness, staff, customers. Single? great, married? Great, but have seen lots of complications in relationships with bars. Good accounting skills for monitoring, cash and stock. kinda jumping all over, will sit down and put a list together for ya!

Man, if you have the time, a list would be hugely appreciated. My dad's owned a couple of businesses, but nothing food industry so general finance and such I got him as my go-to, but I really need someone who's been there and done that. Really like the idea of paying for your own drinks there to set an example!

MVW67

Ken Light:
MVW67:
JDH:
Ken Light:
Great points, guys, and especially on the liquor license which is a HUGE problem in NJ, so I'm leaning towards buying an existing bar for that reason alone, but there are two further complications to consider.

First, xmacro mentioned customers, but what about staff? They're currently managed by failing managers in a failing business and might have some terrible habits. I'd like to clean house but they're probably locals and will badmouth the business to everyone who'd be a customer. I'd like to interview them for their own jobs, but that only breeds resentment. That's a really sticky situation from a mangerial standpoint.

Second, and this is probably more a result of the cursory level of my research than anything, but it seems like the preponderance of existing businesses want to sell just the business at their asking price (which is higher than license + inventory + equipment) and then rent the property, or work out a second deal for the property. Then when they list rent it tends to be 50% + of their net from last year, so that seems like a losing proposition. Maybe I'm just looking at all bad deals and I need to keep looking...
RE the staff. Unless there are flagrant reasons at the onset to let some, or all of them go, I would retain them, with the understanding that things will be changing to suit your business model. If nothing else, that will give you time to find the right replacements for those who eventually leave. Those who enjoy working there, and who like the customers will probably be able to adapt to your way of doing things, and they will be a great asset for you. Those who can't make the change will probably solve the problem for you by leaving on their own. You may have to let some go yourself, but you may find that you can learn a lot about your customers from the ones who do stay .
First thing Ken, been there, done that! Owned bar when young! And have had others dealings, seen owners come and go! Staff, maybe go in to place an sit and watch, Usually I can go into a bar and watch to see bartenders sometimes skimming and giving excessive amounts of booze away, for more tips which in turn is stealing from owners, taking care of good patrons is one thing, but abusing it is another. When I used to go into my own bar and drink I would always pay for drinks, trying to set an example. Like JDH lays the rules out right away, it your money not theirs until they earn it. Location and the type of customers is very important! Buying previously older businesses could also have been grandfathered in on building codes also, could be hidden money pits. First impression is ohh so important to the customers as well! Leasing instead of renting might be a better option if that route is used. I would do the research, look at their books, building soundness, staff, customers. Single? great, married? Great, but have seen lots of complications in relationships with bars. Good accounting skills for monitoring, cash and stock. kinda jumping all over, will sit down and put a list together for ya!
Man, if you have the time, a list would be hugely appreciated. My dad's owned a couple of businesses, but nothing food industry so general finance and such I got him as my go-to, but I really need someone who's been there and done that. Really like the idea of paying for your own drinks there to set an example!

Kuzi had some great ideas to will put it together for you, am out of town next few days and will put it together for ya!

Gaetano7890

Well Ken I don't have a lot of personal experience with owning a bar but I do know something about the business. My grandparents owned a bar/resturant for many years. The money was good and has helped future generationsI have thought about it several times. The two things that I would think about if the business is successful is your life will be spent in the bar. My grandparents owned own one in a resort type town and they were open 6 months out of the year. For those 6 months they lived at the resturant. If your planning on having a family it can be hard because you will be at your business. Another issues is when you serve a product you tend to use it just kinda goes with the territory. I think that there r a lot of promising opportunities in owning a bar you just have to see what you want in your future and go with it. I think that a lot of other post I've seen that employees in general can not be trusted and that's why to have a really successful business you will probably have to live in the bar at least thats what my family did.

Ken Light

Wow, all of you have given me a tremendous amount of food for thought, some stuff I hadn't really considered, or at least didn't consider seriously enough. It seems like the next thing I really need to do is write up a business plan. Anyone know a good book or resource on that?