Advice to purchasing a bar?
Hello Everyone, Am seeking some advice… please be informative, be much appreciated. Basically, i am seeking on my first business venture which would be a bar, small club. Iv seen a bar recently came up for lease and the reason was due to the current owner selling the majority of his commercial property to get into residential property. Here’s what i know so far.. The premium is nil and far as i know no deposit is required. Lease is £35,000 a year with the first 3 months free. Rates are negotiable and i can apply for first business discount. Its fairly large bar over two floors with licenses untill 1am, situated on a main high street in my local area which is also a tourist area in the summer and christmas. Basically i know the leisure industry in a tough industry to get into, but my concept is to bring the west end style/upmarket wine bar to it as there is nothing similar within the town. Initially i have limited capital and am meeting a potential investor soon to discuss it. The bar was never opened during the day to offer breakfasts/lunches. I have some good ideas as i am a fairly young entrepreneur and i know exactly what the 18-30 generation want. Basically any advice/tips/warnings be much appreciated. Thank you
My main piece of advice would be don’t put in any more than you can afford to lose, and keep as many variable costs as possible to give you the best chance of success. That is to say, dont get a bank loan or take on a lease you cant get out of easily.
The reason I say this is that whilst it is possible to turn a profit on a bar, generally unless you know exactly what you are doing they are just money pits. 95% of the week they are losing money, and you have literally a few hours to make it back each week on your peak two nights. Pretty much everything you have said here is high risk – ie first venture, young, no money etc so. NB I imagine the current leaseholder is getting out as they are losing money. Take a very good look at their accounts, and also make sure you get a very good lawyer to deal with the lease, especially if its being sub-assigned to you.
James Smith [i]Chartered Accountant[/i] www.jamesesmith.co.uk --------------------------- Your indispensable guide to Small Business Bookkeeping, Self-Assessment & VAT
The only advice I can give on this would not be commercial, but mostly personal. Having known a few bar and club owners / managers, I would just suggest that you are absolutely sure that it is an industry you want to go into, as the hours are Loooong, and unsociable (except with you customers of course!), and those people I’ve met who work in that industry without having a great enthusiasm for it have quickly become pretty dissolusioned.
Of course, if you’ve already had that conversation with yourself, them skip over this and move onto more practical matters!
And good luck, of course.
Thanks for the feedback,
Yes it is the industry i would love to go into aslong as i can get the finances to get the bar to my specifications, and hopefully its very profitable and enjoyable.
it wont be very profitable, pubs, clubs and bars are all struggling at closing at a very high rate.
Right thats the reality check out of the way now for some advice.
do some market research, is no one doing what you are proposing because no one wants it? Thats vital to find out otherwise you will spend a lot of cash and be very lonely in your new venue. Don’t ask friends ask strangers, friends will tell you they lover your idea and would love a venue like that, strangers will be more honest as they wont care about your feelings. When you canvass the public dont say I’m opening a bar say a company is thinking of opening one they will give you a truer response as again they wont be concerned about your feelings. Check the accounts and get an accountant to check them. If the bar is currently trading go in a few times and get someone you can trust to visit with out you. See what its like for trouble etc.
I would also say you would be better off running a pub for a brewery for 12 months first so you really know what the lifestyle is like before you get into debt to buy into a dream that may turnout to be a nightmare
Okay, Well i have done some research and i viewed it today, it will need modernising and also has enough space for a function room upstairs and a kitchen in the lower ground level..
So potentially have it as a coffee lounge/restaurant during the day and a wine bar/small club at night.
However i have meeting an advisor with the Prince Trust organisation tomorrow, as this is my first business venture and hopefully they can assist and inform me on the best way of approaching this and see if it is worth pursuing.
I have looked into all the realities of running this as it will be 7 days a week and long unsociable hours, also where i will be borrowing a large substantial amount unless i can get a partner i will be running at a personal loss for 12-18 months. However i have no other outgoings so its a risk i can afford to take, but the location of the premises is on a busy high street in an affluent town which is also a tourist location, and has many summer/winter festivals.
Good luck Steve – sounds like you have a busy time ahead of you! But, better than being quiet, eh?