Ive had an idea for a themed bar and have been looking around on the net at classifieds. My question is..when they post what the gross amount is..what would be a reasonable expectation of the net (profit after everything is paid). I was thinking it should be between one fourth to one third of the gross. I am talking about a mom and pop place, shot and beer crowd, and limited menu (as of now).
Bar business question..
- Thread starter bubbas1
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Labor and rent are the two biggest costs. You don't need a huge liquor inventory because you order every week. Plenty of profit on alcohol and beer, but you definitely need to know what your labor costs and insurance costs are before you can calculate net. You may also have to purchase the alcohol license in addition to the business if it isn't offered as part of the deal.
Forgot to mention - in this business there is a huge opportunity for employees (bartenders, waitresses) to steal from you. There are so many ways it is unbelievable. You have to keep a very close eye on inventory. I have known of waitresses that used hot water bottles filled with liquor. Customer orders screwdriver and she orders and orange juice and squeezes in the vodka from her hot water bottle pouch. I know these things sound incredibly crazy, but if you don't have someone there that you trust, it can be a problem. Not trying to dissuade you, just know that it is a lot of work.
Definately......Liquor licenses can be mighty pricey depending on where you are..........Also, it isn' really your labor costs, it's what the labor "costs" you.........The biggest problem is that the more of the house the bartender gives away, the nicer his house becomes at home. I was in the bar business for nearly 10 years. There's not a bartender on the planet that hasn't given something away, it's finding the one that gives away the least.
You better have a damn good idea what you are getting yourself into. The bar industry is saturated in plenty of places, although I suspect in your situation a ma an pa place would be fine because you don't have to worry about your place getting outdated.
you won't make ANYWHERE near 25-33% of gross. Not even close. Like ferdville says your biggest costs are labor and escalating rent if you don't own the building. Plus there is employee theft which happens everywhere. Plus insurance costs which you need liability, workers comp, etc. That adds up. Then you have state and city liquor licenses yearly and inspection fees and fines, because your place will never be up to code no matter how hard you try. Don't forget paying off the cops. Not backdoor stuff like movies and such, but donating to their stupid balls when they call all the time or suffer the wrath of stupid tickets. Then your beer costs should net you about 20% in a perfect world. Don't forget utilities, and I imagine in Wisconsin your heat bills will be a bitch. And also don't forget the direct tv bill. I'd imagine you will have tvs and for the NFL package its not just like buying it for home. They do that stuff on seating occupancy and jack the prices up immensely. Planning on playing music. Well now lets add to that ASCAP fees.
I have investments with a few bars out here, but certainly nothing major. I know what goes on and how extremely difficult the business is. Not trying to discourage you at all, just letting you know that there are a million hidden expenses. All the stuff you never thought of...knife sharpening, tap cleaning, nightly cleaning crew, etc. It's a bitch.
And don't forget your hormonal PMS waitress who calls in sick ten minutes before her shift. The bar business is tough.
good luck to you and hope it works out.
you won't make ANYWHERE near 25-33% of gross. Not even close. Like ferdville says your biggest costs are labor and escalating rent if you don't own the building. Plus there is employee theft which happens everywhere. Plus insurance costs which you need liability, workers comp, etc. That adds up. Then you have state and city liquor licenses yearly and inspection fees and fines, because your place will never be up to code no matter how hard you try. Don't forget paying off the cops. Not backdoor stuff like movies and such, but donating to their stupid balls when they call all the time or suffer the wrath of stupid tickets. Then your beer costs should net you about 20% in a perfect world. Don't forget utilities, and I imagine in Wisconsin your heat bills will be a bitch. And also don't forget the direct tv bill. I'd imagine you will have tvs and for the NFL package its not just like buying it for home. They do that stuff on seating occupancy and jack the prices up immensely. Planning on playing music. Well now lets add to that ASCAP fees.
I have investments with a few bars out here, but certainly nothing major. I know what goes on and how extremely difficult the business is. Not trying to discourage you at all, just letting you know that there are a million hidden expenses. All the stuff you never thought of...knife sharpening, tap cleaning, nightly cleaning crew, etc. It's a bitch.
And don't forget your hormonal PMS waitress who calls in sick ten minutes before her shift. The bar business is tough.
good luck to you and hope it works out.
Bubbas..
Bubbas..
If you have an oppurtunity to e-mail me I think I could help you out a lot here. I am a chef who runs numbers for a living.
I can answer finance questions, staffing questions, and getting things in place to limit any backdoor issues-
Set up of potential Point of Sale system, staffing, everything-
My e-mail is Musca57 then just add hotmail and dot com at the end...
let me know
Will help to let me know where you are located also.
Jason
Bubbas..
If you have an oppurtunity to e-mail me I think I could help you out a lot here. I am a chef who runs numbers for a living.
I can answer finance questions, staffing questions, and getting things in place to limit any backdoor issues-
Set up of potential Point of Sale system, staffing, everything-
My e-mail is Musca57 then just add hotmail and dot com at the end...
let me know
Will help to let me know where you are located also.
Jason
Bubbas,
I have been looking into the same thing for quite some time
Are you in upper NW Wisconsin? I will be up that way this weekend.........let me know, maybe we could talk. :mj14:
Franky
I have been looking into the same thing for quite some time
Are you in upper NW Wisconsin? I will be up that way this weekend.........let me know, maybe we could talk. :mj14:
Franky
I still would suppose to both of you to contact me- I have been contracted to open bars, kitchens, franchises etc- Can answer a lot of # questions for you- Without fees- Can also assist in setting up menus and kitchen staff etc etc- just let me know- I am now back in Minnesota so more accessible to you-
Jason
Jason
Thanks for everyone giving some advice. I will contact the place to get some info..ins costs, liquor lic costs...ect.
Franky Wright...Im in the other end of the state. Right below Milwaukee. If your ever passing thru give a shout. The area that I was looking in is the UP Michigan. Right in the snowbelt because I know how crazy it can get with sledders up there in the winter and there pockets are deep.
Musca...I will drop you a line tommorow with some questions..Thanks
Franky Wright...Im in the other end of the state. Right below Milwaukee. If your ever passing thru give a shout. The area that I was looking in is the UP Michigan. Right in the snowbelt because I know how crazy it can get with sledders up there in the winter and there pockets are deep.
Musca...I will drop you a line tommorow with some questions..Thanks
...have to say that from my brief experience in the financial aspects of these matters...BDB is right. 30% is no where close.... and don't skimp on the liability insurance...could very well save your arse down the road...
...you might estimate a generous 5-8% profit margin.... best of luck.... I've always wanted to own a bar myself, but have a feeling that in my case it would be a disaster.... hell, i might drink up my profits by myself...not to mention some of my free-loading friends. LOL
...wish you the best bubba.
...you might estimate a generous 5-8% profit margin.... best of luck.... I've always wanted to own a bar myself, but have a feeling that in my case it would be a disaster.... hell, i might drink up my profits by myself...not to mention some of my free-loading friends. LOL
...wish you the best bubba.
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5 - 8% is pretty accurate after the first couple of years. Don't count on any profit the first year or two. Too many expenses getting the bar the way you want it. Make sure you have a bankroll to fall back on until it starts supporting itself. I don't think my bar showed a profit until year 3 or 4. Had lots of maintenance and repairs to do. Keep in mind that if a person knows they are going to be selling, they won't be putting much money into repair and maintenance, so there will be lots of unexpected costs come up early on.taoist said:...have to say that from my brief experience in the financial aspects of these matters...BDB is right. 30% is no where close.... and don't skimp on the liability insurance...could very well save your arse down the road...
...you might estimate a generous 5-8% profit margin.... best of luck.... I've always wanted to own a bar myself, but have a feeling that in my case it would be a disaster.... hell, i might drink up my profits by myself...not to mention some of my free-loading friends. LOL
...wish you the best bubba.
Have a couple of more questions. We had a realator send us some paperwork on a bar that we were looking at. From what we were sent it looks like it clears about 30% of the gross. Remember though that this is just a corner bar...nothing fancy. It showed what was taken in and paid out. That included the liquor/food lisc.,state taxes, ins, supplies,restocking..etc.
I wouldnt believe the numbers 100% until I had someone else check them out though.
So the wife and I are going to take a run up there tommorow and take a look at the bar. We figure we would just go in and observe how things are run and check out the clientel, surrounding area.
What I need to know is what kind of questions to ask when I talk to the owner. I can figure out the basics to ask....I am looking for questions that I might not even think of. If that makes any sense.
I wouldnt believe the numbers 100% until I had someone else check them out though.
So the wife and I are going to take a run up there tommorow and take a look at the bar. We figure we would just go in and observe how things are run and check out the clientel, surrounding area.
What I need to know is what kind of questions to ask when I talk to the owner. I can figure out the basics to ask....I am looking for questions that I might not even think of. If that makes any sense.
first and foremost check to make sure that all licenses are current and up to date.
have no clue about wisconsin, but make sure that the liquor license is transferable. normally states do background checks on you the person before issuing a liquor license or transferring one. Better check with state and city and get them involved BEFORE you purchase.
also ask (not sure if they will be honest) for a history of citations for the bar. find out if the health department has any strikes against it or the state liquor commission has had any problems with them. very important if the health department has been coming down on them.
gl
have no clue about wisconsin, but make sure that the liquor license is transferable. normally states do background checks on you the person before issuing a liquor license or transferring one. Better check with state and city and get them involved BEFORE you purchase.
also ask (not sure if they will be honest) for a history of citations for the bar. find out if the health department has any strikes against it or the state liquor commission has had any problems with them. very important if the health department has been coming down on them.
gl
