Starting & Running a Bar

Heisenberg.

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Bandara

The Scientist wrote: »

The idea/Opportunity has stemmed from observation lately. We've noticed that while the Country is going through a rough patch, the one Industry that doesn't seem to be suffering is the Bar trade.

Have to disagree with you here, as far as I'm aware the bar trade has been completely decimated for the last 3 years or so.

Places closing down, margins cut to bits, unable to sell premises etc.

I stand to be corrected but from speaking to people within it, its a industry thats in tatters

Heisenberg.

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information

The Scientist wrote: »

Every weekend our local Bars are still packed to the Rafters. People seem to always have money to socialize at weekends.
I suppose when a recession is in full flow its the one thing people do to forget about it: Socialize.

bar trade is under serious pressure across the board, you can get drunk at home for the price of one pint in some places, although there are the exceptions, Copper Face Jacks is a license to print unlimited money, my mate worked on the audit for them

The Scientist wrote: »

my confidence in filling a premises regularly, it does somehow still seem lucrative.

try your hand at club/bar promoting, you get all the advantages (girls,power) of owning the place but none of the hassles.
You would also get to build up contacts learn the trade if you did decide to rent/buy a place in the future.

Darragh29

The Scientist wrote: »

I cant deny not seeing bars closing but you have to ask is this down to ineffective management and failure to spot opportunities rather than slimmer margins?
The profit on a Keg must surely be close double the cost price?

Very good idea OP, I'm glad I came across this thead... There is a new pub after opening up in the estate where I live, it's a no expenses spared operation in terms of its fit out and the group that brought us this pub are well experienced in running pubs, especially throughout Dublin. They seem to be taking a fairly serious hit in on-trade sales lately though, anytime I'm buying from their off-licence, the pub seems to have only a handful of regular punters and this place has been fitted out to the tune of probably a million or two.

I had a casual conversation with the manager recently and he said they had more or less written off the idea of trying to get anyone into the place during the week, they basically are relying on weekend trade to keep the place open. They tried bands & karokes and all that but no result. They have a poker game on a Thursday evening which brings in around 15-20 punters who will drink for the night playing poker.

I'd say there are other less risky opportunities out there at the moment to be honest... This pub has major backing from the group that owns the pub, no expense was spared to fit it out and I know they are just trying to weather the recession at the moment.

What ideas do you have from a marketing perspective that you think would allow you to be more successful??? Also, from a management perspective, what would you do differently from those you see that are failing or struggling at the moment in this industry???

Heisenberg.

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leiwand

i have been in the bar business all my adult life.
some interesting figures for you. an accountant will urge you to keep turnover(net of vat) / wages ratio at 75/25 but unless everyone is on minimum wage you can add 5/10 per cent on that. gross margin on drink optimal would be 70 per cent but realistic would be 60 per cent and up.
insurance (if you can get it) can be monopoly money as the claim culture has really tied the hands of publcans.
iwas taught a long time if you put on entertainment look for an increase in turnover by at least twice the cost of putting something on.

on a positive note there is a serious lack of energy/ innovation and young talent in the hospitality industry .in a niche market with good ideas (a sustaintainable usp) you will do very well.
some advice look at the young successful promotors(places which are packing venues) in your area for inspiration and maybe start a cooperation and the very best of luck.if you believe in yourself go for it!
b.

Darragh29

The only problem with the cheap drink is that I'd say there is a well understood relationship between the price of drink and the quality of customer you will get.

One area I think many pubs could improve upon, in particular this new trendy pub in my estate, is the staff they hire. There is nothing better than a friendly local that you feel welcome in. I know the pub in this estate are rubbing some respectable decent people up the wrong way and losing business by allowing one guy who works on the door to interrogate people before letting them in. The sad thing is that these guys are contracted from a security company. The staff that run the bar and the restaurant are terribly nice, but it's one muppet at the door that is getting the establishment a bad name and losing it business.

I saw this in action recently and it turned me off going there again, because I thought on another night I could have been at the end of this treatment and when you're putting anywhere up to 100 Euro behind the bar for a night of entertainment, you espect a bit of courtesy at the door.

keefg

Darragh29 wrote: »

The only problem with the cheap drink is that I'd say there is a well understood relationship between the price of drink and the quality of customer you will get.

Good point.

Culchie

I think your timing is perfect.

I think you will be in a position to negotiate a good deal for yourself regarding rent/lease.

You'll be able to recruit (if required) good staff, alot of good people have recently lost their jobs, so you don't need to scrape the bottom of any barrel.

There is a serious lack of entrpreneurship/energy within the pub trade at the moment, so you sound like someone who can make a good impression on an area.

I would advise against the 'cheap drink' strategy, but all else sounds good. The price of the pint is not a price sensitive commodity, especially in your target market.

One thing the pubs don't cater for (imo) is women. If the women are happy to go to the pub, it makes it so much easier for the fellahs to go (and stay longer). Some cocktail offers or some event leaning towards them once a week would be a good way to underpin your base.

Don't be to keen to kill off the poker nights on a mid week night ...if it's pulling in 20 blokes on a Wednesday night, and they are happy in their local hostelry and are well looked after, where do you think they will head for at the weekend when they out for the night? You can't be packed to the rafters every night of the week, but you can certainly use the quieter nights to promote the weekend nights.

information

Opening 4 nights a week

How many people do you need to get in each night ?
How much do you charge for a drink ?
How many drinks do they need to buy ?

Do up your costs and calculate the above figures.
Rent
Insurance
Staff
Drink
Marketing

Heisenberg.

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€20K for what exactly? Insurance?

Darragh29

Deleted User wrote: »

€20K for what exactly? Insurance?

Yeah, I'd pencil in that 20K for insurance alone. I think Diageo have this rule where you have to be a member of the Vinteners Association or the LVA before you can open an account with them or something along those lines...

Heisenberg.

This post has been deleted.

That's what I was asking earlier. I don't see how you could possibly open a bar for 20K? 20K is practically nothing and even to open a small florist in the corner of an estate would cost min 60 - 80k.

redroar1942

Deleted User wrote: »

That's what I was asking earlier. I don't see how you could possibly open a bar for 20K? 20K is practically nothing and even to open a small florist in the corner of an estate would cost min 60 - 80k.

No offence but exactly what qualifies you to pass comment like this? I was under the impression that you were straight out of uni looking to start out on your first venture, am I wrong or has something changed in the past fortnight?

redroar1942

redroar1942 wrote: »

No offence but exactly what qualifies you to pass comment like this? I was under the impression that you were straight out of uni looking to start out on your first venture, am I wrong or has something changed in the past fortnight?

lol I am only out of uni. I have interviewed a lot of entrepreneurs over my years in Uni and that was the impression I was given. Forgive me if I'm wrong!

Edit: Redroar, feel free to use any stats you may have on hand that prove otherwise. I just thought that with the capital involved in running a bar, this would be impossible.

Culchie

Your insurance can be paid monthly, don't give up that easily....your cash flow is key.
Your 20k budget may be enough to take on a going concern. I've known many people take on leases, and they sure didn't have 20k in their back pocket.

Do yourself a favour and go and sit with a publican in a similar town/area and get some feel for the figures. You should also work in a busy bar, and get a feel for the nightly turnover immediately.

If you're going to do this, you should make sure Xmas is within your first 2months trading.... if you can't get in by Xmas, then wait until next summer.

You'll have your opening bills/heating etc... to meet so you want to make sure you've got your best trading month there to cushion the blow.....this make take some hard bargaining with 'landlord' as he might wish to cash in on Xmas trade himself.

Darragh29

Culchie wrote: »

Your insurance can be paid monthly, don't give up that easily....your cash flow is key.
Your 20k budget may be enough to take on a going concern. I've known many people take on leases, and they sure didn't have 20k in their back pocket.

Do yourself a favour and go and sit with a publican in a similar town/area and get some feel for the figures. You should also work in a busy bar, and get a feel for the nightly turnover immediately.

If you're going to do this, you should make sure Xmas is within your first 2months trading.... if you can't get in by Xmas, then wait until next summer.

You'll have your opening bills/heating etc... to meet so you want to make sure you've got your best trading month there to cushion the blow.....this make take some hard bargaining with 'landlord' as he might wish to cash in on Xmas trade himself.

This is the mentality you need to have OP. The most annoying aspect of starting up a business is that sometimes before you can even start up, you have to spend a lot of money on what you could consider to be products you hope you will never ever use and insurance is one of these things. I personally think there should be a government supplied public liability insurance package available for small business start ups that are less than 3 years old.

This would give small businesses the absolute minimum cover required to get off the ground for an affordable fee, instead of the current set up where you ring an insurance company and they will just pick a figure off the top of their head, basically to just get you off the phone...

You've made a decision to start up a business and what will make you sucessful is your ability to get over whatever hurdles are put in your way.

Don't be discouraged by a figure for insurance.

A good friend of mine started a business with his brother in the motor industry after his brother won 800 pound on a scratch card. This business is now one of the biggest suppliers of commercial parts in the industry, and it all started from a 1 pound scratch card. If you have done the research and have the drive, anything is possible.

If you wait until you are in a position to cross every T and dot every I, you would never start up a business. There is a certain amount of learning as you go. Get a quote for insurance and take it from there.

One thing that stuck out in my head about a pub that was starting up in Westmeath a few years ago, where I lived at the time was a woman, probably the mother of the lad who started up the business, would come in every now and again, actually fairly regularly, with cocktail sausages and chicken dippers in a Supervalu bag and go into the kitchen and put them on and next thing she would be passing platters of finger food with little salsa dippers around for anyone who wanted a snack. I'm fairly sure she just did this to help in a small way, her son who was trying to get off the ground, I doubt she was getting paid for it. The cost to her was probably fu*k all, but while I was living there, this place was my only local, I brought my friends there, only because I felt that they genuinely appreciated my custom, based on this small gesture.

There is always room for improvement and you can always take customers from your competitor if you can identify with your customer and win them over with small gestures that don't cost a fortune.

Don't get bogged down with insurance, it's just another overhead like rent or wages. Once what is coming in is greater than what is going out, insurance will not be a problem and you can probably spread it over the financial year anyway...

Culchie

Without derailing thread onto insurance, I found FBD very good to tailor the insurance around my business .... round peg for round hole so to speak, rather than an off the shelf policy that you have to pay for, but doesn't meet your business needs (you could be overpaying for some areas of your policy, and underpaying in other areas).

Now put insurance aside, and proceed with thread. This could be the best thread on boards if you keep us updated. I set up a business 18 months ago, so all these set up hurdles are very fresh in my mind;)

If you have a good temperament for business, are customer orientated, have good staff/business partner, and a very large set of balls, you can make a success out of it.

Heisenberg.

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Culchie

The Scientist wrote: »

Its only a mere thought at the moment Culchie.
Tbh, i do believe in my work ethic & drive to succeed, its just the financial side of things that are very daunting (Keep in mind that the €20k i mentioned would be a loan for the most part). That and i'm only 23, I'm unsure if i want to settle in the small Town i have in mind.
I've traveling etc to get out of my system aswell so i'll have a lot of thinking to do.
Then again if i worked hard at it for 12 to 18 months i could travel in style afterwards...:)

Go travel Grasshopper, you have to be sure, and you have to be 100% committed.

The Scientist

The Scientist wrote: »

Its only a mere thought at the moment Culchie.
Tbh, i do believe in my work ethic & drive to succeed, its just the financial side of things that are very daunting (Keep in mind that the €20k i mentioned would be a loan for the most part). That and i'm only 23, I'm unsure if i want to settle in the small Town i have in mind.
I've traveling etc to get out of my system aswell so i'll have a lot of thinking to do.
Then again if i worked hard at it for 12 to 18 months i could travel in style afterwards...:)

Go travelling first.

I want to stay and get my idea up and running but have to literally force myself to go as I know I will regret it if I don't. That and my girlfriend will probably get fed up of me too. Just make sure you don't get into too much debt. I will have a job lined up for 6 months to get me some finance when I come back and then once I know I can secure the loan for my business, I don't care, I'm setting up my business and that is that! Screw it, it can't be that hard, there are a lot of people out there who I can't believe are in business and are!

Trojan

Agreed with the travel if you're not 100% commited. Recommend working in several different bars if that's what you're thinking about running, give you real world experience.

Offer to do bar management on bar man salary if you think it's worth it for the experience.

Also remember the Irish advice to entrepreneurs: "that'll never work". It's good to be conservative, but it's also good to take educated risks.

antoinolachtnai

I really don't know if it's a good idea to get involved in a pub in a small town, if you want to go travelling in 2009 or 2010. I'm just afraid that the operation won't be big enough and you won't be able to afford to hire a manager. Maybe you plan to sell the lease on. I'd say that would be tough in a small town, but I don't really know.

You need to figure out the numbers yourself.

Richie_c

If you're looking for a quote on the insurance I'd be more than happy to meet up with depending on where you're based. If its too far than I can give you a shout. Didnt read the full thread but saw something in there for an insurance figure of 20k and it couldnt be further from the truth. You wouldnt be looking anywhere near that figure. If your interested give me a call, <snip> and we can organise something



no personal info please. Scientist

AARRRGH

I remember reading a book about the drinks trade, and it all came down to this: do whatever it takes to get women to drink there.

They had analysed successful bars/clubs and the one thing they all had in common was women liked drinking there.

You should check out Sin e and Dice bar in Dublin. They are both owned by the same guy and the both do very well. They keep things simple - simple decor, "alternative" bar staff, good music (e.g. stuff like the Grange Hill theme.) Not sure if this would work in a small town though.

onedmc

The Scientist wrote: »

The profit on a Keg must surely be close double the cost price?

but its not about the gross profit, I'm sure pubs sell it for 4 times the cost.

The costs in a pup must be for things like renovation, staff, equipment.

Remember that many trendy pubs spend hundreds of thousands (sometimes even millions) renovating every few years. And before you scoff at that amount remember that the kit for your local Spar in 2007 was up to 200K.

Bandara

onedmc wrote: »

And before you scoff at that amount remember that the kit for your local Spar in 2007 was up to 200K.

Closer to 450k believe it or not

DubTony

antoinolachtnai wrote: »

I really don't know if it's a good idea to get involved in a pub in a small town

I'm inclined to agree with this. Big towns have some anonymity while small towns can be a bit of a "local" minefield, and you obviously want to appeal to the widest possible potential customer base.

Travel first. Get a year or 18 months under your belt. The way I see it, the pub trade isn't going to change for quite a while and you could still be looking at a similar opportunity when you get back.

A word of warning. Don't be so naïve as to think that you'll be on the pigs back after a year and a half in the pub game. Working hard is all very fine, but it's so easy to get so bogged down in the day to day running of the thing that it will affect your ability to identify opportunities and, of course, what you may be doing wrong. Avoiding working IN your business instead of ON it can be a real challenge. Chances are you'll be taking a 4 year 9 month lease. Be prepared for a bit of a grind.

Sorry if I've dragged the tone of the thread into the depths of negativity. It's not my intention.