pub expenses

Ms.Bond

Hi
I need help with figuring out expenses and profit in a pub. With a turnover of 4000 per week and so far these expenses, lease 400, wages 420, electricity and heat 200 per week, sky 80 and entertainment about 300pw. How do i measure the other inevitable costs tax, vat and stock? How much of turnover would a pub usually spend on stock and vat? Thanks in advance, hope this is the correct forum!

Bicky

water/commercial rates depending on where the business is.
Insurance.
Bank fees.
Cleaning materials.
Legal fees
Accountant fees
Waste collection
Repairs and maintenance
Glasses and other consumables
It goes on and on.

Are the figures certified? Is 4000 an average week? This January is depressingly slow. Is this turnover figure net of VAT? Ie is this the turnover after the Vat has been taken off? VAT is not a cost as such.
Is the lease being offered to you at 10% of the net turnover or a flat weekly cost? The previous would obviously be a better arrangement, unless you think you can Buck the trend and actually increase the pubs turnover. Hard to do on a lease when you will not be investing money in the premises. also your budget will leave little room for marketing or promotion events. 300 really is not much for entertainment either. A band one night per week.
Is it in a small town? The cost of stock will depend entirely on the gross profit you could expect to make. This depends on the location and competition.
I imagine you would struggle to make any real profit on this TBH, pay a wage, and many weeks not even that. I won't go on a rant about the lifestyle and peoples misconception of it, but I will say that if you don't have a good grasp of the figures and the costs involved I would stay clear until you do.
Good luck.

Bicky

Also do not forget staff costs. 8% holiday pay. If an employee earns more than 356 pw you will pay 10.75% of their wages towards employer prsi . If they earn less you will pay 4.25%
Ie if you have an employee earning €10 per hour that hour will cost you €11.22.
IMRO will also come knocking asking you to pay fees for playing music and having live music.
I can't think of anything else off the top of my head.

TheCostumeShop.ie: Ronan

Sounds like a bit of a dud. Remember the majority of your turnover goes to pay the high taxes on drink.

According to DIGI: "In real terms, approximately 60% of the price of a bottle of spirits is attributable to tax; for a bottle of wine it is approximately 30%; and for a pint of beer it is approximately 27%"

The big problem with a business like this is the unexpected costs, like a fight breaks out and smashes your windows etc.

Given the costs involved in staffing a pub, 4k turnover wouldn't nearly cover the opening expenses.

Ps. Just noted a common business mistake in your post: wages 420. This assumes there would only be one staff member (you?) working 7days a week from morning to night or as long as it opens and doing everything from cleaning to bar tending. In a business plan you must value your time and remember if you were sick or to have a life you would need more help.

DubTony

A friend told me the pub he managed had a gross profit of about 40% ... he said that was very good, and they did a lot of food.
Based on 4k a week, thats just €1600 including VAT.
If all the VAT was at 23% the "real" turnover is €3250 a week with a gross of just €1300.

Unless you know with absolute certainty you can achieve that margin and increase turnover significantly, I'd suggest you let this one pass. Sorry

royalcarlowgc

DubTony wrote: »

A friend told me the pub he managed had a gross profit of about 40% ... he said that was very good, and they did a lot of food.
Based on 4k a week, thats just €1600 including VAT.
If all the VAT was at 23% the "real" turnover is €3250 a week with a gross of just €1300.

Unless you know with absolute certainty you can achieve that margin and increase turnover significantly, I'd suggest you let this one pass. Sorry

40% gross profit margin?? thats way off. should be able achieve 60% > if the food is managed correctly.

DubTony

He mustn't have managed the food correctly so.
What kind of margin could the OP expect without food?

The Apprentice

royalcarlowgc wrote: »

40% gross profit margin?? thats way off. should be able achieve 60% > if the food is managed correctly.

One would assume that yes, but in an ideal world the food is probing up the bar with slow weekends/days etc.
Dependant on staffing levels, chefs, type of food pub it really cant be measured off the cuff but with solid information which is a little vague at best.

To be fair you are correct but .. remember that he may have food all day and have a **** saturday night. The crowd he cater for may be the determining factor on both scenarios. I have spend many a year on both sides of the bar.

Also dependant on location..
there are **** loads of variables without knowing the area, target demographic, drinkers - euro or irish , music , Gaa - local soccer team type support, Pool table actually decreases drinking believe it or not.. Causes more arguements ..
Is their security.. if so how many
Waitress,s chefs or cooking it yourself.. If its sandwhich/pub grub
Country or town ?
Town outskirts or Centre location.. footfall etc


€4k a week isnt a whole pile of money my friend.. its actually pretty poor. I could give you a good guesstimate on how many drinks were sold on average on a busy sat night with those takings. 3-4 staff and actually quiet.. not busy

royalcarlowgc

€4,000 a week isn't going to make you money at the end of the day.
I can only assume with that kind of turnover the pub isn't in Dublin.

On those figures I would be reluctant to provide food as the additional overheads that go with the cost of producing food will become unsustainable. (Kitchen Wages,Water Rates etc)

sirreally

From a previous post: "Im a UCC student working on my thesis..."

sirreally

sirreally wrote: »

From a previous post: "Im a UCC student working on my thesis..."

Unreal what folks get up to in college.