Advice : Considering Leasing a Bar

Hotchip123

Hi guys, looking for some advice, myself and a mate are interested in leasing a bar in quite a vibrant town with a growing student body. No bar in the town takes any interest in the students as they believe they have no money. And from recently coming out of college with a degree in bar management and researching this particular area i assure you one thing students will spend their money on a good student based event in a bar. also the weekends are pretty steady in the town so i think i could be on to a winner here! with the current economic climate i reckon maybe i could get a good deal rent + rates wise. the costs is the area i am looing for some serious advice on?

whats the average for : insurance?
initial stocking?

Would €25k get the whole lot off the ground?

All comments really appreciated!

Nody

Between needing to hire bar staff, license agreements, bouncers, buying in stock, setting up restocking agreements etc. I'd guess you're a zero shy on how much cash you're looking at the very least.

Mr Simpson

Entrepreneurial and Business management forum would probably be better for this perhaps one of the mods will move it for you.

With regards 25k, it really depends. Have you found any bar you could look at leasing? Would it need work? How much stock would you need to buy? How much would you look to spend on Marketing? To be honest, I really doubt you could do it for anywhere close to 25k

Mrs OBumble

Moved from Work & Jobs

Hotchip123

We have found a spot, we would need only 2 or 3 more staff, it needs no work, maybe a lick of paint which we would do ourselves.

Mr Simpson

Hotchip123 wrote: »

We have found a spot, we would need only 2 or 3 more staff, it needs no work, maybe a lick of paint which we would do ourselves.

What about stock?

Hotchip123

Mr Simpson wrote: »

What about stock?

I reckon another 5k on top of that will stock the bar

rainbowdash

Hotchip123 wrote: »

I reckon another 5k on top of that will stock the bar

How much is the deposit?

If money is tight you can always run to Tesco for spirits, cans and bottles of coke to top up at short notice, freeing up cash flow.

Obviously you don't have to pay yourself and you can work 100 hours a week for the first few weeks to get it going.

We are in a recession, nothing wrong with thinking a bit different.

I don't think you will get any credit from the bank or brewery in the early stages.

Meathlass

Before you do anything OP, check there is actually a market.

It's an unusual town which has a student population but the local pubs don't actively try and get some of that market.

Speak to the students themselves. How many of them are there? Where do they live? What nights do they go out? Do they actually go out at all or do they just drink at home? If the latter how are you going to convince them to come to your pub?

Speak to the other pubs. Why don't they target the student market? Have they tried it before and with what results?

Is there a student's union you could speak to?

Students tend to go home at the weekends. Who's going to fill your bar then? Most people in their mid 20s to mid 30s won't want to socialise in a 'student pub'.

Lobby Con Shine

Hotchip123 wrote: »

Hi guys, looking for some advice, myself and a mate are interested in leasing a bar in quite a vibrant town with a growing student body. No bar in the town takes any interest in the students as they believe they have no money. And from recently coming out of college with a degree in bar management and researching this particular area i assure you one thing students will spend their money on a good student based event in a bar. also the weekends are pretty steady in the town so i think i could be on to a winner here! with the current economic climate i reckon maybe i could get a good deal rent + rates wise. the costs is the area i am looing for some serious advice on?

whats the average for : insurance?
initial stocking?

Would €25k get the whole lot off the ground?

All comments really appreciated!

And when you were getting this "degree in bar management", did they cover the small issue of licensing laws? Just a thought.

If you lease a bar you become what is known as the "lowest estate" and therefore responsible to the authorities for it. This will require a court application and all that that entails. The licence must be in your name.

Did the degree not cover accounts and finances? €25K? Seriously?

The Apprentice

Lobby Con Shine wrote: »

And when you were getting this "degree in bar management", did they cover the small issue of licensing laws? Just a thought.

If you lease a bar you become what is known as the "lowest estate" and therefore responsible to the authorities for it. This will require a court application and all that that entails. The licence must be in your name.

Did the degree not cover accounts and finances? €25K? Seriously?

I dont know if you are aware but this is coming across as very condescending..


25k is enough the do what your asking as i know someone personally who did this.. He was an utter ****ehawk an all... BUT..

He was aware of his market
There was an opening for that "Type" or style of pub in the town he choose.
Licenses wasnt a problem - The local superintendent i think vetos the person on a case by case basis on whatever grounds whether he should be allowed to get a drinks licence.. circuit or district court cant remember which. Piece of piss as long as your not viper foley etc
He did not have to refit it with equipment from sound and lighting to also furniture that didnt cost him a penny.. where as you might have to sink 300k to make it user friendly.. That **** costs lots
You have not mentioned this and i feel this could make or break that 25k..

Students dont keep a bar open.. trust me i was both a bar manager and a student. You need bar flies and that again will come down to your choosen market/area etc !!

Unless your serving food you need to do some serious thinking on why that town, why that pub is laying vacant etc !!

Either way the best of luck with your future career/venture i hope it goes well for you.

The Apprentice

I think insurance a few yrs ago a quote was something low like 2k .. not cheap but not over the top either. And the rent maybe negotiable but certainly rates with the council wont be.. there walking ***** for that sort of negotiating.

rainbowdash

Mod Note - dont go giving stupid advice like this on here..

Mr Simpson

You'd be a very silly person to open a bar without insurance, especially a bar aimed at students.

As for avoiding tax and rates. That some great advice there, really is.

OP imho, ignore those suggestions, they could work out very costly for you in the long run.

ironclaw

If money is tight you can always run to Tesco for spirits, cans and bottles of coke to top up at short notice, freeing up cash flow.

Completely illegal by the way. Bar's are tightly regulated for revenue etc and a quick one was to buy spirits in Tesco, and top up the bar with them. Easy way to avoid VAT etc.

Unless your serving food, forget about opening a bar. Students alone won't keep it open.

cgarrad

ironclaw wrote: »

Completely illegal by the way. Bar's are tightly regulated for revenue etc and a quick one was to buy spirits in Tesco, and top up the bar with them. Easy way to avoid VAT etc.

Do you not pay Vat after they are sold?

Anyway go for it, if it does not work it will be the best 25k you ever spent and think of the women ;-D

rainbowdash

ironclaw wrote: »

Completely illegal by the way. Bar's are tightly regulated for revenue etc and a quick one was to buy spirits in Tesco, and top up the bar with them. Easy way to avoid VAT etc.

Unless your serving food, forget about opening a bar. Students alone won't keep it open.

Its perfectly legal to to do it.

Source VFI:

http://www.vfi.ie/files/faq.pdf

And there is a mega difference between avoiding tax and evading tax.

An accountants job is to help you avoid tax as much as possible.

ironclaw

rainbowdash wrote: »

Its perfectly legal to to do it.

Source VFI:

http://www.vfi.ie/files/faq.pdf

And there is a mega difference between avoiding tax and evading tax.

An accountants job is to help you avoid tax as much as possible.

Granted but I was referring to the illegal practise which I believe was being suggested. Adding to this the use of a bottle bought in the likes of Tesco and not putting it through the till.

the_syco

All forms of non-alcoholic drink; bulk buy when Tescos does a special. IANAL, but AFAIK "mulitpack: not to be sold singularly" is not legally binding.

The Apprentice wrote: »

IUnless your serving food you need to do some serious thinking on why that town, why that pub is laying vacant etc !!

On this note; check why the pub closed. It could be a costly lesson to ignore, in case you have to spend serious money to fix a serious health and safety issue to continue functioning.

pubcrawler

if none of the pubs in your chosen town cater for students, where do they drink?

to make it viable you need to keep the fixed costs as possible

RENT - get it as low as possible and don't be frightened to argue if the price quoted is to high. On the lease side, take it on a three yr lease with a get out clause after 12 mths ( saved me from a big fall)
HEATING - unfortunately we live in a climate where it is needed as much in the summer as winter. if its powered by electric stay away otherwise your burning money.
CONDITION OF BUILDING- do the bare min you can get away with, save the pounds. if your making good money and getting a crowd, do it up gradually as and when finances allow

All i can say is best of luck your facing an up hill battle, but if you make it work it'll be worth it.

IrishLad2012

Hotchip123 wrote: »

Would €25k get the whole lot off the ground?

All comments really appreciated!

Firstly guys,like to say,fairplay to you,great to see people still interested in the Pub scene.

I have worked in bars for years,so know a little bit about it.I think it is possible to get it off the ground with 25k but remember no one is giving credit these days.

Student bars are still making a fortune,I am in collage in Limerick and spent enough to feed a small country over Rag week.One thing students are looking for now is cheap drink.We live beside a certain Limerick Student bar(not name names),let just say it has strong GAA links in its name.

It sells cans behind the bar,the offer they had during Rag Week was 4 cans for €10,you simply bought your cans and were handed a plastic glass.Dj going all day,in a place no bigger than a community hall,no fancy lights or nice decor but the place was packed every single day.If you didn't get in there by 3 o clock,you would not get in.

Best of luck and remember to start off with,don't concentrate on how to maximize profits,look at how to reduce costs, Profits will follow suit.

I am launching a pub related product in the next few months,so PM me when you up and running,we will talk more.

deuces wild

ironclaw wrote: »

Completely illegal by the way. Bar's are tightly regulated for revenue etc and a quick one was to buy spirits in Tesco, and top up the bar with them. Easy way to avoid VAT etc.

Unless your serving food, forget about opening a bar. Students alone won't keep it open.

Nothing illegal about buying spirits at tescos,you just need to show receipts that you bought them there.No issues with that at all.

JD Dublin

OP be very careful on taking advice here from people who know as much about the bar trade as the average bar-fly

My advice to you is to get help from an accountant who is already dealing with bars. He / she will be able to do projected accounts based on Gross Profit margins which are achievable in the region. I did this sort of work in the past but am out of touch with it now.

They will also advise on food / Tescos / VAT / licencing and so forth.

Later on you will need an accountant / bookkeeper who can cope with a volume of paperwork which the bar trade generates, do weekly or monthly stocktakes and regular Profit & Losses so you stay on top of things, particularly at the start when the heady days of taking in thousands combine with fatigue and can distort your view of reality. This may be the same person who looks after you at the start.