Pub for lease €150 per week

amn88 · 29-03-2011 02:10AM #1

Hi,

A family friend has offered me his pub for 150 euro per week. The pub is located in a town with a population of apprx 2000 - 3000 people. It can hold apprx 120 people. What expenses do I need to think of here. I'd expect a turnover of €4000 weekly on average. i would be spending 500 on entertainment weekly the price of a pint would average at 3.60. Can anyone advise me on roughly the start-up costs involved stock wise and just for general cash flow. Also what costs do I need to think off? The pub will require 100 hours labour (35 of which i will work myself) Is this a profitable venture? Please pm an estimate of annual figures

roast · 29-03-2011 03:53AM

Don't PM it... post it here, I'm interested in an answer also.

toe_knee · 29-03-2011 04:40AM

I thought that if you were taking a lease out on a business that you can have access to the past two years returns. Not an expert on this but I know my local pub was up for lease and one of the lads was looking into it and I am sure that he mentioned this.

Fol20 · 29-03-2011 07:22AM

Do you not have to get a license that can cost upwards of 100k?

Carpenter · 29-03-2011 07:31AM

Hi
Where is it based

sandin · 29-03-2011 08:37AM

amn88 wrote: »

Hi,

A family friend has offered me his pub for 150 euro per week. The pub is located in a town with a population of apprx 2000 - 3000 people. It can hold apprx 120 people. What expenses do I need to think of here. I'd expect a turnover of €4000 weekly on average. i would be spending 500 on entertainment weekly the price of a pint would average at 3.60. Can anyone advise me on roughly the start-up costs involved stock wise and just for general cash flow. Also what costs do I need to think off? The pub will require 100 hours labour (35 of which i will work myself) Is this a profitable venture? Please pm an estimate of annual figures

Turnover including VAT? If so its 3300 + vat.
Margin when you combine soft drinks, shorts & pints should be about 50%. (guinness is lowest margin product in a pub)
That gives you 1650 gross profit
1500 after rent
1000 after entertainment (though 500 seems high - music can be got for 150 a night, pub quizzes can be run for free)
light, heat, rates, water charges (can be hefty) - budget 150/week

You're left with €850 for wages @ 100 hours = €8.50 per hour

If the 4k turnover is before vat, then it could make sense.

abouttobebanned · 29-03-2011 08:41AM

The licence I presume is already in place, what about things like Sky? Will you have to pay for these or have they already been paid in advance?

I'd need to know more about the area the bar is located and crucially why the owner is passing it on.

amn88 · 29-03-2011 03:14PM

Its in a small town in Mayo.

Don't think i would be going with sky unless there is no alternative 'sports' bar in the town, cant see it paying for itself. My 4k estimates included vat, but that may be a little pesimistic. I plan to target a younger crowd, so hopefully margins will be a little better.

Premises has a license and all equipment (I hope) Going to view it this week.

Has being closed for the last year. Owned by a building contractor who works with my father. He just bought the place as an investment a few years back, and is now desperate for some income, he knows nothing about the pub trade and would like to give it to someone he trusts at a knock down price.

If the place is fully equipped and ready to go, all ill need is cash for stock which i'm sure wont be that much and just a general cash flow. Family will work in the bar, so there will be no hassle with people having to wait a few weeks for wages. Would I be unrealistic if i said 5k is all i'd need for this.

shoutman · 29-03-2011 03:18PM

amn88 wrote: »

Its in a small town in Mayo.

Don't think i would be going with sky unless there is no alternative 'sports' bar in the town, cant see it paying for itself. My 4k estimates included vat, but that may be a little pesimistic. I plan to target a younger crowd, so hopefully margins will be a little better.

Premises has a license and all equipment (I hope) Going to view it this week.

Has being closed for the last year. Owned by a building contractor who works with my father. He just bought the place as an investment a few years back, and is now desperate for some income, he knows nothing about the pub trade and would like to give it to someone he trusts at a knock down price.

If the place is fully equipped and ready to go, all ill need is cash for stock which i'm sure wont be that much and just a general cash flow. Family will work in the bar, so there will be no hassle with people having to wait a few weeks for wages. Would I be unrealistic if i said 5k is all i'd need for this.

I know nothing about the bar trade, but I would have thought that all the suppliers would require a look at your bank balance before giving you a lot of product on credit....

amn88 · 29-03-2011 04:12PM

But I do not require credit. How much will it cost to stock the bar 3-4 thousand?

ToxicPaddy · 29-03-2011 04:31PM

amn88 wrote: »

I plan to target a younger crowd, so hopefully margins will be a little better.

I worked in the bar trade for a good number of years and this is the mistake a lot of pubs seem to make, especially in smaller towns and country areas.

A few points to remember:

Most young people dont drink every night of the week, you're talking 2-3 nights max and with the current climate they might not even go out every week
If they have young kids or new mortgages, which a lot tend to have nowdays, then money will be tight so they wont be drinking much either
Young drinkers are very very fickle, someone opens a new venue, your bar can suddenly fall out of fashion and become a ghost town and because you've targetted a specific group, the other groups wont be interested in the place.
Regular older drinkers would usually visit a pub more often, granted they dont drink as much each night but are steady and loyal customers when they find somewhere they like

If you look at any of the dublin pubs, the big fashionable super pubs in Dublin are closing fast, pub groups in trouble and customers down, the smaller local style pubs in the suburbs serving decent food, catering for all ages and groups and doing a more steady trade and surviving this downturn better than their city centre rivals.

The best small town and country pubs I've been in cater to all ages and you'll always find 2-3 dozen customers or more on a weekday night anytime you go in.

Just a few things to consider..

mano79 · 29-03-2011 04:39PM

Id be careful what you sign up to. If it is a casual agreement that you run the pub for a while - why not give it a go. I definitely wouldnt be leaving a permanent job though to do it. The fact that it is in a small rural town it will be hard to sustain turnover. You will prob get a few good weeks where every young one in the area will want to try it out but then a lot will vanish again.

You should keep in mind cost of maintaining bar taps/cellar, rates to your local county council, water rates, pest control costs, cost of hygiene services for bathrooms, tv licence, pub licence. insurance, Revenue costs - will need to be careful to have Vat and employees tax etc ready for Revenue when it falls due. You will also need an accountant - prob anything from 1500+ for the year. Also any profit you make will be taxed so you will need to keep some money aside for your own tax bill when it falls due. Most of the drink companies will not offer any smaller pubs credit now but if you are able to pay up front for the stock im sure they would deal with you. Most areas have someone who wholesales kegs (legally) to other pubs etc who cant get credit. You pay upfront keg at a time. Can be a little more expenive than drinks companies but handy for cash flow reasons.

Be careful about the pub licence also - check when it was last renewed with Revenue. If a licence is let lapse for more than a year it means reapplying throught the courts to have it reinstated - v expensive (solicitors fees, fire cert fees etc). You dont want to find this out when you have opened and the local Garda Serg arrives at the door. And if the owner is a property dev he is probably pretty broke and will not be able to sort this out.

Hope some of this helps. Good luck with it.:):rolleyes::o

Greenmachine · 29-03-2011 04:51PM

Feel like you need more than a 100 hours total. That would mean only having one staff member on the premises at a time. Who is going to clean up glasses and spills if you are the only one in the pub. How many other pubs are in the town. What are the more popular venues? How do they draw the crowds in. Do you know how to pull a pint? do you know how much public liability insurance would be. will you need doormen on weekends? Are you vat registered? Do you know how to do pay role. Are you familar with employment law: your rights and responsibilities as an employer? etc... bit of a minefield

Gerard G · 29-03-2011 05:03PM

Sandins figures seem fairly correct.
If you are paying staff for 65 hours, even at minimum wage ( don't forget employers Prsi ) you will have very little to show at the end of the week. To cut down on your wage costs you should seriously consider only limited opening hours. I expect that 80% + of your turnover would be Friday after 9, Saturday after 8 & Sunday after 5. Its probably not worth opening outside of these hours if you are paying staff.
I think you would probably initially need at least €5k worth of stock but you should be able to get this on credit if you can convince the drink suppliers that you are unlikely to close after a week.
All new pubs make the mistake of targetting the young crowd - in my opinion this market has largely disappeared in rural Ireland.
Don't overestimate your potential turnover - €4k weekly is difficult to obtain. I am involved in the pub trade in a similar sized town with 20 pubs & I would estimate that only 5 of these pubs would be turning over this amount.
The rent seems very reasonable ( too reasonable ) but be careful that the owner is not trying to get you to build up the business so he can let it later at a much higher rent.
Anyway best of luck with the venture.

amn88 · 29-03-2011 06:52PM

Well funny you say that Gerard G, I was going to make a deal within him that I take the pub rent free for a year and build up the pub/ business name so he could charge a much bigger rent the following year. I've worked in a pub 8 years and it was about to close down 2 years ago so i approached the owner to allow me have the running of the pub on friday and saturdays for a share of profits. This has being very successful and I am very reluctant to leave it as its risk free and paying a very good income. It is the busiest pub in the town by far now, But The owner has being very careful not to allow me near the accounts side of things, or any figures really or deal with the stock orders, she really wants to keep me in the pub and not take my own pub in the town.
im only 22 and i really know what the young crowd want in a pub hense i want to target that group. But i do plan to cater for all crowds. bar/lounge idea.

homerjay2005 · 06-05-2015 02:14AM

Sorry for the bump but OP, did you go for this and if so, how did you get on?

Axwell · 06-05-2015 02:29AM

30 or so posts from the OP, last post 3 years ago...safe to say they arent going to come back to you any time soon..

PS dont bump zombie threads.

Pub for lease €150 per week

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