Share This Info:  

Buying A Bar - 4 Tips Worth Reading Before You Buy Your Bar


Buying A Bar 4 Tips Worth Reading

A lot of people think buying a bar would be a fun, easy business to get into. Your job would basically be to provide a place for people to have fun, right? 

Maybe, but bars are one of the riskiest businesses to buy into. The bar business is highly competitive and it tends to rely on contemporary trends within the area. Many owners find the most difficult part in buying a bar is to sustain consistent growth beyond the "buzz" factor.

Also, the laws that ban smoking in public places have changed the game for many bars, hurting profits, but at the end of the day there is no greater markup than that of liquor so there is potential to make money in this business.

Here are a few more things to take in consideration when exploring the possibility of buying a bar from a business broker or direct from a bar business owner:

Food Or No Food?

As I said, competition in this industry is high. You are not only competing with other small businesses but also the large chains that offer both food and liquor.  True bars, establishments that don't offer food, just liquor, are becoming less profitable. Bars in good, dense, urban locations are still strong but suburban bars are struggling. The absence of a kitchen increases the risk of losing hungry customers to other venues. So, while liquor is always more profitable than food and not having the expenses of a kitchen can be good for the bottom line, not having food can also hurt, so consider this option closely.

Liquor Licenses

Regardless of whether or not you offer food, without a liquor license you lose your greatest source of revenue, if not all of it. Not having a liquor license can completely stop your access to this industry so you need to make sure that the existing owner's license can be transferred to you. Liquor licenses in certain areas where there are high concentrations of establishments within major cities have become extremely difficult to obtain, thus driving the value of those licenses very high. In some states, such as New Jersey, they only offer a specific amount of licenses. Once those are gone, they do not issue more.

Owner Involvement, Staff, Inventory Control And Your Customers

If you plan to be involved in the day to day business, be prepared for some potential headaches. Most bars are open until the early morning hours and at least 6 days a week.  With so many operating hours, you have to be adequately staffed. Not only do you have to be staffed for all those hours but you also have to make sure your staff is friendly, hardworking and most importantly honest.

This can be a difficult business to control inventory as pouring an extra drink here and there can easily go unnoticed. Given that most bars do a lot of cash business, it is also easy for dishonest employees to pocket your cash. The bar and restaurant industry is also known for having high turnover, so be prepared for staffing challenges.

Let's not forget to talk about customers. While your customers are the life of your business, they can also be your biggest headache.  When buying a bar, you will encounter customers that come in, have a few too many drinks and become unruly. You also have to worry about how these unruly customers will leave your establishment. With new drunk driving laws being introduced every day, customers like these could up being a big problem.  Not everyone will be a problem, but it's important to ask the current owner what procedures are in place should one of these customers come in.

In my opinion a high degree of owner involvement on a day-to-day basis will make a bar business most successful as it will give you the ability to contain costs and prevent "˜shrinkage. As the Owner, you must have excellent people skills. This is not a business for introverts.

Benchmarks

Successful bars and nightclubs can usually generate up to $5,000 per well on a good night. As you are reviewing financials, keep in mind that the cost of goods should be below 28% of sales in a tavern/bar with little or no food. Payroll should be less than 20%.  Look closely at the rent, it should be about 6% to 8% of gross sales. Serving alcohol should be an extremely profitable endeavor, with average pour costs running as low as 16 percent for liquor, 21 percent for draft beer, 25 percent for bottled beer, and 28 percent for wine but despite these great numbers you have to make sure you have the right management and staff in place to run the operation efficiently.

Peter Siegel, MBAAbout The Author: Peter Siegel, MBA is the Founder (of BizBen.com) & the Director Of the BizBen California Network (founded in 1994!) consisting of business buyers, owner/sellers, business brokers, agents, intermediaries, and advisors (there are over 90,000 users, and 8,000+ listings posted on BizBen.com). To join (FREE) the BizBen California Network, phone Peter Siegel direct at 925-785-3118 - get signed up for business for sale listings (Email Alerts) before they hit the market, view requests from serious business buyers - wanted notices, notices about upcoming FREE online webinars on the topic of buying and selling California small and mid-sized businesses and much more! Call 925-785-3118 to get info about bars, taverns, and nightclubs for sale in your area.


Categories: BizBen Blog Contributor, Buying A Business, How To Buy A Business



  Helpful Resources To Assist In Selling And Buying California Businesses
George Lanza, Business Broker, At Plethora Business Sales

Plethora Businesses, a division of A Premier In Services, Inc., is a Business Intermediary Consulting Firm headquartered in Orange, California. Plethora specializes in the listing and sale of small and medium sized private businesses.

Bob Hughes: Business Broker, Coachella Valley Area

Bob Hughes is a business broker & is President of Hughes Properties. Hughes has a wide variety of entrepreneurial experience with the personal ownership & sale of numerous businesses, and has sold over 200 small & mid-sized businesses in the Riverside County marketplace. Call Bob at 760-323-8311.

Jack Oh, Business Broker - LA, Orange Counties

Business broker and real estate services in the Los Angeles and Orange County areas. 10 years experience with great negotiating skills. To sell a business or buy a business in the LA or Orange County Areas phone Jack and his team at 562-787-4989.

William Park, Business Broker - Southern California

Highest Volume Broker in California, Simply Check our HUNDREDS of Listings! Over 25 Associates, Speaking Dozen Languages, Helping Buyers and Sellers of Small Business since 1982, Centrally Located between Los Angeles and Orange Counties, while Riverside & San Bernardino Counties are Very Accessible.

Michael Floorman, Business Brokerage, BTI, San Francisco Bay Area

Business Team, San Jose (Campbell) located in the Pruneyard Towers at Bascom and Hamilton. Established in 1981 Business Team with over 6600 sales to date has 1000 business listings to choose from, paid Google advertising. We offer highly trained and experienced professionals.

Mike Brewer: Liquor License Broker, ABC Consulting Service

Liquor license brokerage and consulting services. We provide: Alcohol License Transfers Application Consulting & Processing, Liquor License Purchases & Sales, City Zoning Permits & Land Use Entitlements, Public Convenience or Necessity Findings and Letters. Phone Mike Brewer direct at 800-437-1100.

Willard Michlin, CPA, Certified Fraud Examiner, Due Diligence

Willard Michlin, CPA #106752, offers buyers step by step training & assistance in doing Due Diligence Services when they are thinking of making an offer, or are in process of investigating a business purchase. He helps to determine the actual net profit even when there is cash. Call 805-428-2063.

Jeff Sacher, Business Broker: North Bay Restaurant, Retail Specialist

Jeff is a leader in business brokering in the North Bay. Since joining Santa Rosa Business And Commercial in 1999 he has assisted Buyers and Sellers in over 200 business sales and acquisitions. Jeff provides other services for his clients as well. Reach Jeff and his team at 707-888-4972.


  Related Articles, Events, Blog Posts, Discussions, Videos, Interviews
Buying A Bar - 4 Tips Worth Reading About Before You Buy Your Bar Or Lounge

Four factors to consider when buying a bar. Peter Siegel, MBA (BizBen ProBuy, ProSell Programs) with BizBen discusses: The advantages and disadvantages of a bar that serves food as well as liquor. Staffing, inventory control and owner involvement as they relate to a good business are summarized.

Don't Buy A Restaurant Without Checking The Competition - Key Buying Tips

Looking to buy a restaurant business? Check out these tips first to avoid getting blindsided when you buy any type of small or mid-sized California restaurant. Peter Siegel, MBA (BizBen's ProBuy & ProSell Programs & Restaurant Purchase Financing Expert) at 925-785-3118 covers this topic for buyers.

Restaurant And Fast Food Franchises - Successful Tips From Franchise Buyers

Restaurant franchise offerings are among the most popular of the business types potential business buyers seek. What many would-be owners don't realize is that there are specific tips for buying fast food or restaurant franchises that don't necessarily apply to independent restaurants for sale.

Buying A Restaurant Can Be Challenging: 3 Key Tips For Restaurant Buyers

People always need to eat; there should be plenty of business. Some buyers think there is prestige to owning a popular eating establishment. But it isn't an easy purchase. Peter Siegel, MBA (Business Purchase Financing Expert, ProBuy & ProSell Program at 925-785-3118) reviews this topic.

How To Determine Whether The Buyer For Your Business For Sale Is Sincere

A problem owners encounter when offering a CA business for sale is that not all so-called business buyers are qualified to make the purchase. It's frustrating and costly to waste time showing non-qualified buyers the business. Here are ways to identify time wasters so the focus is on real buyers.

Selling Your Business To One Of Your Employees - A Good Idea? Pros And Con

After investing years of time and talent into a company, many small business owners want to feel like they are leaving their business in good hands and for that reason, some sellers opt to sell their business to an employee. Peter Siegel, MBA talks about the pros and cons to taking this route.

What Factors Are Considered In Valuing A Small Business? Advisors Weigh In

Valuing a small business is not guess work. It's not what some other businesses of the same type may have or may not have been sold for, it's not even what a business owner "feels" they want or deserve. It is a formula based on many factors. Peter Siegel, MBA from BizBen & others discuss this topic.

Tips When Using Escrow Bulk Sale Services When Buying Or Selling A Business

The final part of the business for sale transaction is the escrow and bulk sale process by Peter Siegel, MBA (Business Purchase Financing Expert, ProBuy & ProSell Program Advisor) answers questions and describes the escrow and bulk sale process. Peter can be reached direct at 925-785-3118.

See All News, Tips And Events


Michael Brewer, ABC License Consultant
Escrow Services Diane Boudreau-Tschetter
SF Bay Area Solar Company
Chuck Post Laundromat Industry Expert
Facebook
Twitter
Linkedin
Google Plus You Tube
Vlogs and Podcasts


Auto Related
Business Services
Children Related
Communication Related
Computer, Internet Related
Construction Related
Entertainment Related
Financial Services
Health, Beauty Related
Home Improvement Related
Maintenance Related
Manufacturing Related
Media, Publishing Related
Pet Related
Photography/Video Related
Real Estate Services
Restaurant, Food Related
Retail Related
Service Related
Sports Related
Transportation Related
Travel Related
Wholesale Related

Auto Body Shops
Auto Repair Shops
Bakeries
Bars, Sports Bars
Cafe Restaurants
Car Washes
Cleaning Services
Clothing, Apparel Stores
Coffee Shops
Convenience Stores
Deli Restaurants
Discount, Dollar Stores
Dry Cleaners
eCommerce Websites
Fast Food Restaurants
Florists, Flower Shops
Full Service Restaurants
Gas Stations
Gift Shops
Gyms, Fitness Facilities
Home Health Agencies
Hotels/Motels
Ice Cream Shops
Juice, Smoothie Shops
Laundromats
Liquor Stores
Markets, Marts
Nightclubs
Pizza Restaurants
Postal, Shipping Stores
Preschools, Day Care
Print Shops
Salons, Beauty Shops
Sandwich Shops
Smog Test Only Shops
Smoke Shops
Spas, Med Spas
Sushi Restaurants
Tire Shops
Towing Services
Vending Routes
Wireless, Cellular Shops
Yogurt Shops

Alameda
Alpine
Amador
Butte
Calaveras
Colusa
Contra Costa
Del Norte
El Dorado
Fresno
Glenn
Humboldt
Imperial
Inyo
Kern
Kings
Lake
Lassen
Los Angeles
Madera
Marin
Mariposa
Mendocino
Merced
Modoc
Mono
Monterey
Napa
Nevada
Orange
Placer
Plumas
Riverside
Sacramento
San Benito
San Bernardino
San Diego
San Francisco
San Joaquin
San Luis Obis
San Mateo
Santa Barbara
Santa Clara
Santa Cruz
Shasta
Sierra
Siskiyou
Solano
Sonoma
Stanislaus
Sutter
Tehama
Trinity
Tulare
Tuolumne
Ventura
Yolo
Yuba

0 to $99,999
$100,000 to $249,999
$250,000 to $499,999
$500,000 to $999,999
$1 million to $2 million
over $2 million



BizBen - Where California Deals Get Done! 925-785-3118
7172 Regional Street #364 · Dublin, CA. 94568
BizBen · Copyright © 1994 - 2019, All Rights Reserved

               Vlogs and Podcasts  
Join Us On Social Media - Content Updated Daily
Sign Up Today - For Our FREE BizBen Weekly Email Newsletter
Includes The Best Info On Buying, Selling, Valuing, Financing California Businesses:
Articles, Blog Posts, Podcasts, Videos/Vlogs, Discussions, Q&A, Workshops, Webinars,
Resources. Watch For An Email Confirmation After Signing Up Above. Thank you.
Clost Login


Please confirm your registration by clicking the link we've sent to .

If you can't see it, please check your junk mail folder.

If you have any problems registering, or need assistance with your new BizBen User Account please phone BizBen Customer Support at 888-212-4747.



First Name:*
Last Name:*
Email Address:*
Confirm Email:*
Create Password:*
Confirm Password:*
Phone:
(   
 


You Are A:
Individual
 
Intermediary
 

Email Address:
Password:
 
Search BizBen.com

500 New & Refreshed Detailed Postings Daily
Over 2500 Resources Available On BizBen
Since 1994. Where California Deals Get Done!
Buying A Restaurant Can Be Challenging: 3 Key Tips For Restaurant Buyers...
Read More News
Don't Buy A Restaurant Without Checking The Competition - Key Buying Tip...
Read More News