Buying and running a bar can seem like the dream for many entrepreneurs. And, if you enjoy socialising in bars, it can seem very tempting to make it your career.
The truth about running a bar, however, is a lot more work than most would think. You will need to be prepared for late nights and to work weekends.
Despite this, though, it can also be very rewarding. And, for the right person, it can lead to success!
Create a bar business plan
When it comes to bars, there are a lot of start-ups that fail. This is why it can be a good idea to invest your money into buying a business that already has a proven track record. However, you will need to create a clear plan that will make sure that the business you buy will be a success once you take it over.
Do your research and find the type of business that fits your idea of your dream bar and has had a constant stream of customers over the years.
But keeping your bar running will depend on more than just a proven track record. Your experience and knowledge of the industry will also come into play.
The fact of the matter is, even if you hire experienced and knowledgeable staff, you will still need to be able to manage those staff.
And, although good staff can take the pressure off the types of hours that you work, in the beginning, you will need to be there from open to close. This will allow you to get a handle on the running of the business. It will also allow you to make sure that your staff are trained to run the business the way you want it run.
As the owner, it will be really important for you to meet and talk to your customers. You need to make them feel welcomed and appreciated so that they want to keep coming back.
The best way to keep everything you do on track, is to have a clear business plan before you start out. This will give you something to keep referring back to once you have purchased the business but it will also allow you to have a clear idea of what will be required of you and what kind of business you should be looking for.
You will also need a detailed business plan if you are going to get a business loan to buy your bar.
Skills needed to run a bar
Besides being a people person and have some knowledge of alcoholic beverages, it is also necessary to be good with numbers. You need to keep meticulous records of money and stock.
If you want to be a successful bar owner, it can be very beneficial to first be a successful bar manager. Gaining experience working in a bar will help you when it comes time to open your own. Spend the time working at other bars gaining profitable bar building ideas.
Types of bars: Finding the right bar
If your dream is to open your own bar, you probably have an idea of the type of bar you want. For some, it will be a sports bar while, for others, a speciality bar focused on a particular type of alcohol might be their ideal.
In your business plan, you should have set out exactly what type of bar you are looking for. Do you want something low-key that caters more to the local neighbourhood or are you hoping to run an upmarket bar lounge business with security on the door?
Buying the right bar, however, will take more than just finding an establishment that fits your dream. You will need to do a lot of market research and due diligence to make sure that the business you buy will be able to make a profit.
You have to be realistic about the type of business that will be suited to the area that you are looking in. For example, a high concept bar will be suited to London but not to smaller towns in the UK where there simply isn’t the demand.
Evaluating the worth of the bar
Before purchasing a bar, make sure that you have carefully valued the business. Value the business according to both the physical assets and the sales revenue over a number of years.
A popular method of valuing a bar is the Multiple Discretionary Earnings method. This will allow you to factor in the financial and operational factors in the value of the bar. It will also be important to look at the market in general. Get an understanding of what other bars in the area are selling for and do a comparison.
The valuation will also need to consider whether the bar is freehold or leasehold. If it is leasehold, be sure to look at the terms of the lease when it comes to the building that your bar is in. It can ruin your business if your landlord decides to double rent after you’ve been running your bar for a few months or even years.
Get a good understanding of what state the business is in and how much you would need to spend to fix anything that is not up to standard. Will the equipment be included in the sale, what is its value and will any of need to be replaced?
If you can manage to do your research thoroughly, including your due diligence and hiring of staff, you can confidently buy the right bar.