Buying/Opening a Bar/Tavern??
 

Considering purchasing an existing local bar. Any thoughts, hints or ideas? Anything that needs to be looked at or checked into first. Know of any good resources such as web sites or books?

Possibilites include buying the bar without the land and leasing space or buying the land and the bar.

[The bar is a local bar, pretty much a dive, but has a relatively steady business. Has 2 volleyball courts and bands on the weekend. Located in small town near a large city. In an area that will probably see a lot of growth over the next 5 years.]

Let me know if you need more info.

Thanks.

There are lots of things to consider when you are buying an existing business much less a bar. Make sure you do your due dilligence and check the place out before you sign anything. Ask a lot of questions and not just the current owner. Talk to neighbors around the area. Is the bar a good neighbor? Talk to employees. Do they like working there? People will tell you what you think you want to hear or you only hear what you want to hear so keep an open mind.

What kind of lease would you have? What shape is the current equipment and building in? Can the place handle increased business in the next five years? Do you have enough parking? Can you have live music or are there zoning laws controling it? Is the local police force "friends" with the place? Or have there been a lot of problems associated with it from a law enforcement point of view? Have there been any liqour code violations-serving minors? Does the place have a loose or strict minors policy?

Look at the books close if you can. Have your accountant look at them if possible. Find out how much money is made off the books. Why is it for sale? Can you transfer all the licenses associated with the bar? If you have friends in the business, send them in to look at it-see if bartenders are honest-any theft going on. Bartenders can make or break you. (My old boss once said-try to control how much your bt's steal from you.)

That being said, have you ever operated a bar??? Do you want the hours and life associated with owning a bar? There are a lot of great things associated with owning a bar but there can be a lot of problems too. I have been in the business for almost 20 years and it is a challenging and rewarding career. It's a big decision good luck!!!

Are you ready to marry this bar? You will be there more than you will be with your so.
Like stated above RESEARCH. One big thing often over looked, LIABILITY. Check out insurance costs. Big $$$$. I do wish you luck if you follow through.

great advice, cardfan - obviously you know your stuff... I would only mention the relationship your bartenders have with the regulars. Is this a place you went to frequently? The bartenders are the reason people will come in on a regular basis, but you have to keep "comped" drinks reasonable. A friend of mine who owns a pretty big place had an outside company come in an monitor the pours over a week and he discovered he was losing $5k /week on free drinks/heavy pours! Also, I am always leery of stepping into a management role with existing employees... But with that said you have beaten me to my retirement plan! Good luck.

<a href="http://www.tfproject.org/tfp/showthread.php?t=61103&highlight=business+wife">This thread</a> in tilted finance from a little while ago has a pretty in depth discussion on purchasing a retail kind of business. Obviously there are special legal issues with owning a bar vs. a convenience store, but it should still provide you with a lot of information about buying vs. leasing, things your accountant should look into, etc.

Are you a regular there? If not you should check out the vibe of the bar and make sure you don't want to change it too much. Buying a biker bar and turning it into a place selling strawberry dacharis would be a good way to piss off the existing clientele.

Thanks for the advice thusfar. I'll keep you updated if the deal goes through.

You can't go wrong with the advice thus far posted, but let me add my two cents.

First, although the guy has bands on the weekend, you really need to check whether or not he's got a permit for music. Could be that he doesn't but the cops are letting him slide because nobody complains. But when somebody does....

Around here, we have a situation where a guy bought a bar on county land that had had music for several years. The new owner cranked it up a notch with punk bands, and neighbors began complaining about the noise and about drunk punks wandering into their front yards and trashing stuff. The neighbors complained and the county got involved, and it turns out that the venue's business license is for an Italian restaurant with an attached bar -- no music, nothing else. The new owner never checked.

Second, if you don't buy the building, get a long lease with good terms as part of the deal. Otherwise, you're at the guy's mercy. Be sure that the name and telephone number are part of the deal.

As for buying commercial real estate: get a good real estate lawyer. Otherwise, they could put one over on you. You should probably have one when negotiating the lease, too; there's a lot of back and forth on who pays for what, what kind of improvements are allowed, whether you have to pay to take improvements out if you leave or if they belong to the building owner with no compensation, who pays for what damages and insurance, all that kind of stuff. Real estate lawyers aren't cheap, and I've used them rarely. But I'm _always glad I did._

ok does a liquor lisense exchange hands between the old and new owner? applying for one can be a pain depending on where you live compared to the existing places that sell it already.

insurance would be a pain also.. one word.. smokers.. why you cant smoke in theaters.. one .. people hate it.. yet ever fucker that leaves strikes up a smoke. heh.. second the fire code...

on that note.. better check with the fire marshel while you at it.. make sure there arent any past violations there.. dont want him comeing in.. they are as bad a OSHA at times.

and do they sell food there.. most bars i know of have a kitchen in the back .. server finger foods or what not.. then comes the health department.

then you gotta have ye old dwarven bouncer.. toss them out on thier arses.. harrrr

but yeah a few toughs would go nice with any bar, never know when a freak breaks lose on ya.

all in all, i like sports bars best.. and college peps comein on the weekends .. good cash there.

good luck on your future purchase

Have a great friend who trusts and respects you as equally as you do to them, be involved in the operations as a strong second opinion. Can't lose with someone who is on the same page.

And when you open, aside from all else, have a big smile for everyone because you're there because you want to be, not because you have to be. I'll drink to that.

Thanks for the Question & Answers!!!
 

I too am looking into buying a place!

I deal with the bartenders every week-drives me nuts at times. So much so that I've repositioned my business to more food sales and less alcohol sales to reduce the theft. I've got great people working for me but I don't trust them further than I can throw them.......

Well, you could try paying them enough to keep them honest. In my experience, most owners / managers don't.

If you treat employees with respect, most will treat you the same. Of course, there are assholes in every business - bartending included. Fire them if they're stealing.

BTW - how can you say "they're great people" and "I don't trust them" in the same sentence, about the same people?

The guys I know who owned a very succesful bar, were quite rich but extremely miserable. One in particular, had a wife that didn't trust him or his patrons so she worked there whenever he was there and she was nasty to all the pretty maids sitting along the bar. Too bad her hub was so cute! In time it became quite disfunctional and the two brothers (they owned this bar as partners) ended up hating eachother. It's a different lifestyle for many reasons esp. in that you are feeding peoples "habits". All of those fun, but uninhibited habits.....

I have known two bar owners pretty well in the past. One a family operation and the other just one guy. Both of them complained that the two biggest headaches thay had were:
Finding people you could trust to work there and
They had to work too many hours, the guy said that even when he wasn't there the place was always on his mind, like a 24 hr a day job. He finally sold the place and bought a coin operated car wash, said it was the best decision he ever made.