to close for comfort or good for business?

[FRE2FALL5]

Hello to all i'm new to this forum from sw ohio.
I am currently looking at bar that is for sale through the current property owner for $150,000. whith the rent being 3500/month. The previous bar owner was only open for a little less than 2 years before being closed down for not paying his bills and operating without a liq. lic. (Did not get it renewed). Since the night he got shut down the bank forclosed on his note and a lockout order from the court was ordered (everything is still in the bar including stock) The property owner has since purchased the debt from the bank and is looking for a buyer. Now before you ask no i do not have any experence in the bar industry but have owned and operated a auto repair business whith 2 employees in a very saturated market for over 7 years without operating in the red since my second month in business. My financial partner however is a seasoned bar owner who sold his bar 3 years ago and is willing to help me both financially and help teach the tha bar business.
The question is the bar is located in a small strip building with another bar on the other end. They really dont draw that much of the potential business in this area and also has just changed hands. Do you think this is a problem or would it be good for competitive business. Fre.

[intensity]

What exactly are you getting for 150k? Does that include the liquor license and all the assets? Also, you won't be buying his company correct, just his assets under your new corporation or LLC?

As far as being worth it, you need to figure that out. Noone here knows your area better then you. Having another bar close by isn't always a bad thing. It draws potential customers to the area, etc.

[FRE2FALL5]

INTENSITY WHAT I WILL BE GETTING IS EVERYTHING EXCEPT LICENSE BUT THERE ARE 5 AVAIL. IN THIS AREA W/SUNDAY SALES. ALL ASSETS WITHIN THE CONFINES OF THE BAR ARE INCLUDED IE POOL TABLES, DART BOARDS POS SYSTEM COMPLETE KITCHEN, STOOLS, TABLES, JUKE,SOUND AND LIGHT SYSTEMAS WELL AS A COMPLETE SPACE THAT IS LESS THAN 2 YEARS OLD, VERY WELL LAYED OUT FULLY TILED BATHROOMS THE WORKS. tHIS WAS A SINGLE THEME BAR THAT I THINK JUST WONT FLY IN THE LONG RUN BUT HAS THE POTENTIAL TO BE THE PLACE IF YOU KNOW WHAT I MEAN. FRE.

(sorry about the caps wasnt watching)

[excellentbars]

Hey Fre

I would look at this thread

http://www.nightclub-business.com/forum/showthread.php?t=4597

[owneroper]

are you sure the game machines are included ? did you check the price of available license?

[ministry]

you also need to make a list of things that you are buying and then price them out new and see if it is truely a good deal. maybe it is cheaper to build new.

[FRE2FALL5]

excellentbar, my score was 65
owneroper, yes the machines are owned except for the dart boards and current d6 lic w/sunday sales will run around $3'000/year.
ministry, my partner who knows the current pricing of equipment says that the value of current assets are in the range of 85-90,000 will all being under 2 years old, and since its all allready in place it saves on install costs and all the other structure improvements(heating, cooling, plumbing and lighting, ect.) it appears we would incure little upstart costs after initial purchase. fre.

[owneroper]

how does the smoking ban effect you? I think that is high for a business with no property, not sure where you are at in ohio. what exactly are you buying for 150? How old is the stock? How much. I think you could do better I just dont get what it is your buying, a business that went bad, so thats not worth anything. so if assets are 95 what is the other 55 for? and then you owe rent 3500??

[macaws49]

I have only had my bar for about 14 months. How many people will the bar hold? $3500 in rent. I can hold about 100 people, never have that many. I can not imagine paying out 3500 in rent.
Don't rush into it without doing your homework like I did. I was shocked at the taxes and insurance.
By the time I found this board I had too much invested to not open, but if I could go back I WOULD NOT OPEN A BAR.
If the bar in the same strip is doing poorly what are you going to do so different than them?

[FRE2FALL5]

The smoking ban is in full effect in ohio with no exceptions. Yes i know for a fact that the rent is way to high. So heres another question for all the seasoned strip mall type bar owners. What would it cost to completly outfit a bar with all the extras including plumbing, electrical, heating, sound, lighting, kitchen, tables, chairs, bar stools, ect. in a 2800sf strip mall type building in order for it to be turn key minus product? :confused: Fre.

[excellentbars]

Fre

Lest look at this first statement below for this project, I already would be looking to pass on this or go in and hard ball the owner....I would sit down with the owner and tell him you will take over the business with a limited amount of money down for that $3500 rent...Why? you will need the $150,000 you where going to use to purchase the venue to market and promote the venue...Also I would offer the landlord a smaller number like $40,000 and maybe a little more that would be made in a few seperate payments placed in your high season if there is one!


The question is the bar is located in a small strip building with another bar on the other end. They really dont draw that much of the potential business in this area and also has just changed hands.

;) The landlord made a bad deal and with the other bar shutting down that is a horrible sign....because the last tenant added all the TI's doesnt mean that you should have to pay for them again....
The landlord can write off his losses and move on to a new tenant who is motivated to make this venue happen....Be warned that you need to figure out why these venues didnt work and adjust your new concept accordingly....

It is not correct to assume that you will walk in and promote to the area and you will be successful......What do you think the owners of the last 2 venues did? unless they where complete morons they would have done the same thing....."Create value by creating a good marketing plan"

Rent calculations

$3500 for 2800 sft= $42,000 per year at $15 per square foot

-is the lease a NNN = tripple net lease that includes taxes and insurance?
-Is the lease a gross lease
-How are the utilities paid since it is in a strip mall is everything metered seperately?

These numbers are important to figure your real costs per month!

Next part


The smoking ban is in full effect in ohio with no exceptions. Yes i know for a fact that the rent is way to high. So heres another question for all the seasoned strip mall type bar owners. What would it cost to completly outfit a bar with all the extras including plumbing, electrical, heating, sound, lighting, kitchen, tables, chairs, bar stools, ect. in a 2800sf strip mall type building in order for it to be turn key minus product? Fre.

The cost of building in another strip mall would not save you any money and would most likely take up to 6 months to complete having to jump through a million hoops for permits, licensing and construction issues.
I would recommend that finding a venue such as another restaurant that has had some infrastructure is a better bet on a limited budget.

A new kitchen will run you $40,000 to $80,000 easy with equipment, construction and a small bleeding ulcer! :(

I would sit down and negotiate with the landlord and otherwise keep looking and something good will come along and you will be glad you waited

Cheers
Chris