Leasing a bar...Is it worth it?

[BDiamond]

First of all thanks to everyone for being here and adding content. It's an invaluable resource for guys like myself.

I actually wrote the post first and then added this bit - I've realized I'm tryin to sort through my thoughts in this post and I only ask 1 or 2 questions in this rant of mine. READ AT YOUR OWN RISK!!!

I have an opportunity to buy or lease a small neighborhood bar located in a little strip mall. It is a total turnkey operation. Friday/Saturday night is 1 bartender, 2 waitstaff, 1 cook, no security, no bar back.

I frequent the establishment every weekend. Nothing special. It has a small kitchen. They have Karaoke 2X a week, poker on Tuesdays, and was packed for college football.

From my understanding the bar was bought by two younger guys and the owner was carrying the note. They spent the profits, didn't keep up with payments, and the owner took it back. The original owner approached me, stated the he felt I had a good grasp of the business from our many conversations, and asked what I thought about buying the bar. I'm talking with him tomorrow. I'm assuming I don't have enough cash to buy it outright but I'm sure he'd carry a note for a bit with a balloon or something.

I've had several thoughts:

I've averaged about $100K/yr income in a sales position that I've held for the past 3 years. Some days I work 4 hours, some days 14. So my first thought is could I expect to make that kind of money? At the same time I considered keeping my current job as the bar has a good staff that are very proficient and wouldn't require me to be there 24/7. My daily flexibilty would allow me to meet with vendors, handle inventory, financials, etc. I'm done with my day around 9:30 p.m. which would allow me to come in just as things got going for the evening. If I needed I could slowly phase out my primary job as income from the bar allows me to.

Another thought is how will the staff and regulars adjust to having me be on one side of the bar one day and on the other the next? I've made many friends with the regulars and the staff and I'm afraid that's going to cause problems ranging i.e. wanting free drinks, wanting overpours, the staff not respecting me as "patron gone owner", etc. If I did buy it I wouldn't try to get involved in WORKING at the bar but focus on RUNNING it. (Visiting with new faces, being available if we get slammed, etc) If the change in ownership wasn't announced nobody would even know the difference

I've got about $60K cash that I could commit but why? I do okay, have no risk, and enjoy my job. I've worked in the industry before (DJ, security, bartender, manager) and absolutely loved it so I'm sure I'd enjoy it again.

I think ultimately I'd want to carry it on a note, keep my current job and if it required a larger time investment phase out my other gradually. This way I have an income base, I can dump it if it becomes more than I anticipated with the expectation of everything working out fine, pay it off, and maybe even sell it at a profit later down the road.

Is this feasible or do I have to have an all or nothing attitude? Can I make the same money? Could I lease it as a source of secondary income since it's pretty turnkey w/minor changes or do I need to quit my job and focus soely on the bar?

Any thought would be great. Sorry about the ranting...I am normal when I haven't been reading threads for 6 hours!!

BDiamond

[David]

Is it legal to lease the liquor license in Omaha? Most States require that you own the license. There are some ways around it.

* You can draft a Management Ageement
* You can do a Contract for Deed (C4D)
Check with you States Revenue Department or Liquor Control Board

[BostonDave]

Is it a dream of yours to open a bar of your own or have you always dreamed of having a steady 100K job that you enjoy?

Do you have a family?

Let me know and then Ill give you my 2 cents... I have been involved in a very similar situation that you are...

[BDiamond]

Both actually. Preferably making 100K owning a bar!!

It has been a dream of mine to own a nightclub. The difference is this one is a l "bar". It's a place where I go to be able to sit with friends and have a drink. Not quite the concept I would choose or clientele I would cater to if I was opening my own from scratch. That would have more of a nightclub atmosphere.

Because the bar is profitable and turnkey I don't want to try to fix something that isn't broken...it just needs polishing and tightening up.


As far as my family is concerned because they already feel like they don't get much of my time I have a crazy schedule. I sure any profits from the bar would get sucked up in marriage couseling fees cause that's probably where we'd up!!

I look at it as an opportunity to do something I've always wanted to do, probably have a fraction of the risk most guys on this forum carry, and maybe be able to fully fund the retirement accounts this year or take some dollars and take some time off more often.

Thanks for the reply BostonDave. Hopefully you can shed some light on this opportunity,,,

[BARTENDER 54]

Good Morning David,

In the Great State of Nebraska you own the license. you lease or buy the building and your name is on the piece of paper.
ie; You own a bar on Market St. ...it burns down...you can transfer that license to another physical address..without having to go through all the BS to get it in the first place. Or having to rebuild a structure at that same old address, because that is where the license was originally set for. Or if your landlord gets to be a prick and triples your lease, you can file to move the license to another address

It used to be..back when, that you bought the license and the business came with it. Now ( I think , with the conception of strip malls and the like, where you can't buy the physical address)you own the paper but not necessarily the structure.
You can be an "absentee owner", hire a manager to run it..but the manager's name then has to be on the license...or if you do not reside in the same county as the "establishment" is located and are not incorporated in any way..or have a felony on your record, the manager's name must be on the license.

BDiamond,
Where, in ballpark terms, is this place??? And don't worry I have NO desire to own a bar in the "BIG" city...I'm just kind of curious what part of town it's in.

As far as your family thinking they are on the short stick already...then you might as well get a divorce now and save all the BS you will be going through.

And as far as the employees seeing you go from patron to owner...have you ever made a complete ass out of yourself in that bar??? If so... then they may have a hard time "respecting" you as the boss.

Anywho, Good Luck in whatever,
Rick