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Anyone ever own/run a Bar or Pub?

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investorpaul

Joined
5 January 2009
Posts
595
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7
Hi everyone,

Bit of a side topic for a stock forum but perhaps someone on here has experience owning/running a bar.

Basically I am helping out a family member, they are running their figures on a bar they are looking to open and I am planning devils advocate and running separate figures.

Just wondering if anyone out there has industry average figures/knowledge for:

1. Sales per square metre
2. Avg Gross and Net profit margins

I have run my figures but the sales PSM to make a decent profit seems way too high to me approx $9,500 psm, which equates to an avg of 440 patrons a day drinking on avg 2.5 drinks at an average price of $3.75

Any help will be appreciated

P.S. the family member who is looking at this will get all the proper account/legal/consultants in at a later stage. This is very much a broad brush approach to see if a "small bar" does stack up

Edit: Just noticed a spelling mistake in heading - Every should be ever - perhaps a mod can change it?
 
Your figures are right. It is really hard to make a bar work.

I don't know the exact roi per sq metre, but i do know that it is a struggle for many to keep surviving.

But, then again, it depends on where the bar is. If it's in an isolated area with not much else around (in terms of drinking), then perhaps it has a chance to work. If the new owners have no experience in the hospitality industry, tell them to forget about it! More people than not go bankrupt trying to run a bar or restaurant because they want to follow the good old Aussie dream.

Also, the first thing to go during a recession is descretionary spending and hospitality.

There are also many rules and regulations, and have you heard of bar-flies? Well, they actually do exist and your friend will most likely have to have pest control in regularly to clean them up, as well as cockroaches.

All round, unless extremely experienced, a bad idea.
 
Aussiest said:
Your figures are right. It is really hard to make a bar work.

I don't know the exact roi per sq metre, but i do know that it is a struggle for many to keep surviving.
Click to expand...

440 people per day in 200 sqm seems high at first but works out to an avg of 30 people per hour for a 14 hour day.

Obviously mid week trade would be nothing compared to the weekend so you would be relying on friday and saturday night to bring in the dollars.

I believe there is a market as the bar has a unique concept and idea to draw in the punters but once you run the figures its wages and rent that is the killer.
 
investorpaul said:
I believe there is a market as the bar has a unique concept and idea to draw in the punters but once you run the figures its wages and rent that is the killer.
Click to expand...

Well, hopefully they'll make the right choice!

Good luck to them...
 
No idea how to run one.

But

Will you have live bands, special nights?

An crowd pullers which might increase your numbers?
 
Green08 said:
No idea how to run one.

But

Will you have live bands, special nights?

An crowd pullers which might increase your numbers?
Click to expand...

Yer there will be events like the above and there is a central idea to pull in punters on regular occasions.
 
I have worked in a few pubs in my time - the hardest thing is getting people in during the day.

Of the successful bars - they had good restaurants and live music to pull in the punters, and I know they made good money.

I hope they know that bar management is a very demanding job - working until 2am every day isn't everyone's cup of tea.
 
Over a 14 hour day you are not going to get a steady stream of customers, you will get smashed at lunch, at 5pm and then later on...

I have worked for years in hospitality... it is ****HOUSE...
 
Forget the live bands
Forget the decent food
Forget cheap beer
Just wack as many pokies in as possible,60k profit per year per machine

At least thats what my old local has done
 
Adam A said:
Forget the live bands
Forget the decent food
Forget cheap beer
Just wack as many pokies in as possible,60k profit per year per machine

At least thats what my old local has done
Click to expand...

Yep this is how you do it.

I have noticed the push towards family friendly bistro's to get the punters in. One local down here has a large outdoor section with a kid’s park put in. It also has another child minding room with painting, playstation and other activities so mum and dad can get drunk in peace. Food is plain and a little bit (imo) yet it always packs a crowd. It’s all about building up a crowd to play your pokies.
 
I find the casino carpark best for the littles
leave the widow down 1/4 inch all round,can get 2 to 3 hours in before pesky security guards stick their noses in
 
To give perspective to any walkin business which pays rent for the space to sell products / services etc. the very real reality is that once the door opens the business is losing money due to the start up costs and running costs.

But that is not to say it cannot be profitable. Very much the contrary. Atmosphere, product and service (if there is demand) are what will make a bar profitable from a customer's point of view.
 
Don't know about running them but I've financed many. At the time blonds seemed a good ROI; eperienced my fair share of market rejection there too!
 
Paul i have no experience in running bars/pubs but a few things to help break down and achieve your $9500 psm goal.

If you need 440 patrons per day to have 2.5 drinks on average then you need to ask yourself what will entice you to goto a pub and have a couple of drinks?

Women? (obviously added expense) but i know this pulls in alot of male tradies after a ****ty day at work. (you need to determine if its a male dominant bar or a mixed 1).

Sports area? (dedicated sports lounges work much better than screens everywhere as it adds to atomsphere)

Pokies? (well that will add to your profit but i dont think its the main thing that will bring in patrons as they have RSL's and other clubs for that).

Food? (good quality food and a very reasonable price is something very important as people tend to make it a night out).

Safe and clean environment (always a must if you want people to come back).

And of course well priced drinks which i think you have worked out.

For me you need to look at what brings in the most profit then work everything around that

i.e if pokies bring the most profit then cheap quality drinks/food/entertainment with a good atmosphere will definately see patrons playing the pokies (especially if you have good machines set up).

Best off speaking with a successful bar/pub owner and get some suggestions.
 
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