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Axel Young
Axel Young

Buying An Existing Bar Business



Many bars fail due to being undercapitalized. Experts recommend having enough money on hand to operate for a year including at least six month's worth of rent and operating expenditures. Even if you've got this far without raising finance, having access to good working capital will help you avoid stormy weather if something goes wrong. If you'd like more guidance on funding options, you can read our guide on loans for small businesses.




buying an existing bar business



The bar industry is not a business to get into if you are just looking to have a place to hang out. But while every night may not be a party, the bar business could be lucrative if you are organized. Remember that as a bar owner, your role will be more of a facilitator of fun rather than participant.


Taking over an existing bar is the quickest way to get up and running. The previous owner can leave customers, stock, and staff in place and hand you the keys. You have a built-in clientele and staff that know the bar, maybe better than you do.


The process of taking out a loan to open a bar may involve completing a loan application and providing financial information such as business revenue and expenses, as well as personal financial information. The bank may also require collateral, such as a lien on the property where the bar will be located.


Using investors or your own money will generally be the route to take for funding a bar, since banks may be hesitant to loan money without any business or income history to review. To raise money from investors to open a bar, you will need to create a business plan and pitch deck that outlines your concept, target market, and financial projections. We'll cover all of this later in this article.


Long, detailed business plans are usually only required if you need funding from a bank. The better approach is to create a lean plan of a few pages that will help you validate your idea and move along intelligently from the start. Include the following in your plan:


Find these candidates by hiring slowly: Use platforms like Poached Jobs, and AllBartenders.com and ask for referrals by reaching out to family, friends, business partners and other connections in the hospitality industry.


Conventional, SBA, and online lenders typically instruct small business owners to submit financial documents for the existing company, including cash flow, operating expenses, and physical assets. You should work with the current owner to get business valuation details and financial statements.


The cost of opening a bar depends on several factors, including the type of business (bar, pub, tavern, or nightclub) and location. You'll have to consider rent or mortgage payments, permits, licensing, inventory, salaries, insurance, and inventory. Costs can range between $100,000 and $850,000 but you may be able to start your bar or nightclub with much less."}},"@type": "Question","name": "How Much Money Do Bars Make?","acceptedAnswer": "@type": "Answer","text": "Bars can make a lot of money. That's because they can mark up the cost of alcohol by as much as 500%. Gross profit margins at bars can be as high as 80%. The average bar owner earns $27,500 per month in revenue, which equals about $330,000. Once you take out expenses, which average about $24,200 per month, you end up with roughly $39,600 in net profit per year.","@type": "Question","name": "How Much Do Juice Bars Make?","acceptedAnswer": "@type": "Answer","text": "Juice bars make and sell fruit and vegetable juices on the premises. They tend to appeal to health-conscious people and are increasing in popularity. Because they don't require traditional kitchen equipment or even a seating area, they are often fairly profitable. The average startup costs run between $25,000 and $400,000. Annual revenues can be anywhere between $100,000 to $600,000. Once you factor in expenses, which tend to be pretty low, you end up with a sizeable profit."]}]}] Investing Stocks Bonds Fixed Income Mutual Funds ETFs Options 401(k) Roth IRA Fundamental Analysis Technical Analysis Markets View All Simulator Login / Portfolio Trade Research My Games Leaderboard Economy Government Policy Monetary Policy Fiscal Policy View All Personal Finance Financial Literacy Retirement Budgeting Saving Taxes Home Ownership View All News Markets Companies Earnings Economy Crypto Personal Finance Government View All Reviews Best Online Brokers Best Life Insurance Companies Best CD Rates Best Savings Accounts Best Personal Loans Best Credit Repair Companies Best Mortgage Rates Best Auto Loan Rates Best Credit Cards View All Academy Investing for Beginners Trading for Beginners Become a Day Trader Technical Analysis All Investing Courses All Trading Courses View All TradeSearchSearchPlease fill out this field.SearchSearchPlease fill out this field.InvestingInvesting Stocks Bonds Fixed Income Mutual Funds ETFs Options 401(k) Roth IRA Fundamental Analysis Technical Analysis Markets View All SimulatorSimulator Login / Portfolio Trade Research My Games Leaderboard EconomyEconomy Government Policy Monetary Policy Fiscal Policy View All Personal FinancePersonal Finance Financial Literacy Retirement Budgeting Saving Taxes Home Ownership View All NewsNews Markets Companies Earnings Economy Crypto Personal Finance Government View All ReviewsReviews Best Online Brokers Best Life Insurance Companies Best CD Rates Best Savings Accounts Best Personal Loans Best Credit Repair Companies Best Mortgage Rates Best Auto Loan Rates Best Credit Cards View All AcademyAcademy Investing for Beginners Trading for Beginners Become a Day Trader Technical Analysis All Investing Courses All Trading Courses View All Financial Terms Newsletter About Us Follow Us Facebook Instagram LinkedIn TikTok Twitter YouTube Table of ContentsExpandTable of ContentsGetting StartedCostsEarningsEconomic Risks and RewardsOwning a Bar FAQsThe Bottom LineSmall BusinessHow to Start a BusinessThe Economics of Owning a BarByEvan Tarver Full BioEvan Tarver has 6+ years of experience in financial analysis and 5+ years as an author, editor, and copywriter.Learn about our editorial policiesUpdated July 15, 2022Reviewed byMargaret JamesFact checked byKirsten Rohrs SchmittIf you love the nightlife and the boogie but still can't figure out the best way to earn a living, why not consider opening up your own bar? Businesses in this industry, which include bars, pubs, taverns, and nightclubs, make their money by selling alcohol and providing people with entertainment.


The cost of opening a bar depends on several factors, including the type of business (bar, pub, tavern, or nightclub) and location. You'll have to consider rent or mortgage payments, permits, licensing, inventory, salaries, insurance, and inventory. Costs can range between $100,000 and $850,000 but you may be able to start your bar or nightclub with much less.


When looking to open a new restaurant or bar, the two choices are to find a new space to rent to use for your restaurant, or to buy an existing restaurant or bar. Often times, spending the money up front to buy an existing restaurant can end up being beneficial in the long run, as opposed to renting a new space and building a restaurant. The main benefits to buying an existing restaurant, as opposed to building a new restaurant in an empty space, are: (1) the existing restaurant equipment; (2) the existing licenses; and (3) the current lease.


The first issue to consider is the existing restaurant equipment. Building a new restaurant in an empty space can be extremely expensive, so it can certainly be beneficial to take over a space which is already set up to operate as a restaurant. If you are taking over a space that has not existed as a restaurant before, you will need to install many different pieces of equipment and machinery in order to operate your restaurant. These include an HVAC system, a ventilation system, and fire prevention systems. You also need to make sure the premises is properly zoned, and may need to obtain many new permits and approvals from various government agencies in order to operate a restaurant. If you are taking over an existing restaurant, most, if not all, of these should already be in place.


There are some questions that should be asked when reviewing the existing equipment. First, what condition are the assets and equipment in? Second, is the equipment owned outright or is it leased? If it is leased, you must determine whether or not the terms of the equipment lease are favorable, and whether or not you would want to assume such lease. We always recommend a thorough inspection of all equipment being purchased. Often times purchasers will be so excited to get started that they will not due their proper due diligence, and will be met with unpleasant surprises following the sale.


The next issue to consider is whether or not the existing licenses are in place, most notably, the liquor license. Transferring the liquor license of the business you are purchasing means that you are able to apply for a Temporary Permit in conjunction with your new license application. The Temporary Permit, once approved, gives you the ability to open and begin alcohol sales while your full license is still pending. However, before you begin any transactions with the seller, you must first familiarize yourself with the Temporary Permit requirements, to be sure that their license is transferable. 041b061a72


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