Opening a bar/pub...?

Dave!

Hey folks,

I'll start off by saying I'm quite young, in first year in college actually, but I'd like to at some time in the future open up a bar (I have a specific idea).

I was just wondering if someone could outline some of the things that I need to do in order to do this.

For instance, what should be the very first thing I do? Expand on the idea and decide on exactly what I want the place to look like, etc.? Or should I try to find somewhere to get money first, afterall i can't do anything without money?

Is there any way that a bank would give me a loan while I'm so young? If I were to do something like this, I'd like to do it while I'm young, and don't have any responsibilities, really.

Also, my father always tells me to start my own business, and he says if it fails, you just start again... but a friend I know who works in a bank tells me that if you go bankrupt, you won't get a loan again. Which would be closer to the truth...? If I go bankrupt in Ireland, could I go to a different country, like Spain or something, and get a loan there? Or if I go bankrupt while I'm young, could I argue in 5-10 years that it was because i was young, etc.? ie. can you argue the case, or is it just a case of, you're bankrupt, get away?

Sorry for all the questions, but I'd like to do this at some stage in the future.

Thanks

onedmc

1) Get a job in the business (Pub) for at least 1 year to the the experience. But 2-4 years is probable advisable to get real experience.
2) Dosn't matter what age you are the bank will not give you money. They will loan you money against assets only. You may get a small loan from a bank if you can show your money making experience.
3) Pubs are big business so if your thinking about starting you are talking about millions or at least E100,000's to get going.

My advice is start with a sandwice bar or even smoothie after 3 years then move onto somthing like a restaraunt then an addition 5 years later you may have enough experience and cash to look at somthing like a pub.

Your return on investment (ROI) for the sandwice/smoothie bar is probable one of the best at the moment. You could always buy somthing like an O'brians franchise, I think you could get a startup for about 50,000.

Dave!

onedmc wrote:

1) Get a job in the business (Pub) for at least 1 year to the the experience. But 2-4 years is probable advisable to get real experience.
2) Dosn't matter what age you are the bank will not give you money. They will loan you money against assets only. You may get a small loan from a bank if you can show your money making experience.
3) Pubs are big business so if your thinking about starting you are talking about millions or at least E100,000's to get going.

My advice is start with a sandwice bar or even smoothie after 3 years then move onto somthing like a restaraunt then an addition 5 years later you may have enough experience and cash to look at somthing like a pub.

Your return on investment (ROI) for the sandwice/smoothie bar is probable one of the best at the moment. You could always buy somthing like an O'brians franchise, I think you could get a startup for about 50,000.

Thanks for that

Do people usually start off with a smaller business and move onto another one? I suppose unless you have a few hundred grand lying about, it'd be hard to just go straight into what you want to do...

Re: the franchise, what's involved in starting a franchise? I mean, how would I go about doing that? Write to O'Brien's asking for it? Can you really start one up for as little as 50,000? That's not much, do I gather that O'Brien's buy the premises, etc., for you, and you run it? Is there any criteria that you need to meet (ie. education, etc) to do this? I mean, is there a rigorous test to get through? Also, would there not be alot of competition for this kind of thing, with more wealthy people getting a piece of the action?

Thanks again

EDIT:

Also, is it not very limited what you can do with a franchise? Do you have to check with the people above you if you're allowed to do everything? Would it require much work to run a franchise? Alot of the work is done isn't it? I've never seen an owner working behind the till, and accountants do the numbers I thought?!

Sorry about all the questions, you don't have to answer them individually!

antoinolachtnai

You will need quite a bit more than 50k to open any franchise that involves a shopfront element in Dublin. You have to get a leasehold, and that just isn't cheap. There's no point in skimping on the leasehold either. You have to have a food preparation area of some sort. Kitchen setups that meet the standards are not cheap. You will need a good chunk of capital to carry you through the first six or twelve months, when you will be losing money like crazy.

It is not easy to make money in the bar business. There is a world of real estate deals behind the scenes that is hard to imagine. Many of the bars in Dublin are currently being bought and sold for the debt they are carrying, in order to allow a tax write-off. You can always lease a bar for a few grand a week, but you'd really better know what you are doing.

Working in food and drink is hard work. Managing a food and drink operation is incredibly demanding, intellectually, physically and emotionally. I haven't done it myself, but I've seen it being done first-hand, and it's hard. If you haven't seen an owner working in a cafe, then you don't know what they look like, or you haven't been looking properly. They are there.

I think you need to get a better understanding of what goes into a decent cafe or takeaway. You also need to understand what the margins and overheads are like.

I think you should trade under a limited liability company (but millions disagree with me). This gives you some protection from creditors if it all goes wrong, but not too much, because the bank will want personal guarantees.

Basically, though, your friend in the bank is right. You make it pretty tough for yourself if you mess up in a business like bars and restaurants, moreso than in technology. The reason is that pubs and restaurants are mostly about management, rather than innovation. (I'm not saying that it's easy to get going again in technology, because it isn't, but it's easier.) In general, the way financing seems to work is that new guys go into business with or get a break from a more established partner.

There is a slightly different culture in the US. But still, you need to know what you are doing. Nobody is going to give you money if they don't think you know how to run a business. And if you screw up, it's going to be more difficult the next time.

You need to build up a network of people in food and drink if you want to be in that business. All these people know each other and know all the tricks, scams and personalities. If you aren't on the inside of this loop to some degree, you will have a tough time.

Dave!

Thanks a bunch for that, very helpful.

I'm just a little confused/frustrated here, cos when I look at people who own businesses, they're not necessarily educated, they didn't necessarily go to college, study business, and then start one up. I just don't know where they'd get all the money it takes to start one up! Would they just be working in a bar for a few years, and then have saved enough in tips to buy a piece of it? lol

Thanks again

antoinolachtnai

Well, loads of businesses (particularly cafes and restaurants) go out of business. As someone who has a degree and a financial qualification, I can reassure you that ust because someone didn't go to College doesn't mean they haven't learned a lot of stuff, and it certainly doesn't mean they aren't extremely smart. I'm pretty sure no one in this thread said that a business degree would be a valuable form of education.

The ignorant-rags to opulent-riches story you get in the papers every now and again are the adult equivalent of a fairytale. It very rarely works out that way. It might be possible to make a fortune in the bar trade on the basis of raw talent alone, but don't bank on it happening to you.

The issue of where bartenders get the money from to buy their first bar - i'm afraid this is an old joke that reflects badly on both bar owners and bar tenders, and I'm not going to explain here. When you realise what the joke is, then you will know you have learned something important!

Sorry for sounding so tough, and I don't mean to put you off. You should try it if you're sure it's what you want to do and if you can find a way to deal with the risk. but it really is a tough business. Best of luck with it.

Dave!

Thanks alot, I'll try to find out that joke

The main idea I can think of [for me] to build up enough money to get into business is to get a good idea for a website and make money that way, mainly cos I'm good with computers and can do some web design.

d-arke

first off, i'd like to say, i'm like davemcg here. would love to set up my own business (at least dave knows what in unlike myself), i just finished my business studies degree nearly two years ago. anyways, from what i've gathered, as people have said already, banks will give you a loan against assests and nobody at a young age would likely have any assests unless their fortunate enough to say have a parent who will supply the deposit to a first house.

as for setting up a new business, my bet would be to look to the foreign markets outside of europe and find a product that could take off, write to the company and blag your way into becoming sole distributor for that product. some 15 year old kid in the UK a few years ago became sole european distributor of those little aluminium kids scooters, made himself a fortune.

well thats my plan. good luck with the pub idea

is_that_so

I agree completely with onedmc in relation to what you should do.
A few observations of my own if I may.I have been out on my own for 8 months, IT services company, and it is damn hard work.
I still reckon it was the right thing to do but no money is being made just yet.

1) Coffee shops/restaurants have a 1 in 3 failure rate.
2) Franchises can be very expensive in general, they will cost you 50K plus in the first year. Most will cost in excess of 100K.
3) Most businesses will not make make any money in the first 12-18 months.
4) Contact you local enterprise board and do their very practical and very good SYOB( Start your own business) course.
5) Write a very detailed business plan. A bank will demand one for the kind of money you are looking at.
6) Do some projections - Excel will do for that and see what your best case and worst case scenarios are. Do a 1 year and a 3 year projection.

The very best of luck to you.